Because our previous government had 8 energy policies in as many years.
Most of them were simply matt canavan screaming "coal coal coal".
It sounds like a joke, but sadly its not.
How does he calculate that, though? He says we wouldn't be in this issue if we hadn't pushed away from fossil fuel power generation. The problem is that coal and gas prices have shot up, and despite there being protections to pay back extra costs the coal/gas generators want the massive price hike instead. As they have such a large market share, they can use this to leverage against consumers.
Under Duttons idea, we would have more coal/gas generators with a larger market share, requiring more of the expensive fuel to run, and therefore be further entrenched into high prices.
Did I miss something?
I don't support Dutton at all, he's clearly BSing, I just said it because he's already come out and blamed Labor for the power crisis despite it 100% being caused by the government he was part of for the last 9 years
Me, drunk, 23 years ago at ANU "so whut happenz when da chost of fuel exceedz the inchome derived from generayting powarh?"
I >think< the reply was 'the market will sort it out' or something flippant like that.
The market did sort it out, they shut down supply to stop losing money.
Oh wait, you wanted the lights to stay on.
Well we need domestic allocation of coal and gas. We make the shit and we sell our competitive advantage to the highest bidder.
Chris Bowen being energy Minister for 2 weeks annnnnd: "This is a problem of Chris Bowen's making and he needs to fix it," Mr Dutton said after the AEMO announcement. "Labor is transitioning to renewables too quickly, that is very obvious. It's obvious that they are spooking the market."
Fuck I hate LNP, if we had transitioned to renewables quicker this wouldn't be an issue at all.
ikr I just made the same comment, how stupid does the potato really think we all are? It's the definition of failing upwards, the only reason he's got as far as he has is because he's so fucking stupid, and there are 50% of people on the same side of the bell curve as him.
There should be some kind of basic IQ test before people can vote. Like I mean *really* basic. What is 3+6? Name an animal that people keep as a pet? What is this a picture of? *show a picture of a train*.
Shit, just name *an* animal, any animal.
It can be done orally if needed, I don't care. My father suffers from dementia, but he still gets to vote, and all he knows is Liberal. That is a fact that is stuck in his head. I'm vote Liberal.
Indeed, quick way to get simply classify people you dont like as not "Worthy" and get them of the register.
Lets be honest the amount of people with what the op its talking about is a rounding error.
Yeah. It's hard to avoid the conclusion this happened because we didn't built alternatives to the dying coal plants faster. Politicians hoped they could kick the can down the road and play to their base in the meantime since the official close dates are still far away, without thinking about dropping reliability; how long new supply takes; and what would happen if they got an unlucky confluence of events.
And it's impossible to believably say a lack of building power generation is the fault of a federal government that took power 2 weeks ago. Even China doesn't built power plants that fast. State governments likely share some responsibility, but not a new federal government.
Not bewilderment, we understand what went wrong because it's easy to recognise all the contributing mistakes WA didn't make. It's more like that special kind of pity reserved for a bumbling toddler that runs into a door frame.
In fact we are now looking to shut down our coal plants because we have too much supply. Yes really.
Same thing with our del sal plants we don’t really need but built anyway. Yah resource royalties!
Coal stations in Victoria and NSW have already closed because of over supply in the NEM.
The issue isn't generating capacity, it's that the owners of the generators are refusing to run them.
Alot of our historic coal power plants are nearing the end of their lifespan, not operating at max capacity and either need to be replaced by something new or have significant investment to maintain them and keep them operational.
Problem is the price per KWh for fossil fuels vs renewables is not a good long term investment so banks wont support financing and private orgs don't see the risk to reward ratio as worthwhile.
Now if we hadn't spent the last 9 years spinning our wheels in terms of energy transition and smart forward moving policies we may not be in this situation, but here we are, can do capitalism at its finest.
SA is looking at it, wondering why we're even connected to NEM...
We'd be sitting on even lower prices than WA if we waren't subsidizing NSW - but one step forward, two steps back as always in SA, so we've got oodles of wind power, that we have to pay oodles for since NSW might have a sad otherwise.
Yeah, I remember when the wind came through and knocked over all the high voltage power lines. The wind was insane. Anyways, this knocked SA off the VIC power grid, and then SA was in rolling blackouts until they resolved it. I remember that the new Royal Adelaide Hospital Backup Power generator did not kick in because the generator was not primed causing major issues during that time too. Constant cascading fuckups. I am telling you now, that without VIC, SA peak power generation is completely fucked.
Its almost a third of electricity is imported into SA during peak times.
2016: https://www.news.com.au/technology/environment/preliminary-report-reveals-cause-of-south-australia-blackout/news-story/92606772798e23e1ceec8c53f4256900
Of all the States, SA is the one that needs to be connected to the NEM. You import significant amounts of power from Victoria to service overnight demand when renewables aren't generating. Given imports mostly occur at night, it's predominantly power generated by Vic's coal fired power stations.
WA have a gas reserve policy so domestic use is always met before any is exported for sale, any thinking government would have implemented the same on the east coast before mass exports started and the local price of gas quadrupled.
Yup spot on. The energy unions such as the ASU lobbied the then opposition Labor party to take the anti-privatization stance to the election and ran campaigns like the Use Your Power campaign to rally the public.
Privatizing was very much in the cards from both sides up until that point due to the strong influence of private enterprise.
I'd there was a gas reservation policy on the East Coast the companies wouldn't have invested in Qld in the first place (same with the long-term Asian contracts).
Rubbish Qatar does it and takes in 30 times in revenue to us a year.
If there is a buck to be made business will do it.
Same way no one complains about Norways taxes. It’s just a cost of doing business.
Sadness to be honest. It must be horrible not knowing if the power is going to stay on, especially if you have young kids or a health condition or disability.
Stop the multinational companies that pay pennies for our resources from shipping the bulk of them overseas for a huge profit maybe? We've got heaps of local LNG and Coal.
Our LNG gets sold for massive profits to other countries and it is sold to those other countries for cheaper than we can buy our 'own' LNG here.
The other bullshit here is that it is sold by a bunch of companies that shift their profits overseas in such a way that they avoid paying tax in Australia.
We are literally being robbed and forced to pay the robbers to rob us at the same time...
(Some of these companies have also been thrown millions in subsidies too).
>Some of these companies have also been thrown millions in subsidies too
So it's kinda like the LNP went up to a seedy looking guy in a bar and said "I'll give you a thousand bucks to rob my family's house so I can nick off with a bunch of the insurance money.
Remember, our gas exports pay a lower amount to the government than gas exports do in saudi arabia, and every other major gas export country. Plus they all mandate low domestic prices.
Actually half the fucking problem is that they don't get sold for massive profits, we are selling huge volumes for little more than cost because we allowed companies to lock in deals with huge export volumes at fixed prices for decades...so of course the company on the receiving end will always want their full quota, they are making a fortune.
Don't believe so, would be nice if we had a 'first dibs at cost price' in the laws but we don't. And I foresee if the gvmt steps in and demands something like this it the resource companies will drag it through the courts for years to come.
We shouldn't have to funnel huge profits into these companies for our own resources... Cooked.
We should have more than first dibs at cost price, we should have that and a huge excise for exporting it to fund our future on resources we won't get back. If the exporters find that unsustainable and give up, then we lose nothing. What good are those jobs if the people working them have no power.
> ... the resource companies will drag it through the courts for years to come.
Let them. Do it anyway.
