Albo's Coal and Gas Price Cap and Financial Aid proposal

[qldfrog]

too many ALP politicians ( and minions ) own rental properties ( they would NEVER limit their own income ) and that is only what is in the pecuniary interest register , goodness knows what is 'off-the-books'

but don't fret is isn't just the ALP

The so called rental crisis could easily be solved here in qld as we are supposedly preparing the olympics
Build the games accomodation as public housing and plenty of units available after.but i somehow doubt it will happen.

 

[sptrawler]

Because going off grid in most situations is economically worse, for all involved.

Even if you can produce enough electricity for your own needs and have batteries to store it, you need to over size you system so that you can survive the cold and cloudy days, but then on the sunny days you aren’t connected to the grid, so have no way of selling the excess power your oversized system generates.

Being connected to the grid allows you to sell your excess once your batteries are full, and allows you to import during the low production times, so you don’t need a huge over sized system.

Hey sunshine, my son has been offgrid for twelve months, with three teenagers they all game and have satellite internet.
He came up last weekend and I asked him how the off grid was going, as I actually do have an interest in the reality of it.
His system is 30kw of panels 15kw BYD blade battery, 13kva diesel auto start generator, that auto starts at 20% battery capacity and shuts down at 60%.
So 20 km south of Collie, which is a pretty cold wet sort of place, it has had 5 starts over the last year and runs for about 1.5 hrs to shutdown.
So he and I are both from an electrical background, we first thought the 15kw battery might be a bit small, but now we are thinking a bigger battery would require more generator run time to recharge two depleted batteries.
The problem most people have is, if the power supply runs past your house as in suburbia, you will have to pay a service fee.
The more people that become self sufficient as E.V's increase and their V2G and V2L capability increases, the price of electricity consumed will go down and the service cost because the electricity goes past the house will increase.
To maintain the system, so everyone has to work out what works best for them.
The son is off grid because he lives on a large rural block and doing the sums, off grid works better, than $hitty rural supply and a huge connection cost plus a service fee. no brainer really.
We just weren't sure our calculations were right, before they bit the bullet.

 

[Value Collector]

Hey sunshine, my son has been offgrid for twelve months, with three teenagers they all game and have satellite internet.
He came up last weekend and I asked him how the off grid was going, as I actually do have an interest in the reality of it.
His system is 30kw of panels 15kw BYD blade battery, 13kva diesel auto start generator, that auto starts at 20% battery capacity and shuts down at 60%.
So 20 km south of Collie, which is a pretty cold wet sort of place, it has had 5 starts over the last year and runs for about 1.5 hrs to shutdown.
So he and I are both from an electrical background, we first thought the 15kw battery might be a bit small, but now we are thinking a bigger battery would require more generator run time to recharge two depleted batteries.
The problem most people have is, if the power supply runs past your house as in suburbia, you will have to pay a service fee.
The more people that become self sufficient as E.V's increase and their V2G and V2L capability increases, the price of electricity consumed will go down and the service cost because the electricity goes past the house will increase.
To maintain the system, so everyone has to work out what works best for them.
The son is off grid because he lives on a large rural block and doing the sums, off grid works better, than $hitty rural supply and a huge connection cost plus a service fee. no brainer really.
We just weren't sure our calculations were right, before they bit the bullet.

That kinda proves my point. (Firstly I am not talking about people that live in remote locations with no grid access), let me run you through the way I weigh up such financial decisions about whether going off grid makes financial sense.

For most people it only costs around $1 per day to be connected to the grid, so that’s around $365 / year. So going off grid is going to save you a maximum of $365 / year.

But going if grid isn’t free, in order to be able to save this $365 per year by going off grid, you have to do two things which will have negative financial consequences for you, and consume that $365 annual saving.

1, You have to have over sized infrastructure, which can be seen by your sons 30kwh of solar panels with a diesel back up generator, when a smaller solar system and battery and no back up generator would be fine if you had a grid connection. The reduction in capital outlay and maintenance would probably be well worth spending $365 / year by itself.

