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My electricity usage for the latest quarter I have been billed, just a few days ago, was 14 percent less than for the same period last year. My bill was 21 percent higher. Simple arithmetic tells me that per kWh my charges have increased by about 25 percent in just one year. Much more to come, no doubt, if federal Treasury is half right and Chris Bowen, Matt Kean and Lily D’Ambrosio et al, continue their maniacal efforts to close down cheap coal power.
To be clear, mine is a single-person household; and, while distinctly unrich, I am not on my uppers. I can afford the bill. That might not be so easy for a struggling family or single mother with two or three children. Having their power bill increase by 25 percent might not be a small thing at all. Oh, it’s the war, the pollies in charge claim. Putin is to blame, not us. They’ll say anything to further their agenda. Not to put too fine a point on it, they’re liars to a man and woman.
For a reference point, Russia invaded Ukraine on February 24, 2022. Everything was hunky dory before then, apparently? Au contraire. I can do no better than cite the impartial ABC News, which reported on July 18, 2018:
Throughout the 1980s, ’90s, and most of the 2000s, electricity prices tracked fairly closely to general consumer price trends. In the past decade, however, electricity has shot off the charts. Since 2008 power prices have risen 117 per cent, more than four times the average price increase across sectors. There was only one brief reprieve in 2014 after the carbon tax was repealed, but that hip pocket relief was short-lived.
There’s a pointer in there to our current malaise. Hint: carbon (dioxide) taxes by other names. Tony Abbott (he whose name dare not be spoken in approbation on the ABC) gave us the reprieve in electricity prices to which the ABC refers. Another reprieve occurred in 2020 and 2021 during the authoritarian lockdowns of the hysterical COVID era; not sure why. However, electricity prices soared in the December quarter of last year. Is that down to Putin? That is the question. Maybe in some part, but it seems unlikely that he’s had more than a timing and transitory effect.
According to CPI figures, the index of electricity prices in the December quarter 2022, while spiking in the quarter, was only 3 percent higher than in the March quarter of 2020. So, in fact, the current level of electricity prices simply represents an extrapolation of an established trend. Ergo, the damage has been inflicted over numbers of years. More accurately, self-inflicted by closing down coal power, hobbling coal power and, in its stead, foisting intermittent and unreliable power onto the grid.
There is nothing unique about Australia. It’s happening wherever climate alarmists occupy government; principally in Europe and in North America. In Germany, for example, with its focus on green energy, household electricity prices rose 30 percent between 2011 and 2020 — almost three times the general increase in consumer prices. A study out of the University of Chicago shows that US states with a higher penetration of renewable power had correspondingly higher electricity prices. As the authors point out, the higher prices likely reflect costs that renewables impose on the generation system due to their “intermittency” and “higher transmission costs.” What a surprise.
Global spot prices for coal and gas did spike sharply as a result of the war. However, it’s hard to say by how much this affected electricity prices in Australia. Domestically, coal and gas are mainly sold on a contract basis which insulates domestic buyers from upward spikes in spot prices. Moreover, a good amount of coal power and the coal which fuels it is jointly owned. So that too would insulate Australian prices from global spikes. But look, no need to argue about that. International coal prices have dipped by 22 percent from their peak in September 2022. Natural gas prices are now back to their pre-war level. Ergo, if Putin was to blame, expect a commensurate dip in electricity prices. My advice: don’t hold your breath.
Finally, first close your eyes and engage in nostalgia. Recall the halcyon days of Australian energy generation. Coal power stations sitting on, or adjacent to, hundreds of years’ supply of high quality, easily extractable coal. Chugging away night and day without a moment’s interruption. Supplying households and industry with the cheapest power in the world. Second, open your eyes and face the awful reality of where we are now and where we’re heading.
Reliable and cheap power is giving way to countless far-flung wind and solar farms, most of which exist only in the febrile imaginings of energy ministers and which, in any event, don’t work when the wind isn’t blowing and the sun isn’t shining. Firming, so-called, is being supposedly met with expensive batteries, which provide back-up measured only in minutes; with abundant pumped hydro which doesn’t exist and is never likely to, if Snowy 2.0 is any guide at all; with green hydrogen, which has never been produced at scale or, at any scale, at anything like an affordable price; with thousands of yet to be built concreted steel pylons carrying thousands upon thousands of kilometres of high-voltage cable criss-crossing the country to share power on the off chance the wind is blowing somewhere. And, according to the geniuses in government, federal and state, this mishmash of fanciful aspirations will actually be built and actually work and, to boot, provide the cheapest electricity. Explain that again Messrs Albanese and Bowen. Speak slowly.
A convenient scapegoat is Vlad and one supposes that it’s all his fault the various European and the UK governments went all green, shut down their regular and relaible sources of power generation and had to buy oil and gas like it was going out of fashion (and it was according to them) from The Russian Federation. Many people here have the same mindset and one marvels at how they hold Vladimir responsible for price rises in commodities he hasn’t heard of. That man, and he isn’t a nice man when it is all said and done, would be the first dill the KGB ever hired in it’s long history of hiring clever people.