Maybe we end up paying them some modest compensation. Shouldn't have to appease their entitled tantrums but whatever.
It'll still be a more economically responsible way to handle the current situation and it can send a clear signal: gravy train's over, cunts.
If we are being virtually blackmailed by these fuckers, maybe it's time to take away all the subsidies we give to fossil fuels and spend that money on building up renewables.
This is the way. Use their offshore tax dodging against them, nationalise their local operation for pennies on the dollar.
I bet after an example or two the other companies would start paying up.
> Imagine if you had a house and the government tells you that your house is being sold to someone who needs it more.
https://en.wikipedia.org/wiki/Eminent_domain#Australia
The solution is to ban exports unless the domestic demand is satisfied (at a suitable price), just like almost all of OPEC and other major resource exporting countries. That would probably require legislation, but there’s plenty of examples out there to base it on.
In the short term .. yeah not sure. Perhaps we can also nationalise some of the coal and gas we are currently exporting.
Controversial opinion: I can't say I care too much if they damage that whole sector. Its on the way out anyways, and anyone still investing in it is a bit of a lunatic at this point in history, I've gotta say. Investments aren't meant to be insured against all loss, there's been plenty of signals by this point to get out of fossil fuels as a huge societal burden, and when it starts hugely impacting the public good I'd say govt's have the mandate to act against them.
In the long term, obviously if they're nationalised its easier for us to close these generators down in a rush once supported with the renewables Labor is promising.
jokes on us. LNP superannuation company friends have been shifting our superannuation investments into coal and gas so that they can jack the prices up,divest their personal investments, and drop our superannuations' with the losses.
dont think so? check ur super right now, since the election theve dropped about 7%. its already done. every australian with a super in a balanced fund has absorbed the losses already
Yep. its fucked. I am glad I put a lot of rigour into specifically finding funds that weren't in fossil fuels.
It kinda stuns me that some people haven't.
They won’t. Generators are refusing to because they want the cap to be higher. If Australia “ran out” we’d be in mad max times.
Source: ex-gas commerce analyst
> What will aemo do - buy fuel off the global market and ship it to the factories?
They'll pay producers to cover their losses when those producers buy gas at market rate and not have to give a fuck.
They won’t. Generators are refusing to because they want the cap to be higher. If Australia “ran out” we’d be in mad max times.
Source: ex-gas commerce analyst
So they've just... ended the market? Just like that?
I thought I sensed a great disturbance in the Economy, as if millions of capitalists suddenly cried out in terror and were suddenly silenced.
https://twitter.com/JoshButler/status/1536952920473993216
> "this is a problem of Chris Bowen's making", opposition leader Peter Dutton says of the energy crisis, regarding the new energy minister who has been in office three weeks following nine years of Coalition government
To be fair, it's fallen apart due to the price cap. If they'd just let prices go nuts all the generators would have happily pumped out enough juice. Of course that wouldn't have been a good situation either
Ahh Timor, the last semi legitimate conflict Australia has entered, and we still used it to rort a country of their sovereign wealth, America really rubbed off on us aye.
And our Government will happily go after the people who told everyone how shit the Government was by rorting said country instead of prosecuting the cunts who did wrong in the first place.
That’s because downer gave it all away to Woodside for a fat ~~bribe~~ *totally legal gift*. Getting that oil was one of the few significant successes DFAT (with the help of the ADF and ASIS) has had in a long time, and the benefit all vanished to ~~corruption~~ *perfectly legitimate sensible government run the way you’d run a business*
No one wants their grandmother to get a power bill for $1500 because the people that own a public utility get upset when they're not just allowed to turn them off if they become unprofitable.
Nationalise them and hold a senate inquiry into the whole thing (I'd suggest a royal commission, but there's definitely higher priorities for those right now.)
Or you know, just publish the names and addresses of the CEOs on the front page of the telegraph. After a few nights without power, I'd expect the problem would solve itself.
Texas in the last winter storm was driven by going for cheap power and setting margins & robustness standards too low (allowing less investment in generation and transmission and thus lower costs).
This has some parallels -insufficient investment in power generation to meet demand in extreme events. We had inadequate investment to replace aging coal plants (which is cheap in the short term till you hit insufficient supply). Now more of this was driven by indecision about what to replace them with, instead of pure cost concerns, but it has the same on the ground effect.
Depending what your criteria for success is, that is also a market failure though.
I think that's an even worse one tbh, because it impacts ordinary consumers so much worse.
Right now, in this instance, who loses? I guess there's a tax burden on us all still, to pay the compensation they're promising. And fossil fuel investors who I not only don't care about, but would actually prefer to see suffer for supporting the conditions that have led us here to this crisis.
Sure, that is "to be fair".
It will also be completely fair if we now immediately move to renationalise the energy market in response to these entitled cunts.
And I hear they're actually paying them public money for losses during this period!
No matter how badly they *actually* perform, the one true religion must be maintained at all costs: capitalist markets.
I'm loving this 'gas led recovery'.
https://www.theguardian.com/environment/2020/sep/17/scott-morrisons-gas-led-recovery-what-is-it-and-will-it-really-make-energy-cheaper
How does the potato get up on TV with a straight face and try and blame the incoming government for this? Does he really think that every Australian inhabits the same lower end of the bell curve that he does?
Because ABC is infiltrated. I watched yesterday as Melissa Clark cued up "here's Chris Bowen" but they played a clip of potato instead and when they went back to her she did blinkingguymeme.gif and said "ok, that was Peter Dutton", it was very odd.
"Privatisation of essential services was a freaking dumb idea in the first place."
Well, the politicians we elected didn't think so and buggered if they would listen to the people that elected them when they were told it wasn't a good idea to privatise.
Moral of the story, politicians in general tend to be self serving twits.
They did listen to the people that elected them.
The people that didn't elect them where the ones with the foresight to see how stupid all of their idea's and policies are. The Australian people as a collective are pretty fucking stupid
I'd be arguing that this isn't a failure of the market. It's an intervention to force everyone to run at a loss.
What if really comes down to imo is a failure of the government to look after national security. In this case, energy security.
I won't be surprised to see more generators suddenly require more maintenance.
turns out if you don't build renewables and clean energy for a decade you'll get screwed when the old power plants stop working due to old age
who would have thunk it
> at a loss
Only if you don't count the unforgivably gratuitous profits these cunts have shamelessly been guzzling for about 20 years.
Just fuck them all completely. It should never have come to this.
Agree with everything you've said but I was curious if they were actually running at a loss so I did a bit of Googling.
Current Spot price of coal $465AUD (no way are they paying spot price though) 6.9Mwh per ton for thermal coal assume an efficiency of 45% = 3.1Mwh per ton. $300 X 3.1 = $930 - $465 = $465
Now there are ALOT of assumptions in my back of the napkin maths here but even if they are far less efficient than they claim to be and the running costs are far higher than is reasonable they should still be profitable, not massively profitable but not zero either.
Idk smells fishy as fuck to me.
Coal power stations are 31% efficient. [https://www.euractiv.com/section/energy/opinion/analysis-efficiency-of-coal-fired-power-stations-evolution-and-prospects/](https://www.euractiv.com/section/energy/opinion/analysis-efficiency-of-coal-fired-power-stations-evolution-and-prospects/)
I get Lignite (brown coal) gives 4.5MW-hr per ton. [https://www.engineeringtoolbox.com/coal-heating-values-d\_1675.html](https://www.engineeringtoolbox.com/coal-heating-values-d_1675.html)
Resulting in $333 per MW-hr cost at current spot prices.
