Getting a better Energy deal - WHAT A JOKE!

[Bushmiller]

I believe one of the mistakes made by governments is to rest on their laurels. My knowledge of the power industry is mainly in NSW and QLD with a little information on the other states. It seems that at some time they all formed a government owned corporation to supply the energy demands of their state. They actually did this reasonably well, as long as you ignore the inefficiencies of government owned bodies. They united the power stations and provided reliable energy, which was the primary concern. In NSW, for example, the government then embarked on a range of new power generators and built twelve modern power stations (or added to existing stations). All were 660MW units: Two at Vales Point, four at Erraring, four at Bayswater and two at Mount Piper. These were superb units, built almost with no regard to cost and easily the largest in Australia. The last one was built in the mid eighties. So all of them are now around thirty years old and wearing out. They have not continued updating the equipment.

In the mid nineties, the NSW electricity commission began the process to make these stations available for sale, but it did not happen. Now it has. The governments did not want to spend money on new stations and they wanted private enterprise to buy the old stations and undertake new projects. What they missed was that a power station is expensive to build and it takes a long time as Fletty said. They also missed that private enterprise, if it was going to invest, needed to have a degree of security. We saw this particularly in Victoria where stations sold there were given guarantees of income. It wasn't truly private or into the true spirit of a competitive market. I think the stations were sold for a song in the end and this was partly because they paired up stations and sold a good one with a dog. Eg. Bayswater and Liddell.

At the moment only a very brave or even foolhardy investor would commit to the Australian market.

The last thermal stations were built in Queensland between 2001 and 2005. Two units at Callide (C station), one unit at Tarong North, two units at Millmerran and one unit at Kogan Creek, which is the largest individual unit in Australian at 750MW.

These QLD stations are all very modern, being supercritical stations, and the only stations of this type in Australia. Supercritical means that the steam is heated beyond the point where the density of the steam equals that of the water. The pressure is 24bar compared to 15.8bar in conventional units with a drum boiler. However they are still thermal coal-fired stations and emit greenhouse gases.

I can't see any company building a new coal-fired station. The existing stations will surely be run into the ground until they become redundant and superseded by something else: Arguably this is quite a distance into the future. I see that I have gone off Brett's original topic, but is does provide some background information as to how we have arrived in a competitive market with the generators we have and possibly why the retailers behave the way they do.

Regards
Paul

[FenceFurniture]

I see that I have gone off Brett's original topic, but is does provide some background information as to how we have arrived in a competitive market with the generators we have and possibly why the retailers behave the way they do.

All good Paul, and thanks for your various insights.

I read in a News article yesterday that the ACC forced some of the retailers to reveal their margins which were "going along at a pretty good clip of 5-10%, mostly 8%". That doesn't particularly sound like good margin to me, but more importantly I have to wonder why we need SO many retailers. I have previously made the point that they must surely have a fairly precise set of figures to work with and make a profit, so if there are as many as we do indeed have, there is only a certain amount of competitiveness that is viable. Then, in what I think is a direct result of that, they all work their formulae backwards and make it different, just to be bloody different! This just adds to the confusion grossly.

Then there are the handful of retailers who must surely rely on Suckers. One that I can think of (but won't name) is consistently around 50% more expensive than the cheapest on offer. Why would anyone in their right mind sign on for a deal like that?

I was doing some numbers for someone the other day and for the same kWh consumption (peak and CL1) the yearly prices were:
$2995 (but unsurprisingly the FIT was rubbish at 6.71c)
$3030 (with an average FIT of 11.6c)
$3052 (no FIT at all)
$3059 (big player retention rates)
$3120 (big player retention rates)
$3284 (*big player with good rates/discount but sub-standard FIT of 9c)
so that lot are all reasonably close to each other. Then there was a jump to the $3½ grand mob. This holds most of the big players like AGL, Origin, Energy Aust
$3404
$3603
$3646
$3653
$3658 (*same big player with smaller discount but well above average FIT of 17c)
and so on right up to $4409.

