Future of the Australian Electricity Market

[woodPixel]

These sorts of relative costs imply that in a year or so most of Australia's electricity will be generated by super expensive gas

Unless we nationalise it, or embargo our needs first....

[GraemeCook]

... Snowy 2 won't come on-line before 2027 (if that early), and the second link across Bass Strait will be even further in the future....

Not sure the latter suggestion would pass the pub test in Tassie.

My reading is that most people are so disgusted with the AER, AEMO and AEMC that the second link is unlikely to be built. Run a referendum now and the consensus might be to pull the plug on the existing cable. Most think it is a failure.

[Bushmiller]

Not sure the latter suggestion would pass the pub test in Tassie.

My reading is that most people are so disgusted with the AER, AEMO and AEMC that the second link is unlikely to be built. Run a referendum now and the consensus might be to pull the plug on the existing cable. Most think it is a failure.

Graeme

I struggle with how selective people in Tassie pubs, and indeed anywhere in Australia, can be. The AEMO, just to take one of the institutions but it applies to all the bodies you mentioned, have operated the market since the competitive market first began 25 years ago. All through these years Australians enjoyed dirt cheap electricity despite how the government of the day would constantly advise that electricty costs were escalating. During this period the generators battled to make a profit.

All businesses are entitled to make a profit: A reasonable profit that is and not a mega windfall. It is only in the last eight months that wholesale prices have gone ballistic. Indeed it is time to look closely at the "rules" as the whole playing field has dramatically changed. However, that has not been caused by AER, AEMO or AEMC. Probably, if we were being honest, we would say that a combination of circumstances, mis-management at governmental level and greed has sparked this dramatic change in the cost of electricity we are now about to experience. I say "about" to experience as many people, mainly those who are with the traditional retaillers (who had lengthy fixed price contracts), have not been significantly affected at this point. It was the opportunity retaillers who jumped in and purchased primarily on the spot market who have been catastrophically impacted and in turn their customers. Yes, some revision will have to happen.

Snowy 2 is pumped hydro as we know and you just can't dig tunnels and build dams in the blink of an eye: We have inherited the inactivity ( and denial) of previous governments and if there is disenchantment it should be placed squarely in front of the door of those who refused to acknowledge that the world was changing in a way that has never been seen since the Industrial Revolution of the early 1800s.

As to bass link, I wonder why your fellow Tasmanians think it is a failure? It was put in to ensure continuity of supply for Tasmania in case the prime source, hydro, should undergo a drought. Look what happened when the link broke. Tasmania ran on diesel. Pull the plug now and go "black." Failure? Are they on the same planet as the rest of us? Unfortunately the plethora of media comment by the manipulative and the deceitful has much to answer for.



Regards
Paul

[GraemeCook]

Not quite, Paul.

There have been two significant periods when Tassie has run partly on diesel. A major drought in the 1960's and a more recent case caused by an inept government selling too much power to the mainland, at the time of a minor drought.

Tasmania has traditionally had retail electricity prices substantially below mainland rates; that has not been the case for 20 years and prices continually rise. But they have not built a new hydro station for 40 years!

There is now plenty of wind power and solar power available. Hydro can provide both base load and the intermittent load when the sun stops shining and the wind doesn't blow. Unlike coal, it can kick in virtually instantly.

Pull the plug now and no one will notice.

No arguements about investors being entitled to a reasonable profit for their investments and risks undertaken. But a big part of the hostility to Basslink 2 is that profitibility element with certain companies wanting their profits underwritten. That expectation alone will probably scuttle the project, unless there is a major rethink.

[FenceFurniture]

AER, AEMO or AEMC

I have to wonder whether most people even know who these organisations are. Some people would have heard of AEMO, only some, and probably only of late.

...this dramatic change in the cost of electricity we are now about to experience.

Looking at my electricity usage for the period 19th May 2021 to 18th May 2022: my bills for the period $864.82. With my new "Retention Rates" plan with Origin (i.e as cheap as it can possibly be low as they are prepared to go, and certainly the best rates on the market here in Blue Mountains) the bills would have been $1269.91, which is a 46.8% increase.

