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 There was only one brief reprieve in 2014 after the carbon tax was repealed, but that hip pocket relief was short-lived.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.