Peter, you couldn’t make up what has been passing for government in Australia. Of course you are correct about the rise in electricity prices in Australia. For instance in the The Philippines the price I pay for electricity has risen by about .5 of a peso (1.5 cents) per Kwh since the beginning of 2022. The price has hardly changed in 6 years, with the rise since 2022 bringing prices back to a “pre covid” state. What the Federal and NSW governments have managed to do in a twinkling by imposing their fiat over the gas and coal industries is to wreck the perception that most of the world had, that Australia was a safe place to invest in. It is almost as if the politicians who obviously have no idea about how the real world works, had a brainstorming session as to how to do more damage to Australia and its future than Morrison’s little “covid vandalism”, and this is what they have come up with.
Yes, and all said many times before, of course.
However:
[part line from the article]
Peter Smith is clearly not familiar with the geoscience, engineering, working conditions, finance and marketing of mining operations. Yes, some deposits are more readily mined than others, although all of them, bar none, have their own difficult geology – but many are just hard, consume-all work.
Perhaps Peter could try his hand at sorting through running a deep longwall operation in faulted, gassy strata, irrespective of the various seam qualities. Or perhaps a multi-seam deposit with lower quality multi-split plies of varying thicknesses may entertain.
He is right though in that the Aus power supply was “halycon” days, now past, and those of us who knew how protected the general populace actually was also know the destruction slowly being imposed.
Simple arithmetic tells me that per kWh my charges have increased by about 25 percent in just one year.
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Only if about 25 percent is about 41%.
There’s been quite a lot of talk about Grid scale battery backup but today, globally, there is about enough battery backup for about a minute. The famous Tesla Battery in South Australia could run the State for about 8 minutes.
The current Lithium Ion battery manufacturing capacity globally is pretty much all going to Electric Cars. If they stopped supplying batteries for cars the current capacity at todays prices could provide about half a days battery backup globally at a cost of about 100 Trillion of todays Dollars and would take 400 years.
When we consider what it would take to say only just double the current production it becomes clear that when politicians and activists glibly talk about how battery storage will solve all the problems with Wind and Solar they are just revealing themselves to be idiots.
Any discussions of these issue without the real numbers is propaganda and a waste of breath.
You are sitting around the board table at a power company. One proposal you are asked to consider is an investment to upgrade one of the company’s older power stations so that it can continue to operate, generating cleaner and cheaper electricity in the long term. An alternative proposal is to close it down, which by reducing supply will lead to higher electricity prices, and the company will be congratulated for helping to save the planet. The funds can then instead be invested in renewables, leading to even higher power prices.
So far it’s a no-brainer, right? What’s missing though is a market mechanism that puts a value on the reliability of supply. In using taxpayer funds to build battery systems, governments are distorting the market and in effect adding to the cost burdens on consumers. My point is that the cost of battery systems should be borne entirely by the producers of intermittent power.
To lbloveday, thanks for correcting my “simple” arithmetic. I divided 21 by .86. Should have divided 121 by .86. Reminds me again of my frailties. It’s annoying too because the increase of 41 percent is so much more impactful, apart from being true.
“Reminds me again of my frailties”
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You are no orphan – I’m going downhill and picking up speed after 2 severe knocks to the head last year, so I wear a bespoke t-shirt:
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BETTER A HAS-BEEN
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THAN
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A NEVER WILL BE
Thank you occidental for your perception of our energy and past government leadership problem indicated in the following:
“It is almost as if the politicians who obviously have no idea about how the real world works, had a brainstorming session as to how to do more damage to Australia and its future than Morrison’s little —” [effort to embrace net zero by 2050]???
“the cost of battery systems should be borne entirely by the producers of intermittent power”
And the cost of addition pole and wire to distribute the non renewables from the far flung corners of the world.
Common sense economics.
Why is this not talked about in the media or political world?
Dear lbloveday,
Mate, remember, once your over the hill you pick up speed!
Still quite a way from the bottom – I still use the contraction “you’re” rather than the determiner “your” where appropriate!
Left off the smileys because I don’t know how to paste them!
In SA this morning, as on many mornings, we are dependent on gas and Vic brown coal for our power. What happens when the gas and coal are turned off? (Ref AEMO website)
The Putin hatred is tedious. Ask Russians if they think Putin is a tyrant. They do not. They prefer strong leaders and he has higher support than most Western leaders get.
The energy mess exists because of American hegemonic warmongering. Sure, Putin is playing a part because of the need to protect Russia’s borders but look to the source of this war and the US meddling is easy to see.
The important lesson from all of this should be, remain as self-sufficient as possible in terms of energy. That way it does not matter who is running which country or trying to start wars because you control your own energy resources.
“Ask Russians if they think Putin is a tyrant. They do not.”.
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Some do, some don’t, and asking the relatively few Russians any of us know will not provide the ratio.
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I had a close Russian friend who thought Putin was a tyrant and worse – “Fcuk Putin” was her most common comment on him.
I was going on percentages in terms of voting and polls. Of course some hate him because that happens in all systems.
I should have been specific. I did not mean every Russian supports Putin but that Putin has huge support from Russians, higher than most Western leaders. He has 88% approval and even if you wanted to factor in some not being honest, it remains high.
I was not basing that on Russians I know or knew when I spent a lot of time there ten years ago. You decided to quote a friend. I am just going on stats.