Don’t look now: Accounting trick destroys national economy

By Jo Nova

How to hide $100b storage, transmission lines, battery costs in a dodgy accounting trick

The cost for our whole national $100 billion dollar energy transition apparently rests on a CSIRO report that assumes we’ve already spent the infrastructure money “therefore” future costs after 2030 are almost nothing. It’s like a Nigerian email scam… except that it has fooled our Minister for Energy.

You have been selected to win a new national electricity grid, just give us your economy…

Chris Bowen, said Minister, thinks wind and solar will reduce the cost of electricity, despite them doing the opposite so far.

The CSIRO GenCost report says that renewables are cheap if we pretend we have already spent the money on the transmissions lines, the pumped storage, the “firming” of the grid. It’s like a used car salesman that says the second hand electric car will be cheap to run while hiding the twenty grand you have to spend on a new battery before it can move out the door…

There is a circular reasoning here that says we assume it’s worth spending bezillions now because renewables will be cheap after we have spent bezillions. […]

Inflation be damned — Brown coal is still making electricity for 3c a Kilowatt hour

By Jo Nova

Don’t mention brown coal?

Last quarter I reported that the Australian Energy Market Operators (AEMO) had strangely “forgotten” to list the brown coal prices in its quarterly report, despite it being the second largest energy source in our national electricity market.

Other quarters, often they would include a graph comparing the average winning bids of all the major fuel types — a graph that surely is essential in these inflationary times where our electricity prices are setting record highs, rising by 25% this month, and we have a national debate on our energy crisis.

In the next quarterly report the AEMO did list the average “winning bids” of brown coal but didn’t do the comparison graph, so I’ve done it for them. If only they had room in their 68 page report and $450 million dollar budget so Australians can see, at a glance, which fuel source provides the cheapest wholesale generation by far, every quarter, all the time?

Despite all the inflation, the war, and the pandemic, brown coal generators are still making electricity for 3c a KWh. Shouldn’t Australians know that?

Click to enlarge (Or download the larger JPG file)

Compare that to […]

Green Australia: where Industry is on Edge, the grid “precarious” and electricity prices up 25%

By Jo Nova

The land that is the Renewable Crash Test Dummy is holding its breath

This time last year, the Australian energy market turned into a kind of Hunger Games spectacle with daily feeding-fest at dinner time where prices were so burning hot that unhedged smaller retailers begged their own customers to leave them and then the whole market was suspended. The bonfire was so big we’re still paying for it, and retail electricity prices are set to rise another 25% in a few weeks.

So it’s no surprise that as the cold weather arrives downunder, everyone involved in energy is “on edge”. Suddenly Australian corporate leaders are telling it like it is — the Alinta Gas chief says there is just no way we can build enough renewables in time — he can’t even “see a way” of building enough renewables to compensate for the coal units that are being closed.

The man who used to run the Snowy Hydro Scheme agrees (and then some) — saying we need to build a “Snowy” every year, and we are being lied to (his words) and it will take not 8 years, but 80 years to get there. The […]

Vale Liddell coal: given away for nothing and destroyed by predatory capitalism and a screwed Green market

By Jo Nova

A “win” for predatory capitalism and government mis-interference

Liddell power station (foreground). Bayswater power station (rear).Photo NSW DPI

Yesterday, for the last time the final turbine was switched off at Liddell Coal plant after 52 years of operation. The NSW government gave it away for free in 2014 — bundled like a McHappy Meal in with the sale of Bayswater Coal, valued at $0. Governments saw old coal as worthless, at least until 2017 when everyone saw the bloodbath when the Hazelwood coal plant suddenly closed and electricity prices suddenly rose 85%. Then they started to panic a little — even Malcolm Turnbull (our Renewables lovin’ PM) started openly pressuring AGL to sell Liddell so it could keep running until his pet project the Snowy Hydro 2.0 could start. Chinese owned Alinta turned up with $250 million dollars and was willing to put in a billion to repair the station and extend its life up to 2030. Despite that bonanza, AGL refused to take the money. It was determined to run it into the ground and shut it down instead. Now it’s determined to blow it up as well. The Demolition crew is already appointed […]

