“There is a growing concern that some network reliability standards are too high — which some claim have reflected political responses to isolated major blackouts, rather than systemic problems — with costs that exceed consumers’ willingness to pay.” — Productivity Commission, 2013
How quickly everyone forgets, between institutional amnesia, base politicking (including from the media) and the harebrained climate denialism that appears to be becoming a hallmark of the Turnbull government every bit as much as it was of the Abbott government.
Driven by rising consumer anger at years of massive increases in electricity prices in New South Wales and Victoria, and the Coalition ‘s insistence that it was all somehow to do with a carbon price that hadn’t actually started yet, in 2012 the Gillard government asked the Productivity Commission to look at operation of the electricity sector, what had been driving the big price rises and ways to better regulate it.
Electoral anger about electricity prices at that time was visceral, with voters blaming electricity companies (private and public), regulators they saw as kowtowing to big, often foreign-owned companies and claims of gold-plating and companies rorting a highly complex system. Even regulators themselves admitted that the laws they were regulating were eminently rortable, which led to a round of changes at the state and federal level before the PC reported in April 2013.
The PC report didn’t necessarily make for pleasant reading for Labor — by then in its death throes anyway — with its call for privatisation of remaining electricity assets (Labor continues its absurd, union-derived opposition to electricity privatistion even now) and its finding that electricity price rises were at least partly driven by excessively high reliability standards.
[South Australia’s blackout explained]
But the PC was adamant: reliability standards were “mostly” too high — they didn’t take into account the possibility of inter-state operations, and they were set with no reference to actual consumer preferences. “State and territory governments, and their regulators, still play too large a role in setting reliability standards,” the PC lamented. It proposed a different system of assessing consumer preferences for reliability and using that as a basis for developing national standards.
Now, invoking “energy security” (in the fine tradition of putting “security” after a word in order to stifle debate), the Turnbull government is using reliability as part of what looks like a return of the Abbott government’s war on renewables. Having initially blamed renewables for the South Australian blackout, the stubbornly incontrovertible role that collapsing infrastructure played in the event forced the government to switch tactics to suggesting — more nebulously — that state government commitments to renewable energy placed different requirements on infrastructure and somehow decreased reliability.
“The number one has to be keep the lights on and SA failed to do that,” Turnbull said yesterday. “At all times energy security is paramount and that is why we need better coordination and cooperation between the states, territories and the federal government to harmonise state and federal renewable energy targets,” said Energy Minister Josh Frydenberg — and by “harmonise” he means reduce state targets to the federal government’s minimalist target. “Events in South Australia do show an urgent need to look at the reliability and stability of the energy system,” on the eve of a meeting of energy ministers from across the country.
[Chris Uhlmann joins Barnaby in blaming wind energy for SA’s blackout. They are dead wrong.]
Transmission and distribution companies across the eastern seaboard will be cracking the bubbly at such statements, because they open up the rich vista of a new era in gold-plating of networks in the name of “energy security”, driving ever-higher consumer prices.
The rich irony, of course, is that the Coalition once used electricity prices as a key weapon in its campaign against a carbon price, but now seems to want to increase power prices as part of its campaign against renewables. Still, just say “energy security” over and over and maybe people will forget about it.
Increasingly domestic consumers will have no interest in “energy security” as the amount of self generation goes up, demand goes down and increasingly devices are low powered and/or battery supported. Of course large energy intensive industry and public facing commercial services can see this coming: they will have shoulder the enormous cost of maintaining high reliability, low variability power. Why have so few of them their own back up supplies? Hospitals do, because the cost (whether dollars or culpability) of being held accountable if people die as a result of power failures outweighs the cost of standby power. But smelters don’t because they have long flicked the cost onto the public purse.
“Energy security”?
Try “revenue security”, “profit security”, “donations security” and the always popular “career-after-politics-security”.
So true Bob, disappointing that BK still supports the outrageous rent-seeking that always follows privatisation of public utilities.
Now the NSW govt has apparently “balanced the budget ” by selling assets….more consumer suffering to follow.
Public utilities often do not have competition.
There is some competition in power generation, but no real competition in distribution, the so called “poles and wires”.
To get competition you would need duplication. Which seems unnecessarily wasteful.
Haha. Spot on!
“The number one has to be keep the lights on” said the Prime Minister railing against Rewnewable Energy…what a pity there are no lights on between the PM’s ears as he might actually make more sense if they were.
And to think that there is LNP moves afoot to withdraw unsustainable energy supplement payments to be withdrawn from pensioners. It’s wrong. Still, …not a problem for the LNP, they know most pensioners will vote for them anyway and come what may.
Once again Bernard your Private is Best attitudes have confused issue. I suggest that privatisation has been a problem, not a solution. I have now had 3 suppliers in 5 years, each one more useless and costly than the one before it and each one foisted on me. You cannot privatise essential services, they are monopolistic they will always betray the low end users.
Hear hear. Why doesn’t Crikey get someone to argue in detail against BK’s absurd love-in with privatisation?