2, cutting your self off the grid removes the ability to sell your excess power and take part in virtual power plant plans that earn you credits, this alone would probably mean you lose more that $365 per year, especially if there is times during the year you are away on holiday.

3, the capital saved by not having to invest all that extra money into an oversized system can be invested and earn more than the $365 / year grid connection cost.
———————————

Even if you want to go off grid, and set your self up with a huge solar system and batteries, it will still be worth keeping the grid connection intact just to sell your excess each day and remove the need for a diesel generator.

After all are you really “off grid” if you rely on a diesel generator? Technically yes, but realistically you are just connected to another type of grid, which once you factor in capital cost and maintenance my cost you the same as grid connection anyway.

(I know you have mentioned before that in WA, there is some weird rule that means you can’t sell your excess once you have a battery, but this not the rule for most of the country)

 

[sptrawler]

That kinda proves my point. (Firstly I am not talking about people that live in remote locations with no grid access), let me run you through the way I weigh up such financial decisions about whether going off grid makes financial sense.

For most people it only costs around $1 per day to be connected to the grid, so that’s around $365 / year. So going off grid is going to save you a maximum of $365 / year.

But, in order to be able to save this $365 per year, you have to do two things which will have negative financial consequences for you.

1, You have to have over sized infrastructure, which can be seen by your sons 30kwh of solar panels with a diesel generator, when a smaller solar system and no back up generator would be fine if you had a grid connection. The reduction in capital outlay and maintenance would probably be well worth spending $365 / year by itself.

2, cutting your self off the grid removes the ability to sell your excess power and take part in virtual power plant plans that earn you credits, this alone would probably mean you lose more that $365 per year, especially if there is times during the year you are away on holiday.

———————————

Even if you want to go off grid, and set your self up with a huge solar system and batteries, it will still be worth keeping the grid connection intact just to sell your excess each day and remove the need for a diesel generator.

After all are you really “off grid” if you rely on a diesel generator? Technically yes, but realistically you are just connected to another type of grid, which once you factor in capital cost and maintenance my cost you the same as grid connection anyway.

The point I was making that seemed to have escaped you, is the fact, if the grid is available to you as in suburbia, you wont be able to escape that $365 per year not only that but that charge will increase considerably.
As more people become self sufficient with batteries in suburbia, the underlying cost of supplying the service will have to change, from being a consumption based charge, to a service based charge.
So what you are basing your assumptions on, completely eludes me.
By the way, the son has grid access at the bottom of his block and it would cost about $50k to connect, that is why we did the sums.

 

[Value Collector]

The point I was making that seemed to have escaped you, is the fact, if the grid is available to you as in suburbia, you wont be able to escape that $365 per year not only that but that charge will increase considerably.
As more people become self sufficient with batteries in suburbia, the underlying cost of supplying the service will have to change, from being a consumption based charge, to a service based charge.
So what you are basing your assumptions on, completely eludes me.
By the way, the son has grid access at the bottom of his block and it would cost about $50k to connect, that is why we did the sums.

My original point I made to Divs question was that the reason the government doesn’t encourage people to go off grid is because it is financially worse for everyone involved.

You then seemed to dispute my opinion by using your sons setup as an example, you seemed to be saying that a setup like his is not financially worse than being connected to the grid.

I then just broke down the savings involved in disconnecting from the grid vs the large added costs and revenue losses, which in my opinion show that a grid connection is good value.

—————————
I don’t think the grid is going obsolete, I actually think it’s going to be a very important part of energy trading even for those who are self sufficient.

As I said even your son would benefit from it if he were able to connect.

—————————

Even if we all had large solar systems, batteries and Ev’s that are V2G, there would be enough times each year that we either need to buy extra power or sell extra power to make the grid worth while.

 

[sptrawler]

And I before my sons experience would have agreed with you, I actually have a friend who had a farm off grid 30 years ago, when the grid came close he connected and sold his off grid system to Caiguna roadhouse on the Nullabor.
What I was pointing out was that it isnt black and white these days, obviously you think it is.
IMO as I said, if you are in suburbia, the service cost will increase, whether you are conected or not, if you have a few acres and grid connection is an extra cost i.e there is a surcharge to add bays, an off grid system may be an option.
It's a bit like deep sewage, once it goes past your block you pay for it and have to connect to it.
Even if you dont have a house on the block, many places charge a service fee if it passes.
If you have a small rural block, you can keep your septics, why would you connect to the main sewage?