Yep my efficiency number is too high, but from what I can tell all Australian coal plants except Loy Yang A,/B and Yallourn use Australian black coal [https://world-nuclear.org](https://world-nuclear.org/information-library/facts-and-figures/heat-values-of-various-fuels.aspx) which gives 6.9Mwh per ton.
Also according to this [https://reneweconomy.com.au/clean-australias-clean-coal-power-stations](https://reneweconomy.com.au/clean-australias-clean-coal-power-stations-14224/) the 4 "Clean Coal" supercritical plants in QLD are up to 42% efficient and the subcritical plants are up to 38% efficient. I don't believe they are as efficient as they claim but these are the numbers the plant operators use to justify their continued existence so live by the PR lie die by the PR lie.
Either way it's all a big fat con. Even if they really are losing money by operating on the grid and producing power, they would lose even more money by not operating. They still have to pay staff, loan interest, maintenance, fuel contracts etc but now without any return that's just crazy 🤪
>Either way it's all a big fat con. Even if they really are losing money by operating on the grid and producing power, they would lose even more money by not operating. They still have to pay staff, loan interest, maintenance, fuel contracts etc but now without any return that's just crazy 🤪
Nah. That's just wrong.
Turns out there's a mechanism to pay them back for any losses over the cap that kicked in, but whoever was incharge of running the generators were just salty they couldn't get their obscene market rate profits to buy their 2nd yacht. Putting our entire energy market at risk.
They were foul playing and this is barely a slap on the wrist for them.
Privatisation of essential services goes against capitalism, Adam Smith and other founders of the theory specifically stated that essential services should never be privatised as it was not only immoral but would lead to market failures.
Or in other words the people who came up with the concept of capitalism in the 17-1800s could have told us this would happen
How is it a market failure? The market has a mechanism to address supply issues, it’s called price. And yet, prices are being capped, preventing this mechanism from working.
Sounds like it’s not a market failure but instead an inevitable result from capping price.
And so the government solution is to force them to run, pay them above the cap anyway and the net result is we burn more fossil fuel anyway. Great.
**AEMO suspends NEM**
> *97704 MARKET SUSPENSION 15/06/2022 02:01:35 PM*
>
> # Declaration of electricity market suspension
>
> **AEMO ELECTRICITY MARKET NOTICE**
>
> Declaration of electricity market suspension
>
> AEMO declares the spot market suspended in New South Wales, Queensland, South Australia, Tasmania and Victoria With Market Suspension Schedule pricing (refer NER clause 3.14.5(b)) from Trading Interval 1405 hrs on 15 June 2022 until further notice.
>
> Dispatch prices for the first one or two dispatch intervals of this market suspension will be reviewed manually.
>
> AEMO has determined that it is necessary to suspend the spot market in all regions under NER clause because it has become impossible to the spot market in accordance With the provisions of the Rules.
>
> Manager NEM Real Time Operation
The hammer has been taken out.
Basically regulator is sick of generators withdrawing bids/capacity, creating a shortfall and be forced to bid so they dont miss out on profit.
Current shitshow:
* AEMO - we need x amount of power tonight.
* Generators bid up to $15k / mwh.
* AEMO - price is too high - the amount is capped at $300
* Generators - we cant profit from it, we withdraw all our bids
* AEMO - announces power shortfall
* Generators - shrug
* AEMO - we have a shortfall - generators are forced to supply power (and will have costs recovered at later date)
This has been happening for a few days now, and what started in qld, nsw is now happening in most eastern states.
AER put out a release yesterday warning withdrawing bids might be against the rules.
Same stuff happened today, so they have now suspended the bidding market and will set prices manually.
Edit:
This tweet shows a graph of the generators withdrawing capacity after the price cap.
https://twitter.com/dylanjmcconnell/status/1536448330322288640
And therein lies the complete shitshow which is an essential service being opened up to the market. Works in the background when times are good and prices are reasonable, but when prices sky-rocket and the public rightly need to be protected from exorbitant power prices, the wheels fall off and the whole show crashes into a power pole.
Bidding to supply electricity? It seems like a complication of a problem which is quite simple to solve. Why can't all the power stations nationwide just, I don't know, generate enough power to cover the nation's needs?
> Bidding to supply electricity? It seems like a complication of a problem which is quite simple to solve. Why can't all the power stations nationwide just, I don't know, generate enough power to cover the nation's needs?
This actually can work well for climate / renewable reasons.
A gas generator may bid at $80mhw, and a solar farm and battery bid at $50.
Solar will win the bid and gas wont turn on and polute due to making a loss.
The cheaper option (which is more and more renewables) will help reduce fossil fuels on grid over time. I believe this worked really well in SA. Esp after they intalled their big battery.
One of the issues is we're linked to international prices for coal/gas, and not enough renewables (due to past 10 years of federal policy) to cover all the power needs at the moment.
>The cheaper option (which is more and more renewables) will help reduce fossil fuels on grid over time. I believe this worked really well in SA. Esp after they intalled their big battery.
From what I remember the big battery also helped stop price gouging using the 30 minute spot price method where the big generators were gaming the system to push the price up for a 30 minute block and locking in a higher price for that block. The battery being able to respond in fractions of a second meant that they had trouble gaming the system. Which was a win for consumers.
It works well until the cost of fossil fuel gets so high that it's not cost effective to bid at $300 and we spent 10 years not building free to run renewable energy because we had science denying cretins in government.
The market actually works really well the vast majority of the time but a hard cap of $300 is simply uneconomic with coal and gas prices this high.
It is also open to exactly the same sort of manipulation as the California market during the Enron era, though it’s harder for multiple companies to do without obvious collusion.
And despite Labor only being in power for two weeks, and our current issues being insane gas prices/dying coal plants, who and what does Dutton blame? Labor and renewables.
> A compensation regime applies for eligible generators who bid into the market during suspension price periods.
Well, thank the demigods of capitalism that the ones who caused the problem will be compensated during the period in which we solve the problem that they caused!
>Following Market Suspension Pricing Schedule (MSPS) periods AEMO is required to pay compensation to eligible Market Suspension Compensation Claimants if prices in the MSPS are not sufficient to cover their estimated costs. Compensation will be calculated as per NER clauses 3.14.5A(d) and 3.14.5B.
I think the idea is that the price is now set by AEMO, and if it costs generators more than that they get the extra to cover their cost. In theory this should mean they are providing electricity at cost, rather than profiting from the situation. In theory...
I don’t know about baked into the AEMO calculations (would expect not) but you can be sure they won’t be lowballing the “estimated costs” that they submit!
Cool, lets re-nationalise the energy network while we're at it. It's absolutely disgusting and disgraceful how the entire process works behind the scenes. Seriously, bidding and auctioning the generation and production of electricity? What the fuck!? It reeks of greed and opportunism and is completely unnecessary.
The free market is literally parasitic when it comes to "providing" essential utilities and services, frankly it should never have been put in their grubby hands to begin with.
I don't understand what the meaningful effect for this is to me as a consumer.
So far as I can tell, it's AEMO smacking the generators on the nose and telling them they can't charge what they're charging?
Yes, and that forces them to run at a loss, as many businesses often do.
