Essay by Eric Worrall
h/t observa; The Australian Energy Market Operator has replaced freedom with a regime of coercion and expropriation, in a desperate effort to stabilise Australia’s skyrocketing energy prices and supply shortfall.
Australian Energy Market Operator suspends spot market for wholesale electricity to ensure reliability and avoid blackouts
By political reporter Melissa Clarke and Nicholas McElroy
The Australian Energy Market Operator (AEMO) has taken the extraordinary step of suspending the spot market for wholesale electricity across the country.
Key points:
- The electricity sector has been dealing with soaring costs
- It forced AEMO to cap prices and compel generators to offer their services
- Now the spot market for wholesale electricity has been suspended to try and ensure reliability
The electricity sector has been dealing with soaring costs, forcing AEMO to cap prices and compel generators to offer their services.
…
AEMO chief executive Daniel Westerman says suspending the market will simplify operations of the electricity market.
We are seeing very challenging times,” Mr Westerman said.
“It was impossible to operate the system under current conditions while ensuring reliable, secure supply of electricity to Australian homes and businesses.
“Right now we see the market is not able to deal with all the factors thrown at it. Frankly, those factors are quite extreme, ranging from generators that are both planned and unplanned outages, very high demand. [There are] a confluence of factors at hand.”
He said the suspension created a more simple process to keep track of energy generators.
“We are creating a simple process where AEMO has true visibility of which generators are available and when in advance, rather than relying on last minute interventions,” Mr Westerman said.
…
Read more: https://www.abc.net.au/news/2022-06-15/aemo-suspends-energy-spot-market-amid-power-crisis/101154054
Why do I claim the Australian government has imposed a regime of expropriation?
Electricity providers claimed they refused to offer services under the government imposed price cap, because it would have meant running at a loss. Now they are being told they have no choice, they will be compelled to provide power at the price the government sets.
…
A spokesperson for the Australian Energy Council, which represents major power generators including AGL, EnergyAustralia and Origin, said its members faced a “complex issue” but were seeking solutions to the power crunch.
“The price cap unintentionally means that some plants can’t recover their fuel costs. Participants are legitimately seeking ways to resolve the problem,” the spokesperson said.
…
Read more: https://www.brisbanetimes.com.au/politics/federal/power-companies-accused-of-unconscionable-conduct-as-they-withdraw-from-grid-20220614-p5ath9.html
I have no doubt energy companies will comply, in the short term. I suspect directors will burn down their own companies to avoid being unjustly prosecuted, fined and possibly jailed. Who would not do the same in their place?
But what will be left when the smoke clears? What happens when generation companies have been forced to burn shareholder’s capital, to operate at a loss, for the political convenience of people who care nothing for their property rights or expectations of fair treatment?
The Australian fossil fuel electricity market was already a dangerous place to invest, given Australian government’s market distorting preference for renewables, and the bipartisan Aussie net zero target, which clearly leaves no place for fossil fuel generators.
My prediction, the threat of expropriation will be the final straw on the back of an already skittish industry.
In my opinion, after today, nobody in their right mind will spend a penny on power system maintenance or upgrades, now that everyone knows the government believes they have the right to expropriate. Except perhaps when directed to do so by the government, under threat of prosecution.
Worst case, competent managers will flee the industry, flee the risk of going to jail, perhaps even flee the country. Their replacements will in many cases be the kind of people you normally wouldn’t hire. The smart shareholders will sell fossil fuel generator assets, leaving companies in many cases in the hands of the inept or, perhaps worse, in the hands of corrupt political opportunists. In time these companies will collapse.
Welcome to Venezuela.
Expect a few more “unplanned” outages of units
“Green Fail: Australian Government Suspends the National Electricity Spot Market”
It seems just hopeless trying to get facts right here, but the Australian Government did not suspend the National Electricity Spot Market. The AEMO did. And, to repeat, the AEMO is a separate company with statutory responsibilities.
” The company [AEMO} is 60% owned by the Commonwealth Government, as well as the state governments of the Australian Capital Territory, New South Wales, Queensland, South Australia, Western Australia, Tasmania, and Victoria. The other 40% is owned by industry members, which includes a range of companies from the gas and power sector. AEMO employs approximately 1,000 people and is administered in Melbourne, Victoria. “
None of this has anything to do with anything Green. It is all trying to cope with the rapidly rising price of coal and gas.
Its everything to do with green Nick. The reason fossil fuel capacity is in such a sorry state is the Labor and to a lesser extent the Coalition has done everything in their power to intimidate investors – imposing climate reporting rules, talking up the transition and imminent shutdown of “stranded assets”.
Now the chickens have come home to roost, the government’s response is expropriation.
Imagine you were a fossil fuel investor, what would your response be?
“The reason fossil fuel capacity is in such a sorry state”
This was not an issue of lack of fossil fuel capacity. There was a deliberate withdrawal of service due to imposition of a price cap. The cap was in response to high fuel costs, driven by high world prices.
The AER was onto the tactics being used here:
Let you in on a secret the whole reason for the shortfalls is the generators want the head off the guy that wrote that … that would be the redacted bit 🙂
They not only deny the claim they are going after blood.
Well, if the generators are holding the country to ransom in a feud with the regulator, then it is certainly time to suspend the market.
Or let the market function, to determine the true price of electricity.
Can’t let that happen, they have to do everything in their power to hide what they are doing.
BTW, collapsing private enterprise has always been their goal. That way the government can take over everything and pretend to be the hero.
The problem will be that there will most likely be nothing left to take over. It doesn’t take long for unmaintained generation facilities to become unusable.
Didn’t the government do that in Venezuela? I don’t recall the government there being held in high esteem.
Its not really a true market, its more like a ‘sports competition’ with its own elaborate rules about who can play and when
The basic problem still remains they are replacing base load and on demand fossil fuelled generation with wind and solar
This is spot price. Its not like selling cabbages ( which are expensive too) its a regulated spot price market for very short term power ( 1/2 hr or 20 min blocks)
The generators are free to sell their output outside the AMEO market , and most power is sold this way , in longer term contracts
In fact many generators are probably losing money on older contracts and likely want to make it up on the highest possible spot prices.
Of course its complicated as no one has a separate distribution network, its all on one grid for the eastern states, and the generation and demand has to be exactly matched more or less for each instant. Thats the AMEO main job
think of it like a football game where the referee is needed to make the match follow the rules ( including suspending the rules !) and can disallow certain actions
However as you have said the essential problem is they are pushing out on demand fossil fuels for those ‘gig workers’ the wind and solar who just dont turn up when you want them.
The AEMO spot market operates on 5 minute increments.
The issue is that the price to all participants is set by the highest price of the last MW into the market.
Most fossil fuel power is actually sold onto the spot market because no one in their right mind would agree to long term contracts when the rules keep changing all the time. This is the reason that the large aluminium industry in NSW fled overseas – they could not get anyone to enter long term low price contracts.
Destroying low cost coal fired power plants which can operate at very high Capacity Factors has meant that the cost curve, when unreliable renewable generators leave the market, is increasingly relying on ultra high cost diesel generators to set the price.
Stokes has seriously lost his marbles … the consequence of acute cognitive dissonance … hopelessly devout to the green religion and yet reality messes with his head … what is he to do ?
Bipartisan anti-fossil fuel policies have led to the dilemma facing our electricity supply … they just can’t come to the point to tell the truth and unravel their lies and manipulation.
A lot here seem to forget that an absolute free market does have it’s pitfalls and drawbacks as well.
We see these now at work.
In 2008 the free market would have imploded if the governements didn’t intervene. Many forget that this crisis is just patched, not over.
So nick does have a point. Without governement the whole financial free market system would have collapsed.
This has nothing to do with renewables, all with customer end contracts: i’m having a 4 year fix tariff which i took in 2020 at the deep corona dip. Now i still pay that ridiculous low price. This for another 2 years.
Due to these contracts, 2 power providers did go bankrupt. But their power generation infrastructure was kept running by the state. Result: no blackouts. No shutdowns. No power outages for the customers that were impacted, as the state automatically took over for 2 months.
My conclusion?
Free market is ok, but there are 4 things where the free market systematically fails: tapwater, power, finance and public transport.
Why finance? Well in 2008 we were just one hair from global money transfer shutdown. Ironically it is a communist state move that saved the free market. (Well communist for usa standards, who should really learn that communism means something entirely different, than a few basic state controlled common needs ).
All what renewables will do is make it more and more visible.
The achilles heel of free market is that it needs growth to continue. The whole “green renewables” hype is an effort to keep a growth rate, not to “solve the co2 issue”.
A lot of free market protagonists here seem to forget that. Renewables and green solutions are not about climate, but about narratives to keep the growth engine going.
I still remember that one sentence from a top banker from 30 years ago in belgium (forgot his name).
He said “till now the economic gains and growth were made by destroying nature, but a lot more growth and gains will be made to switch to green and renewables. All it needs is that the “old ways” reach their saturation points, so that they have no other choice then to switch to green solutions”
Best example? The automobile industry. It “needs the EV”, as fossil fuel based cars are on the saturation level.
The EV solves this issue by forcing a swap of technology, which equals a complete renewal of the automobile parc.
Many forget that background
Most folks knowledgeable about “natural monopolies” don’t advocate a free market. They know government regulation is necessary to maintain an equity between stockholders and customers. This has worked well to meet demand, reliability, adequate return to stockholders, and low prices to customers.
