More bad luck for the renewables industry. Despite providing free energy from the sun and wind, electricity prices keep rising relentlessly, shockingly fast. Even doubling in wholesale costs in South Australia and Victoria.
It was supposed to be cheap to collect low-level-energy across hundreds of thousands of square kilometers. Who knew that subsidized, unreliable energy would induce volatile pricing, allow the players to game the system, create obscene spikes, drive out the cheapest providers, require expensive battery storage, more frequency control, more maintenance, just as much back up supply, $400 million dollars worth of extra diesel generators (and the rest) and extra long transmission lines? Who knew? — Probably thousands of engineers.
Spot the pattern? Every other nation with lots of renewables has expensive electricity and our forward market says there’s more price rises coming.
Australian electricity prices rising six times faster than wages are growing
Sydney Morning Herald
Electricity prices have jumped by six times the rate of the average pay rise, new figures reveal, as family wallets are increasingly squeezed by essential services such as education, utilities and fuel.
The most significant price rises were electricity, up 12.4 per cent, fuel up 10.4 per cent, domestic holiday travel up 6.3 per cent and fruit up 9.3 per cent.
If you think our economy is flaming out now, wait til we reach the 23% RET target, and pay for the $1 billion interconnectors and the $4 billion extra hydro storage that we didn’t need when we had enough coal power. Then, after we reach the bottom, we’ll have to pay more to build new USC coal baseload, just to keep up with Indonesia, because we were too frightened to upgrade the old cheap plants; and it’s too frightening for any investors to do it for us.
High energy prices make everything else more expensive too. How much of the rise in hospital services, education, and beer is due to the higher costs of energy? Last week Victorian hospitals couldn’t even afford to keep all their lights on. The only thing that high energy prices don’t push upwards, is wages.
Most of the rises were in states that blow up or disassemble their coal plants
Wholesale prices double in a year in SA and Victoria (paywalled)
Samantha Hutchinson and Michael Owen, The Australian
…
Average wholesale energy prices in Victoria and South Australia have more than doubled since this time last year, as experts warn that blackouts and supply issues are likely to increase as state governments chase aggressive renewable energy targets.
The mass outages [last weekend] affected more than 60,000 residents, some of whom were cut off for more than 28 hours.
Grattan Institute energy director Tony Wood said Sunday’s and Monday’s blackouts and high pricing showed that the state had botched its energy transition program by allowing baseload power sources — such as the Hazelwood power station — to be replaced by renewables, which delivered intermittent power.
The Victorian State Premier blames privatization (can someone tell him about Texas?)
In Victoria, Mr Andrews blamed the outages on the Coalition’s decision to privatise the state’s energy assets in the 1990s. “Fact is, there was more than enough power being generated to meet the demand yesterday — but the private companies and their distribution systems failed yet again,” he said on Twitter.
The SA government thinks SA electricity is cheap:
SA Energy Minister Tom Koutsantonis said wholesale power prices were “notoriously volatile”. “Since August, wholesale power prices in South Australia have been consistently cheaper than Victoria, and in September and October, SA had the cheapest wholesale prices of mainland states in the National Electricity Market,” he said.
In fairyland people only need electricity in months starting with O and S. Can someone remind him that a couple of years ago, in 2015, every state had cheaper wholesale electricity. The wholesale price in SA in 2015 was $41/MWh. By 2017 it was the “cheapest in the nation” at $69/MWh. Laugh til you cry.
Odd 2018 CPI trivia: Three of the four fastest rising items are energy: energy for our homes and businesses, energy for human bodies, energy for cars. Is that a message there?
— Nothing that 5 or 10 nuclear plants and a few new gas wells can’t fix.
h/t Dave B, Robber, TdeF, El Gordo, Lance. Thanks.