Results 736 to 750 of 2079
-
18th June 2022, 08:09 AM #736SENIOR MEMBER
- Join Date
- Feb 2015
- Location
- Hobart
- Age
- 78
- Posts
- 190
-
18th June 2022, 10:39 AM #737SENIOR MEMBER
- Join Date
- Jun 2009
- Location
- Elizabeth Bay / Oberon NSW
- Age
- 76
- Posts
- 133
I'm going to play Devil's Advocate here, so please don't go ballistic.
If the spot price of a power generator's inputs doubles or quadruples and their daytime output is crippled on a sunny day because rooftop solar has taken most of the load, what do they do? Company directors are required by law to act in the best interests of their company, not the customers', although the second follows the first. On the other hand, the government can't allow the economy to shut down due to a lack of power, so their only solution at present is to subsidise the power stations' losses. Blind Freddy could have seen the effect of solar rooftop on the daily demand curve which has weakened generators' profitability but the Ukraine situation is a Black Swan. Good engineering practice demands consideration of, and solutions to, catastrophic failure. Maybe AEMO war-gamed this current chaos, who knows?
What the feds have not done over the last twenty years is to frame energy transition policies which would provide certainty to both ends of the market. Only WA ensured there were provisions in place for LNG operators to supply their intra state needs. So NSW is planning to endanger the best agricultural land in the state to add capacity in a country which is the largest exporter of LNG in the world. Neither "the market" nor "technology" can solve the problems alone. We need the decision makers to heed the experts.
mick
-
18th June 2022, 04:54 PM #738
Another way of arguing towards the same scenario as Mick, is in terms of classical economics as originally defined by Adam Smith, and later refined by Maynard Keynes and Paul Samuelson.
For almost 100 years from c.1900 the electricity industry was regarded as a natural monopoly and, to ensure equity, that monopoly was placed firmly in the hands of government agencies. It worked quite well, but eventually fell foul of the righteous right's mantra that "... the private sector can do it better ..." and the electricity agencies were largely privatised. This would have been fine if you had even competition. Mick's friend Blind Freddy would confirm that in no part of the electricity industry is there (near) perfect competition. Mainly you have oligopolies dealing with oligopsonies, each looking for an opportunity to shaft each other, or to join forces and shaft the end consumer - poor old Muggins.
The oligopolies and oligopsonies, most players are both, include:
- Producers of raw materials - gas and coal companies,
- Electricity producers,
- Electricity distributers,
- Electricity retailers.
- Poor old Muggins at the end of the line is the only price taker.
The gentlemen of the righteous right absolutely fail to achnowledge that government control over such an imperfect market is necessary or desirable. "The invisible hand of the market will solve everything!". The Americans have traditionally had privatised "utilities" but have usually had very tight regulatory controls to ensure no one exploited their monopolistic position. Occasionally they have relaxed their controls, usually with disasterous consequences - eg the California electricity fiasco 20 years ago.
As Blind Freddy says "... The only thing that you learn from history, is that you learn nothing from history".
-
18th June 2022, 05:06 PM #739
Sit Back, and Watch
With the current electricity shenanigans - as defined by the dictionary - there is absolutely nothing that Muggins can do except be shafted.
All the other players in the market have a vested interest in ensuring that truth never enters the public arena - something about "self incrimination". But I must be naive as I do not know how an innocent person or company can "self incriminate".
If we start with the premise that whatever we see in the media is someone's attempt to obfuscate or create fake news, then we will probably be somewhere near the truth. Perhaps there will be a Royal Commission in five years time.
-
21st June 2022, 11:17 AM #740GOLD MEMBER
- Join Date
- Jun 2005
- Location
- Helensburgh
- Posts
- 608
The energy market explained by Clarke & Dawe
CHRIS
-
21st June 2022, 11:36 AM #741
My wife was amused by the Clarke and Dawes skit: It seems nothing has moved on.
Regards
PaulBushmiller;
"Power tends to corrupt. Absolute power corrupts, absolutely!"
-
21st June 2022, 10:43 PM #742
-
22nd June 2022, 10:28 AM #743
The AEMO price cap is effective at curtailing prices. This is a snap shot from yesterday. Note that the spot price was below the cap in some states.
Spot market 21 June 22.PNG
The central figures in bold type under RRP were indicative of what the market predicted if there was no cap in place. The RRP prior to 1750hrs is what actually happened. The figures on the map were the live prices for that five minute segment. While the cap has improved market stability, we are not out of the woods just yet.
Regards
PaulBushmiller;
"Power tends to corrupt. Absolute power corrupts, absolutely!"
