Doomed Planet

Wrecking a Nation One Electricity Bill at a Time

The first thing to recognise is that for many years now governments — Labor and Coalition alike — have been hard at work destroying the low-cost electricity market that Australian businesses and consumers once enjoyed. The second thing to note is that there is an actual undertone of energy realism — yes, really! –about the Albanese government, but it is no portent of good news: “You’ll know what we’re up against when your electricity bill arrives,” the Treasurer said on Thursday (July 28). That would be the bill we were assured during election season would fall by $275 once Labor waved its magic wand. 

We can see the degeneration of Australia’s electricity security graphically presented in the chart below which tracks July electricity prices from 2015 to the present day. This year, prices are on average $350 per megawatt hour, a far cry from $50 back in 2015. With subsidies for renewables leading to the closure of crucial power stations they crept up to $85 by 2019, which still seems cheap in comparison with the Himalayan ascent towards $400 that has occurred since 2021.

We will not see bills cut. What we will see is a doubling of household bills as the present spot prices work through the retail system. The only thing that can stop this in the near term will be if high prices lead to the closure of major energy users – aluminium smelters, for instance. Oh, the tragic irony!  The pride of the nation’s industrial base now needs to be supported by the very governments whose policies brought the high electricity prices that wrecked the economic viability of their operations.

Of course, while closures of heavy industries’ energy users would give some price relief to household bills in the short-term, what such a measure really means is de-industrialisation and, as a result, permanently lower living standards. In the long term, we can mend the supply only by ceasing to discriminate against low cost coal and, possibly, nuclear.

As in Europe and US, Australian politicians have remained resolutely  blind to the fact that the presumed “cheapness” of the wind and solar they promote hangs on their ongoing need for subsidies. We are already spending at least $7 billion a year on wind/solar subsidies and the ALP policy is to markedly increase this. Their proposed measures include:

♦ a fourfold increase, from $20 billion to $80 billion, in the cost of transmission by which electricity is moved around the nation — an increase required because of the less dense electricity represented by wind and solar;

♦ a Net Zero public service

♦ community batteries

♦ the so-called safeguard mechanism to force businesses to reduce their emissions

♦ forced reductions in agricultural emissions – that might extend to suppression of nitrogenous fertiliser use, a measure that has cut Sri Lankan farm output by a third, bankrupting that country, and where the introduction of similar policies in the Netherlands is causing massive turmoil. Canada, too, has poised to join this march of folly and has announced forced reductions in these fertilizers’ use.

♦ on top of all the above, we are to have subsidies for electric vehicles, thereby encouraging a further massive drain on the grid

This madness is not confined to Australia. The Biden administration as soon as it hit the decks started cancelling gas exploration rights and pipelines, announced massive new renewable subsidies and , on top of all that, legislation that will force businesses to adopt costly new environmental standards.

There is now some realisation in the UK of the problems this has caused, with both contenders to replace Boris Johnson each saying they want to reduce taxes on electricity, a proposal that will do nothing more than paper over some cracks. Bear in mind that UK electricity prices have already doubled this year.

Another response is to try rejigging the electricity market. The UK government intends to have suppliers paid according to their bids rather than the market price. It’s a bit more paper on another growing crack, as all this measure will see is a change in bidding strategies with no impact on price and a considerable increase in administrative resources.

The vulnerability of continental Europe, due entirely to abandoning stable supplies of electricity and subsidising wind and solar, is dramatically evident in the crisis confronting Germany, Italy and other countries, a long-brewing crisis explosively triggered by Russia’s denial of a stable gas supply. Few politicians understand the real reasons for the crisis: replacing stable and low-cost fossil fuels and nuclear power with wind and solar. Like a drunk driver speeding the wrong way down a freeway, they spare not a spoken word or thought for the catastrophe just ahead.

France, at least, has abandoned its own green policies and is returning to nuclear power. In Germany’s case efforts to avert disaster remained dogged and hobbled by green fantasies, with the energy minister seeking to continue closing the three nuclear power stations that remain in operation. The excuse, a spurious one, is a lack of fuel rods.

Make no mistake, hardship during the northern hemisphere’s coming winter is inevitable. After that, as the world  tilts, it will be Australia’s turn and that promise of $275 annual saving will be an even bigger sick joke than it is today.

Alan Moran, of Regulation Economics, wrote the chapter “Current trends and perspectives in Australia” in Local Energy Markets edited by Tiago Pinto et al and recently published by Elsevier

10 comments
  • Daffy

    The left and their mad climatista hangers on are busily showing their true colours: they hate the ordinary person, the despise those less well off than they…and yet they imagine a hubristic moral high ground because the are ‘saving the planet”; but only by killing off its denizens.
    Hypocrisy writ large.