 

[Smurf1976]

On grid versus off - I'll simply say that as a whole the grid is very much here to stay and we're going to see far more, not less, electricity used in society.

That said there are certainly situations where off grid makes more sense and they basically come down to circumstances of being a long way from the grid relative to consumption. That's what it comes down to economically. The less you need, the less it's worth spending to connect. Hence even the energy industry itself has small off-grid systems in remote places doing various things - hydro headworks, weather monitoring, even oil pumping. No ideology there, it's just down to what's practical and economic.

Back to the thread topic however, the price cap on coal and gas itself, I do ponder how the various companies will react?

I'm thinking of actions that aren't necessarily rational in the short term but which management might decide to do as part of some broader plan trying to back government into a corner?

Eg shut the mine either outright or via some backdoor means. That might seem irrational but there are precedents in other countries and industries so I do think we could see some "interesting" outcomes here.

Just make sure more rock gets mined with the coal so it's not up to spec?

Gas processing plant has a mysterious breakdown in the depths of winter?

OK, that's all getting a bit speculative and conspiracy like but suffice to say I'll be extremely cautious about all this when it comes to investing. Investing in something where there's a direct conflict with government is fraught with danger.

If I was to make one prediction though it would be based around physical shortage. Bearing in mind that's me looking at the technical (physical, engineering etc) side of it and noting that it wouldn't take much to bring it about. That is, with gas it's a tight supply situation as it is and that being so, pretty much any producer could break the market if they wanted to. Speculation on my part but my guess is someone will do just that.

 

[divs4ever]

Because going off grid in most situations is economically worse, for all involved.

Even if you can produce enough electricity for your own needs and have batteries to store it, you need to over size you system so that you can survive the cold and cloudy days, but then on the sunny days you aren’t connected to the grid, so have no way of selling the excess power your oversized system generates.

Being connected to the grid allows you to sell your excess once your batteries are full, and allows you to import during the low production times, so you don’t need a huge over sized system.

except ( at least of the rural property ) the grid power isn't reliable

also there is nothing to stop you from having one system that powers the property and and another that is mostly for sale to the wider grid

the off-grid system probably needs to be a hybrid system , at least wind and solar , but they are other technologies being investigated , but the energy storage seems to be the biggie ( how do you store weeks/months of surplus energy reserves efficiently ) so you can navigate predictable events ( like the bush-fire season , or the cyclone season ) which often disrupts grid supply when they events occur

 

[divs4ever]

The so called rental crisis could easily be solved here in qld as we are supposedly preparing the olympics
Build the games accomodation as public housing and plenty of units available after.but i somehow doubt it will happen.

getting those units/accommodation made to any sort of standard ( in QLD ) is the problem , and besides what guarantee is there that the Olympic Games will be anymore than some bizarre sideshow by then ,
for example will they have to create trans-gender events ( and villages ) , and what about 'excluded nations ' that could extend up to one quarter ( or one half ) of the global population ( even more if travel restrictions/medical mandates persist )

and then we have the myopic 'cheating scandals '

and the third issue in QLD is the public transport , it is bad enough if you are ' a sardine ' ( work in an office/business during normal office hours ) almost impossible if working odd-hour shifts ( the old cartoon about the IT support staff living in a cardboard box in the car-park is bizarrely appropriate ) and i remember stories of Uni students sleeping in obscure corners between lectures and sessions in the libraries ( and their part-time jobs )

 

[qldfrog]

Anyway we are now far off subject.
Guilty myself

 

[divs4ever]

well the price caps are political expedience , if it really mattered ( high energy prices ) all the government had to do is remove the various fees/charges/taxes on energy ( coal/gas/oil ) used in local consumption ( think of the drop in petrol/diesel prices alone ) , inflation on top of the other taxes should get close to filling the gap

 

[Value Collector]

except ( at least of the rural property ) the grid power isn't reliable

also there is nothing to stop you from having one system that powers the property and and another that is mostly for sale to the wider grid

the off-grid system probably needs to be a hybrid system , at least wind and solar , but they are other technologies being investigated , but the energy storage seems to be the biggie ( how do you store weeks/months of surplus energy reserves efficiently ) so you can navigate predictable events ( like the bush-fire season , or the cyclone season ) which often disrupts grid supply when they events occur

That’s why I said I am not talking about people who don’t have the grid as an option, but for the rest of us it’s a cheap back up and cheap access to market.