-
22nd June 2022, 12:36 PM #744
The energy market cap is due to be lifted at 0400hrs tomorrow (23/6/2022).
Regards
PaulBushmiller;
"Power tends to corrupt. Absolute power corrupts, absolutely!"
-
22nd June 2022, 02:07 PM #745
-
22nd June 2022, 02:57 PM #746
Graeme
I have toassume it is because there is more generation available. For example our second unit at Millmerran is back i/s following a scheduled outage. I know this because....I am the driver .
Just as an amusing aside, one of our senior personnel gave the following account as an analogy to the energy crisis using the ubiquitous milk market:
"I thought I would address the recent media coverage surrounding “rolling blackouts” using an analogy, to make it easier to explain to your family and friends.
The milk industry in Australia consists of 3 main types of milk:
- Cow milk
- Soy milk
- Almond milk
The milk demand in Australia is usually satisfied by a healthy mix of cow, soy and almond milk.
Lately, the price of milk has been increasing significantly, due to increasing input costs:
- Cows are getting more expensive…
- Soy beans are getting more expensive…
- Almonds have stayed the same price, but unfortunately there are not enough almonds to satisfy the massive demand for milk. In addition, almond production is sporadic and hence is not the perfect substitute for cow and soy milk.
Once the price of milk goes too high (above $6.74 on average), the market operator steps in and caps the price of milk at $3 to protect all us milk drinkers.
The problem is, that cows cost $4 and so do soy beans. $3 is not enough to cover the input costs of producing the milk.
Only the almond farmers can cover their costs at $3 a bottle.
So the poor cow and soy bean farmers can no longer cover their input costs, and hence decide to stop making it, placing even further pressure on the milk industry.
Now the market operator can force cow and soy bean farmers to produce milk, but only if there is a real risk of a milk shortage.
So a few phone calls later, and the market operator has summoned half of the cow farms and soy bean farms to start producing milk again, and nobody has to go without milk.
So the risk of an actual milk shortage should be very small, given the market operator performs their duties correctly and orchestrates milk production in line with their forecasted milk demand. The only risk I can see is if they get their milk demand forecast wrong, and didn’t summon enough cow and soy milk production in time.
So when the media reports on a milk shortage, just know that the market operator has the powers to force milk production, even if it is at a loss to farmers.
Hope that made sense, and feel free to follow up with any questions.
Happy milk-drinking "
I will leave it to you all to decide which producer is which.
Regards
PaulBushmiller;
"Power tends to corrupt. Absolute power corrupts, absolutely!"
-
22nd June 2022, 04:14 PM #747
Trouble being with this analogy, is that the electricity market is dominated by a handful of titanic oligopolies who are known to be Ruthless Bastards.
Consumers are also "price takers". There is no real competition to choose from.
Milk, according to my son just now (he works in IGA) has 41 suppliers and distributors in Canberra ALONE. On the shelf (their shelf) are 24 separate milk brands/products (edit: I added products, as he said the milk choices tend towards being a bit esoteric, but "milk" it still is)
When I buy power, I get to choose from Origin or ACTEW. Both are notorious price gouging usurists.
There is no choice.
Shopping around isn't a choice. There is no market.
The genie needs to be stuffed back into the bottle and electricity generators and distro must be government once again. Power is a natural monopoly. The "free market" and "market competition" mantras are a fraud.
-
22nd June 2022, 05:45 PM #748
-
22nd June 2022, 06:36 PM #749
WP
I take your point, but it was supposed to be a light hearted analogy intended for those ignorant of the energy market rather than the cognoscenti that frequent this thread. Also when deregulation of the milk market occured many farmers went out of business thanks to the big retailers. Gouging can come from both directions. I am envious of your two choices for power. We have one: Take it or leave it (same with phone providers).
I concur that the electricity market should not have been privatised and have stated this myself on more than one occasion (two?), but I have certainly pointed out that it will never happen. No government has the money (they spent it as soon as they got it) and certainly no one has the inclination. There is however a big case for revising the rules. Quite how that is done and legislated I don't know.
Regards
PaulBushmiller;
"Power tends to corrupt. Absolute power corrupts, absolutely!"
-
22nd June 2022, 06:53 PM #750
WP
I guess that, reluctantly, I should point out that the cessation of the competitive market was squarely aimed at the wholesale market. Any skullduggery by retailers would be a separate issue.
Regards
PaulBushmiller;
"Power tends to corrupt. Absolute power corrupts, absolutely!"
Similar Threads
-
qld electricity market confusion
By weisyboy in forum NOTHING AT ALL TO DO WITH RENOVATIONReplies: 7Last Post: 5th February 2008, 10:15 AM
Bookmarks