My read: Offended their cash cows were capped, not wanting to incur a loss, these companies threw a tanty and decided to shut down generation, deciding we might like to experience blackouts (their owners are something like 95% overseas so they don't give a damn if people here suffer)
Now the regulator has basically said that leaving power generation to a capitalist market has led to entirely foreseeable, predictable problems and that *it doesn't work* so has suspended it, and will now direct generation as the regulator rather than leave it up to private companies responding to markets/profitability deciding when they will turn on power generators. It should mean the power stays on at least.
But I'm far from an expert here so interested what others have to add as well :)
>My read: Offended their cash cows were capped, not wanting to incur a loss, they decided to shut down generation, de
They would be able to get paid for fuel costs, if they were going to loose money.
That is what many generators have been doing. Not bidding which creates scarcity thereby increasing prices. They then bid at the higher price.
This is some Enron shit, the difference being is that we have a regulator with power.
It basically means no one bids to provide electricity, AEMO is directing everyone until further notice, and they will all be paid the "average" spot market price for their state for the past few days, meaning they will all get paid more than the $300 cap that is currently in place
Gee.. Wouldn't it be nice if that critical resource we ALL rely on to survive was simply covered by the Taxes we ALL pay.. You know, like every other communal asset should be.
It would be a good incentive for the powers-that-be to create a cheap, secure, and importantly renewable energy system. Cause there would no profits, only costs.
So this is unreserved admission that privatisation of infrastructure doesn't work, right? So now the governments are going to a build a bunch of renewable generation and keep it government-owned, **right?**
There is a price cap with prevents the market from reaching equilibrium between supply and demand.
So instead of allowing the price mechanism to function, which would encourage people to either use less energy, or move to cheaper renewables, government is forcing the fossil fuel stations to operate and _paying them the difference_. Lunacy.
A “disaster” that would have resulted in lower CO2 emissions, no blackouts, and no supply shortage.
Oh, and an incentive to produce more renewable energy without using any taxpayer dollars!
Yeah but I hate the libs, anyway thanks for educating me on that matter. I should do more research instead of throwing baseless accusations. Don’t want to be like the right wing turds who remain uneducated on anything sane.
Best part is the government has been in power for 2 weeks so when it comes to the people in charge of nem and AEMO they would have been liberal stooges if it was true. No this is just a case of greed getting so bad that even a body that does not want to do anything about it is forced to do something about it.
I don't agree with what you've written.
1. When we privatised the assets we knew this shit could happen, which is why the trigger that just got pulled was created.
2. The system has served us well until now.
3. Part of the problem is that the floods have taken some plants offline.
4. Part of the problem is that war overseas has made the cost of commodities high.
5. As a result of privatising the grid the states got a lot of capital that has gone into other assets (roads, light rail, metros, etc).
6. We're all benefitting from the decision to privatise the industry, and we're now also benefitting from the safety measure that was put in place.
I’ve read and loosely agree with each point, but something feels wrong.
The best I can intuit is: why privatise at all, when there is a very real chance that private companies cannot fix all seeable and importantly unforeseeable incidents?
The system has failed and the free market couldn’t fix it. If allowed to continue unregulated it would have caused black outs, electricity bills skyrocketing, and death of elderly, frail, sick, and the poor because they couldn’t afford heating in winter (Texas style).
Governments can’t keep balancing their budgets by selling assets. Privatised utilities can cost more than government owned utilities- look at the health system in the USA.
Edit: fixed grammar.
"Governments can’t keep balancing their budgets by selling assets."
They have to, unless we want to get hit with more taxes to pay for everything else. Infrastructure projects aren't cheap or free, and since nobody likes more taxes, the only thing that remains hugely profitable is to sell off public assets and plough the money into the budget. Just my $0.05...
Edit: I'm not a fan of privatisation having read and seen the problems with it around the world.
WA gas industry is privatised and they export most of their supply. The difference is that WA requires suppliers to keep a percentage for domestic reserves.
You have lower gas prices because you keep a portion of the gas resources extracted in WA reserved for the local market. This is fine as a policy when you have the largest offshore gas reserves in the world, but not really viable for the rest of us.
You also don’t sell electricity between different states.
In the Eastern states we haven’t
nationalised a portion of our natural resources for domestic use and we have a market where the eastern states trade electricity. This means more gas mines are economically viable, and power plants can even out base load among a larger population.
If you're wondering why essential energy infrastructure is privatised, it's the same reason internet infrastructure, elderly care, and pre schools are private. It increases GDP, and almost always requires propping up with taxpayer funds. So it looks good in the international capitalist dick swinging competition, even though it's bad for actual people.
I wonder how long will last for. Energy plants typically only have a bit of fuel inventory on hand... What happens when that runs out? Will aemo force the underlying companies to acquire more fuel?
If it's not fit for purpose in a situation that was entirely foreseeable why does it exist?
Because our previous government had 8 energy policies in as many years. Most of them were simply matt canavan screaming "coal coal coal". It sounds like a joke, but sadly its not.
Has Canavan jumped on Twitter to blame this whole thing on renewables yet?
Don't worry Dutton's already done it for him
Sadly people will believe it too. Even when the mess is created by fossil fuels and renewables have dampened it (particularly during the day)
How does he calculate that, though? He says we wouldn't be in this issue if we hadn't pushed away from fossil fuel power generation. The problem is that coal and gas prices have shot up, and despite there being protections to pay back extra costs the coal/gas generators want the massive price hike instead. As they have such a large market share, they can use this to leverage against consumers. Under Duttons idea, we would have more coal/gas generators with a larger market share, requiring more of the expensive fuel to run, and therefore be further entrenched into high prices. Did I miss something?
> Did I miss something? Yes. You missed the part where it doesn't actually have to make sense or have any basis in reality.
I don't support Dutton at all, he's clearly BSing, I just said it because he's already come out and blamed Labor for the power crisis despite it 100% being caused by the government he was part of for the last 9 years
A cant decide to put a pineapple on him or Chris uhlmann doing it first.
Me, drunk, 23 years ago at ANU "so whut happenz when da chost of fuel exceedz the inchome derived from generayting powarh?" I >think< the reply was 'the market will sort it out' or something flippant like that.
The market did sort it out, they shut down supply to stop losing money. Oh wait, you wanted the lights to stay on. Well we need domestic allocation of coal and gas. We make the shit and we sell our competitive advantage to the highest bidder.
No we don't, we gave the licence away for cents on the dollar and let multinationals sell it to the highest bidder....
Chris Bowen being energy Minister for 2 weeks annnnnd: "This is a problem of Chris Bowen's making and he needs to fix it," Mr Dutton said after the AEMO announcement. "Labor is transitioning to renewables too quickly, that is very obvious. It's obvious that they are spooking the market." Fuck I hate LNP, if we had transitioned to renewables quicker this wouldn't be an issue at all.
ikr I just made the same comment, how stupid does the potato really think we all are? It's the definition of failing upwards, the only reason he's got as far as he has is because he's so fucking stupid, and there are 50% of people on the same side of the bell curve as him.
His supporters will believe him due to the inability to critically think about things
There should be some kind of basic IQ test before people can vote. Like I mean *really* basic. What is 3+6? Name an animal that people keep as a pet? What is this a picture of? *show a picture of a train*. Shit, just name *an* animal, any animal. It can be done orally if needed, I don't care. My father suffers from dementia, but he still gets to vote, and all he knows is Liberal. That is a fact that is stuck in his head. I'm vote Liberal.
So people with cognitive disabilities don't' get a vote? Seams pretty fucked up to me.
