There were no headlines but $300 million dollars was burned at the stake of renewables
Just another day on the exciting Australian NEM.
Friday week ago we had another price spike hitting the $14,500 mandated price cap. On that day South Australians and Victorians paid a blistering $61 million and $210 million respectively. That’s the cost of a single day’s electricity on what was a hot day (but not a record) for Melbourne (38C) and Adelaide (42C). These are temperatures that those cities often reach in summer. It was about 28C in the other three capital cities. Don’t be fooled — high temperatures are not the reason for the price spikes — as it happens, NSW used 22% more electricity than Victoria that day yet paid 90% less.
Thanks to David Bidstrup for calculating these numbers (MSWord file).
But even NSW and Queensland are pay millions too much
You might think NSW and Queensland have reasonable prices for electricity, but lest we forget, what they pay today is still three times more expensive than they would have been if they were paying 2012 prices. Long ago in the renewable dark ages the average price of wholesale electricity was $25/MWh — that was the average for the whole month of March 2012.
And in 2012 when Melbourne was hotter (40C on Jan 2nd), the cost of electricity was a mere $31/MWh.
The market is screwed.
The price table with the costs and demand for March 1st, 2019 in each state of Eastern Australia. The lower two rows are the prices and theoretical cost if the same demand was priced at the same rate that each state was paying on an average March day in 2012.
This year, the average wholesale price in NSW (so far for the first 10 days of March) is $86/MWh and QLD is $74/MWh. It’s twice that in SA ($198/MWh) and Victoria ($195/MWh) and it’s $119/MWh in Tasmania.
Prices are off the scale
Renewables fans (like the ABC) will tell us that high prices are caused by old coal, but old coal plants didn’t cause price spikes in 2012. Demand was greater in 2012 than it is today (everyone is using less electricity than they’d like because of the price) and coal power took on more of the load — with less “help” from renewables.
There are more price spikes today, more wind power, more solar power and less coal power. Most owners of coal plants have little incentive to fund and maintain their coal plants. The more coal plants they can shut, the more their other generation assets will earn. Look at what happened to Hazelwood.
The Australian NEM is a giant success for corporate gentailers or State owned generators and totally wrecked for consumers.
The 2012 figures come from the AEMO average price of electricity for the month of March 2012 multiplied by the same demand as on March 1 this year.