....a combination of circumstances, mis-management at governmental level and greed has sparked this dramatic change in the cost of electricity

That sounds like you are blaming The Morrisons, but AFAIK (or AFAWK), Energy was one of the few portfolios they didn't have enough time to swear themselves in to. Otherwise, had they been the Ministers For Energies, all would have been saved and we'd be warm and fuzzy in the safe knowledge that they'd make it rain when we needed it for Hydro, make it sunny when we needed it for Solar – maybe even both at once (!), and then tuck us in at night, when they would bend over backwards and make wind power for us.

Hmmm. "The Morrisons".....sound like a good name for a band....perhaps a Death Metal Band.

[FenceFurniture]

But they have not built a new hydro station for 40 years!

Yes, but don't forget that they had a damn good crack at a new one in 1982, until they were scuttled in '83.

[Bushmiller]

Not quite, Paul.

There have been two significant periods when Tassie has run partly on diesel. A major drought in the 1960's and a more recent case caused by an inept government selling too much power to the mainland, at the time of a minor drought.

Tasmania has traditionally had retail electricity prices substantially below mainland rates; that has not been the case for 20 years and prices continually rise. But they have not built a new hydro station for 40 years!

There is now plenty of wind power and solar power available. Hydro can provide both base load and the intermittent load when the sun stops shining and the wind doesn't blow. Unlike coal, it can kick in virtually instantly.

Pull the plug now and no one will notice.

No arguements about investors being entitled to a reasonable profit for their investments and risks undertaken. But a big part of the hostility to Basslink 2 is that profitibility element with certain companies wanting their profits underwritten. That expectation alone will probably scuttle the project, unless there is a major rethink.

Graeme

The recent event was when the bass link broke. There may well have been a drought and there was a perfect example of greed resulting in Tassie selling their power to the mainland. However, the breakage was the salient point here.

The link itself was put in place to insulate the island against bad times: Not for when there was plentiful water, plenty of sun and abundant wind. It is much too easy to say "the sun is shining" today. The old mantra of "continuity of supply" has fallen by the wayside in favour of making money; right now.

When you say Tasmania has traditionally had prices below the mainland rates, but not for the last twenty years this is only about the duration of the competitive market (or did you mean the last two years?) Before that there were no prices: Just power. I don't know much about the second Bass Strait link to the exent I didn't know one was even proposed.

I would reiterate my earlier statements in this thread that talk of more renewables without accompanying storage facilities is a recipe for disaster, blackouts and bankruptcy.

Regards
Paul

[FenceFurniture]

I would reiterate my earlier statements in this thread that talk of more renewables without accompanying storage facilities is a recipe for disaster, blackouts and bankruptcy.

Agreed Paul. The actual generation of renewable power is pretty much sorted (but will obviously undergo improvement and expansion). In my view, the vast majority of research money should be going into storage. Say we put 80% of the money into research - under previous Govts that would be 80% of zero = ummm, zero.

[Bushmiller]

I have to wonder whether most people even know who these organisations are. Some people would have heard of AEMO, only some, and probably only of late.


Looking at my electricity usage for the period 19th May 2021 to 18th May 2022: my bills for the period $864.82. With my new "Retention Rates" plan with Origin (i.e as cheap as it can possibly be low as they are prepared to go, and certainly the best rates on the market here in Blue Mountains) the bills would have been $1269.91, which is a 46.8% increase.


That sounds like you are blaming The Morrisons, but AFAIK (or AFAWK), Energy was one of the few portfolios they didn't have enough time to swear themselves in to. Otherwise, had they been the Ministers For Energies, all would have been saved and we'd be warm and fuzzy in the safe knowledge that they'd make it rain when we needed it for Hydro, make it sunny when we needed it for Solar – maybe even both at once (!), and then tuck us in at night, when they would bend over backwards and make wind power for us.

Hmmm. "The Morrisons".....sound like a good name for a band....perhaps a Death Metal Band.

FF

Good point about the regulators and a little difficult to know just where their jurisdictions begin and end.

You have a choice of retaillers. Yopu are indeed in a blessed location compared to the one option here.

Scomo, with all his other hats probably ran out of "energy" or perhaps that was still to come in his third term or, more likely, he didn't think it rated much attention..

Regards
Paul

[FenceFurniture]

You have a choice of retaillers. You are indeed in a blessed location compared to the one option here.

Yes, I don't understand why there can't be other retailers everywhere. It's not like they actually do anything to deliver the sparks. They are given a meter reading (by the wholesaler or distributor, Endeavour Energy in my case), create a bill, receive the money, pay the wholesaler. It could be done from a home-office, as far as I can see. Apparently they have to fool around buying on the spot market - can be done from anywhere that has internet.