Reliability has been removed from the equation and adequate return to stockholders is being compromised. Customers are seeing higher costs and less reliable service. The only people with a current advantage are the profiteers receiving subsidies for unreliable power.
These effects were predicted. There is no one to blame other than the governments who decided to toss everything into the air and hope it came down in the right order to make the puzzle as shown on the box.
Free markets contributing to the 2008 crash is a joke. If the big players in the financial markets would have had to suffer the consequences of the creation of their “financial time bombs” they would never have designed them in the first place. They new that they would get bailed out by the government. One role of recessions is to let the market get rid of “bad business models” not preserve them like government bailouts do.
AS one who was here and was following the economics, the US Government forced the big banks into that situation. Both Bush and McCain (both RINOs) still had the insight to warn Congress that forcing banks to make loans to people who could not demonstrate the ability to pay those loans back would endanger financial entities. They were booed off the stage by a Democrat-controlled Congress. Banks tried to redistribute the risk, but it all came crashing down when home values sank, and people walked away from their under-water mortgages. That resulted in a huge ripple effect. As Democrats controlled Congress, and leftists controlled our media, most Americans and obviously the rest of the world never realized what had just happened.
I do agree that when the Government causes a disaster through stupid laws they have to step in and do something. But the fault still rested with those stupid laws and the people who passed them.
“time to suspend the market”
But the current system is built on the market warped for costly partially usables…
Indeed let’s just jump straight to global communism, eh Nick? You’ve waited all your life for it, and you ain’t gettin any younger, amirite?
Yep permanent suspension of the market is fine by the companies and let pricing fall where it may 🙂
Ready for all the squealing from the energy sellers and home owners demanding the government do something … this is classic.
I am surprised you didn’t quote poor old Sarah … poor baby
She is a bit clueless and a dime short in the IQ arena. I thought all these renewable companies were on her side.
Pretty sure Sarah sea-patrol has and IQ substantially higher than Nick is currently displaying !
“if the generators are holding the country to ransom”
only in your fetid juvenile leftist idiotology driven ex-mind”
Would you want to be forced to sell something for half the price it costs to produce !
Nick….you’re a smart guy. How do think this going to go…near term, and then over the next years?
“Nick….you’re a smart guy…”
Objection, your honor. Assumes something not in evidence.
Nick was a smart guy … his cognitive dissonance is taking a toll on his mental health.
Socialist/greens are trying to force the generators to operate at a loss, but it’s always the fault of the capitalists for complaining.
Nick your evasions are getting monotonous.
Let’s see your pay stub where you work for A$10.00 an hour, Nick. If you aren’t – isn’t it time to arrest you for holding the country to ransom?
That isn’t hostage taking. In the free market, the buyer is free to say “I won’t pay more than X”, but the seller is then free to tell the buyer to go pound sand. Since, in this case, the buyer can compel the seller to sell at X, it isn’t a free market and the buyer is, in fact, part of the government. Honestly, I’d love to see the generators tell the government, “FU, you do it” just so people like you could finally understand something about the world.
Companies claimed the price cap was too low. Instead of listening to concerns, maybe raising the price cap, the AEMO has seized control of assets, accused companies of gaming the system, and is demanding they provide product, regardless of the financials. That is expropriation.
As for the global price of fuel, Many US states can produce power for 10c / kWH. China and India seem to be able to produce stable caseload power at a reasonable cost.
What have they got that we don’t have? Other than politicians who shield fossil fuel energy providers from green lunacy?
“regardless of the financials”
You seem to be obstinately refusing to accept what the financials actually are. As the regulator says, if they sell while a cap is in operation, they get compensation for the difference. But they want more.
“What have they got that we don’t have?”
They can mine more coal and gas than they have the capacity to export. But they are working on that, as we did.
” Other than politicians who shield fossil fuel energy providers from green lunacy?”
The biggest state that meets your 10c is Texas. And they have plenty of renewables.
You’re the one who is not getting it Nick. These are privately owned generators, the owners can choose not to switch them on. If the government wants them to supply power they should allow the market to set the price at which they are prepared to switch on.
Instead the government has decided to expropriate the power, without offering fair compensation.
If you are wondering why power providers can charge such high prices, maybe you should take a good look in the mirror.
In a functioning market high prices would be an opportunity for new entrant investors to cash in, Adam Smith’s invisible hand would bring down prices. But in Australia’s hostile, dysfunctional market, there are massive barriers to entry. For starters banks won’t lend them money to build new “stranded assets”, thanks to pressure from radical greens.
Even so, sustained high prices would bring in a few daring entrepreneurs – except the government just killed all that, by deciding to price fix and expropriate.
Pretty much it Eric then the regulator thought they would pull there trump card by “DEMANDING” they go online. Only to be shutdown by the generators who simply declared there equipment was unsafe and needed repairs. Nothing the regulator can do the generators have engineer reports saying so … remember one must do what experts say 🙂
The regulator big stick turned out to be just a little bit less that a small twig.
That’s the point where the government expropriates the plants directly. Hire their own “experts” who proclaim that the equipment is in perfect condition, since that’s what the politicians want to hear.
Not possible it’s private property and equipment and no act or law allows such a thing. There is a deeper problem imagine if they did such a thing they would become liable for any damages or accidents … could you imagine a group of dropkick bureaucrats at AEMO ever going out on that much of a limb 🙂
The coal generators are out making a point as an example and there is probably no doubt the equipment needs maintenance … could it be run well given a financial incentive one might take the risk 🙂
https://www.msn.com/en-au/money/markets/huge-yallourn-coal-fired-power-plant-operating-at-half-capacity-as-energy-crisis-pressures-mount/ar-AAYtgDx
There in lies the problem for AEMO the operators will only risk there equipment if there is a reward on offer 🙂
What act or law allows people to be rounded up and shipped to a CoViD Gulag? What act or law allows police to wade into an actually peaceful protest march and pound people with their billy clubs?
What Leftist (whether Communist Socialist or Fascist Socialist) has EVER cared about acts or laws? (Until they are in full control, that is – then they’ll happily shoot you for spitting on the sidewalk.)
Some people like that 😉
Different mechanism. The regulator isnt bringing units online that were shut for maintenance.
These are fully operating units ( something like 1-2 GW in each state) that werent available for commercial reasons. The market operator has said – as per the rules the companies had previously legally agreed to – your choices are no longer an option
You would have to provide evidence there is no discussion of any such thing beyond your claim.
Maintenance not being done because the generators are marked for redundancy when the fairy farts at the bottom of the garden provide all the power to the grid.
You couldn’t just build a ultra critical coal power plant these days in Australia. The opposition from enviros inside and outside parliament, the bureaucracy involved would make sure it never happens.
The previous federal government that just lost election was planning to use its own hydro generating company to build a new fossil fuelled gas plant on the site of a closed coal station
Beside that, you can’t get funding.
Nick is right , for the wrong reasons. Closing the base load coal is the cause. But the the generators have already signed up to the market operators rules – which allow them to overide the the daily ‘offer and accept’ type of auction.
Think of a ‘used car auction’ with instead of reverse base prices theres reserve maximum prices. Dont like the rules then you cant participate.
They have over-ridden the auction system as the pricing signals are all wrong ( self inflicted as the fossil fuelled generation has been foolishly pushed aside)
Privately owned except for Stanwell in Queensland … owned by the state government and renown for gaming the system on behalf of the socialist government to support its huge debt responsibility.
Do you ever say anything rational anymore? Non sequiturs piled on top of lies and Bolshevik assumptions.
This ^
Read Alice O’Connor much??
“As the regulator says, if they sell while a cap is in operation, they get compensation for the difference. But they want more.”
Nick, do you understand that producers seek to make a profit? Hence why they want to make more? Do you know why producers want to make a profit?
Nick also leaves out they don’t get the compensation until 6 months later.
Its a regulated market – the US states outside Texas even set the prices their regulated utilities can charge for power.!
The Aussie version is more like Texas but with a lower price cap
“Do you know why producers want to make a profit?”
Yes. But the regulator thinks that withholding supply so that you have to be ordered to supply and so get compensated at a higher rate is all a bit much. He said it, not me.
And Texas is now, again, facing the prospect of blackouts, this time for warm summer conditions.
Not just Texas. Kansas just informed us to expect the same. Kansas has killed off all their coal plants and is working on killing off the nat gas plants – going big time into solar and wind. Solar and wind just don’t have the the capability of meeting high demand. Kansas hasn’t yet killed off its one nuke plant but it just isn’t capable of handling everything.
It’s a glimpse into the future for the US. Thanks John Kerry, Joe Biden, and the National Socialists (aka the Democrats).
Nazis are more like the ultra right wing….the people that stormed the Capitol
You have your names all mixed up
Socialist- left wing
Nationalsocialist- ( all one word in german vocab) means ultra right wing
Even today in Germany the party closest to mainstream GOP is named christian socialist or by its initials CDU
Hitler and Mussolini both were rabid Socialists before they found out they could wield more power with less responsibility through Fascism. They could blame the “privately” owned companies for failures to make the trains run on time.
Marxism has three main phases:
No.1 is Fascism
No. 2 is Socialism
No. 3 is Communism
There has never been a transition from Socialism to Communism. Once the bureaucracy gets big enough to implement Socialism it never lets go of power.
Fascism can transition to Socialism, see Cuba and Venezuela. It never progresses on to Communism, however.