Now I get that the way each individual uses their elec will affect these numbers, and also that some of the sca schemes have been designed for the best FIT and will have poorer discounts, and that means buyer beware, but again I cite the example of my computerless pensioner mother.

Speaking of which, it's about time I got on the case for her......but my gawd that's going to be tedious getting the info.....

[woodPixel]

Clean Energy Target dumped by Coalition in favour of Malcolm Turnbull's new plan, a National Energy Guarantee - ABC News

More government interference and oversight.

That will fix the problem.

Doubt.....

[FenceFurniture]

I must be missing something - is there any provision for new power generation? All I can see is that "existing power stations may be kept running longer" and "Mr Turnbull says solar, wind, coal, gas, batteries and pumped hydro will all be part of the energy mix."

Well, yeah, big deal, they already are. And.....?

[swk]

I must be missing something - is there any provision for new power generation? All I can see is that "existing power stations may be kept running longer" and "Mr Turnbull says solar, wind, coal, gas, batteries and pumped hydro will all be part of the energy mix."

No. there is no provision for new power stations. The magic market rules are (have been since the late 1990s) meant to send price signals to investors and they will jump in to build new stuff where an opportunity exists in the market.
And this market always had a chance of failing and it has. The structural rules in place mean there wont be any big coal, gas or nuclear stations. I think we have been over this enough times to understand now that no big investments (ie big power stations of what ever type) will be made by private industry in the coming years. The only alternative now (if big power stations are truly needed) is for the federal (or state) government to stump up and build one (some?) themselves. Even then that will take years and will be too late.
The only energy infrastructure which will be built are the cheaper,smaller renewables and if something can be done about the gas prices maybe some small gas turbines. This will happen at a lower level than it could be because even though the coalition is trying to hold them back, there is still some money to be made by these types of generation. But the long term integration of them into the system (which needs to happen sooner or later) wont be a priority.
My quick take on it. The coalition have kicked the can down the road, again. They are only offering “solutions” which will take them to the next election.
“…requires retailers to use a percentage of electricity from so-called dispatchable sources such as coal and gas, batteries or pumped hydro…”.
Is no long term solution at all. The existing dispatchable stuff which is getting old will be withdrawn from the market anyway (just like Liddell was) because it is old and clapped out. The existing generator owners wont change their long term plans in any meaningful way*. When the amount of “dispatchable” power falls below the “required” percentage, what then? Either the remaining old stations will be there and charge significantly more (because they are not in competition any more, the retailer is required to buy their power and they’ll probably need to spend a fair bit to keep old plant in service) or, less likely, someone will step in with some new middle size plant which will also be expensive as they need to recoup their capital costs much more quickly than normal (and the retailers will still have to pay a premium for the “required” power which they could supply). This wont be a path to cheap power at all.

*The last few might hang on a bit longer than planned if the requirements for dispatchable power drive the pool price up sufficiently.



I had a look back and we covered these self same topics backin 2015 in “The Great Energy Debate” thread, so nothing changes, the can just gets kicked down the road. This is the classic case where a problem develops over multiple years and will take multiple years to solve, but the political cycle is only three (ish) years so pollies cant/wont/are not able do anything of substance.
SWK

[swk]

AEMC - Expanding competition in metering and related services

Meters -

Just for interest I went back to my contacts and found out some interesting info.
What I am going to write is correct for SA, but as all the states operate under the National Electricity market rules (from AEMO) it should be very similar to the other eastern states.

Types -

Meter types 1-4 are smart meters of varying capacity. They can record power consumption over short time periodsand can communicate the data back to some where.
Meter type 5 is an interval meter (like the smart meters) but it cant communicate and must be physically visited for the data to be down loaded
Meter 6 is the old fashioned type which just records a simple running total and must be visited to be read.
Type 7 is a “meter” which doesn’t have a meter(!) That is, it is a supply with an agreed charge (an example might be for council streetlights)

Since 2015 there has been a rule change which allowed more competition in metering services. This is coming into definite effect on 1 December this year (also true for the other states as well, I believe). Basically any new meter or replacement meter can be owned by the retailer or some third party. In SA the distributor has declined to continue with metering services. All old meters will be owned by the distributor until they are changed, then the retailer (or someone else) will own them. Old meters will be replaced whena customer changes retailer * or the meter breaks down.