Stark contrasts: UK faces rolling three hour blackouts, while Norway has cheap electricity and “too many profits”

By Jo Nova

Just to recap: Energy prices are so wildly high in Europe — thanks to a quest to alter the planetary climate — that 70% of fertilizer plants have already shut down, half the aluminum and zinc smelters have closed, and glass-makers and tilers who survived both world wars may go out of business. German homes are reduced to being wood fired (if they can find the firewood). Meanwhile someone very naughty set off explosions on the Nordstream gas pipes from Russia, and since a third of all UK gas comes from an underwater pipe to Norway now suddenly people are very nervous about that. Before most of this unfolded, UK consumer confidence was at minus 44 — the lowest ebb ever recorded since 1974 when people started recording these things. Now it’s even lower (minus 49). As many as one in four people in the UK were saying they won’t heat their homes in winter. It’s the most dramatic fall in European energy since the late Middle Ages. Luckily, at least the UK and Germany both have some old coal plants they haven’t blown up.

To make things more exciting, last week, after the underwater bombs went […]

Blistering electricity prices: It was the quarter the whole market broke and Australia got a $12.1b price signal

Looks like a system wide failure

For years the average wholesale price was somewhere between $30 and $60 per megawatt hour for electricity on the Australian national grid. But for the entire 2,184 hours of quarter two this year, we were paying an average price of $264 per megawatt hour. It wasn’t just due to a couple of freakish spikes, instead it was a relentless burning average, like a lava flow arrived at your wallet.

At an average operational demand of 22GW, that’s a hefty $12.7 billion dollar price tag for 91 days of electricity. Last year the same period it cost $4b. Years ago, before we added all the unreliable generators, it would have cost $2 billion.

It would have been cheaper just to build a whole new power plant last year.

The graph below covers the century so far. It is that bad.

It wasn’t that there was a particular time of the day when prices were higher, instead every hour was a bloodbath. It was a phase change. There was no happy hour at this hotel.

And it didn’t matter whether a state was renewable-heaven or a den of black-coal. Prices were shocking in every […]

Two Australian families end up in hospital trying to heat homes with coal burners

Do Australian Lives Matter?

Two families this week, one in Adelaide and one in Sydney, tried to heat their homes with charcoal barbecues. Thankfully no one died.

Four more people are rushed to hospital after burning COALS inside their home as the price of electricity soars

Sam McPhee, DailyMail Australia

A second Australian household have been rushed to hospital with carbon monoxide poisoning after attempting to warm their house with a charcoal burner – laying bare the reality of the country’s ongoing energy crisis.

Emergency services attended a home in Adelaide‘s Bedford Park on Friday morning after four people woke up feeling faint and suffering from nosebleeds. They had been attempting to warm their home overnight using a cooker. All four showed signs of carbon monoxide poisoning.

It comes after a family of six from Sydney’s west were also hospitalised this week after using a burner to warm their granny flat.

His father said it was a response to rising gas prices in Australia.

Energy poverty can be deadly.

Four people “lucky to be alive” after indoor fire leaches carbon monoxide

Twenty South Australians have been admitted […]

Cold snaps and blistering electricity prices downunder — where one state burnt $2.4b in electricity in May

And the bonfire continues

As cold fronts sweep across the south east of Australia electricity prices are setting records nobody wants to set. The wholesale prices for electricity –across a whole month — soared past $300 a megawatt hour in three states of Australia. In NSW the cumulative cost of wholesale electricity for May alone worked out at $2.4 billion dollars. It’s enough to build a power plant. Back in 2015, before Hazelwood old brown coal plant closed and Australia installed more renewable energy per capita than anywhere else on the planet, the average price in NSW was $35/MWh. Back then it cost $260 million for the whole month. (And Hazelwood wasn’t even in NSW. ) The point is not about one coal plant, but about how recently the system still worked and how fast it fell apart. Hazelwood coal plant in 2017 was 53 years old and still selling electricity at $30 per megawatt hour when it was shut down. Since then the whole grid has so much more capacity yet so much less ability. There’s no resilience left. A few speed bumps wiped out the whole road train.