[GraemeCook]

Graeme

The recent event was when the bass link broke. There may well have been a drought and there was a perfect example of greed resulting in Tassie selling their power to the mainland. However, the breakage was the salient point here.

No Paul. We had a five year drought, stoarage dams were run low and, as the drought persisted, the Basslink cable was too small to bring in sufficient energy, so and they fired up the Bell Bay generators. Then Basslink broke and exacerbated an existing problem.

... I would reiterate my earlier statements in this thread that talk of more renewables without accompanying storage facilities is a recipe for disaster, blackouts and bankruptcy.

Regards
Paul

Yep, renewables without storage is a problem! But once you have the Dam, hydro is probably the ideal storage medium. Wind and solar when available, then switch on the hydro!

[GraemeCook]

I am trying to be very cautious with how I word this as I do not wish to inflame things.

I never listen to the radio - there is not one in the house and I never turn on the car radio. But a couple of weeks ago I was in a friends car and he is addicted to talk back radio (Yuk). So I was an unwilling but captive audience.

Some one was having a rant about the problems of electric cars. Most of it was the usual "we'll all be doomed" extremism, but a small part was fairly cogent, and suggested that while electric car owner's had the best motives in their choice of vehicle, that they could actually and inadvertently be exacerbating the electricity supply problems. His argument was quite simple:

1. Electricity demand follows four fairly consistent bands during the day; low demand overnight, moderate demand during the day, high demand at breakfast time and peak demand at dinner time. (AEMO website verifies this.)
2. Absolute peak demand occurs between 5.00 and 7.00 pm each night.
3. Electric car owners leave work at 5.00 pm and drive home and immediately plug in their cars to recharge, right at the peak of the demand cycle.
4. Thus they exacerbated a major existing problem.
5. And those cars are fully charged well before midnight when there is excess supply.
6. Only a small percentage of electric cars are charged on off-peak supplies. (I have not been able to verify this.)

He offered two solutions

1. Only allow electric cars at home to recharge on off-peak tariffs so they do not exacerbate the problem. Even if you replaced his compulsion with encourage this would be beneficial.

His second solution was even better but required fairly sophisticated technology:

1. Install a "super smart"(*) electricity metering system.
2. At 5.00 pm he knocks off work, drives home and plugs in the car,
3. The super smart meter knoows that there is high demand for electricity so it draws from the car battery into the grid - the car becomes part of the solution.
4. Then, when the grid moves into a low demand period the super smart meter reverses the current flow and charges the battery - again the car is evening demand through the day.
5. If he has an early start or a very high demand day ahead, then he presses the over-ride button and the super smart meter ensures the car is fully charged by, say, 6.00 am next day.
6. (*) He used another phrase for "super smart" but I cannot remember it. I only half listened until I realised he was talking sense.

He also irritated the bejusus out of me because every step he was advocating he was also saying should make compulsory. Most people want to do the right thing and if that option is available and they know about it then they will adopt it. Especially with anything involving renewables - it is the driving force. Compulsion would probably be counterproductive with many people, like me.

[Chris Parks]

Graham, most BEV (battery electric vehicle) owners don't need to charge their vehicles every night and those who do can set the period of recharge after peak demand time. It looks like my son could be getting an electric company car as part of his new job at BYD and he will only need to re-charge once a week but in his case at work.

I echo your thought on radio, I have had my car for 6 years and I don't know if the radio works, the bit that plays music and audio books works and that is all I care about.

[Bushmiller]

No Paul. We had a five year drought, stoarage dams were run low and, as the drought persisted, the Basslink cable was too small to bring in sufficient energy, so and they fired up the Bell Bay generators. Then Basslink broke and exacerbated an existing problem.




Yep, renewables without storage is a problem! But once you have the Dam, hydro is probably the ideal storage medium. Wind and solar when available, then switch on the hydro!

Graeme

During that period Tassie was selling power into the mainland, because they could make money. I saw it. That unconsionable activity (particularly if the drought had already been in existence for some time) depleted the dams further just to make money and when the Bass link broke they were up that well known creek: No paddle.

