{"id":257060,"date":"2023-05-12T13:56:39","date_gmt":"2023-05-12T11:56:39","guid":{"rendered":"https:\/\/climatescience.press\/?p=257060"},"modified":"2023-05-12T13:56:42","modified_gmt":"2023-05-12T11:56:42","slug":"perfect-insanity-australias-renewable-energy-policy-guarantees-blackouts-rocketing-prices","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=257060","title":{"rendered":"Perfect Insanity: Australia\u2019s Renewable Energy \u2018Policy\u2019 Guarantees Blackouts & Rocketing\u00a0Prices"},"content":{"rendered":"\n
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From STOP THESE THINGS<\/a><\/p>\n\n\n\n

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Australia\u2019s energy crisis was perfectly predictable and perfectly avoidable. Just over 20 years ago, sound engineering gave way to delusional ideology, obsessed with the notion that wind and solar would provide all the power we could ever need. The rest, as they say, is history.<\/p>\n\n\n\n

Over time it\u2019s getting harder to convince youngsters that Australia once had a perfectly reliable and affordable power supply. Explaining that it was deliberately destroyed by renewable energy rent seekers aided and abetted by a cynical political elite might take some doing, as well. For now, those implicated have been able to point all sorts of causes for Australia\u2019s power pricing and supply calamity, such as Vlad Putin\u2019s march into Ukraine.<\/p>\n\n\n\n

But one thing they can\u2019t blame on Putin is the deliberate closure and planned destruction of perfectly functional coal-fired power plants, like NSW\u2019s Liddell that until last week delivered reliable and affordable power (2,000MW thereof<\/a>) to the Eastern Grid for more than 50 years.<\/p>\n\n\n\n

In our last post, we noted that its closure resulted in an instant 80% jump in wholesale power prices.<\/p>\n\n\n\n

The other inevitable consequence \u2013 which will soon follow \u2013 is load shedding (aka \u2018demand management\u2019) and mass blackouts (aka \u2018supply mismanagement\u2019) every time the sun sets and\/or calm weather sets in, during midwinter and at the heart of summer, when demand is at its peak.<\/p>\n\n\n\n

We\u2019ll cross the team from Jo Nova and Eric Worrall for a closer look at the consequences of Australia\u2019s utterly insane energy policy.<\/p>\n\n\n\n

Vale Liddell coal: given away for nothing and destroyed by predatory capitalism and a screwed Green market<\/strong>
Jo Nova Blog
Jo Nova
29 April 2023<\/p>\n\n\n\n

Yesterday, for the last time the final turbine was switched off at Liddell Coal plant after 52 years of operation. The NSW government gave it away for free in 2014<\/a> \u2014 bundled like a McHappy Meal in with the sale of Bayswater Coal, valued at $0. Governments saw old coal as worthless, at least until 2017 when everyone saw the bloodbath when the Hazelwood coal plant suddenly closed and electricity prices suddenly rose 85%<\/a>. Then they started to panic a little \u2014 even Malcolm Turnbull (our Renewables lovin\u2019 PM) started openly pressuring AGL to sell Liddell<\/a> so it could keep running until his pet project the Snowy Hydro 2.0 could start.  Chinese owned Alinta turned up with $250 million dollars and was willing to put in a billion to repair the station<\/a> and extend its life up to 2030.  Despite that bonanza, AGL refused to take the money<\/a>. It was determined to run it into the ground and shut it down instead. Now it\u2019s determined to blow it up as well. The Demolition crew is already appointed for early next year<\/a>.<\/p>\n\n\n\n

David Archibald notes the insanity:<\/p>\n\n\n\n

The experiment is to close the Liddell power station in NSW and see what happens. Liddell\u2019s operator, AGL, has applied to the NSW Government to blow up the power station rather than leave it in a form that can be restarted. This is the military equivalent of burning your bridges behind you \u2014 the expedition succeeds or you die.<\/p>\n\n\n\n

Liddell\u2019s big value to AGL was not to generate electricity but to buy and sabotage \u201cthe competition\u201d<\/strong>
Like so many parts of the Western economy, the predators buy up the cheaper end of the market in order to destroy them. AGL are the largest single generator<\/a> in Australia. They own a portfolio of gas, hydro, wind and solar power, all of which will likely make higher profits with Liddell out of the way.<\/p>\n\n\n\n

The year after Hazelwood closed AGL profits launched up from $539 million to $1,600 million<\/a>.  No wonder they didn\u2019t want to sell.<\/p>\n\n\n\n

Liddell was worth more dead than alive<\/strong>
It shows how screwed our electricity market truly is when billion-dollar assets producing cheap electricity are better off destroyed. Hello, AEMO our energy market operator \u2014 are you listening? And ultimately, Hello Anthony Albanese (the current PM). He commands this ship of crazy rules. The market is just doing \u201cwhat makes sense\u201d \u2014 and generators are not rewarded for making cheaper electricity as much as they are rewarded for destroying it.<\/p>\n\n\n\n