*I don’t know what will happen when that customer changes to a second or third retailer, but it could be interesting. J

So, my experience from 12 months ago was AGL pre-empting this rule in an attempt to get their own type 4 meter in place of my (the distributors) original type 6.

Regards
SWK

[crowie]

It sounds like you should contact the Energy Ombudsman, especially if you are being forced to pay more because you can't use your panels (or use them properly). If that doesn't get any action in a month then you might find that another energy co sending them a "cease and desist" notification will stir them up a bit.

Time for hard ball Peter.

I may need one of your letters again please Brett, thank you, Peter

[Bushmiller]

A correction to my post #241, which I can no longer edit:

"
These QLD stations are all very modern, being supercritical stations, and the only stations of this type in Australia. Supercritical means that the steam is heated beyond the point where the density of the steam equals that of the water. The pressure is 24bar compared to 15.8bar in conventional units with a drum boiler."

The pressures are 240bar and 158bar!! Quite a difference. Or 24,000KPa and 15,800KPa if you prefer.

Regards
Paul

[FenceFurniture]

What do we think? Will it work? Is it a fizza? It seems an extraordinarily simple proposed solution to a complex problem.

I've read a few people's opinions and nobody seems to really be able to call it one way or the other. Of course I am in no real position to call it one way or the other, but this policy is a mere 8 page document, which can be summed up in two lines by:
"retailers have to contract to buy a certain amount of dispatchable energy,
and a certain amount renewable energy that has the overall effect of reducing emissions"

None of the "certain amounts/levels" have been defined. It really is very hard to see how that is going to click magically into gear and result in "no blackouts, less emissions and lower prices". A Trifecta, as Stephen Long describes it.

It seems way too simple. If it really is that easy why didn't someone - anyone - think of this before (a decade ago)? As far as energy production it seems to be relying on "the market will look after itself".

Just looking at the first part "no blackouts" - it's very hard to see how the retailers can control that without the introduction of new dispatchable power sources. Smart Meters/appliance control is too far away for it to be effective, appealing to the public to switch off on hot days will be, I suspect, like pissing in the wind. ("I just spent $20k on this AC for hot weather, buggered if I'm not going to use it - everyone else can turn off").

I'd like to be wrong because simple solutions are the best!

[FenceFurniture]

The market will certainly sort itself out for renewables (but they are not yet dispatchable until we have some large battery storage):
Small town of Glen Innes to become renewable energy hub scattered with wind turbines - ABC News (Australian Broadcasting Corporation)

[BobL]

FF asked me to post this "Cost of batteries is falling fast" into the thread.
https://www.woodworkforums.com/f271/g.../2#post2051728

[Dibbers]

more of the same if you ask me... not enough there for investor confidence IMO.

I love how a 50c a week saving is considered a good thing... when our electricity & gas prices have recently shot up by +20%, we're still at a massive loss... but hey, we don't want facts to get in the way of spin now do we?

The funny thing is, i think most Australian's wouldn't be as outraged by the price spike recently experienced if it actually looked like delivering a sustainable, reliable, renewables focused energy portfolio. Sure you'd still have a lot of people complaining and struggling, but you'd offset some of that with the environmental benefits...

[FenceFurniture]

Sorry to stray back on-topic but it will only be brief

This morning I received a call from Origin Energy (with whom I now have both accounts). They said "we have received a notice from AGL to send your elec account back to them".
"BOLLOCKS!" I said. "They're incompetent!"
So he had to transfer me to AGL so I could tell them not to do anything, and she had to transfer me to someone else, who got a pretty good roasting.
These bloody companies are so much in bed together that they can transfer phone calls between them . One wonders if they also share the same call centre.