Nazi’s *were* Fascists with Socialist policies. Just look at their Constitution, Socialist to the core.
Just like the Democrat platform of today.
Don’t confuse the racism of Hitler, Mussolini, and their adherents with the political and economic policies and beliefs they implemented.
The term National Socialists fits the Democrats of today to a T. They would like to do away with the power of the state and local governments (See Amendments 9 and 10 in the Bill of Rights) and just have a national government. Their driving meme is “from each according to ability, to each according to need” – the same as Marx. They are Fascists to the core, from censorship to taxes. The US used to live by the code “you can do what you want, government permission not needed”. Under the Democrats the US has moved to the code “you can only do what the government says you can do”. 1984 at its finest.
Mussolini and Hitler socialists ? Thats a funny one.
Once they had political power the vehicle they used was right wing populism.
Its like saying because Regan was once a left wing union president his government was the same
Hitler and Mussolini we’re Fascists. That means the STATE took precedence over any individual.
They were dictators who convinced the people that STATE control over business and individuals would lead to better lives for all.
That’s a long way from right wing populists who want limited government and for the individual to be the most important.
You need to study different governments in more detail. Forget the social media ‘experts’, most don’t have a clue.
Hitler’s National Socialist Program
(see https://en.wikipedia.org/wiki/National_Socialist_Program)
7: We demand that the state be charged first with providing the opportunity for a livelihood and way of life for the citizens. If it is impossible to nourish the total population of the State, then the members of foreign nations (non-citizens) must be excluded from the Reich.
11: Abolition of unearned (work and labour) incomes. Breaking of debt (interest)-slavery.
13: We demand nationalization of all businesses which have been up to the present formed into companies (trusts).
14: We demand that the profits from wholesale trade shall be shared out.
16: We demand the creation of a healthy middle class and its conservation, immediate communalization of the great warehouses and their being leased at low cost to small firms, the utmost consideration of all small firms in contracts with the State, county or municipality. (bolding mine, tg)
23: We demand legal opposition to known lies and their promulgation through the press.
25: For the execution of all of this we demand the formation of a strong central power in the Reich. Unlimited authority of the central parliament over the whole Reich and its organizations in general.
Socialist to the core. And part and parcel with the Democrat Party Platform of today.
Mussolini:
from wikipedia (see https://en.wikipedia.org/wiki/Benito_Mussolini)
Mussolini was originally a socialist politician and a journalist at the Avanti! newspaper. In 1912, he became a member of the National Directorate of the Italian Socialist Party (PSI),[7] but he was expelled from the PSI for advocating military intervention in World War I, in opposition to the party’s stance on neutrality.
Mussolini had a profound influence on Hitler’s political views, especially his Socialist views.
What has happened to the teaching of history today? Both Hitler and Mussolini were as far left in their politics as it is possible to be. So are today’s Democrats.
Socialists like to pretend that being a racist means you are a right winger. However the most racist people I have ever met have all been socialists.
Democrats, actually. The Democrat Party in the US was founded in the early 19th century specifically to protect the interests of the farmers, especially the big slave owning farmers in the Democrat southern states.
This is a lie that socialists have been trying to sell for decades.
Nazi stands for National Socialist. If you examine the economic policies of the Nazis, it was socialist down the core. Ditto for the fascists, socialist to the core.
There was absolutely nothing right wing about the Nazis, even the racism was pure left wing since leftists are racist to the core.
Socialist means left wing
nationalsocialist means ultra right wing
When the nazis took power they imprisoned and supressed the existing socialist party , its enemies
Just because German is very close to English doesnt mean the words translate exactly , especially compound words
Schadenfreude is two words together in german mean damage pleasure , not what it means in English
You taking nonsens.
“When the nazis took power they imprisoned and supressed the existing socialist party , its enemies”
Have you *ever* asked yourself why they did this? The word “enemy” should be a clue. German nationalism was the *enemy* of Russian Communism as advocated by the Socialists in Germany. This was like cousins fighting over who was to control an estate!
That does *not* mean that one was right-wing and the other left-wing. They were both as left-wing as you can get!
You don’t have to look at what the Nazi’s called themselves to see how left-wing they were, including Hitler. Just look at the National Party Program and its planks. It’s all laid out there in no uncertain terms.
Nazi is NATIONAL SOCIALIST German Workers Party. Quit lying, or go learn a little history.
I guess you could say they were socialist in name only.
No, the party platform was socialist to the core. Do some reading!
When Nick decides to tell a whopper, he goes all out.
While it is technically true that they have the tools and ability to mine and drill, what they lack is permission.
Difference between what and what? No spot market to give the real price that they should be paid.
Deliberate misreading? Or something else? Sounding very much like a Biden press secretary…
Most generation is sold at pre arranged longer term contracts
Spot prices are for very short term supply ( Its in half hour blocks). They already know the regulator price cap
“Difference between what and what?”
Difference between the market cap price, if that is what they sold at, and their $600 or whatever production cost, if they can establish that.
The bit I don’t understand you greentards got what you wanted
1.) Fossil fuel prices higher (your mechanism was a carbon tax)
2.) Constrained use of fossil fuels
You got everything you wished for .. whats the problem 🙂
I rolled around laughing at our PM today he is “furious at the power generators” and yet he is discussing increasing our carbon emission pledges.
Many, perhaps. Certainly Oregon and Washington with all the dams on the Columbia River. In California, try 19 cents per kW-hr.
This is a seller’s market, because dispatchable reserve capacity is almost gone, because huge amounts of renewable capacity have been added instead.
I remember someone claiming renewables were free.How’s that working out in your market? Nick how big is you electricity bill for this FREE power?
Sometimes these deniars just amaze.
Nick thinks the companies should accept $300 for power that costs them $600+ to produce.
You are an economic fool, Nick !
This was already tried in California in the 2000’s where the utilities were forced to by power at fuel driven-high costs but the rates paid by the customers were capped. The utilities ended up where you might think they would, in bankruptcy.
Yep. AFTER having to buy electricity from Bonneville Power, which had to buy it back from the aluminum plants that had long term contracts for it.
Even Nick’s lies are getting pathetic.
He actually wants to ignore everything that has happened over the last few decades to get us into this sorry state, and only talk about the things that have happened in the last week.
They withdrew services because the price cap imposed by the socialist/greens was less than the cost of production. However like most socialist/greens, Nick doesn’t care when other people suffer.
No. Everyone misses the main issue.
This is a complete failure of an artificial market structure which was ‘cleverly’ designed to favour renewables.
The geniuses behind this debacle should be hanging their heads in shame and revisiting their understanding of market theory to see where they went wrong.
markx — you are spot on. Everyone seems to be talking around the basic problem of improperly structured markets.
Unless the grid operators insist on capacity charges and payments sufficient to keep either thermal plants or battery backups available there will be neither.
In my neck of the woods ISO-NE struggles to sustain a high enough capacity charge, but regulators only see the low marginal costs of renewables.
Perhaps you might like to blame the closures of power plants caused by the Govt policies as Eric points out above.
Instead of spending small amounts (approx $30 million) to upgrade a SA power plant, Weatherill (Labor) virtue signalled by blowing it up!
Instead of assisting the company to upgrade Halzelwood the Vic Govt shut it down.
Instead of using the $Billions paid BY the traditional power generators to maintain and upgrade our power system the govt spent absolute minimums to keep it barely ticking over – the usual Govt malfeasance when the appropriate and industry – and pocketed the rest into their ‘consolidated revenue’ sluts fund… sorry, slush fund.
Instead of making the so-called ‘renewables’ (they aren’t) compete in a market the govts poured $Billions into them as subsidies, a lot of which went to mates who promptly absconded with the cash leaving their solar and wind companies to crash and burn like a wind turbine.
And worst of all, instead of learning from the disaster they have xcreated they are doubling down to collapse the industry entirely.
None so blind as those who refuse to see.
Wow Nick! You spin like a disk drive!
Just keep spinning…
More like a floppy disk. Not much capacity for data.
A CD with a broken laser. !
Why do windmills and solar panels produce unreliable power?
Try looking at the big picture Nick. Why can’t wind and solar produce baseline capacity 24x7x365? Why are fossil fuel generators even needed as EMERGENCY backup?
If you ever hope to rid the world of fossil fuel power plants in order to reach net zero you must pay the price. Everyone has told you that for as long as I’ve been on WUWT.
You have two choices, nuclear power or demand management (rolling blackouts). Which is it?
AM I understanding you correctly Mr Stokes?
If the AEMO suspended the spot market and the AMEO is majority owned by the government, that makes the AMEO a government controlled entity AKA the GOVERNMENT
That ^^^ and the government is footing the bill which they won’t discuss but apparently has “NO LIMITS” according to Minister Bowen
“AMEO is majority owned by the government”
The AEMO is majority owned by governments. State and federal, and with varying interests and politics. The federal government does not have a majority.
It is a coop with wide membership, including the generators. And is has processes (board etc) to match.
Last time I checked math, 60% was a majority. Must be using New Math
Government is Government regardless of the flavor.
Its like the US Federal Reserve Bank. Owned by the Federal government but it has its own board who make their decisions independently.
Thats what AMEO is
AMEO will do what their masters tell them … their master put them there to do their bidding.
That would be the board of directors that is appointed by the government?
Uhhhh – everyone else is 40%. Federal is 60%. Guess who wins?
Nope. They arent political appointees or who have to get approval from their government owners for decisions.