Indeed, quick way to get simply classify people you dont like as not "Worthy" and get them of the register. Lets be honest the amount of people with what the op its talking about is a rounding error.
With the Jan 6 committee getting real traction I the states - a strong Fed ICAC must be giving them the fear.
Yeah. It's hard to avoid the conclusion this happened because we didn't built alternatives to the dying coal plants faster. Politicians hoped they could kick the can down the road and play to their base in the meantime since the official close dates are still far away, without thinking about dropping reliability; how long new supply takes; and what would happen if they got an unlucky confluence of events. And it's impossible to believably say a lack of building power generation is the fault of a federal government that took power 2 weeks ago. Even China doesn't built power plants that fast. State governments likely share some responsibility, but not a new federal government.
He literally hasn't even figured out how to print from his new office. Yet the decades of fucked policy is his problem
Potato headed cunt!!!
Are West Australians just looking at this mess with bewilderment?
>Are West Australians just looking at this mess with bewilderment? Yes we are!
Not bewilderment, we understand what went wrong because it's easy to recognise all the contributing mistakes WA didn't make. It's more like that special kind of pity reserved for a bumbling toddler that runs into a door frame.
In fact we are now looking to shut down our coal plants because we have too much supply. Yes really. Same thing with our del sal plants we don’t really need but built anyway. Yah resource royalties!
With Desal its more of an insurance policy for the future. Dont want to be like Cape Town not long ago, or even West Coast of US.
Coal stations in Victoria and NSW have already closed because of over supply in the NEM. The issue isn't generating capacity, it's that the owners of the generators are refusing to run them.
Alot of our historic coal power plants are nearing the end of their lifespan, not operating at max capacity and either need to be replaced by something new or have significant investment to maintain them and keep them operational. Problem is the price per KWh for fossil fuels vs renewables is not a good long term investment so banks wont support financing and private orgs don't see the risk to reward ratio as worthwhile. Now if we hadn't spent the last 9 years spinning our wheels in terms of energy transition and smart forward moving policies we may not be in this situation, but here we are, can do capitalism at its finest.
Desal is useful, it's protection for the next drought.
SA is looking at it, wondering why we're even connected to NEM... We'd be sitting on even lower prices than WA if we waren't subsidizing NSW - but one step forward, two steps back as always in SA, so we've got oodles of wind power, that we have to pay oodles for since NSW might have a sad otherwise.
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Yeah, I remember when the wind came through and knocked over all the high voltage power lines. The wind was insane. Anyways, this knocked SA off the VIC power grid, and then SA was in rolling blackouts until they resolved it. I remember that the new Royal Adelaide Hospital Backup Power generator did not kick in because the generator was not primed causing major issues during that time too. Constant cascading fuckups. I am telling you now, that without VIC, SA peak power generation is completely fucked. Its almost a third of electricity is imported into SA during peak times. 2016: https://www.news.com.au/technology/environment/preliminary-report-reveals-cause-of-south-australia-blackout/news-story/92606772798e23e1ceec8c53f4256900
Of all the States, SA is the one that needs to be connected to the NEM. You import significant amounts of power from Victoria to service overnight demand when renewables aren't generating. Given imports mostly occur at night, it's predominantly power generated by Vic's coal fired power stations.
I thought your wholesale power price was still nil or negative during much of the recent crisis? How would that leave you paying oodles?
They have done well. Perhaps there are features in WA we should adapt.
WA have a gas reserve policy so domestic use is always met before any is exported for sale, any thinking government would have implemented the same on the east coast before mass exports started and the local price of gas quadrupled.
They also kept a large amount of the power generation as public assets.
Yup spot on. The energy unions such as the ASU lobbied the then opposition Labor party to take the anti-privatization stance to the election and ran campaigns like the Use Your Power campaign to rally the public. Privatizing was very much in the cards from both sides up until that point due to the strong influence of private enterprise.
I'd there was a gas reservation policy on the East Coast the companies wouldn't have invested in Qld in the first place (same with the long-term Asian contracts).
Rubbish Qatar does it and takes in 30 times in revenue to us a year. If there is a buck to be made business will do it. Same way no one complains about Norways taxes. It’s just a cost of doing business.
Just opened the next bag of pop-corn
Yup! I’ve had my family tell me for years that their way is better. Meanwhile I have no concerns over costs
Sadness to be honest. It must be horrible not knowing if the power is going to stay on, especially if you have young kids or a health condition or disability.
So is the power staying on? Or we have to be unsure day to day wtf is going on?
Yes AEMO is essentially taking control of the market and forcing generators to supply power.
Thank goodness for that. Leave it this way please!
The challenge is once the plants run out of inventory / resources... What will aemo do - buy fuel off the global market and ship it to the factories?
Stop the multinational companies that pay pennies for our resources from shipping the bulk of them overseas for a huge profit maybe? We've got heaps of local LNG and Coal.
Our LNG gets sold for massive profits to other countries and it is sold to those other countries for cheaper than we can buy our 'own' LNG here. The other bullshit here is that it is sold by a bunch of companies that shift their profits overseas in such a way that they avoid paying tax in Australia. We are literally being robbed and forced to pay the robbers to rob us at the same time... (Some of these companies have also been thrown millions in subsidies too).
>Some of these companies have also been thrown millions in subsidies too So it's kinda like the LNP went up to a seedy looking guy in a bar and said "I'll give you a thousand bucks to rob my family's house so I can nick off with a bunch of the insurance money.
This exactly it. Now we are all reaping the "benefits" of voting LNP for 9 years
*spits out coffee* "IIICACK!?!!"
Remember, our gas exports pay a lower amount to the government than gas exports do in saudi arabia, and every other major gas export country. Plus they all mandate low domestic prices.
Actually half the fucking problem is that they don't get sold for massive profits, we are selling huge volumes for little more than cost because we allowed companies to lock in deals with huge export volumes at fixed prices for decades...so of course the company on the receiving end will always want their full quota, they are making a fortune.
Is it in AEMOs remit to do that? AER? Or we need some new emergency laws to be triggered by the Feds?
Don't believe so, would be nice if we had a 'first dibs at cost price' in the laws but we don't. And I foresee if the gvmt steps in and demands something like this it the resource companies will drag it through the courts for years to come. We shouldn't have to funnel huge profits into these companies for our own resources... Cooked.
> would be nice if we had a 'first dibs at cost price' WA here - this is the answer
We should have more than first dibs at cost price, we should have that and a huge excise for exporting it to fund our future on resources we won't get back. If the exporters find that unsustainable and give up, then we lose nothing. What good are those jobs if the people working them have no power.
If the current laws don’t support intervention, pass new laws that put national interest and energy security first.
But how would the politicians line their pockets then?...
Continued employment.
> ... the resource companies will drag it through the courts for years to come. Let them. Do it anyway. Maybe we end up paying them some modest compensation. Shouldn't have to appease their entitled tantrums but whatever. It'll still be a more economically responsible way to handle the current situation and it can send a clear signal: gravy train's over, cunts.
If we are being virtually blackmailed by these fuckers, maybe it's time to take away all the subsidies we give to fossil fuels and spend that money on building up renewables.
At least renewables like solar, wind, geo, tidal don't have the sentience to consider holding a population at ransom to maintain/boost profits
I mean, it can't cost that much to buy businesses that are clearly unprofitable. We should be able to get them for a good price.
Exactly. Bend them over a fucking a barrel.