  • Botswana O’Hooligan

    Our retirement home came with solar and last summer the monthly electricity bill was in the order of $23-$30, this year it was $63 and our mid winter bill just to hand is $98 as against $43 for the same period last year. The irony of it all is that the taxpayers provide the money the government hands out in subsidies to these hare brained schemes and we are then charged double for our electricity. Come in spinner.

  • 27hugo27

    Having just received our first $1000 power bill after 8 years of getting a refund or paying only 2 bills a year, i hear on the radio today that they are set to skyrocket AGAIN!! All this completely unnecessary but for our green madness, and they’re doubling down! Add record fuel prices (also contrived thanks to Biden) and runaway inflation, I’m wondering when the pitchforks are coming out. My wife and i hoped to build a new house this year, and in 8 months since signing, the cost has gone up over $70,ooo! Needless to say we’ve had to cancel the contract and wait things out, yet must pay holding costs. Where to vent my rage?

  • rosross

    Having put in a lot of solar panels and a battery, as well as a woodburner, we are in pretty good shape for the moment.
    But not everyone can do that and these costs are crippling not just domestically but in businesses. It is one thing to keep the heating low for Winter and another to have your business go bankrupt.

  • Biggles

    Putin has long since been funding the German Greens. His long game for wrecking Europe is paying off.

  • rosross

    @Biggles,

    I doubt Putin is guilty of most of the charges made against him and the Greens have been powerful and active in Germany for a very long time, some 29 years.

    Europe is doing a very good job of wrecking itself and you can hardly blame the Russians for that. In fact the West has done a good job of destroying itself by traipsing along behind the Americans bent on their economic domination of the world, which required a global economy, which is now wrecking many countries including Germany and the US. It seemed like a good idea at the time for a few people to make a lot of money and most went along with it.

    Anyone with an eye to history and human nature would know that losing the capacity to be self-sufficient was very dangerous indeed.

  • ianl

    @27hugo27

    >”I’m wondering when the pitchforks are coming out.” [Your quote]

    Pointless relying on this.

    What is really happening is a piecemeal, bit-by-bit implementation of planet saving: truckers, then farmers, then motorists, then air travel … and so on. Any spontaneous resistance from the “oiks” will be dealt with using the police as armed militia; a few months of being beaten up will suffice, with the only real preparation required by the managerials is to ensure the police receive 20% pay rises first.

    The most likely response is already seen in split-out tactics of the “I’m all right, Jack” variety. A typical example is the rosross comment above, with smug deployment of solar panels and batteries.

    While I respect Alan Moran’s long-term, doughty fight, I’ve realised for nearly a decade now that the fight to retain civilised living standards is long lost. A declaration of climate emergency (the next bushfire or flood season will do as excuse) and the whole panopoly of equivalent C-19 control will descend.

  • 27hugo27

    Can’t disagree with any part of your reply ianl, but can add to it. Yes, incremental in true Gramscian fashion is our demise. Sky-high inflation/fuel/energy costs (all avoidable with good governance) hot on the heels of the business and societal crushing plandemic in a one-two punch Cassius Clay would be proud of. Sadly, the police are to be feared now, or anyone with a clipboard and a Camry with govt plates. Did you read or hear that they are aiming for zero, yes ZERO road deaths? One can only imagine the fines, demerit points, jailtime, loss of licence and livelihood, house to realise this utopian goal. And the “cashless society” will be the final nail in our coffin, every transaction located, taxed and habits noted – and so many of us are welcoming it! Try as i might, unless a divine intervention occurs, i see dark days ahead, the monster of the left/globalists sprouting two more heads if ever we manage to lop one off.

  • Christian

    I’m pre-retirement, 5 to 10 years off (maybe sooner if I get the sack). I plan to move to QLD where at least it won’t cost so much to heat and cooling is cheaper, and they still have state owned power stations. Furthermore, I will get myself a petrol or diesel generator.
    I guess if the pitchforks come out in Europe, then maybe it will spread to here. The energy price cap in the UK will go to GBP 4000, which is astonishing. That might just be enough to cause massive riots and protest.

  • John-Tassie

    Another not remote scenario. A massive coronal mass eruption on the getting active sun will trash most power supplies, electronics and computers. I think my 1986 diesel landcruiser will survive but there will be a deadly rush on local fuel supplies. The poms seem to be ahead in this – see the recent SBS series COBRA. We seem to be due for another sun burst Carrington level event. It will disrupt or demolish the global money barons and cryptocurrency. Have our politicians any idea or plans for this possibility? Professor Kellerman of dept of disasters and health at University College London takes this threat seriously. The UK National Grid has a plan called Black Start. Has Australia or any state any such plans? Or are we blinded by the net zero stampede? Are we heading back to the stone age?

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