The DC link was put in place to safeguard Tasmania particularly against drought and not so greedy companies or governments could make money. There may well have been a problem any way, but it would not have been anywhere near so acute. The Bass Strait strategy would have worked if it had been used the way it was intended.

Remember, all generation sources have a fatal flaw. Hydro only works when you have water. Ask the Europeans at the moment. It is a big mistake, in my opinion, to place such great store in any single source of energy.

Regards
Paul

[Bushmiller]

I am trying to be very cautious with how I word this as I do not wish to inflame things.

I never listen to the radio - there is not one in the house and I never turn on the car radio. But a couple of weeks ago I was in a friends car and he is addicted to talk back radio (Yuk). So I was an unwilling but captive audience.

Some one was having a rant about the problems of electric cars. Most of it was the usual "we'll all be doomed" extremism, but a small part was fairly cogent, and suggested that while electric car owner's had the best motives in their choice of vehicle, that they could actually and inadvertently be exacerbating the electricity supply problems. His argument was quite simple:

1. Electricity demand follows four fairly consistent bands during the day; low demand overnight, moderate demand during the day, high demand at breakfast time and peak demand at dinner time. (AEMO website verifies this.)
2. Absolute peak demand occurs between 5.00 and 7.00 pm each night.
3. Electric car owners leave work at 5.00 pm and drive home and immediately plug in their cars to recharge, right at the peak of the demand cycle.
4. Thus they exacerbated a major existing problem.
5. And those cars are fully charged well before midnight when there is excess supply.
6. Only a small percentage of electric cars are charged on off-peak supplies. (I have not been able to verify this.)

He offered two solutions

1. Only allow electric cars at home to recharge on off-peak tariffs so they do not exacerbate the problem. Even if you replaced his compulsion with encourage this would be beneficial.

His second solution was even better but required fairly sophisticated technology:

1. Install a "super smart"(*) electricity metering system.
2. At 5.00 pm he knocks off work, drives home and plugs in the car,
3. The super smart meter knoows that there is high demand for electricity so it draws from the car battery into the grid - the car becomes part of the solution.
4. Then, when the grid moves into a low demand period the super smart meter reverses the current flow and charges the battery - again the car is evening demand through the day.
5. If he has an early start or a very high demand day ahead, then he presses the over-ride button and the super smart meter ensures the car is fully charged by, say, 6.00 am next day.
6. (*) He used another phrase for "super smart" but I cannot remember it. I only half listened until I realised he was talking sense.

He also irritated the bejusus out of me because every step he was advocating he was also saying should make compulsory. Most people want to do the right thing and if that option is available and they know about it then they will adopt it. Especially with anything involving renewables - it is the driving force. Compulsion would probably be counterproductive with many people, like me.

Graeme

His comments have some elements of truth, like all such things, but there are two stages towards EVs. The first is while much of the energy produced is still by fossil fuelled stations while the second is when the great majority of power is produced by renewables, which is arguably still a long way off: I, for example, may never see this.

The dynamic is not the same for both scenarios. For the moment, it really doesn't matter much when the vehicle is charged other than if it occurs at night the EV is being charged by fossil fuel energy and largely negates the benefit of an EV. Once renewables are the prime source of energy it will be important to charge during the day and I would expect tarrifs (money fundamentally) will dictate when people charge their vehicles. As time goes on, charging stations will replace fuel stations, although not neccessarily in the the same type of locations (probably many will be in office blocks or other places of work.)

Arguments by your radio commentator of this nature are not really helpful and are reminiscent of the Luddites (this is a bit rich coming from me I know). When the combustion engine first appeared there was much conjecture about doom and gloom and for a period of time, in the UK at least, a person had to walk in front of a motor vehicle holding a red light (I wonder how many were propositioned). Such is the nonsense spouted when people don't understand what they are talking about.

Fear is a big driver of distrust and many governments, and others, have used it successfully to promote their own agendas. While I don't think for one moment it will be plain sailing, I fully expect the issues will be sorted out. One thing your radio man should have mentioned and as you have not mentioned it I guess he did not raise it, is that the demand for electricity will increase to much more than is currently required. While on this thread we have focused on electrical generation and how it is produced, it is worth remembering than more electricity will be needed to cope with the substitution of gas and petrol.

Actually the fact that your commentator offered solutions, which seemed quite reasonable, seems to indicate he was making a mountain out of a molehill.

Regards
Paul

PS: I only listen to Radio National.