Think of interest rates , not set by the government, inspite of the US Fed being ‘owned’ by the government
AMEO is more like a not for profit who works in best interests of consumers
That’ll be the day.
There are some socialists who actually seem to buy the propaganda.
Socialists always tell you that they want control for your interest.
Funny how the only people who end up winning are those who run socialism.
The best interest of consumers by … driving the generators bankrupt by forcing them to sell below cost. Guess you think Australians will be better off engaging in subsistence farming too.
Malarky! Who established their charter? Did they just grow naturally out of the soil?
Interest rates can’t just be set arbitrarily by any old bank or lending institution. If they stray too far from the Fed rate then other competitors will undercut them and they lose business. Who competes with AMEO to keep them in check?
Duker, do some research, the Fed is NOT owned by the US government.
BUT, the Board of Governors of the fed ARE appointed by the president and confirmed by the Senate.
“Federal is 60%”
No, total governments 60%. Various states plus federal. States are not federal subsidiaries.
That’s the theory, reality reveals something else.
And it has the authority to set a price and force people to sell at that price, regardless of loss. It is part of the government.
Another liberal who fails reading comprehension. ” The company [AEMO} is 60% owned by the Commonwealth Government, as well as the state governments of the Australian Capital Territory, New South Wales, Queensland, South Australia, Western Australia, Tasmania, and Victoria.
If you own 60% you control the company. This is a government enterprise.
The logical endpoint is nationalisation. Government ownership of electricity production because no investors see a reason to do so. Which means higher prices.
And hugely (or is that hughly) reduced reliability.
What are they going to own when all the fossil fuel plants are unusable because of lack of maintenance and no fuel?
It won’t be just higher prices. It will be massively higher taxes.
“The logical endpoint is nationalisation. Government ownership of electricity production”
That was actually the starting point. All except one of Australia’s coal power stations were built and owned by state governments. Then they privatised, to varying extent. Qld generation is still at least half state owned.
An agency does something, but the government bears no responsibility.
Nick’s desire to deflect attention from his socialist paymasters is hitting ludicrous levels.
BTW. the only reason there is a crisis in the first place is because of policies put in place by you socialist/greens.
Pull the other one Nick. It ha bells on it.
The board of AEMO has a green tinge. These people appointed the current CEO – Daniel Westerman.
Drew Clarke Chairman of the board:
Tony Concannon:
There are others with engineering and economics expertise.
Westerman’s badge of honour is the UK grid – we will see how that holds up in the coming winter.
Well, Tony Concannon has done other things:
“He was an Executive Director of International Power plc (2004-11), previous Chairman of the Electricity Supply Association of Australia (now known as the Energy Council of Australia), CEO for IPR Australia and CEO Asia Pacific region for GDF SUEZ energy until Q1 2014.”
ESAA/ECA, of which he was chairman, is the body representing elec generators. And then there is
John Pittard
“He has previously held senior executive roles with some of Australia’s largest corporations, including NewsCorp Australia, Telstra, Pioneer International and Shell Australia, and has been a Director of a number of digital companies, including REA Group and CareerOne Limited.”
Trust Nick to take a totally blinkered view on everything.
Have you ever heard of root cause analysis?
It has everything to do with some generators being given preferential status to supply, and then to supply only when it suits them, and supply the amount which they cannot accurately predict in any sort of reasonable advance. This is Green driven policy.
Reliability of supply is given no thought as it would seriously impact on renewable generators. This is Green driven policy.
Green policies have impacted on supply of fuel and any sort of infrastructure related to fossil fuels.
And you choose to blame prices of coal and gas.
You are the sort of person who claims that “clean and free” gravity is doing away with the need for all these stinking dirty horses pulling the cart while you are going downhill. So after getting rid of three of the six, and restricting food to the remaining three, you blame the remaining horses when you cannot get up the next hill.
You have hit the proverbial nail right square on the head.
Nick is obviously not a businessman. He has no knowledge or experience in running a business profitably.
One need only ask why 5 minute periods. If, as Griff is fond of saying, the wind is able to be forecasted well ahead of time, then much longer time periods than 5 minutes could and should be used for the bidding periods. Something like 4 hours could be used.
Yet, as we all know, 5 minute periods give unreliables a vast head start in the race thereby penalizing those plants capable of constant baseload supply. This is a market prime for splitting into long periods of supply with bonuses for adding unplanned power and major fines for not meeting supply that has been bid and won. This arrangement would put proper emphasis on reserve capacities so that additional bonuses could be earned and limited fines assessed. Let the best man win and efficiency reign supreme.
How long before the UK in the hands of Bunter and The Princess follows this course of action?
Ban ice cars before EU Check
Ban gas boilers before EU Check
etc
Our problem is Boris agrees with the last person he spoke with – hence, the shopping trolley monicker.
But this should be read by all… especially Eric and Co
“How the green agenda fed the Grenfell disaster
Stephanie Barwise, QC for the families at the public inquiry into the Grenfell disaster, has said that the fire was the ‘predictable yet unintended consequence’ of a ‘laudable desire to reduce carbon emissions…”
https://www.spiked-online.com/2022/06/14/how-the-green-agenda-fed-the-grenfell-disaster/
You could argue the CCC has blood on its hands.
The UK has a Capacity Market, which pays generators to be available, I believe that the Australian NEM will introduce something similar.
This winter.
“Right now we see the market is not able to deal with all the factors thrown at it. Frankly, those factors are quite extreme”, Says the Chief exec of AEMO.
The major destabilising factors thrown at the energy supply market is government interference.
If state authorities allowed the market to function, there would be no energy crisis in Australia.
And there is the main problem area, the State Governments.
They privatised power stations and transmissions lines and pushed the Federal Labor RET
“They privatised power stations and transmissions lines “
Hang on…Eric is screaming blue murder about expropriation.
Nick is talking nonsense again.
The Australian constitution does not allow property to be confiscated without compensation. I reckon the companies could argue strongly before a court that is what is occurring. And directors are required by our Corporations Act, to act in the best interests of the company. Producing electricity at $400 per KwH and being required to sell it at $300 per KWH is arguably not in the interests of the company. Better to close it down.
As for solar and wind picking up the slack? Where I live, we have had very still cold and overcast days over the last week. We have solar and a battery because we could see this coming. BUT, given the current weather, almost nothing is being generated from our solar and the battery is certainly not being charged. Zero wind power as well. The solar farm over the hill is in the same state. So how much do we as a country have to spend to keep these unreliables backed up appropriately? And how long will the batteries etc. last in our current weather, noting it is pretty common winter weather? How will ordinary people be able to afford to heat their homes and even keep the lights on? Governments in Australia at least are supposed to look after the interests of all Australians not just rich, inner city luvvies who seem to be making a killing having their solar and wind investments subsidized by some of the poorest members of the Australian community.
Then of course there are the ethical and legal issues. As a company director, I have to report on Modern Slavery legislation with the aim of identifying and not using products from companies using such labor. Companies that breach that Act will ultimately be named, shamed and fined. That pretty much would wipe out for my company, any use of Congolese mined lithium and cobalt (mined by small children) and Chinese solar panels and lithium (Uigher involuntary (!) labour).
Government policies are totally contradictory. I foresee swathes of unemployment coming as any company with a brain either closes down or moves offshore. But I am OK says Nick, so nothing to see here!
“Nick is talking nonsense again.
The Australian constitution does not allow property to be confiscated”
I’m not the one talking about confiscation. That would be Eric. We have an electricity market with an independent operator and rules for participation. You don’t have to sell electricity at any price. But you have to abide by the rules if you want to sell through the market.
Nick, this is the funniest comment so far: “You don’t have to sell electricity at any price. But you have to abide by the rules if you want to sell through the market.” If you don’t you are liable for??????
Nick’s only mental skill is spinning ever more elaborate lies.
… and his pretty dizzy already.
“If you don’t you are liable for??????”
You’ll have to make your own arrangements. The market has rules. If you want to sell through it, you have to comply with them.
You haven’t once mentioned that you have examined the financial statements of these fossil fuel power plants. You have no data as to what their costs including taxes actually are. Yet you take the position that they are greedy profit seekers. Your bias leads you into believing the worst base motives of the power plant owners.
Does your believing that CO2 is an existential also a bias?
Do you agree that it is wrong for the government or any of its entities to force companies to sell their product at a loss !
Or do you think that is OK !
What if they turned around and told you to sell your house at 1/4 of its values.. bet you would be complaining like a leftist sycophant then !!
Companies were abiding by the rules..
.. now the AEMO has broken those rules.
That is the claim as the retard from the AEMO who put out your statement above.
So let me explain the issue so even a leftard can understand it.
The generators who can least do what is claimed is the Coal based generators that can’t meet a 5min window to ramp up or decrease to meet that window. The ones who can do it most are the darlings to the greentards the renewable generators followed by gas generators. Now our AEMO retard who made the claim didn’t clarify that and leftard MSM who like Nick to stupid or lazy to research just use the formula COAL = BAD so it must be the coal based generator that are bad actors.
So for a coal based generator not only don’t they get to do the supposed behaviour but they are wearing all the blame and then to top it they are the ones demanded to generate at a loss.
The coal based generators are a bit tired of being the whipping boy for a bunch of government civil servant retards and greentards like our Sarah.
Just because you don’t want to call it confiscation, doesn’t mean it isn’t confiscation.
Forcing companies to operate at a loss is confiscation, even if you can’t bring yourself to care.