 

Wholesale electricity prices are higher across the […]

Energy Crisis picks up speed Downunder: Now a major Gas retailer goes under

Last week small electricity retailers were bleeding so badly they doubled their prices and asked their customers to leave.

This week it’s a big gas retailer, as Australia belatedly faces the same pain that hit and wiped out UK energy retailers:

Gas retailer Weston Energy’s collapse stirs call for Labor intervention

Perry Williams, The Australian

Weston Energy, which provides gas to more than 400 companies and government agencies, ceased trading with immediate effect on Monday, creating uncertainty for major manufacturers with 7 per cent of the east coast’s commercial and industrial market forced to find a new supplier.

The company said it could no longer finance cash flow requirements of its trading portfolio “on a timely basis” with prices rising over 180 per cent since April, and almost three times higher than at the start of the year.

These are blistering rises in costs:

With spot gas prices up to four times higher than normal levels and wholesale electricity prices in NSW on track to finish the June quarter twice as high as the previous record, Mr Willox called on the Albanese government to respond.

It’s a cult.

[…]

Scorching electricity price spikes in NSW and Queensland

Brisbane on May 3rd was a glorious 15 to 25C (or 60F – 77F) and yet the price of electricity was shocking.

The scale of the graph is so distorted that all the normal price gyrations fall to nothing, and there is only the spike — a full hour of $14,000 burning for every megawatt, and the state needing 7,000 megawatts. The demand level, or load is not unusual, but it’s about $100 million in electricity.

And this is the nice time of year for electricity managers, or it used to be. With weather that’s ideal for human habitation most air-conditioners and heaters are off. But the sun is setting earlier, and solar power is shrinking just as everyone gets home from work to turn on the oven.

AEMO

Some may blame the “lack of coal power”, but notice what’s happening to wind and solar power at critical time from 5:20pm to about 6:30pm.

All the wind and solar power in Queensland on May 3, 2022 |

Though there are other factors at work too and some are a bit mysterious according to Paul McArdle. Queensland at one point had only a 7% instantaneous reserve plant […]

Australian wholesale electricity prices have doubled in the last year (and it’s because we don’t have enough coal power)

Luckily for Energy Oligarchs, Australian electricity prices have bounced right back to pre-pandemic insanity. Wholesale rates are romping around $170 dollars a megawatt hour in April across the whole national grid…

The media mouthpieces are blaming it on outages of coal turbines — even though wind power fails every week, and solar fails every day. If unreliable generators cause high prices, then Wind is King Fickle. They’re also blaming high coal prices, but coal itself, is a small part of the cost of a two billion dollar plant. Naturally, neither political team has a clue how to fix this. But it’s all so banal — the prices are set at auction, and some fuels are cheap. Add more of the cheap type, and we’d get cheaper electricity.

Right now, if there were more black coal plants setting the price more of the time, electricity would be half the cost. If enough brown coal plants like Hazelwood were still running, the prices would be a fifth. It’s all there in the data that ABC journalists never find. Consider the winning bids by fuel type in Australia for the last quarter of 2021. For Brown Coal, the average winning bid was $11 […]

The Green Agenda meets The Energy Crisis (just in time for COP 26)

Some great Green plans are starting to come undone and it’s not even winter yet

But it is just in time for a reality check on COP26.

Europe’s energy crunch is continuing, as gas storage volumes have shrunk to 10-year lows. In the UK 12 energy companies have collapsed this year leaving 2.2 million customers stranded without an electricity provider. Things are so bad the Dutch government is thinking of reopening the Groningen gas field, Europe’s largest onshore gas field. This is a big backward step for the transition to magical energy. “Until recently, the plan was that Groningen would be closed completely by 2023, ending the large-scale gas production and export by the Netherlands with a bang.”

There are even thoughts of switching back to coal. Drax is suddenly talking about keeping some coal plants running a bit longer, something that would have been blasphemy a few months ago.

Across Europe and Asia — the energy crisis runs amok

No one can blame Brexit for food shortages in Brussels:

https://twitter.com/hermannkelly/status/1442901773958582274

But people can blame Green policies for energy pain

Kate Andrews: Britain’s weak energy security puts net zero in doubt The Daily Telegraph, 29 […]

Bluescope spends a billion in US because “cheap energy”

Add another billion to the cost of the Renewable Energy Target?

