That was the headline on the front page of the AFR on Friday.
Households are facing increases of up to 20 per cent, but businesses on five-year contracts signed in 2012 are facing hikes of as much as 83%.
The closure of Hazelwood is being blamed, but of course the price of gas has had more than a little to do with it.
Unsurprisingly an AEMO report fins that consumer demand will flatline, even with increased population, because consumers use less as the price goes up, and they generate their own.
Monday saw another article, Energy, price cuts threaten manufacturers:
- Soaring energy bills and pricing pressure from supermarket chains could force food and grocery manufacturers to close plants and shift offshore, says the new chief executive of the sector’s peak body.
Australian Food and Grocery Council chief executive Tanya Barden says more domestic food and grocery suppliers will become unviable if they cannot pass on rising input costs or are forced to cut prices further as energy bills double.
They’ve absorbed price deflation for their produce over the last six years, but a breaking point may be reached in the next 18 months.
As Ootz linked on another thread Bills have become centre of the energy discourse galaxy in Australia. Yet Finkel saw electricity prices as more or less flatlining after 2017 through to 2050.
2. Businesses turn to renewables
Increasingly, it seems, we are going to get stories like Victoria agribusiness turns to 196MW wind farm with 20MW storage:
- Agri-business company Nectar Farms has announced a $565 million expansion of its new hydroponics business near Stawell in the Victoria’s western districts, that will include a 196MW wind farm and 20MW of battery storage and make it 100 per cent renewable-powered.
In what is a unique project in Australia, Nectar Farms will expand its 10 hectare state-of-the-art hydroponic glasshouse and plant technology to 40 hectares to supply vegetables to local and international markets.
They had intended to use gas, but it was too expensive, and supply unreliable.
Further west we find in the AFR Adelaide winery turns to solar as power bills double.
The article also says that the five months to the end of May saw a record 386 megawatts of solar panels installed on the roofs of homes and firms around Australia, beating the previous record from 2013:
Australia is looking at a new way of shooting itself in the foot by contemplating an Australian Standards proposal that lithium-ion batteries be only allowed in homes if they are contained in a concrete bunker.
Europe and the USA have standards that allow them, but here we need to be made safe from this dangerous technology:
- Home battery storage systems would be banned, while lithium-ion batteries for laptops, mobile phones and other devices, electric vehicles, and gas bottles are not.
Giles Parkinson says:
- The “coal versus no new coal” debate has come to define the battle lines over Australia’s energy future. It can basically be boiled down to one concept: the assumption that we have to rely on baseload power for the reliability and security of out electricity supply.
A new report from the US highlights how the concept of “baseload” is really just an artefact of an old industry, and points out that baseload should not be confused with reliability. The two do not go hand in hand, and hanging on to the term is getting in the way of planning for the future.
Baseload is effectively a marketing term for “clean coal”.
Parkinson links to The Brattle Group report which was commissioned by the NRDC, a US-based NGO, on baseload power. This is what a modern power supply might look like:
Parkinson also points out that coal and gas generators failed in the heat in February. Gas failed in Victoria in the recent cold snap.
From Giles Parkinson at RenewEconomy:
The Minerals Council of Australia has entered the world of make-believe with its new “analysis” of energy costs in Australia – but at least it has found a novel way to make new coal generators look cheap.
First of all, you halve the estimated cost of coal generation, double the cost of wind and solar, and then add absurd levels of “back-up” that do not apply to the fossil fuel generators – whose output continually went missing at crucial times in last summer’s heatwaves.
Unfortunately that’s not how the story was told in the AFR.
- From June 17th to June 23rd, the vast but sparsely populated province of Qinghai was powered only by wind, solar and hydro plants, according to China’s official Xinhua news agency. During that period of time, “green energy” plants provided the province with 1.1 billion kilowatt hours of electricity — the equivalent of burning 535,000 tons of coal. 72% of that came from hydro plants, while the remainder was from wind and solar, said the provincial grid company.
Located in northwestern China, Qinghai is China’s fourth biggest province/region, but also only its 30th most populated (trailing behind only Tibet and Macau). The province is bigger than France, but 12 times less populated with just around 5.8 million people.
Qinghai is known for its abundance of natural resources, including high-altitude plains that are perfect for both wind and solar farms. Earlier this year, a massive solar farm was completed on the Tibetan Plateau that spans out 27 square kilometers, capable of powering 200,000 homes. Additionally, the province is home to many fast-flowing rivers that are the sources of China’s biggest waterways — the Yellow River, the Yangtze and the Mekong.
If you want to talk the old language, hydro provides the baseload. However, Qinghai is seen as an exporter of power to the rest of the system.
- China has said that it will boost use of non-fossil fuels so that they account for 20% of its energy consumption by 2030. By the end of the decade, China plans to spend $360 billion on green energy projects, and it recently surpassed the US as the world leader in renewable energy development.
7. Scrapping the Limited Merits Review
The Turnbull government plans to scrap the Limited Merits Review.
By way of explanation, almost half of the average bill reflects the cost of getting electricity from the power station to homes or businesses, via the “poles and wires” that make up high-voltage transmission and local distribution networks. The revenue they charge is set by an independent government agency called the Australian Energy Regulator (AER) every five years.
The transmission and distribution entities have had the right to challenge these determinations, in what is known as the Limited Merits Review. In the past at times the AER has been found to have made mistakes by the Federal Court and the Australian Competition Tribunal. This can mean that we have cheaper electricity now, but the grid could then be under-maintained, leading to unreliability and higher prices later on.
If AER can make unchallenged determinations, it also introduces ‘sovereign risk’, a turn-off for investors. In the linked article Brendan Lyon is the CEO of Infrastructure Partnerships Australia, says the proposal is a really bad idea:
- When it comes to energy, federal politicians need to stop “helping”. Australia’s energy system is now a complete bugger’s muddle precisely because of multiple political interventions, across the tiers of government, over a long period of time and without any uniting or unifying national energy policy.
- The federal government should abandon “Snowy 2.0” and related attempts to directly intervene in network prices – and instead, return to “Energy Markets 101”. A strong merits review regime is a cornerstone of stable regulation.
8. Labor will support the CET
Mark Butler, Labor’s spokesperson for Climate Change and Energy, in his new book ‘Climate Wars’‘ argues Australia remains disconnected from the dawning gravity of the social, economic and environmental threats of climate change. As a gesture to peace, he said Labor would support a Clean Energy Target as conceptualised in the Finkel Review.
9. Brown to Green Report
Climate Transparency has compiled a Brown and Green Report to review country performance feeding into the G20 meeting.
Australia remains “inadequate”, but we are fifth most attractive for investment in renewables, after China, India, the US and Germany.
I’ve only just had time to skim the report.