Essay by Eric Worrall
Surprise – despite a political promise of cheaper power bills, turns out someone has to pay the trillions of dollars required to “transition” to renewables.
Electricity prices to soar as energy transition falters
Angela Macdonald-Smithand Jenny Wiggins
Updated Oct 10, 2022 – 6.40pm, first published at 2.19pm…
“Next year, using the current market prices, tariffs are going up a minimum 35 per cent,” Alinta Energy chief executive Jeff Dimery told the summit in Sydney, with disagreement from Origin Energy and EnergyAustralia.
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Mr Dimery warned Australia was “out of time” on putting in place policies to support investment in new firmed renewables capacity to replace the coal power plants exiting at an accelerating rate, worsening upward pressures on pricing.
“What cost $1 billion to acquire is going to cost me $8 billion to replace. So let’s talk about that and still explain to me how energy prices come down, I don’t get it.”
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It makes it harder to achieve the drop in power prices promised by Labor by 2025 in the run-up to the election in May, although Climate Change and Energy Minister Chris Bowen did not back away from that assurance.
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“It appears that some people think [the energy transition] will be easy and cheap, but I think most people in this room understand it’s hard and expensive and likely to drive energy bills [up] in the near term,” said Andrew Richards, CEO of the Energy Users Association of Australia.
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“If you look at the quantum of investment required … [estimates] look at anywhere between $US100 and $US120 trillion of investment necessary to effect transition by 2050. That is orders of magnitude more than the supply chain is capable of doing today.”
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Read more (paywalled): https://www.afr.com/companies/energy/electricity-prices-tipped-to-rise-at-least-35pc-in-2023-20221010-p5boif
Could it be nobody ran the numbers, before our politicians opened their mouths and committed to an impossibly expensive energy solution?
Note the $US100+ trillion is a most likely a global transition estimate, though this isn’t clear from the context.
The cost of Australia transitioning is around AUD $7 trillion by my estimate, much of that cost is battery backup. Though this estimate is just the cost of replacing current demand, it does not include the cost of providing additional electricity for a 100% electric vehicle fleet.
And of course, there is a real question whether the transition is even possible, given European solar manufacturers appear to be choosing to close their factories rather than face the prospect of using their own product to power operations.
It’s a good thing the sun and wind are free. Otherwise, Aussie power bills would be really high.
The end game is to take ALL your money and possessions. You will then be housed in a 500 square foot “free” cubicle. The electric grid will be unreliable at best, and unavailable most of the time. If you need electricity for any reason, there will be a large hamster wheel in one corner of your domicile, which will afford you a trickle of electrons, as long as you are running in the wheel. Just don’t overdo it, as your food ration won’t sustain continuous generation. And, any excess energy you generate will be shunted to others who chose not to turn the wheel (EQUITY, damnit!). Welcome to paradise.
No matter how cheap the cost of the generation of electricity by the renewables wind and solar, the use of wind and solar power will result in an increase in our electrical costs. The reason is because wind and solar power generation are unreliable and must be backed up 100 percent by an on-demand system. The cost of the on-demand power generation and transmission lines must be paid for regardless of the amount of renewable power used. If a power company needs $100 million to pay for the fixed costs of the generation facilities and transmission lines, it needs $100 million in revenue regardless of the percentage of power generated by renewables. If renewables generate 30 percent of the power, rates for the electricity provided by the on-demand power generation must go up, because the fixed costs of $100 million must be paid for. Renewables can only add to the capital costs (and expense) of generating electricity because the renewables add nothing to the on-demand supply of power and thus their capital costs are an added burden on the cost structure. While wind and solar may be “free”, the capital costs (and maintenance costs) are not and the fixed costs of the on-demand system must also be fully covered.
The only way that the renewables make economic sense is if they produce both enough electricity and produce it so cheaply that they can pay for their own capital costs plus the capital cost of the on-demand plants. Thus if renewables generate 30% of the power, their revenue must cover 30% of the fixed costs of the on-demand generation as well as their own capital costs.
This is not just theoretical. We have a real world example in Germany which has gone in a big way in the use of wind and solar to power their grid. Prices have not declined with the increased use of renewables and in fact are approximately three times what they are in the United States (13 cents/KWh (cheapest US) vs. 44 cents per KWh (Germany)). This resultant higher price level is based on the inherent economics of wind and solar power. Germany’s higher costs are not due to them not “doing it right” and in fact are due to the inherent unreliability of solar and wind.
In very broad terms, the three components of delivering electricity to a customer – power plant, fuel and transmission – each costs approximately a third of the total cost. This means that, broadly speaking, two-thirds of the costs of providing power are fixed and must be paid for whether or not the power plant is used. If a homeowner has solar panels on his roof and is able to generate all of the power he needs during the day, the full capital costs of the on demand generating plant and transmission lines must still be paid for. One might argue that the electricity generated by the solar panel allowed the power company to avoid the fuel costs, but that is not helpful because unless the power company generates and sells electricity it is unable to generate the revenue to pay for the $100 million in fixed costs. Unless the homeowner is completely “off the grid” and is never part of the power company’s demand load, solar power only adds to the total cost structure, and hence adds to the total cost of the electrical power system. The homeowner may pay less, but the system’s costs are higher.
Where’s my $275, Turtle?? You & the Italian citizen PM promised it before the last election!
He relied on his birth certificate not listing his father to ignore birthright to Italian citizenship that Section 44 of the Constitution does not permit. And legally he was in the clear on that basis.
But later as an MP around 2018 the Turnbull Government required all MPs to complete and sign the declaration required for candidates to stand for election to Parliament again, and he did, again ignoring his father copying the birth certificate. But that he knew who his father was, had travelled to Italy and met him and other family members, he appeared on ABC 7.30 Report to discuss a book about his life including his Italian father and family and how he searched for, found and met them.
Yup! I was going to write all that myself actually! lol
Good old ABC covering for him…even though technically, they outed him!
Statutory declarations require a signatory to be responsible for the content.
The Minister should have joined a circus, some makeup and there is clown.