Sounds like Australia has discovered the way to close down all remaining fossil fuel generation without accepting blame
“Independant” ? In so far as government policy allows.
I think it’s teal actually
Poor, poor Nick. He no longer knows the difference between past and future.
SA demolished its last fossil fuel generator with a massive, controlled explosion as a public spectacle. so much for that !
Well, the owner, Alinta, demolished it. Now SA’s electricity supply is much improved, and wholesale prices have gone from most expensive to mid-range.
Eskom, SA’s national energy provider has just announced more price increases. Although the prices at the moment are only slightly above the global average, they are almost double that of neighbouring countries. NERSA, SA’s energy regulator has stated that SA will have to deal with more price increases ‘with no end in sight’ because of the global fuel problems.
Can you actually provide some evidence to support the notion that privatization is the problem?
I note angrily that the new Federal Government is blaming the Coalition Federal Governments led by Abbott, Turnbull and Morrison and pretending that the crisis evident now began from 2013.
The Renewable Energy Target of just over 30 per cent was established by Labor in 2010-2011 with taxpayer funded subsidy incentives for private sector investment and penalising coal fired power stations by restricting their generating hours depending on the supply position of intermittent wind and solar installations and other penalties that now also include banks unwilling to provide loans to coal based businesses including power stations.
Electricity is one of many State Government responsibilities, they are also responsible for approving development applications and processing for new power stations, renewables installations, hydro power stations, etc. The list is long and covers most developments including mining and gas extraction. States privatised electricity assets owned by the people and pushed the Federal Labor RET transition.
The Morrison Federal Government made many proposals subject to State approval including most recently one gas generator for Victoria, two gas generators for New South Wales and one gas generator and one coal fired power station for Queensland. They also offered to underwrite the finance for the coal fired power station. So far only one gas generator for the NSW Hunter Valley has been approved.
However, the fact remains that no political side can claim to be blameless for this crisis.
The problem is that the insult of watermelon is apt. Socialism always involves coercion, and using a “democratic”, i. e. State program setting prices must have some method of enforcement.
“Why do I claim the Australian government has imposed a regime of expropriation?”
Well, again, it’s an AEMO decision. But there is nothing new about suspending the market and moving to a calculated pricing mechanism. There is an established guide that they are following here. The methodology document is dated 5/7/2017.
Again the absurd claim that the actions of a government regulator have nothing to do with the government.
And it doesn’t matter if it is written in some document. Expropriation is wrong and will leave a scar.
AEMO is not a government regulator. It is a market operator, like the ASX.
Rubbish it’s a lot of bureaucratic dropkicks most of whom are appointed by the government. That is part of the beef with the regulator is it’s this quango that is NOTHING like the ASX. The ASX is itself a listed company and subject to all the normal company rules.
So now your research who does AEMO answer too?
AEMO’s governance page is here. You can see the usual set of bios of members of the board etc. The board is responsible to the members. You can see a list of them there too. It includes just about anyone who has dealings with the NEM.
ROFL walk to step 4 and step 5 of your own link .. exactly what do you think you get. Now go look at ASX board appointment … OWN GOAL TO NICK 🙂
Step 4 and 5 guarantees you get a bureaucrat … YES MINISTER.
AEMO selection is a disaster like all company boards you need conflicting views to make good decisions. AEMO selection means you get bureaucrat who won’t rattle the boat and know how to walk between both Liberal and Labor.
Is there a Nick assigned to every blog to just take up space?
I think he sometimes posts with the moniker Griff.
Oh, no way, no way.
Government is a lot like the mafia, low level players know what the boss wants, and do it without requiring direct, traceable orders.
That way the useful idiots like Nick can go on and on about how the don has clean hands.
God you’re dense. Typical Stokes distraction. It’s an entity controlled by the government, created to regulate an industry. In the US, we have the US Postal Service which is a separate corporation, but nobody imagines that it’s any less of an incompetent government bureaucracy.
A rose by any other name, comrade Stokes.
A better example is the Federal Reserve. It’s 100% owned by its member banks, but its Board membership is nominated and confirmed by the Federal government to which it ‘reports’. Contrary to the various fictions taught in school, the Fed exists only to provide its members the benefit of having a legal monopoly on the creation of money in exchange for enabling the Federal government to issue vastly more debt than it would otherwise be able to do in a free market.
A truly stupid person could not come up with the elaborate lies and evasions that Nick uses.
Point taken, but it doesn’t put Nick in a better light. Better to be dense and wrong, than a master deceiver.
If they are operating under the aegis of the government then they *are* a tool of the government. You can run but you can’t hide.
Imagine the mafia showing you a document to justify stealing your house. What world does Nick live in that a document magically absolves theft of its moral consequences?
A totalitarian communist world where the needs of the state outweigh any needs of an individual. A world without any natural law, only the will to power. The only thing immoral is failure to submit to the power of government. Anything that the government decides is ipso facto moral.
I think it’s called the Law of the Jungle. The strong survive, the weak get eaten!
A bit different, I think.
Countries like Australia that are incrementally morphing into socialist totalitarian states tend to put government power behind undeserving weak individuals (not just Albo, here I refer to an endless stream of politically-favored designated victims), while oppressing the self-reliant and strong.
It seems from this outside observer’s point of view that the frog boiling process is nearing completion in Oz.
sounds remarkably like Putin’s Russia to me!
Communism/Fascism/Authoritarianism are all essentially the same in practice, benefits accrue to the elite and the masses suffer. The chief difference is what myths the elite group propagates.
Communists have all their elite in the Party and pretend to be building socialism, supporting workers internationally.
Fascists have elite both in government and in pseudo-independent industry (oligarch/cronies). They pretend to support a nation, ethnic group, or a religion (see Iran, Afghanistan). They pretend to have a collective for the particular group to the exclusion of out-of-group members.
Authoritarians don’t waste a lot of time preening their propaganda pretending that they have high principles. There’s a strongman, connected henchmen, and the masses.
Aussie elites are in the internationalist camp, approaching their destination of communism.
Russia today is clearly in the national socialist camp.
Shareholders in every business demand a reasonable Return On Investment, they do not risk their money to assist governments to crawl out of a deep hole they created for themselves as elected representatives of we the people, elected to govern in our best interests.
And adding to the economic vandalism taking place are the State Government orders for industrial companies to shut down operations when electricity shortages are expected, and despite the compensation paid by we the taxpayers via the State governments for loss of income no shareholder will tolerate interruptions like that long term. If I was a CEO under the circumstances I would have an exit strategy and be preparing to move the business offshore.
But maybe the governments are not worried, Labor signed the UN Lima Protocol in 1975 which was the beginning of the end for most manufacturing in Australia, the UN has marked our nation as developed and too wealthy so pass the wealth creation manufacturing activities to UN favoured developing nations, like China.
Here in the US, Biden has ordered refineries to start producing more gas, otherwise there will be consequences.
https://www.foxbusiness.com/politics/biden-threatens-oil-companies-emergency-powers-supply-inflation
ROFL I am going to laugh if the gas producers have “unplanned maintenance” as well 🙂
Gee, maybe if he hadn’t nix’d the completion of that pipeline, the refineries would actually have the crude to refine. Mind-blowing, I know.
Haha did warn you that you will have an interesting week 🙂
Well, I’m still posting 🙂
Only because they had to suspend the market … you have a few weeks to get thru yet 🙂
But the quality has not improved at all.
Well, I’m still posting
Unlike most climate activist sites, WUWT encourages a good debate.
Well said Eric.
And I hope you will continue!
WUWT unlike many sites does permit discussion of minority viewpoints. Unlike Ars or the Guardian which bans them or (Ars) piles on and votes them down to invisibility.
I mostly disagree with Nick but value his participation and value the site for allowing it.
I would also say that the mindless personal abuse that Nick sometimes gets devalues the site, and people should stop it.
sometimes ya have to jerk a dogs chain to get it’s attention
There are three possibilities here – Nick is insane, or he is an idiot, or he is a deliberate liar.
Refusing to recognize such people places the auditor into the same category.
Its simpler than that: he disagrees with you. And with me too most of the time. Get used to it.
The difference between us is that I understand the effects of free speech, and a lot of people here do not.
The value of open discussion and dialogue on a site like this is that erroneous ideas can be expressed. When expressed they can be discussed and rebutted. This happens to Nick, Griff, Lloydo all the time.
And sometimes Nick in particular can be correct and informative.
As JS Mill understood going on 150 years ago the free play of ideas and discussion in the end results in the refutation of error.
So the solution is not to insult Nick, Griff and Lloydo with childish insults. That does nothing. Personal attacks do nothing. Calling them stupid or liars does nothing.
What does something, maybe not for you but for the mass of people passively reading, is to calmly and factually refute what people say that is wrong. That is effective. What you are doing is self indulgent, infantile, and persuades no-one.
Do something effective, and stop regarding discussion as a way of relieving your feelings. Your feelings are unimportant. What counts is progressing the rational dialogue. There are no exceptions and no excuses to this. Its 150 year old political science, and its the basis of Western democracy. Learn and value it.
The problem is that they are ignorant, in the traditional meaning, of both engineering and management. You’ll notice none of them ever say “In my experience managing such and such”. Never made a payroll, never met a revenue commitment, never worried about customer service, don’t know about quality control.
