Guest essay by Eric Worrall
h/t JoNova – Australia’s increasingly precarious green energy grid is forcing curbs on economic activity, with plans to pay energy intensive businesses to shut down during periods of high demand, to minimise the political risk of voters noticing what a mess their electricity supply is.
Electricity users will get paid to cut energy use under historic new market reform
By Stephen Long Posted Yesterday, updated Yesterday
Electricity consumers will be paid for reducing their power demands under a radical change to the market that will be introduced next year.
- ‘Wholesale demand response’ will come into effect in October 2021, allowing large electricity users to be paid for reducing demand
- Big energy generators and retailers had wanted to delay the change, citing the COVID-19 crisis
- Some advocacy groups want to extend the scheme to households and small businesses
The historic rule change announced on Thursday will allow what’s known as “wholesale demand response” — where the wholesale market can pay users for cutting electricity consumption, rather than paying electricity generators to increase supply, when the system is under strain.
The shift, which will begin in October 2021, has been adopted by the Australian Energy Market Commission (AEMC) despite opposition from big energy generators and retailers, who were using the COVID-19 crisis to pressure for delaying the rule changes.
The commission has described the change as “an important reform to the NEM (National Electricity Market)”.
It argues it will reduce electricity prices for consumers and improve reliability on the network, by allowing demand response to compete with “peaking” electricity generators that typically receive very high prices for supplying additional electricity during times of heavy demand.
The rule changes are a major victory for a coalition of community and environment groups that fought for the shift to demand response — the Public Interest Advocacy Centre, the Australia Institute and the Total Environment Centre.
“Big energy users like factories and farms will be able to earn money by saving energy during heatwaves and at other times when electricity prices are high,” the Australia Institute’s energy lead Dan Cass said.
Earning money for shutting down factories and farms and not producing anything – what could possibly go wrong?
The goal of going full renewable is impractical, maybe impossible. A study in 2019 identified the cost of going renewable is an expansion of mining and industry, with increases in industrial activity around 35 – 105% (and in the case of lithium an eyewatering 2700%) just to satisfy existing energy needs.
When you add in the need to increase energy to supply all that additional mining and industry, the upper end of that estimate is likely a runaway equation, in which renewable infrastructure can never catch up with the energy demands of new industry and mining required to build and maintain renewable infrastructure – especially if everything has to shut down and stop producing whenever weather conditions are unfavourable.