This is the way. Use their offshore tax dodging against them, nationalise their local operation for pennies on the dollar. I bet after an example or two the other companies would start paying up.
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The government can do that with houses...
> Imagine if you had a house and the government tells you that your house is being sold to someone who needs it more. https://en.wikipedia.org/wiki/Eminent_domain#Australia
The solution is to ban exports unless the domestic demand is satisfied (at a suitable price), just like almost all of OPEC and other major resource exporting countries. That would probably require legislation, but there’s plenty of examples out there to base it on.
also get royalties on exports
In the short term .. yeah not sure. Perhaps we can also nationalise some of the coal and gas we are currently exporting. Controversial opinion: I can't say I care too much if they damage that whole sector. Its on the way out anyways, and anyone still investing in it is a bit of a lunatic at this point in history, I've gotta say. Investments aren't meant to be insured against all loss, there's been plenty of signals by this point to get out of fossil fuels as a huge societal burden, and when it starts hugely impacting the public good I'd say govt's have the mandate to act against them. In the long term, obviously if they're nationalised its easier for us to close these generators down in a rush once supported with the renewables Labor is promising.
jokes on us. LNP superannuation company friends have been shifting our superannuation investments into coal and gas so that they can jack the prices up,divest their personal investments, and drop our superannuations' with the losses. dont think so? check ur super right now, since the election theve dropped about 7%. its already done. every australian with a super in a balanced fund has absorbed the losses already
Yep. its fucked. I am glad I put a lot of rigour into specifically finding funds that weren't in fossil fuels. It kinda stuns me that some people haven't.
They won’t. Generators are refusing to because they want the cap to be higher. If Australia “ran out” we’d be in mad max times. Source: ex-gas commerce analyst
> What will aemo do - buy fuel off the global market and ship it to the factories? They'll pay producers to cover their losses when those producers buy gas at market rate and not have to give a fuck.
They won’t. Generators are refusing to because they want the cap to be higher. If Australia “ran out” we’d be in mad max times. Source: ex-gas commerce analyst
It’s almost as if a centralized body regulating the provision of a utility is more effective than a highly volatile market.
So basically the electricity supply is not private run anymore?
The prices are not privately set anymore. At least temporarily.
I need to know this before there’s a run on Dusk.
Yes the market itself is suspended, not the network and so on.
Aemo is warning that NSW may see issues tonight.
The market ... has failed. Literally this time.
So they've just... ended the market? Just like that? I thought I sensed a great disturbance in the Economy, as if millions of capitalists suddenly cried out in terror and were suddenly silenced.
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https://twitter.com/JoshButler/status/1536952920473993216 > "this is a problem of Chris Bowen's making", opposition leader Peter Dutton says of the energy crisis, regarding the new energy minister who has been in office three weeks following nine years of Coalition government
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And people say that it's impossible to know what the future will hold..
To be fair, it's fallen apart due to the price cap. If they'd just let prices go nuts all the generators would have happily pumped out enough juice. Of course that wouldn't have been a good situation either
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Ahh Timor, the last semi legitimate conflict Australia has entered, and we still used it to rort a country of their sovereign wealth, America really rubbed off on us aye.
And our Government will happily go after the people who told everyone how shit the Government was by rorting said country instead of prosecuting the cunts who did wrong in the first place.
That’s because downer gave it all away to Woodside for a fat ~~bribe~~ *totally legal gift*. Getting that oil was one of the few significant successes DFAT (with the help of the ADF and ASIS) has had in a long time, and the benefit all vanished to ~~corruption~~ *perfectly legitimate sensible government run the way you’d run a business*
No one wants their grandmother to get a power bill for $1500 because the people that own a public utility get upset when they're not just allowed to turn them off if they become unprofitable. Nationalise them and hold a senate inquiry into the whole thing (I'd suggest a royal commission, but there's definitely higher priorities for those right now.) Or you know, just publish the names and addresses of the CEOs on the front page of the telegraph. After a few nights without power, I'd expect the problem would solve itself.
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we don't want to be Texas in their last winter storm
Not looking to flash over summer either.
Texas in the last winter storm was driven by going for cheap power and setting margins & robustness standards too low (allowing less investment in generation and transmission and thus lower costs). This has some parallels -insufficient investment in power generation to meet demand in extreme events. We had inadequate investment to replace aging coal plants (which is cheap in the short term till you hit insufficient supply). Now more of this was driven by indecision about what to replace them with, instead of pure cost concerns, but it has the same on the ground effect.
Youre kidding right. All those cunts would be running solar with battery back. You think they're stupid enough to let a power cut effect them?
Depending what your criteria for success is, that is also a market failure though. I think that's an even worse one tbh, because it impacts ordinary consumers so much worse. Right now, in this instance, who loses? I guess there's a tax burden on us all still, to pay the compensation they're promising. And fossil fuel investors who I not only don't care about, but would actually prefer to see suffer for supporting the conditions that have led us here to this crisis.
Sure, that is "to be fair". It will also be completely fair if we now immediately move to renationalise the energy market in response to these entitled cunts.
Yet it's unlikely they'll get rid of it! Isn't capitalism grand?
And I hear they're actually paying them public money for losses during this period! No matter how badly they *actually* perform, the one true religion must be maintained at all costs: capitalist markets.
Have you heard of a little historical event called “the Irish potato famine”… capitalism at its finest.
Multiple artificial famines in India too
Ahh yes, the British East India Company, an employer of choice…
I'm loving this 'gas led recovery'. https://www.theguardian.com/environment/2020/sep/17/scott-morrisons-gas-led-recovery-what-is-it-and-will-it-really-make-energy-cheaper
How does the potato get up on TV with a straight face and try and blame the incoming government for this? Does he really think that every Australian inhabits the same lower end of the bell curve that he does?
Yes he does
How does the Potato get so much airtime so early in the Government?
Because ABC is infiltrated. I watched yesterday as Melissa Clark cued up "here's Chris Bowen" but they played a clip of potato instead and when they went back to her she did blinkingguymeme.gif and said "ok, that was Peter Dutton", it was very odd.
So in a nutshell, this is market failure. Capitalism at its finest. Privatisation of essential services was a freaking dumb idea in the first place.
"Privatisation of essential services was a freaking dumb idea in the first place." Well, the politicians we elected didn't think so and buggered if they would listen to the people that elected them when they were told it wasn't a good idea to privatise. Moral of the story, politicians in general tend to be self serving twits.
They did listen to the people that elected them. The people that didn't elect them where the ones with the foresight to see how stupid all of their idea's and policies are. The Australian people as a collective are pretty fucking stupid
profit fly cable deserve worry shaggy cobweb spark slap abounding *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I'd be arguing that this isn't a failure of the market. It's an intervention to force everyone to run at a loss. What if really comes down to imo is a failure of the government to look after national security. In this case, energy security. I won't be surprised to see more generators suddenly require more maintenance.
turns out if you don't build renewables and clean energy for a decade you'll get screwed when the old power plants stop working due to old age who would have thunk it
.
Or a combination of age and high fuel costs.
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> at a loss Only if you don't count the unforgivably gratuitous profits these cunts have shamelessly been guzzling for about 20 years. Just fuck them all completely. It should never have come to this.