What is the old saying? ‘Ignorance is bliss’ is a phrase first said by the famous British poet, Thomas Gray. These folks blissfully expound on things they have no direct knowledge of and expect us to take them seriously? They would be much better off asking questions of those who have training and experience rather than arguing the opposite position.
Ignorance can be cured. Insanity, idiocy, and pathological lying cannot.
The insane, idiotic, and, yes, even the liars are entitled to free speech. Just as much as those with who I disagree on some matters.
The difference between the first three and the latter is that reason does not work on them.
Oh, and by the way… “self indulgent, infantile” – do you own a mirror?
We feel more realistically virtuous for it !
unfortunately
You are lying through your teeth Nick… its disgusting to see.
AEMO is a government owned entity…. period.
And by suspending the supply contract system, they are now forcing companies to provide at less than it costs them to produce.
If you don’t think that is wrong.. you should move to North Korea where you will nothing and you will be happy.. or else.
Since the AEMO is 60% owned by the government and hence has to do whatever the government tells it to do, actions by the AEMO are government actions.
You are correct that there is nothing new about suspending freedom and have government decide what prices should be. It’s called socialism, and it has failed over and over and over again, but people who consider themselves smart are always willing to give it another shot. This time with themselves in charge.
Many British car companies produced cars at a loss for decades with socialist government help *call it subsidy.
Selling stuff at below cost price was great run by committees and government wonks.
Where are they all today? bankrupt or foreign owned.
Who owns that archetypal British company Bentley?
Audi
Maybe we should go back to basics: Steam replaced sail on the seas many years ago. Steam is expensive. Wind energy is free. But the ship-owners with no government coercion worked out that expensive steam was more cost-effective than free wind. All the same arguments apply to electricity generation, but government coercion has stuffed it up.
Bring on the blackouts. We went through this nonsense in the 1970’s and it was only when we had rolling blackouts the Government finally went and built a bunch of coal power stations. So if blackouts is what it takes for people to wake up so be it. By the way stock up on candles.
Excellent points! By going back to the beginning when things worked like they should- a time before
liberal policies screwed things up- you’ve clearly proven they caused the problem. The facts are
clear cut & can’t be twisted to blame you for their screw ups as they always try to do. What garbage!
I’d also stockpile anything needed in an emergency or think the gubmint may ban, ration, or confiscate. You have to stay one step ahead of the goons!
If you live near a major city I would advise watching out for roving mobs of socialists looking for free stuff. Too bad you don’t have a 2nd amendment.
I invested in commodities – mostly lead.
If you are a good enough shot, you should be able to recover most of the lead that you use.
You’re right. Now I have to invest in casting equipment. Good thing brass is reusable with just a little work.
Uh oh! Red flag!
From my cold dead hands! First they have to get past the Dogs of War.
Australia (minus WA) needs to switch to a capacity energy market from its current energy-only market.
In a functioning market guaranteed capacity is satisfied by futures contracts. I suspect a government administered capacity market would be a disaster, players would game it by claiming imaginary capacity.
As far as I can make out, the energy companies have been producing a set amount according to contract but Australia’s been hit by severe cold weather and demand has exceeded expectations. It’s this unforseen shortfall that seems to be causing the problems – the spot price mechanism should have kicked in to cover the temporary surge in demand except for the price cap. Rather than industry greed it appears to be a government doing things on the cheap and forgetting that you usually get what you pay for.
I’d be interested to hear from someone on the inside, as it were, as to what the difference is between the price cap price and the preset contract price?
The same behavior will eventually be seen in California.
No one in their right mind will expose capital to fund fossil-fueled or nuclear electricity generation in California at the risk of expropriation by government fiat or constructive expropriation by the plaintiff’s bar.
I wouldn’t put a dime anywhere near California.
Investing in dispatchable generation located near (but not in) California might actually be a money maker.
It is too early to conclude that Nevada and Arizona are starting to come to their senses, but there are encouraging signs.
Nevada is still controlled by Democrats in all branches of government AND the voters approved a ballot measure sponsored by Tom Steyer requiring a minimum amount of “renewables” in the electric utility mix.
Arizona voters REJECTED the minimum requirement ballot initiative, also sponsored by Steyer, but the initiative language included “regardless of the cost” language put in by the Republican Sec of State of AG, I don’t remember which, so the voters UNDERSTOOD there could be hell to pay.
The politician who got that language in the Arizona initiative was defeated in the next election by massive Tom Steyer donations to his opponent and ad campaigns.
BTW, Steyer makes his money from “renewable energy rent seeking”.
Energy wise, the green dream means going cold turkey – and it’s going to be horrendous
Sorry, Eric, but it looks like competition and capitalism are on the way out in Australia, something I never thought I would see. This is a bad start on the road to Venezuela and other failed nation-states.
Australia like most Commonwealth countries, former members of the British Empire who still have the Queen as head of state, has always teetered on the edge of tyranny and statism, but mostly we seem to bumble through. I agree though that the last few years are extremely worrying. Zimbabwe was a commonwealth country, so freedom is not guaranteed, even if we’ve mostly done OK the last few centuries.
I don’t see any connection between having a Queen, as the nominal head of state, and tyranny, as tyranny also seems to be advancing outside the Commonwealth. I think the real connection is between the preponderance of ‘voters’ who are willing to invoke state force to coerce others to do their bidding and tyranny.
I believe the reference to the Queen was merely to define who is in the commonwealth and who isn’t.
Although Mozambique a former Portuguese colony with no connection to the Commonwealth became a member in 1995. Not entirely sure why or how this happened
You don’t have to have been a former British territory to join the commonwealth, nor is having the Queen as head of state necessary to join. There are a set of shared principles that the 54 member states have signed up to which has led to 4 countries being suspended (Zimbabwe withdrew from the commonwealth after suspension).
And the queen is part of the arch – mafia organisation surrounded by paedos, narcissists and green loonies, mostly wannabe kings paid for by rent seeking from hereditary crown lands
The reason the founders of the US Constitution considered Democracy to be the worst form of government ever invented by humans.
Direct democracy can work if the society is small and has a certain level of cultural homogeneity. When everyone mostly agrees on the big questions, the democratic process is sufficient to resolve minor disputes. But big, fundamental conflicts can’t be solved with a 50%+1 vote.
Australia…, has always teetered on the edge of tyranny
Teetered? look at what they did to the aborigines.
The Queen, or as I like to call the monarch anywhere, the head of the family of the last successful murderer, since all ruling families got their power through murder.
That is why American Democrats seem so supportive of Monarchy, they want a dictatorial government.
This ^
This news confirms the concept of “tipping points.” Not in the climate system so much, but in electricity supply. Keep promoting parasitic injection of intermittent wind and solar power, and watch what eventually happens.
Spot-on, weather-dependent generation and ‘dispatchable’ base-load generation are entirely different products supposedly competing in an unfair fake market.
Wind and solar could not compete, would not even exist, in a genuinely free open market.
I agree Chris, but one key problem in Australia is the Commonwealth/ State relationships and responsibilities. Our national government cannot compel a State to build any infrastructure if for political or economic reasons they don’t want to, and the Senate has blocked most liberal deals to get anything like dams or coal fired power stations approve.
So the system is not functional, never mind the policies involved. However one can only hope that following sufficient energy disruption, blackouts etc, that Labor will finally see through the net zero emissions nonsense and get a few more new generators built as the Coalition tried to, but were too gutless to push hard to achieve anything worthwhile. When the public finally finds out they have been conned into believing the climate change scam about CO2 being a pollutant, they will slaughter all guilty government incumbents, and about time too.
What happens is that loons like Nick will say that fossil fuel generators failed and crashed the grid, duh!
Fascism is a form of authoritarianism characterized by dictatorial power, forcible suppression of opposition, and strong regimentation of society and the economy
Eco-fascism. What Australia has.
Venezuela indeed! all that’s missing is a US emabargo on oil etc, confiscation of overseas assets and sanctions on the country so we can’t trade freely and all thats left is learning Spanish!
The sanctions did not cause the crisis. link
The international (not just American) sanctions were applied because the Maduro regime was being totalitarian, just like Marxists always are.
The misery in Venezuela is on the Venezuelans, not on the international community.
Yes, socialism is its own ‘reward’. Of course, IF our / your government actually believed socialism was bad, there’d be no need to sanction the Vens, would there?
The sanctions weren’t for being socialist. They were for things like expropriating the properties of American citizens and companies.
Yep. Nationalizing foreign assets.
You know, stealing.
You know, what the EW post is about.
The US isn’t buying Venezuelan oil, but all other countries are free too.
The Venezuelan government stole assets from American companies. Those companies went to US courts in order to seize Venezuelan government resources in order to compensate them for those thefts.
It really is amazing how communists try to rewrite history in order to justify their failures.
“The US isn’t buying Venezuelan oil” – now that is funny!
Up until fairly recently Venezuela was shipping oil to Russia for some imagined ‘debt’ thus circumventing US sanctions. Russia was then selling it on as Russian oil to, amongst others, the USA. It’s a funny old world ain’t it?
Which supports my point, that the US “embargo” was not hindering Venezuela’s ability to sell it’s oil.
Well I wasn’t disagreeing with you, just noting an oddity, as it were. The US position on not doing business with Venezuela or any country that did business with Venezuela (hence the Russian ‘debt’ scam – not business, just an old debt, honest!) may or may not have had an impact but the biggest hindrance on Venezuela selling its oil is that it isn’t capable of extracting very much on its own. Venezuela simply doesn’t have the skill or resources to pump much oil.
