We’ve seen it with the big banks, we’ve seen it with the Crown and Star gambling empires, and now we need to see it with fossil fuel companies — the moment the corporate abuse of power achieved through state capture becomes so egregious that a reckoning is required and significant change is delivered.
In their quest to exploit the unreliability of coal-fired power and high energy demand, electricity generators up and down the east coast so relentlessly gamed the rules of the now-suspended National Electricity Market (NEM) that they made it impossible to continue to operate.
But they’re also responsible for the long-term disaster left after nine years of inaction and climate denialism by the Coalition — an electricity generation system hopelessly underfunded and stuck in the early stages of the necessary transition to renewables.
Those nine years of failure, ameliorated only by Malcolm Turnbull’s desperate attempt to drag the Coalition closer to reality — an effort that cost him his prime ministership — were fully bought and paid for by fossil fuel companies. The coal miners, the gas exporters, the coal-fired power generators, the frackers. They bought delay and obstruction of decarbonisation, the killing of the highly effective carbon price the Abbott government inherited, the Coalition’s war on renewables, the defeat of Turnbull’s energy plans, the “gas-led recovery” and the “CoalKeeper” tax.
The result is a “market” not worthy of the name, which operates to gouge households and small businesses while gas and coal exporters make out like bandits — in the case of gas exporters, while paying virtually zero tax.
A transition with the handbrake applied
If a business-as-usual policy response was untenable yesterday, it’s far more so today after the Australian Energy Market Operator (AEMO)’s suspension of the NEM. To the imperatives of climate, national security and economic opportunity, the task of keeping the lights on now requires a dramatically accelerated decarbonisation of our electricity supply.
The crisis also illustrates that, despite the fulminations of many on the left, privatisation has played no role in our electricity sector woes. It is Queensland, where state-owned power generators Stanwell and CS Energy dominate the market, that has seen the biggest price rises. Price rises have been lower in NSW, which sold its generators nearly a decade ago, and price rises in South Australia and Victoria, privatised in the 1990s, have been lower still — though that also reflects the dominance of renewables in SA and the lack of brown coal exports in Victoria.
It turns out that it doesn’t matter whether a power generator is state-owned or privately owned, it will still seek to game the system to maximise profits at the expense of households and small businesses. And ironically, the intervention of AEMO has rendered that entire debate irrelevant, by effectively asserting government control of generation capacity.
Fossil fuel companies have brought it on themselves with their relentless efforts to distort public policy, prevent decarbonisation and rip off Australians. AEMO and governments shouldn’t be in any hurry to restore the operation of a broken NEM.
I reiterate what I said yesterday: That generators in Queensland remain publicly owned does not make any case for privatisation. That they have gamed the bulls*t National Energy ‘Market’ is more a matter of the perverse incentives baked into the NEM and little to do with who owns them. Firstly, it was never a ‘market’ and authentic sense of the word. It was set up as a synthetic and inauthentic system for the supply, trade and delivery of energy with too much inherent freedom of action for the participants with classic neoliberal hubris. But the fatal and fundamental flaw has always been the discretion generators have to supply or withhold power. That unilateral discretion is precisely what has ultimately exposed the NEM for the fraud it is. Put it to death and start again with a system that compels generators to act in a way that best benefits society whoever owns them. And public ownership is the most certain way to ensure assets work for society, not to its detriment.
way back when the Gas & Fuel Corporation served Victoria, I had them as a client doing graphic design for them – a lot of their posters, leaflets, magazines were all about encouraging people to be energy efficient and get the best out of their stoves, heaters etc … of course that all went out the window when the market was privatised
At times Bernard gets a wee bit carried away. Queenslands largest plant is currently Stanwell. Completed over 25 years ago. Economic life expectancy of a coal powered station 20-25 years. Improved technology generally makes more sense to replace in economic terms, however there are political impediments to this and refurbishment is generally the preferred option.
Stanwell underwent a refurbishment last year. (Shutdown for maintenance)
To make it simple – would you buy a new 1995 model car today? Would it comply with current design and performance criteria? Things need to be put into perspective.
Stanwell is comparatively young and uses black coal.
Queensland already has may small solar/ pumped hydro-plants already in operation, along with 2 hydro power-stations rolling quietly along on the Tully and Baron River falls maintaining baseload generation.
There are solar/ wind farms out in western Queensland feeding specific towns.
If Campbell Newman had not killed the solar industry with a 2 week notice, most of Queensland would have at least roof top power.
Campbell, the gift that keeps on giving, was shunted out of office when he announced that he was going to sell off our power industry.
That was a bridge too far for we parochial members of Queensland.
