A new power shock builds


The local gas spot price is still at least double what it should be:

The wind has stopped blowing, and gas usage has surged from averaging 2% to 9%:


Sending power prices to the moon:

This is how it is supposed to work, so long as your gas price is reasonable, which it is not.

This is why power futures are glued to $100MWh:


As usual, Albo is doing absolutely nothing to prevent another power shock. Indeed, he is using policy to make it worse, gaming to increase renewables input instead of power storage to displace gas.

This sad truth has finally been whispered in the halls of Origin takeover:

Canada’s Brookfield says AustralianSuper must be factoring in higher energy prices for consumers and running Origin Energy’s coal-fired power station for longer in its finding that the $20 billion takeover bid from Brookfield and partner EIG undervalues Origin.


They are, of course, the same thing. Because coal-fired power is totally unsuited to use as firming for renewables because they cannot switch on and off quickly.

Eraring will only be kept open if ORG reaches a gouging deal with the NSW government to do so.

That is all that changed between the original bid and today, and that is the extra “value” that Australian Filth Super is chasing.

The dynamics are warped:

  • ORG starves NSW of gas, derailing the energy transformation from coal to renewables.
  • Pollies panic about both blackouts and price spikes.
  • ORG gouges pollies to keep coal-fired power open to support transition to no coal!

Why did the ACCC not demand the divestiture of Eraring to the NSW government as part of its approval process?

Not doing so has allowed a stranded asset to become a privately owned energy subsidy cash machine, derailed the takeover, and trashed the NSW public.

Just another day at the gas cartel head office.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.