When it comes to long term storage of energy, It’s possible for each house to have say 12 - 24 hours storage, and then the grid can have different levels of storage.

The end result we need to get to is basically double the amount of renewable generation to what we need, with large amounts of storage from batteries and hydro, and back up gas generation.

Then when the sun is shining and the wind is blowing we can run off the renewables, charge the batteries and hydro and use the excess to make hydrogen.

Then when the renewables production is low, we can drain the batteries and hydro.

 

[bk1]

It's the nationalisation of Gas and Electricity. Pure and simple.
Except the energy companies will still be expected to pump in capital to develop and maintain the systems.
Lets not talk about exploring for more.
And we are paying for it, a cap is a subsidy that is paid for through taxpayers.

 

[Garpal Gumnut]

Anyway we are now far off subject.
Guilty myself

For that reprehensible behaviour frog you should be confined to posting on the FMG thread only for a period of not less than one week.

gg

 

[Garpal Gumnut]

It would be interesting to see how many associated entities, families and pieces of fluff or toyboys of the ALP Cabinet sold shares in ORG recently.

These decisions should not be trusted to oligarchs within Government.

gg

 

[Value Collector]

It's the nationalisation of Gas and Electricity. Pure and simple.
Except the energy companies will still be expected to pump in capital to develop and maintain the systems.
Lets not talk about exploring for more.
And we are paying for it, a cap is a subsidy that is paid for through taxpayers.

The prices set as a maximum are quite high, and are triple what drillers were selling the gas for not to long ago, so it’s not that bad.

 

[bk1]

I will take the view of the AEMO and producers, I'll pass on your opinion.

 

[divs4ever]

It would be interesting to see how many associated entities, families and pieces of fluff or toyboys of the ALP Cabinet sold shares in ORG recently.

These decisions should not be trusted to oligarchs within Government.

gg

i sold my ORG shares , but in December 2017 ( @ $9.45 )

( which is sad because at one time i considered ORG as a 'core holding ' ,sometimes you just have to take the profit and RUN )

 

[Smurf1976]

I will take the view of the AEMO and producers, I'll pass on your opinion.

AEMO doesn't comment on matters of economic regulation. They'll look at the physical aspects only.

Physical aspects as in gas supply and consumption.

Aiming to be politically neutral, I'll simply observe that there are multiple conflicting aspects to all of this.

One one hand big business in general doesn't seem to be on side with the gas and coal companies. Already we've got Rio Tinto and Alcoa publicly on the side of government, not the coal and gas industry, for that reason. When their own selling prices are fixed but energy prices rise, that simply squeezes their profits, potentially sending them negative. That's a very real issue when you're selling into a global market and the competitors have much cheaper energy than you've got access to.

Obviously the gas companies have a very different perspective.

One the other hand there's the physical supply side and the reality that south-eastern Australia is shifting toward reliance on imports. The Port Kembla (NSW) terminal is physically under construction and the Outer Harbour (Adelaide) terminal is next. With the rather big problem being that government can do whatever it likes with regulating the price of domestically produced gas but it can't do anything at all about the price of imports.

If gas is regulated to $12 but the LNG price is $34 then quite simply nobody's going to ship LNG into those facilities, turn it into gas and blow their money. Business does do the odd silly thing but nobody's that foolish.

That's unless, of course, government comes up with the idea that the LNG imports be sourced from elsewhere in Australia. Not impossible but realistically we'll need Australian flagged ships if they're going to permanently operate in Australian waters transporting Australian gas from one Australian port to another.

Government brings back the Australian National Line?

This could get interesting.....