In the last few days Bluescope Steel (formerly BHP) has confirmed it will spend US$700m (AU$1b) to expand it’s North Star steel mill in Ohio. So there are multiple headlines. But back in February CEO Mark Vassella explained exactly why they were thinking of it, and his first reason was “energy prices”. Last week, high energy prices were even “a tragedy” for Australian manufacturing. This week however, he’s clarified his position by muddying it up. Now there other reasons and the solution is to fix our gas prices. He’s backpedaling and tossing quotes that happen to help the renewables industry.

Perhaps he’s been heavied by his PR and strategy team? Now he’s saying that energy costs matter, but labor costs do too and “we weren’t ever going to put another steel mill in Australia”. He’s even saying energy costs “did not play a role” — the complete opposite. These will become the quotes the renewable energy fans rely on. Apparently, now what he really wants is cheaper gas — which requires a socialist government-driven solution to fix gas prices, and it’s safe for anyone to mention anything that requires […]

Just change one rule — so the world can see what Wind and Solar really cost

Random power generators. Photo JoNova

Wind and solar power are the intermittent freeloaders on the electricity grid. They are treated as if they’re generators, adding power to the grid, but instead they provide something the grid doesn’t need — power that can’t be guaranteed.

Random gigawatts has the illusion of looking useful, but it’s the gift of a spare holiday house you don’t know if you can use til the day before. It’s the spare fridge in the garage that overheats in hot weather, the extra turkey for thanksgiving that might not arrive til the day after. The bills, the storage, the clutter, the chaos.

As I keep saying in RenewablesWorld fuel bills go down, but the land-maintenance-staff-insurance-FCAS-storage-and-capital costs all go up.

RenewablesWorld is a place where a lot more people and machines sit around and watch cat videos on youtube.

Here’s a great plan by Terry McCrann.

The one rule that would expose wind power’s true cost

Terry McCrann, The Australian, Business Review

If you wish to sell power into the grid, the NEM or National Energy Market, you will have to guarantee a minimum level of supply and guarantee that minimum level of […]

18 years of Renewable Energy Target means an expensive and unstable grid, and still 75% coal

A big new study by electricity grid nerds (and I mean that in the nicest possible way) shows that after all the money and pain of 20 years of forced transition Australia’s electricity has shifted from 85% coal powered to 75% coal powered, which cost billions and as a bonus, made electricity more expensive and unstable. We drove out some brown coal, but swapped it for black coal. Instead of ousting coal power, the extra solar and wind power replaced some gas and hydro.

The authors are genuine independent experts, and the report is incredibly detailed — so this is rare — but still suffers from serious drawbacks:

The team doesn’t question the need for an artificial expensive transition. Almost all the problems they describe are caused by government policies that task our grid with changing the climate as well as producing cheap and reliable electricity. In a grid being ruined by inept policy, the implied solutions almost all involve more regulation and government policy. If our gas prices are too high we could ban sales overseas, but then we lose the export income. The left hand steals from the right. The free market solution is to use another fuel, […]

More renewables, more record prices

Once again, bad luck for renewables. The AEMO put out their report for the first quarter of 2019. Despite a massive growth in renewables, power prices are still not falling as predicted.

The report highlights that record high spot wholesale electricity prices were set in Victoria and South Australia, and nearly in everywhere else as well:

• Victoria and South Australia’s quarterly average spot wholesale electricity prices of $166/MWh and $163/MWh were their highest on record.

• Victoria and New South Wales recorded their highest underlying energy price on record, while Queensland, South Australia and Tasmania recorded their seconded highest energy prices on record.

These record highs were not just billion dollar price spikes, but the actual underlying energy prices as well.

Looks like a trend here:

Wholesale electricity prices, NEM, Australia, Q1, 2019 | Click to enlarge.

The news gets reported but somehow coal and heat get the blame?

Record power bills in NSW, Vic

Perry Williams, The Australian

Power prices in NSW and Victoria soared to their highest level on record in the first quarter of 2019, with the jump blamed on high coal and gas tariffs and searing […]

Invisible costs of renewables: “Staggeringly high” $125b for US electricity consumers

A major new “nail in coffin” study shows the more renewables we force onto the market the more expensive electricity gets.