Renationalisation. And if the private companies complain about it then the company, the CEO, the CFO, the COO, and all the board members get audited by the ATO. Going back as many years as they are allowed to.
Do that whether they complain or not.
Let us not also consider the effect on the previous govt of a certain sect who have some very out of step with most Australian’s views on where we should be taken. After all, why invest in changing our current method (fossil fuels) to something that will help the world survive (renewables) when your beliefs encompass it (our world) coming to an end, very soon, especially as they are doing so very well out of it themselves.
Oh! And just in case you are thinking that the loss of an election and it’s PM stopped that, they are still in our Parliament and not at all finished with, mark my words.
I agree with you. This sect is pernicious.
No, no, no, Bernard. A thousand times no. I agree with much of what you write, but I think you’re dead wrong on this. The move to privatisation is the root cause of many of our problems, not just in the energy sector. It is this movement that has led to the corporatisation of many former government entities (in telecommunications, Telstra is another case in point).
All of these entities once existed to provide a service to the public. Imperfect they may have been, but I would argue that in the majority of cases, they did so much more successfully than what we all enjoy today. Then they were told by their political masters that they had to stop acting like the providers of a public good and become much more like private enterprises, with profit replacing public good as their key reason for existence. ‘Corporatisation’ is the bastard child of privatisation, bred by those lacking the political guts to go all the way, but still seeking to gain the benefits of full commitment.
Having made the transition to a new operating paradigm, they are now lambasted for doing so too successfully, and for screwing over they public as effectively – in some cases, more effectively – than private companies do. In my opinion, this is grossly unfair.
I have always believed, and I continue to believe, that the essentials for survival in our society: water, energy, health, transport and so on; are not suitable for provision under some kind of hacked free-market model. The proof of the pudding, etc..
Yes! Yes! Yes! Graeski! A thousand times Yes! I agree with virtually everything that you have written.
The only minor change that I would make ‘on the fly’, is that I would add Banking to that list of essentials you talk about in your final sentence. Even that is nothing new. I mean Labor leader Ben Chifley sought (quite correctly) to do that as far back as 1949.
No need to nationalise and lose all that bark fighting the Big Ar$ed End of town.
When the Commonwealth (and the state counterparts) existed there was competition – STB beloved and worshipped by the private sector, see Adam Smith on social occasions – which put some manners of private banks.
Similarly GIOs and dare I suggest Medibank & HCF/MBF?
Exactly.
What’s worse, this will likely be used as an argument not for renationalisation, but for even more fiddling with the “market” to make it even more artificial, complex and unmanageable . . . until the next set of loopholes are discovered, the corporations (both private and public) game the system again, and we go right back to the beginning.
The core of the problem is that markets just flat out don’t work for things like this, and trying to sprinkle the magic market fairy dust all over things like electricity and water and health and so forth in order to get improved services is just magical thinking of the worst kind.
The very concept of a ‘market’ is that a 3rd person takes a slice of value from 2 others in a transaction, by virtue of having brought them together and clipped their tickets.
True – complexity breeds complexity which is true in spades when a given scham…sorry scheme is fatally flawed in conception, execution and purpose.
I would n’t mind if we could add to that list Healthcare and Education. That is, getting rid of the user pays element in schools and healthcare. Simpler and fairer systems, surely?
I’ll only stick it in a little way…
Has anyone else wondered about the timing of this debacle starting almost straight after the election?
I certainly suspect an attempt to ambush the new government, and hasn’t it blown up in their faces spectacularly..!!
Perish the thought, they are titled “the Honourable” though I’ve no idea why.
Yes, a lot. And where is the up-until-4 weeks-ago previous energy minister Angus Taylor? Not to be seen. Why is the media not hammering on his door for an explanation.
Because they respect his privacy.
As far as I’m aware, Taylor is still the member for Hume. He’s a public figure. No respect of privacy needed.
You’d think that a former minister for energy would be responsible for his previous ministry and would be free to answer questions about his obstruction of the transition to renewable energy generation.
insert “pissing myself laughing” emoji
Why would anyone give any respect to a man who really does know how to manage a public asset for his own benefit?
On the other hand, the cud chewing voice lowering BS that dribbles forth. Needs privacy!
He held a press conference recently but no one attended!
No one asked him a question, ha!
Why would they!
Was later today, all Labor’s fault, but I find most of what he says hard to understand.
Drivel!
Ha ha! He is now the shadow treasurer! Needs an abacus badly
Abacus! No, &ga$ would only spin the beads as if it was attached to his cot. Best not give him a slide rule either as the young chap would only chop his tongue off in it…