Because a dictator threw out the companies that built the oil infrastructure and rewarded his cronies and minions with high paying jobs in the industry guaranteeing that the industry would fail from the incompetence of his followers.
You know, the way the US bureaucracy is now failing the US citizens. Need to clean house in DC starting with the FBI and DOJ, rotten to the core.
If I owned a fossil fuel generator in the NEM I would hand the keys to the state govt and offer to provide maintenance and operation at cost price, plus profit.
Govts are getting a free ride, blaming those nasty corporations for high prices and blackouts, they have so distorted the free market that corporations only have one sensible course of action.
I wouldn’t offer to maintain it. They are the experts. Let them try to operate and maintain. In other words, Let the bastards freeze in the dark.
Also make them go and mine their own coal and gas 🙂
It’s all about the last mob’s delay denial and chaos-
‘Delay, denial and chaos’: Plibersek lashes Coalition’s ‘failed’ energy plans (msn.com)
Whereas all the clever climate changers like Ms Plibersek need do is bung in more cheap unreliables and connect them all up-
Wind Energy in Australia | May 2022 | Aneroid
Simples really.
What could possibly go wrong?
Right out of Atlas Shrugged!
Only switch off the inner city green seats and let the rest of us get on with life with no disruptions.
Now that I fully support … rolling blackouts should be restricted to the area of Teal and Green candidates.
We are in the hands of lunatics.
Good coverage by Jo Nova:
https://joannenova.com.au/2022/06/blackout-risk-in-five-states-continues-wholesale-energy-market-suspended-australians-told-to-use-less-electricity/
Yallourn lost 2 of its 4 generators- ~700 MW. That’s at least 10% of Victoria’s power demand. Not
having reliable generation & the YUGE storage- both battery & hydro- needed when Oz uses >500
GWh of energy/day will hopefully wake up people to the fact Oz is planning to jump off the cliff without a parachute by relying on unreliables!
Welcome to ‘greenouts’ and we have a new appropriate terminology-
Australia’s energy crisis thanks to ‘policy idiocy’ (msn.com)
Take a closer look at the AEMO media release today:
https://aemo.com.au/newsroom/media-release/aemo-suspends-nem-wholesale-market
“The current energy challenge in eastern Australia is the result of several factors – across the interconnected gas and electricity markets. In recent weeks in the electricity market, we have seen:
· A large number of generation units out of action for planned maintenance – a typical situation in the shoulder seasons.
· Planned transmission outages.
· Periods of low wind and solar output.[UNPLANNED, yet a known risk]
· Around 3000 MW of coal fired generation out of action through unplanned events.
· An early onset of winter – increasing demand for both electricity and gas. [UNPLANNED, YET ALSO A KNOWN RISK]
“We are confident today’s actions will deliver the best outcomes for Australian consumers, and as we return to normal conditions, the market based system will once again deliver value to homes and businesses,” he said.”
No MSM statement that I have seen mentions the above UNPLANNED yet clearly known risks.
Today’s “catastrophic market failure” occurred because governments bought the CC bogeyman tale hook, line and stinker, thus creating the conditions in which such a failure was inevitable.
Around 3000 MW of coal fired generation out of action through unplanned events.
That’s the bit the idiots and tame media don’t get or are wilfully denying. With dumping on the grid by solar and wind plus coal being told it has to go naturally the coal plants have been running on sticky tape and string to eke the last of the revenue out of them. Hence their breakdowns and just in time maintenance as it’s every coal generator investor for themselves now.
Normally peak demand is summer aircon whereby around 20% of generation/grid overbuild is required and yet here we have a polar cold snap exposing the growing coal generation fragility. Add to that Putin’s impact on global supplies with spiking FF prices and consumers face a perfect storm the AEMO has to dance around politically with an incoming Labor Govt.
They must know the real underlying score here so they’ve virtually thrown their hands in the air and reckon the power market is stuffed. (expect AEMO resignations and jumping ship to follow here). The demonised coal generators couldn’t care less as they’re not going to throw good money after bad rejuvenating individual boiler generator units.
That’s for the Labor Gummint to come begging with the taxpayer handouts if they don’t want increasing greenouts. All because the numbnuts ignored the very real costs of storage with their unreliables and they can’t fess up to that. Their State sponsored dumping by solar and wind has achieved what dumping always does. Drive out their coal competitor leaving gas to set reliable pricing and along came Putin. The climate changers and their MSM flunkies can’t spin their way out of this
You are the first I have seen realize and post it was the renewables generators who were doing the scam … and yes the coal generators are peeved on both fronts. I think the term in Australian slang is they have had a gut full and are starting by kicking heads.
I don’t buy the Putin angle. The US is responsible for the runup of fossil fuel costs. The US government virtually shut down domestic production to meet ESG investment targets the administration put in place by executive fiat. If the US was firing on all cylinders the Russian loss would barely be noticed. As usual, when the US sneezes, the world catches pneumonia.
The real situation is that there is not much future working in a dead-end industry – at least that is what everyone with suitable aptitude is told throughout their education.
The State owned utilities were inefficient but one of their benefits was as a training ground for apprentices and engineers.
If you know someone in their late teens contemplating a career choice, ask them where power station fitter/mechanic/electrician/engineer ranks on their career list.
How many high school career advisers have been inside a power station Let alone an underground coal mine?
Cut off the supply of qualified people to an industry and the demise of the industry is certain.
I was paid to do engineering risk reviews and two factors that become significant in engineering risk are lack of funds and imminent closure. Not many young people want to take up a dead-end job.
It’s possible there are no good guys in the room, similar to the California Enron thing in 2000. Stupid regulators create an almost free market with distortions that can be gamed by unscrupulous operators. Unscrupulous operators pushing the right buttons to make the game pay out. Powerless ratepayers getting screwed from every direction. Congrats to the system operators for choosing the ratepayers. It’s a tough call, but if you don’t want the government in your junk, keep the lights on.
This action is not for the rate payers, it is for the rent seekers, you know, the “renewable” energy providers who can’t provide 24/7.
One more step closer to Nationalizing the energy sector for Aus. They think things are screwed up now, just wait.
The best thing that could happen.
Then, as the rates continue to climb, the voters can congratulate themselves on picking the “right” (left) politicians!
According to Eric, it was the (evil greens/socialists/insert your bogeyman here) responsible for the Oz shortfall, when it was actually generators holding back power. Now, in a world class exercise in creativity and about face, AEMO is somehow negligent in suspending the rules that led to generators holding back power.
Well sure, its all part of a Agenda 21. George Soros, Never Trumper (insert your bogeyman here) conspiracy.
I can’t understand why scientists don’t respond to articles on this site; Its so rational, evenhanded, objective, and consistent.
Come back and visit us after you finish remedial physics, chemistry, statistics, economics and mathematics.
He finished Socialism 101 and figured that was all he needed to know.
Solar doesn’t run on moonlight Tony and that just leaves wind with your net zero Utopia-
Wind Energy in Australia | May 2022 | Aneroid
The more astute got out with a spate of ship jumpers last year mate-
Architect of Integrated System Plan to leave AEMO as staff exodus continues | RenewEconomy
But they’re always on the lookout for enthusiastic people like yourself-
AEMO appoints new Chief People Officer – Energy Magazine
How dare those evil capitalists refuse to operate at a loss.
If you try to understand why the coal generators are holding back capacity you might see it is the renewable generators who started this and how. The coal generators are going to kick heads until someone brings the renewable generators into line. Start with an understanding a coal fired plant can’t ramp up or down to meet a 5min window and you will get what the renewable generators were doing.
The owners of the power stations also own W&S assets.
Australia has more exporting capacity for coal and gas than what is in excess to need internally. So Australian energy users are fully exposed to the global price for these inputs.
The situation for gas was identified back in 2016 when the Gladstone LNG export facility commenced. It has been downhill from there. Coal is now at the same point apart from the lignite in Victoria, which has no export facility but the useful idiots in government are trying to shut down this fuel source.
I am reasonably confident that Australian States have energy ministers who do not realise that electricity in has to match electricity out plus line losses on a second-by-second basis.
In fact none of the system modelling for addition of intermittent generators was based on second-by-second generation-demand matching. South Australia went black before ANYONE involved in the supply of electricity realised system inertia was important.
Socialist central planning and the price variations caused by supply and demand simply do not get along….
Well they’re going to have to-
Government ‘stepping in and taking over’ Australia’s energy system | The Courier Mail
That’s not going to go well at all. How many days into the new government and what have they done?
Central planning and a modern/productive society don’t go together.
Thus ever from tyrants. So, is anyone in Australia ready to embrace my anti-CAGW panic political party, yet? Kick the liberals and labor and greens to the curb. I think it’ll be a political winner and make a climate realist the PM for years to come? The so-called ‘conservative’ Liberal party will come crawling.
The only thing getting rid of the spot market does is to hide the true cost of electricity.
Which is of course, why it’s been shut down.
So sad. This is a classic example of how socialists create a problem and then raise taxes and people’s cost of living so that they, the inventors of the problem, solve it by creating a new and much worse problem.Australia, the U.K., Germany, France, Spain, the US, Canada and many other Western nations falling into the green black hole.
Mostly government tackles situations by acting to achieve the lowest common denominator: punish the good to prevent it from showing up the bad.
Price controls have never been anything other than disastrous and counterproductive.
This is the beginning of the end.