Everyday someone tells us renewables are cheap, but these estimates come from flawed “LCOE” method (at best) supposedly the lifetime cost, but without many indirect costs. Granted, it’s hard to figure out what the bill for renewable energy is. But what really matters to every man and his dog, is the cost effect on the whole system, not a cherry-slice comparison of a few sunny-windy hours a day which doesn’t take into account the effect that renewable energy has on the rest of the 24/7 electricity grid.

Greenstone, McDowell and Nath have analysed all 29 states in the US where there are laws demanding a certain percentage of energy be renewable. On average a 4% increase in renewables led to a price rise of 17% and the impost was wildly high compared to any remotely sensible cost-benefit analysis. Renewables are the car insurance bill that costs 3 times as much as your car. Any serious environmentalist would hate renewables.

Michael Shellenberger, Forbes

The cost to consumers has been staggeringly high: “All in all, seven […]

Solar Power at $70 is still twice the price of brown coal

More fake news: Miners are only switching to solar because they can’t get access to cheap coal fired power.

“Miners switch on to renewables”

A better headline would be: Renewable targets make electricity so expensive miners are forced to switch to renewables.

The money quote:

Emily Alford is a principal consultant at Oakley Greenwood … [she] told The Weekend Australian that solar generation cost about $200 a megawatt hour five years ago, and had dropped to about $70-$80 now.

Compare that to 53 year old Hazelwood coal power which was selling electricity for $30/MWh in it’s last month of operation. When brown coal stations set the price in Victoria they were winning bids at prices like $13/MWh.The cheapest electricity in the world comes from 30 year old brown coal plants.

The $70-$80 estimate is artificially low. Unreliable power makes the other baseload generators more expensive, adding $30/MWh to gas generators for example. Because the back up generators have to be there, not earning money while solar feeds in, they have to charge more to recoup those costs in a shorter working period. Doh. So add that cost to solar, not the gas.

Compare the real costs and weep: […]

Australian electricity market wrecked by big-gov: corporates gouge $3b from electricity customers

Thanks to Big-Gov’s Renewable Energy Target, big corporate greed was unleashed:

ABC — Australian energy giant AGL ‘gouged’ customers after Hazelwood closure, new research shows

Some of the nation’s biggest energy companies have allegedly used the closure of Australia’s dirtiest coal-fired power station to price gouge customers and make an extra $3 billion in wholesale profits, according to a new report.

We already knew that renewables are so poisonous they make other generators more expensive. But this is something “extra”. Either big corporate’s suddenly turned into greedy machines or the government destroyed the free market that worked fine for years:

When the closure of Hazelwood was announced just a few months earlier, AGL increased the price of much of the coal-fired power on offer from the Bayswater and Liddell plants in NSW.

The study found a significant part of the output from the Liddell plant was repriced from $40 to $60 per megawatt hour, to greater than $5,000 per megawatt hour — so expensive it effectively restricted supply.

At the same time, much of the power offered by the Bayswater plant almost doubled in price, from about $40 […]

“Market Bloodbath”: Too many new remote renewables projects means high losses

As Australia push-pumps “renewables” into remote locations some of their incomes are suddenly being cut because the losses (as they transmit across long lines) are higher than they expected. On March 8th the AEMO rerated many generators and this year it’s being called a bloodbath for wind and solar. Some of them, like AGL’s Silverton wind farm face losses of 20%.

It all revolves around something called Marginal Loss Factors, a value that is set by the AEMO each year for each generator. The rating is reduced by transmission losses over distance and also by “congestion” from other renewables which are popping up in the same remote locations far from the cities and industries that need the electricity they make. This sudden loss of expected income threatens new wind and solar projects (as it should — hello market signal!) Sometimes the loss factors are hard to predict years in advance which makes it difficult to also predict whether a project will return a profit (even despite the guaranteed subsidies).

Another renewable inefficiency strikes — “marginal loss factors”

Generators are paid according to the electricity that arrives rather than what they produce at the plant. (Seems fair). This is called the […]