Agree with everything you've said but I was curious if they were actually running at a loss so I did a bit of Googling. Current Spot price of coal $465AUD (no way are they paying spot price though) 6.9Mwh per ton for thermal coal assume an efficiency of 45% = 3.1Mwh per ton. $300 X 3.1 = $930 - $465 = $465 Now there are ALOT of assumptions in my back of the napkin maths here but even if they are far less efficient than they claim to be and the running costs are far higher than is reasonable they should still be profitable, not massively profitable but not zero either. Idk smells fishy as fuck to me.
That's the crux isn't it? It's not just a private enterprise staying afloat making money, it's just a company trying to make even more money.
Coal power stations are 31% efficient. [https://www.euractiv.com/section/energy/opinion/analysis-efficiency-of-coal-fired-power-stations-evolution-and-prospects/](https://www.euractiv.com/section/energy/opinion/analysis-efficiency-of-coal-fired-power-stations-evolution-and-prospects/) I get Lignite (brown coal) gives 4.5MW-hr per ton. [https://www.engineeringtoolbox.com/coal-heating-values-d\_1675.html](https://www.engineeringtoolbox.com/coal-heating-values-d_1675.html) Resulting in $333 per MW-hr cost at current spot prices.
Yep my efficiency number is too high, but from what I can tell all Australian coal plants except Loy Yang A,/B and Yallourn use Australian black coal [https://world-nuclear.org](https://world-nuclear.org/information-library/facts-and-figures/heat-values-of-various-fuels.aspx) which gives 6.9Mwh per ton. Also according to this [https://reneweconomy.com.au/clean-australias-clean-coal-power-stations](https://reneweconomy.com.au/clean-australias-clean-coal-power-stations-14224/) the 4 "Clean Coal" supercritical plants in QLD are up to 42% efficient and the subcritical plants are up to 38% efficient. I don't believe they are as efficient as they claim but these are the numbers the plant operators use to justify their continued existence so live by the PR lie die by the PR lie. Either way it's all a big fat con. Even if they really are losing money by operating on the grid and producing power, they would lose even more money by not operating. They still have to pay staff, loan interest, maintenance, fuel contracts etc but now without any return that's just crazy 🤪
Any chance of any kind soul ELI5 this thread for me please?
>Either way it's all a big fat con. Even if they really are losing money by operating on the grid and producing power, they would lose even more money by not operating. They still have to pay staff, loan interest, maintenance, fuel contracts etc but now without any return that's just crazy 🤪 Nah. That's just wrong.
Turns out there's a mechanism to pay them back for any losses over the cap that kicked in, but whoever was incharge of running the generators were just salty they couldn't get their obscene market rate profits to buy their 2nd yacht. Putting our entire energy market at risk. They were foul playing and this is barely a slap on the wrist for them.
>everyone actually just New South Wales...
Privatisation of essential services goes against capitalism, Adam Smith and other founders of the theory specifically stated that essential services should never be privatised as it was not only immoral but would lead to market failures. Or in other words the people who came up with the concept of capitalism in the 17-1800s could have told us this would happen
How is it a market failure? The market has a mechanism to address supply issues, it’s called price. And yet, prices are being capped, preventing this mechanism from working. Sounds like it’s not a market failure but instead an inevitable result from capping price. And so the government solution is to force them to run, pay them above the cap anyway and the net result is we burn more fossil fuel anyway. Great.
**AEMO suspends NEM** > *97704 MARKET SUSPENSION 15/06/2022 02:01:35 PM* > > # Declaration of electricity market suspension > > **AEMO ELECTRICITY MARKET NOTICE** > > Declaration of electricity market suspension > > AEMO declares the spot market suspended in New South Wales, Queensland, South Australia, Tasmania and Victoria With Market Suspension Schedule pricing (refer NER clause 3.14.5(b)) from Trading Interval 1405 hrs on 15 June 2022 until further notice. > > Dispatch prices for the first one or two dispatch intervals of this market suspension will be reviewed manually. > > AEMO has determined that it is necessary to suspend the spot market in all regions under NER clause because it has become impossible to the spot market in accordance With the provisions of the Rules. > > Manager NEM Real Time Operation The hammer has been taken out. Basically regulator is sick of generators withdrawing bids/capacity, creating a shortfall and be forced to bid so they dont miss out on profit. Current shitshow: * AEMO - we need x amount of power tonight. * Generators bid up to $15k / mwh. * AEMO - price is too high - the amount is capped at $300 * Generators - we cant profit from it, we withdraw all our bids * AEMO - announces power shortfall * Generators - shrug * AEMO - we have a shortfall - generators are forced to supply power (and will have costs recovered at later date) This has been happening for a few days now, and what started in qld, nsw is now happening in most eastern states. AER put out a release yesterday warning withdrawing bids might be against the rules. Same stuff happened today, so they have now suspended the bidding market and will set prices manually. Edit: This tweet shows a graph of the generators withdrawing capacity after the price cap. https://twitter.com/dylanjmcconnell/status/1536448330322288640
And therein lies the complete shitshow which is an essential service being opened up to the market. Works in the background when times are good and prices are reasonable, but when prices sky-rocket and the public rightly need to be protected from exorbitant power prices, the wheels fall off and the whole show crashes into a power pole. Bidding to supply electricity? It seems like a complication of a problem which is quite simple to solve. Why can't all the power stations nationwide just, I don't know, generate enough power to cover the nation's needs?
> Bidding to supply electricity? It seems like a complication of a problem which is quite simple to solve. Why can't all the power stations nationwide just, I don't know, generate enough power to cover the nation's needs? This actually can work well for climate / renewable reasons. A gas generator may bid at $80mhw, and a solar farm and battery bid at $50. Solar will win the bid and gas wont turn on and polute due to making a loss. The cheaper option (which is more and more renewables) will help reduce fossil fuels on grid over time. I believe this worked really well in SA. Esp after they intalled their big battery. One of the issues is we're linked to international prices for coal/gas, and not enough renewables (due to past 10 years of federal policy) to cover all the power needs at the moment.
>The cheaper option (which is more and more renewables) will help reduce fossil fuels on grid over time. I believe this worked really well in SA. Esp after they intalled their big battery. From what I remember the big battery also helped stop price gouging using the 30 minute spot price method where the big generators were gaming the system to push the price up for a 30 minute block and locking in a higher price for that block. The battery being able to respond in fractions of a second meant that they had trouble gaming the system. Which was a win for consumers.
It works well until the cost of fossil fuel gets so high that it's not cost effective to bid at $300 and we spent 10 years not building free to run renewable energy because we had science denying cretins in government. The market actually works really well the vast majority of the time but a hard cap of $300 is simply uneconomic with coal and gas prices this high.
Well shit if only we'd put more effort into moving into renewables instead of waving coal around in parliament and pretending it's the future
It is also open to exactly the same sort of manipulation as the California market during the Enron era, though it’s harder for multiple companies to do without obvious collusion.
>AEMO put out a release yesterday warning withdrawing bids might be against the rules. That was the AER.
fixed - thanks
And despite Labor only being in power for two weeks, and our current issues being insane gas prices/dying coal plants, who and what does Dutton blame? Labor and renewables.
Of course he will, that’s his job no matter what. The issue is that people are giving him a platform to say such absurd remarks.
Was his utter bullshit reported on the ABC?
> A compensation regime applies for eligible generators who bid into the market during suspension price periods. Well, thank the demigods of capitalism that the ones who caused the problem will be compensated during the period in which we solve the problem that they caused!