“The smart shareholders will sell fossil fuel generator assets” – Exactly what the alarmists want, isn’t it?
“In time these companies will collapse” – See above.
So the solution will be to forego all maintenance operations to cut cost and lay off all the maintenance crews. Bring the operations crews to skeleton status and wait for the plant to trip off or the remaining crew to strike. Then close the whole thing down.
What can’t continue, won’t!
There is another possibility. Remote perhaps but still a possibility, depending on who runs AEMO. One of the factors that gets suspended along with the spot market is the priveleged position enjoyed by renewables. Under the normal rules, if a renewable operator is producing, effectively the market has to buy their output not others’, and the others have to turn off and wait for the renewables to stop again. Under this temporary managed regime, the coal operators may be able to say that they will provide baseload 24/7 at a fair price as they were designed to do; that their facilities will inevitably break down if they have to keep on being turned on and off. That ‘inevitably’ is oerhaps the key word here – a utility cannot be forced to generate power if it has broken down, and lets face it, its operator is fairly well placed to control when it breaks down.
This still won’t fix the problem fully until (a) new reliable power stations are built, and (b) the rules are changed to favour reliable energy over unreliable. But it could keep the lights on and it could help to get the rules changed.
75% of the electricity generated isnt sold ‘through the AEMO’s market mechanism’
Its done by longer term contracts directly between generator and user , either large scale industry or corporate group or the everyday retailer that most homes and small businesses use.
That is not the situation in Australia. The coal generators will bid blocks of energy at high negative pricer to undercut the intermittents. This is so they can keep the plant hot and connected.
When there is ample dispatchable generation, the price often goes negative. It was negative 12% of the time in Q1 2022. The coal plants kept producing at their minimum controllable output and forced the wind and solar to curtail output.
Voluntary curtailment of W&S has been a regular feature of the NEM for the last three years.
Bidding in The Australian NEM is very complex. They bid down to 5 minute intervals and can have up to 10 blocks of energy all at different prices.
Coal are willing to run at a loss through the middle of the day in the knowledge that they will be scheduled in the evening peak if bidding just under the cost of gas. That means they recover the notional losses.
So they run at a loss to keep their facilities hot while subsidized wind and solar, or as I like to call them, unnecessary and non dispatchable electricity suppliers make money for otherwise useless “generation” capacity.
The disruption is due to duplicated excess capacity provided by wind and solar, not due to any fossil fuel generation capacity.
“Under the normal rules, if a renewable operator is producing, effectively the market has to buy their output not others”
Just untrue. There is mo such rule. Renewables win out because they have no marginal costs, and so can undercut those who have to pass on fuel costs. That is just an economic advantage, and would be present in any selling arrangement.
Renewables have no marginal costs? 🤣🤣🤣
Renewables are so heavily subsidised, they can bid negative prices and still be profitable.
Directors have a mandated responsibility to creditors, employees and shareholders/owners to forecast insolvency and have administrators appointed. Any generator producing with negative cash flow under the present price cap should simply call in administrators. The administrator’s advice would be to stop operating at negative cash flow until you can get more favourable terms.
Australians all, let us a pray for wind and sun. Or maybe Albo can just order the wind and solar farms to produce more. He is the one to blame, after all, he fixed Global Warming. I fear he has overshot and Australians are now suffering a dose of Global Cooling.
In the face of catastrophic Global Warming, who could have predicted that there would be no sun and no wind over Australia rendering all those expensive solar panels and wind turbines USELESS.
Lucky Australia has Twiggy Forrest to sort out this mess. In a few short years he will be producing enough green hydrogen to satisfy the world demand for gas.
Thats not happening , as the generators are making large profits
AGL the largest generator
‘AGL Energy Limited (AGL) has today updated its earnings guidance for the financial year ending 30 June 2022 (FY22) as follows:
A large power station under maintenance has affected that number – but of course it can divert the coal or gas ( mostly on longer term supply as well) to another of its plants that will be running longer
its the retailers who are most exposed by the spot market who can and do go bust. When you realise that 75% of electricity isnt sold in the daily spot market you will realise how little it affects the big profitable generators
Not all generators are like AGL. Generators using diesel fuel would be highly disadvantaged at $300/MWh with the present price cap.
In the last 30 days, diesel has supplied 28.7GW averaging $554/MWh. That would give them a small margin over the cost of fuel. A cap of $300/MWh would create negative cash flow.
There is already a reserve trader arrangement and they have been used before.
https://aemo.com.au/-/media/files/electricity/nem/emergency_management/rert/2021/rert-end-of-financial-year-report-2020-21.pdf?la=en
The average price for the times used in 2021 was $4524/MWh and $11,745/MWh.
If you have an emergency diesel generator that can provide reverse power flow then you are not going to be happy to send power out at a loss when there is already a mechanism in place to be reasonably compensated for the annoyance of turning it on and refuelling then having the additional servicing costs.
Some businesses offer reserve power capacity through on-site generating plants by curbing their normal production so they can help keep the lights on for the whole grid. That can come at a high business cost. Same thing for load shedding. Aluminium smelters would make money at $300/MWh for not taking electricity but if the pots freeze then the costs will be in the hundreds of millions so they cannot sustain being switched off or in “sleep” mode.
The current wholesale gas price is up around $40/GJ so OCGTs would not make money at $300/MWh. They have averaged $569/MWh over the past 30 days so their margin is not that good.
No power station buys quantity gas at the ‘daily wholesale price’ They would have longer supply contracts and only part at the spot price. Then theres hedging to cover if prices rise which also comes at a cost too.
The real problem is the loss of several large coal generators over the last few years and even the widespread solar usage cuts baseload during the day so the baseload stations are on a daily cycle they arent suited for
Duker says “The real problem is the loss of several large coal generators over the last few years and even the widespread solar usage cuts baseload during the day so the baseload stations are on a daily cycle they arent suited for.”
+42
Isn’t it curious how in the past there were only major outages when supply was disrupted by bushfires, cyclones, storms, etc. Now, we face major outages in perfectly normal weather. The only major changes have been introduction of large quantities of wind and solar, and removal of coal power stations. You don’t have to be a rocket scientist to work out what has gone wrong.
Remember: You can’t replace reliable energy with unreliable energy and still have reliable energy.
No one is asking the obvious question – how can a battery make money on price arbitrage when the price is fixed?
I wonder if all those rooftop solar panels with be getting the price cap for their export? Retailers paying $80/MWh for rooftop export are getting a bargain right now. Might keep them afloat.
They dont . They get paid for doing nothing as ‘standy by reserve ‘. Remember $300 isnt for all day every day its probably only a few hours at peak time , overnight it drops considerably
There seems to be an opinion from some sectors that if the energy producers won’t play ball then the Government should just step in and seize the means of energy production.
Ya! Screw you big industry!!!!
Except… having told every man and their dog that Solar = Good we now have many members of the public using their roof space to become energy producers.
Why – if we follow some of these arguments to their logical conclusion – are these roof top producers not being asked to produce more power to make up the shortfalls and if they cannot, what is to stop the government stepping in and seizing control of their homes?
Remember, there is no government created problem that cannot be made worse by adding more government.
Yes. They are woefully uninformed. But heh they will eventually wake up, like those people with solar panels and a big battery who thought they would outlast few days without power. It was gone after 1 day and even when the sun came out couldnt recharge from flat – only a grid supply would do that !
Acquisition by the Commonwealth of Australia and compensation.
The Federal Government can acquire the property of others under The Constitution Act section 51(xxxi), “The acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws.”
This section does not mention compensation, merely
just terms” which in practise means that a big enough matter is likely to end up in a Court of Law with Judges determining the meaning on “just terms.”
We (a Joint Venture between Peko-Wallsend and EZ Industries) experienced compulsory acquisition without compensation when in the 1980s the Commonwealth rendered valueless a number of Mining Leases and Exploration Licences validly granted by the Commonwealth. By creating a national park and offering the United Nations a share of our sovereignty through the world heritage process, we were left with only a piece of law that prohibited all operations for the recovery on minerals in about 20,000 sq km of prime mineral land in the Top End of the Northern Territory.
The records of the day fail to show mention of compensation. It is feasible that Australia lost billions of $$$ of mining income by this act of bastardry.
Our High Court, the Full bench, heard some of our case and decided that it introduced fundamental matters of governance that were too deep to allow any judgement. Case closed.
………………………
Anyone here who imagines that the Commonwealth of Australia will not or cannot acquire the existing means of electricity generation without compensation needs to study history more closely.
Geoff S
The saddest part of this is that the Aussies just held an election, and they voted to give the greens more power, rather than cashiering them. Well, maybe next time, if there is a next time.
Coming to Europe in 3, 2, 1,…
This would not have happened when the power companies were vertically integrated. The amount of money being spent on consultants and systems to create these energy market structures never mind the cost of the renewables and all the grid reinforcements to handle them is mind boggling. It was obvious 15 years ago that this grand experiment would end in tears but no one listened, and here we are.
A well government regulated vertically integrated system that is publicly owned will operate efficiently and avoid duplication. If the government disallows costs to the extent that the stockholders can not make the returns expected on their investments, the regulators and politicians will feel their ire and the system will be very much like what is going on in Australia.
“… in the hands of corrupt political opportunists. In time these companies will collapse.”
That is the greenies goal,
This is truly appalling. Even Australian politicians cannot be *this* wrong about energy policy in good faith. I am choking with rage.