We learnt not too long ago the 4 major reasons why electricity prices have risen over the last 10 years from David Blowers of the Grattan Institute.This adds to that
- Gold plating of the network 42%
- Retail Margin 26%
- Wholesale market 17%
- Environment 16%
Thus the major reason for the higher prices is the privatisation of the industry by various State governments. It accounts for 84% for the price rises.
It is pointless in arguing for nationalisation of the industry although this would be the best thing for the country as no State government could do that for monetary reasons.
Just before we leave this we should remember we never asked about the reliability of coal powered stations. We must thank Peter Martin for informing us that particularly in summer the coal stations are very unreliable.
What then for the future? Unfortunately higher prices are here to stay.
Why is this? Take a look at why prices rose so much to start with.
You need a very good regulator and the gold plating fiasco shows that is not the case.
There is no way at all there will be a vast over supply when the market is now essentially in private hands. Thus as Grattan point out we will never go back to the 'good old days'.
There is no way at all there will be a vast over supply when the market is now essentially in private hands. Thus as Grattan point out we will never go back to the 'good old days'.
Where to go to then. Well we have both the Grattan Institute and the Finkel report telling us the same thing.
Coal is possibly the highest cost alternative whereas renewables are cheap and getting cheaper!!
Add in a battery as recommended by Finkel like the Telsa battery and you have dispatchable power very easily.Moreover it appears wind power and solar energy are complementary
To be honest most of our problems would go away pretty easily if we had a price on carbon and let the market work it out.
The NEG is perhaps a fourth best solution but one I am prepared to live with despite Hugh Saddler's reservations as it is at least a starting point and we haven't even had that in ten years.
My guess is that if we get a change of government we will only get a genuine emission intensity scheme rather than the de-facto one that is in the NEG.
The reason is politics. It leads to emissions falling with the least cost in terms of prices.
Whoopsy. I have been asked do I think the 'Monash' group is serious. NO! If a publicly funded coal fired station was built it would need permanent subsidies to operate. The Libs would be political roadkill for sometime
Postscript:
Ken Baldwin makes good points
Timothy Taylor also has some interesting points.
I got this late. Robert Farrago on nuclear and other stuff
My guess is that if we get a change of government we will only get a genuine emission intensity scheme rather than the de-facto one that is in the NEG.
The reason is politics. It leads to emissions falling with the least cost in terms of prices.
Whoopsy. I have been asked do I think the 'Monash' group is serious. NO! If a publicly funded coal fired station was built it would need permanent subsidies to operate. The Libs would be political roadkill for sometime
Postscript:
Ken Baldwin makes good points
Timothy Taylor also has some interesting points.
I got this late. Robert Farrago on nuclear and other stuff
No comments:
Post a Comment