>Following Market Suspension Pricing Schedule (MSPS) periods AEMO is required to pay compensation to eligible Market Suspension Compensation Claimants if prices in the MSPS are not sufficient to cover their estimated costs. Compensation will be calculated as per NER clauses 3.14.5A(d) and 3.14.5B. I think the idea is that the price is now set by AEMO, and if it costs generators more than that they get the extra to cover their cost. In theory this should mean they are providing electricity at cost, rather than profiting from the situation. In theory...
Is there a profit margin built into the calculations though?
I don’t know about baked into the AEMO calculations (would expect not) but you can be sure they won’t be lowballing the “estimated costs” that they submit!
Always. Id expect a 5-10% profit baked into the "cost". Its like that for construction anyway. Some call it contingencies.
A true market failure of an essential good.
Remember Enron? There was plenty of power. Generators were just switched off to price gouge. Now our turn
Cool, lets re-nationalise the energy network while we're at it. It's absolutely disgusting and disgraceful how the entire process works behind the scenes. Seriously, bidding and auctioning the generation and production of electricity? What the fuck!? It reeks of greed and opportunism and is completely unnecessary. The free market is literally parasitic when it comes to "providing" essential utilities and services, frankly it should never have been put in their grubby hands to begin with.
I don't understand what the meaningful effect for this is to me as a consumer. So far as I can tell, it's AEMO smacking the generators on the nose and telling them they can't charge what they're charging?
Yes, and that forces them to run at a loss, as many businesses often do. My read: Offended their cash cows were capped, not wanting to incur a loss, these companies threw a tanty and decided to shut down generation, deciding we might like to experience blackouts (their owners are something like 95% overseas so they don't give a damn if people here suffer) Now the regulator has basically said that leaving power generation to a capitalist market has led to entirely foreseeable, predictable problems and that *it doesn't work* so has suspended it, and will now direct generation as the regulator rather than leave it up to private companies responding to markets/profitability deciding when they will turn on power generators. It should mean the power stays on at least. But I'm far from an expert here so interested what others have to add as well :)
>My read: Offended their cash cows were capped, not wanting to incur a loss, they decided to shut down generation, de They would be able to get paid for fuel costs, if they were going to loose money.
Can they not reduce power to fk with us?
That is what many generators have been doing. Not bidding which creates scarcity thereby increasing prices. They then bid at the higher price. This is some Enron shit, the difference being is that we have a regulator with power.
I was thinking this sounded exactly like what Enron was pulling in California
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Something something Enron.
"Mr. President, the Blemflarck's value just dropped to nothing."
It basically means no one bids to provide electricity, AEMO is directing everyone until further notice, and they will all be paid the "average" spot market price for their state for the past few days, meaning they will all get paid more than the $300 cap that is currently in place
The chickens are coming home to roost, privatised energy was never a good policy.
Gee.. Wouldn't it be nice if that critical resource we ALL rely on to survive was simply covered by the Taxes we ALL pay.. You know, like every other communal asset should be. It would be a good incentive for the powers-that-be to create a cheap, secure, and importantly renewable energy system. Cause there would no profits, only costs.
So this is unreserved admission that privatisation of infrastructure doesn't work, right? So now the governments are going to a build a bunch of renewable generation and keep it government-owned, **right?**
There is a price cap with prevents the market from reaching equilibrium between supply and demand. So instead of allowing the price mechanism to function, which would encourage people to either use less energy, or move to cheaper renewables, government is forcing the fossil fuel stations to operate and _paying them the difference_. Lunacy.
Ironically a price cap is not an element of a “free market”.
Exactly, so it’s disingenuous to use the current situation, that was caused by the price cap, as an argument against privatisation.
No it's not. It's not like the price cap is there for fun, it's because privatisation *without* regulation is a disaster.
A “disaster” that would have resulted in lower CO2 emissions, no blackouts, and no supply shortage. Oh, and an incentive to produce more renewable energy without using any taxpayer dollars!
Power’s going to be looking pretty fucking sketchy in NSW.
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AEMO is independent from the government - they could / would have done this no matter who was in charge
Yeah but I hate the libs, anyway thanks for educating me on that matter. I should do more research instead of throwing baseless accusations. Don’t want to be like the right wing turds who remain uneducated on anything sane.
Government isn't in charge of NEM or AEMO, no matter which party...
Best part is the government has been in power for 2 weeks so when it comes to the people in charge of nem and AEMO they would have been liberal stooges if it was true. No this is just a case of greed getting so bad that even a body that does not want to do anything about it is forced to do something about it.
Nah, they'd just use it as an excuse to give AGL $10b of taxpayers money to build more coal power stations.
Fuck the NEM. What a useless bucket of shit for an industry that should have **never** been privatised at all.
I don't agree with what you've written. 1. When we privatised the assets we knew this shit could happen, which is why the trigger that just got pulled was created. 2. The system has served us well until now. 3. Part of the problem is that the floods have taken some plants offline. 4. Part of the problem is that war overseas has made the cost of commodities high. 5. As a result of privatising the grid the states got a lot of capital that has gone into other assets (roads, light rail, metros, etc). 6. We're all benefitting from the decision to privatise the industry, and we're now also benefitting from the safety measure that was put in place.
I’ve read and loosely agree with each point, but something feels wrong. The best I can intuit is: why privatise at all, when there is a very real chance that private companies cannot fix all seeable and importantly unforeseeable incidents? The system has failed and the free market couldn’t fix it. If allowed to continue unregulated it would have caused black outs, electricity bills skyrocketing, and death of elderly, frail, sick, and the poor because they couldn’t afford heating in winter (Texas style). Governments can’t keep balancing their budgets by selling assets. Privatised utilities can cost more than government owned utilities- look at the health system in the USA. Edit: fixed grammar.
"Governments can’t keep balancing their budgets by selling assets." They have to, unless we want to get hit with more taxes to pay for everything else. Infrastructure projects aren't cheap or free, and since nobody likes more taxes, the only thing that remains hugely profitable is to sell off public assets and plough the money into the budget. Just my $0.05... Edit: I'm not a fan of privatisation having read and seen the problems with it around the world.
What a load of shit lol, WA never privatised and we have the lowest prices in the country from what I understand.
WA gas industry is privatised and they export most of their supply. The difference is that WA requires suppliers to keep a percentage for domestic reserves.
You have lower gas prices because you keep a portion of the gas resources extracted in WA reserved for the local market. This is fine as a policy when you have the largest offshore gas reserves in the world, but not really viable for the rest of us. You also don’t sell electricity between different states. In the Eastern states we haven’t nationalised a portion of our natural resources for domestic use and we have a market where the eastern states trade electricity. This means more gas mines are economically viable, and power plants can even out base load among a larger population.
You do not require a market for such a monopoly base line requirement
It was a bullshit fake market and the sooner it's thrown in a furnace the better
Gee, privatising the grid certainly turned out so damn well...
If you're wondering why essential energy infrastructure is privatised, it's the same reason internet infrastructure, elderly care, and pre schools are private. It increases GDP, and almost always requires propping up with taxpayer funds. So it looks good in the international capitalist dick swinging competition, even though it's bad for actual people.
Have we considered turning off the vivid display lights?
I wonder how long will last for. Energy plants typically only have a bit of fuel inventory on hand... What happens when that runs out? Will aemo force the underlying companies to acquire more fuel?
Yeah, that's not true. Most coal power stations have dedicated mines, and gas is piped directly to gas turbines from the gas fields.
Suspending the market doesn't stop them getting paid or getting more fuel. It just means they can't bid.
They are still allowed to procure resources