AGL wouldn\u2019t sell Liddell because NSW electricity might get cheaper.<\/a> Oh the travesty?<\/p>\n\n\n\n

As I wrote in 2018, the analysts at JP Morgan were frank about AGL\u2019s strategy \u2014 let\u2019s translate their investor-speak: if AGL sold it to Alinta and Liddell kept operating, it might \u201cunfortunately\u201d keep electricity prices lower which would hurt all of AGL\u2019s other generators. We can\u2019t have that\u2026<\/p>\n\n\n\n

Selling the power station to Alinta would hurt the wholesale prices that AGL can charge for energy from its other assets, the analysts said, while also helping a rival that is determined to eat into AGL\u2019s market share. Operationally, Liddell and AGL\u2019s nearby Bayswater power station are supplied with coal from a single coal loader and are subject to a number of contracts that would need to be unwound.<\/p>\n\n\n\n

\u201cExtending (Liddell) would likely have a negative impact on wholesale prices, and therefore the value of the rest of AGL\u2019s generation assets; it would support the growth of a competitor in electricity retailing; and a separation from Bayswater would be complicated with the two assets intrinsically linked,\u201d JPMorgan said. \u2014 Paul Garvey, The Australian.<\/p>\n\n\n\n

Lower wholesale prices means \u201cgood news for customers\u201d but \u201cbad news for expensive retailers\u201d \u2014 like owners of renewable generators.<\/p>\n\n\n\n

How wiping out cheap generators makes all other generators richer<\/strong>
This, below, was the bid-stack of our national grid ten years ago. The AEMO (market operator) accepts every bid from the cheapest on the left up to the last bid needed to meet the current demand. All successful bidders are paid whatever the top successful bid was. By taking out the cheaper providers on the left, the whole stack shifts \u201cleft\u201d and higher bids must be accepted to meet demand.<\/p>\n\n\n\n

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Liddell is the third \u201cbrown\u201d supplier from the left. *( Not graphed: most diesel plants costing more than $350\/MWh because they blow the scale away.)<\/p>\n\n\n\n

The cross ownership of assets makes predatory capitalism possible<\/strong>
Once upon a time governments were meant to protect consumers from this sort of thing. If 20 separate companies colluded together to rig the market so they\u2019d all be better off but at the consumers expense, we\u2019d call that a cartel. But if one company buys 20 smaller companies then doing the same thing is just \u201cmanaging the portfolio\u201d. See how this works?<\/p>\n\n\n\n

On the Australian national grid there are three large conglomerate players who make most of our electricity (and who also do retail sales of electricity). AGL is marked in blue, and the market dominance is obvious \u2014 singlehandedly generating around 40% of the electricity required in our two most populated states.<\/p>\n\n\n\n

We wouldn\u2019t be in this mess if each separate power plant was competing in the free market to make a profit for itself and there weren\u2019t holy subsidies for intermittent green electrons too.<\/p>\n\n\n\n

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State of the energy market 2022<\/a> \u2013 Full report<\/a> ( PDF 12.94 MB ) page 205.<\/p>\n\n\n\n

Some are blaming the privatisation of an electricity generator \u2014 if you can call it that, when it was given away for free like a toxic frog. But the bigger crime was nationalizing our electricity market and issuing pagan commandments that we use our generators as giant weather changing machinery.<\/p>\n\n\n\n

But thank your central banker for keeping interest rates artificially low for years so the rich could do the takeover and merger dance to remove the competition.<\/p>\n\n\n\n

Last word to John McRobert:<\/strong><\/p>\n\n\n\n

With the closing of Liddell power station and other closures pending, we might as well cut back on our defence budget. Soon there will be nothing left to defend.<\/p>\n\n\n\n

Despite the courageous words of our Energy Minister Chris Bowen that there will be no power shortages \u2013 he who believes that climate can be controlled by legislation \u2013 the words of an old, sad song resonate: \u201cHello darkness my old friend.\u201d<\/p>\n\n\n\n

Vale Liddell<\/a>, and may those you have served so well never forget you.<\/p>\n\n\n\n

Jo Nova Blog<\/strong><\/em><\/a><\/p>\n\n\n\n

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\u201cA couple of hours after Liddell [Power Station] Closed, AEMO \u2026 Issued a Market Notice\u201d<\/strong>
Watts Up With That
Eric Worrall
2 May 2023<\/p>\n\n\n\n

Life without coal? Within hours of the\u00a0final closure of Liddell Coal Plant<\/a>\u00a0permanently removing 10% of New South Wales\u2019 baseload power, an electricity reserve shortfall notice was issued.<\/p>\n\n\n\n

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