I finally got off the phone (3 people later) and the next thing I know I get a call from the AGL Retention team. Well, after telling him that I knew this was not his fault personally, he got the bollocking of his short life. Finish up he mumbled something about taking me off all marketing lists and then he hung up as quickly as he could. Dunno why.



Yep, there's more. A minute later I got an SMS from Origin saying "can we tempt you to stay?" Fer crying out loud, haven't I just sorted this out?

This is beyond ridiculous, but I had to call Origin to make sure that my accounts were really truly ruly cross yer heart and hope to die staying with them because I just don't want any more cock ups. So they have taken me off their marketing lists as well, which means I have to be vigilant to watch out for rate changes in 12 months time.

No problem.

[ian]

What do we think? Will it work? Is it a fizza? It seems an extraordinarily simple proposed solution to a complex problem.

I think it will work

...this policy is a mere 8 page document, which can be summed up in two lines by:
"retailers have to contract to buy a certain amount of dispatchable energy,
and a certain amount renewable energy that has the overall effect of reducing emissions"

None of the "certain amounts/levels" have been defined. It really is very hard to see how that is going to click magically into gear and result in "no blackouts, less emissions and lower prices". A Trifecta, as Stephen Long describes it.

It seems way too simple. If it really is that easy why didn't someone - anyone - think of this before (a decade ago)? As far as energy production it seems to be relying on "the market will look after itself".

it's essentially what I suggested in post #102.

possibly the least expensive "fix" to SA's and the Eastern States' power woes might be to mandate that for every 10 MWh of solar and wind electricity bid into the market the bidding organisation must be able to supply 5 MWh of "dark time" reserve: battery, pumped hydro, coal generation. This should change the generator pricing equation enough to provide some measure of market certainty to the existing base load stations.

I note that my "dark time" reserve is termed " dispatchable energy" in the PM's "glossy".

In part the supply "problem" has arisen because the "zero cost" generators -- wind and solar -- have been able to hit the economics of coal stations for six. You can't run a coal fired power station that takes a day and a half to start or stop (or hours to ramp output up and down) if the return is less than the cost of generation. If you look at a solar farm like Royalla, you will see that the owner is being paid something like 18.4 cents per kWh, even if the actual wholesale price is around 5 cents per kWh.

Leaving aside government's (at least in NSW) unwillingness to invest in new generating capacity over perhaps most of the past 35 years, for the past 15 to 20 years, consumers have been encouraged to conserve -- you remember the Free low energy light bulbs handed out at train stations? and Turnbull's ban (in 2005?) on new incandescent light globes?
I have my own views on why the electricity supply situation has reached its current parlous state, in which China plays no small part.

[A Duke]

Sorry to stray back on-topic but it will only be brief

This morning I received a call from Origin Energy (with whom I now have both accounts). They said "we have received a notice from AGL to send your elec account back to them".
"BOLLOCKS!" I said. "They're incompetent!"
So he had to transfer me to AGL so I could tell them not to do anything, and she had to transfer me to someone else, who got a pretty good roasting.
These bloody companies are so much in bed together that they can transfer phone calls between them . One wonders if they also share the same call centre.

I finally got off the phone (3 people later) and the next thing I know I get a call from the AGL Retention team. Well, after telling him that I knew this was not his fault personally, he got the bollocking of his short life. Finish up he mumbled something about taking me off all marketing lists and then he hung up as quickly as he could. Dunno why.



Yep, there's more. A minute later I got an SMS from Origin saying "can we tempt you to stay?" Fer crying out loud, haven't I just sorted this out?

This is beyond ridiculous, but I had to call Origin to make sure that my accounts were really truly ruly cross yer heart and hope to die staying with them because I just don't want any more cock ups. So they have taken me off their marketing lists as well, which means I have to be vigilant to watch out for rate changes in 12 months time.

No problem.

Hi,
I hope you have a good stock of candles, with such competence you could need them.

Regards