Taxpayer subsidies are worth the cost if they attract more business into the State.The state owned networks are a cost plus profit model two, if they make less than their costs the either go bankrupt or need tax payer subsidies,
The States who sold their power assets did so because Peter Costello told them they wouldn't get any more grants unless they sold. It was called "asset recycling".The states sold their power systems because they had run them into the ground, and they required large capital outlays to meet the forecast growth.
Thankfully W.A, Queensland and Tassie didn't.The States who sold their power assets did so because Peter Costello told them they wouldn't get any more grants unless they sold. It was called "asset recycling".
The States who sold their power assets did so because Peter Costello told them they wouldn't get any more grants unless they sold. It was called "asset recycling".
People who can fix should fix, blame is a way of learning lessons from the past.Thankfully W.A, Queensland and Tassie didn't.
Shame about NSW and Victoria, but par for course, they would sell the baby with the bathwater, going on past performance IMO.
It would have been all different, if chairman Dan had been in when they got the money from the sale, he would have spent it wisely.
You have to be honest, Victoria and NSW could buy back the power stations for a lot less than they sold them for, so they did pretty well.
In South Australia, the Govt was offered North power station back for nothing and refused it, then it was blown up from memory.
So blaming this pile of $hit mess on the Costello, is drawing a long bow, but blaming is goto answer these days, rather than fixing.
I am fine with subsidies where they are needed, but I am just pointing out that comparing a model that is run to provide enough return to keep capital flowing, with a model that was based on government subsidies is not a great comparison.Taxpayer subsidies are worth the cost if they attract more business into the State.
You don't like subsidies? Tell it to the EU, US, Japan, Korea and virtually any industrialised country. They all do it, so capitalist "purity" is a mirage.
Queensland and WA might not have sold, but they have relied on heavy private investment to keep the lights on.Thankfully W.A, Queensland and Tassie didn't.
Shame about NSW and Victoria, but par for course, they would sell the baby with the bathwater, going on past performance IMO.
It would have been all different, if chairman Dan had been in when they got the money from the sale, he would have spent it wisely.
You have to be honest, Victoria and NSW could buy back the power stations for a lot less than they sold them for, so they did pretty well.
In South Australia, the Govt was offered North power station back for nothing and refused it, then it was blown up from memory.
So blaming this pile of $hit mess on the Costello, is drawing a long bow, but blaming is goto answer these days, rather than fixing.
It’s the same in WA, most of the states energy is coming from the private sector that built and owns the gas pipelines, gas power plants, wind farms, and solar.
So how much capital and labour do we want to divert away from mining Iron Ore and into steel making?
I've had enough to do with utilities to say there are good and bad examples under both government and private ownership. What determines it is more about the regulatory environment and the people involved in top positions.He owns the grid and generation assets in Iowa, and sells the power to customers in Iowa for half the price that the government owned utility across the river in Omaha sells that it generates for its customers.
The pipeline was still privately funded, even if it was underwritten by a government contract.In W.A the only reason the NW gas hub was developed and a pipeline was built, was because the State Government agreed to buy a certain amount per day before the pipeline was built on a use or pay basis, when they didn't even have anything to use gas, so for quite some time from memory, Woodside was actually extracting gas and pumping it back down and the Government was paying for it. From my cloudy memory it was 173TJ / day but I could be wrong on that.
Then the Government had to convert a power station to run on gas, to use some of the contracted amount when it arrived and the Government had to reticulate Perth residential properties with the piping and infrastructure to use the contracted gas when it arrived.
Then when it became profitable they sold it off, so you seem to have the story ar$e about, but don't let history ruin a good story.
A lot of others on the forum try to rewrite history, as us older generation pass away they will get away with it, that's the scary bit.
The State owned company that was sold off, you may have heard of, Alinta.
For someone who prides themselves in researching things, that prognosis of yours was lacking in most aspects, I've covered the gas section do you want to get into the solar farms and wind farms?
The Transition from Coal to Natural Gas in Western Australia. How European Ideas of Progress, Colonial Experiences and Frontier Sentiments Transformed an Energy System on the Edge of Asia
The transition from coal to natural gas in Western Australia is relatively recent. Decisions made in the 1970s ultimately resulted in a 1.540-kilometre natural gas pipeline being built and commissioned in 1984. This pipeline, underpinned by a long-term natural gas supply contract with the...books.openedition.org
From the article:
Despite these challenges, Court viewed this now large and potentially low-cost fuel source as a tool to facilitate greater industrialisation, mineral processing, and economic development. In 1975, a group was assembled which included the Stated Energy Commission of Western Australia (SECWA) and the North West Shelf Joint Venture Group (NWSVG). The NWSVG was a consortium of domestic and international private companies which had discovered and controlled leases over these major offshore gas fields. SECWA and NWSVG group concluded that the State Government would need to build and operate a 1.540-kilometre natural gas pipeline from Dampier to Bunbury (the north-west of Western Australia to the south-west). This would be accomplished by a twenty year “take or pay” contract between the private gas companies and SECWA. Of particular import for the private companies, infrastructure for both domestic gas and exported LNG, such as the offshore platform and sub-sea pipeline, would be accessible by both parties.
41The implications of the “take or pay” contract are important to understand, as it was signed by a state-owned utility (SECWA), in unison with private companies, to underwrite an investment in infrastructure which could also be used for an export industry (LNG). While the LNG contracts with Japan and final agreements between SECWA and the private companies were not concluded until the early 1980s, Sir Charles Court’s direct involvement in what was a complex series of agreements, undertakings and ultimately contracts, was a key determinant in securing the international investment for the domestic and then international stages of the LNG.24 The investment, which at the time was the largest in the nation’s history, was made possible by a complex series of decisions. This brief overview merely touches on the main contributing factors. The 1.540-kilometre natural gas pipeline was finished in 1984 and supplied large volumes of natural gas to Perth and nearby industries. In 1989, the first load of LNG departed for Japan.
Also:
Sale of Dampier-to-Bunbury natural gas pipeline officially completed | Western Australian Government
25/3/98 The biggest privatisation in Western Australian history, the $2,407 million sale of the Dampier-to-Bunbury Natural Gas Pipeline, has today been officially completed with the WA Government receiving the full amount from the sale from new owners Epic Energy Australia.www.wa.gov.au
From the article:
25/3/98
The biggest privatisation in Western Australian history, the $2,407 million sale of the Dampier-to-Bunbury Natural Gas Pipeline, has today been officially completed with the WA Government receiving the full amount from the sale from new owners Epic Energy Australia.
The State Government today accepted full and final payment from Epic Energy Australia, just three weeks after the Government announced the details of the successful sale.
When it makes sense it will happen automatically.With increasing automation an outsourcing of high skilled jobs, seems like it would be a good idea to be creating new jobs in new industries sooner rather than later. I have no issue with automation or outsourcing btw, we outsource a lot of our eccom store jobs.
well Australia has heaps of iron , coal , a fair amount of nickel ,oil , gas and uranium .. and the sun shines a fair bit in the Northern StatesIron Ore vs steel making, no idea on that specifically, but I am glad someone is going to try
Well I think everyone who consumes energy wants it at the cheapest price and everyone who produces, distributes or sells it wants to do so at the maximum price.I've had enough to do with utilities to say there are good and bad examples under both government and private ownership. What determines it is more about the regulatory environment and the people involved in top positions.
Go back a generation and several Australian states were easily beating the US on energy costs. Today the opposite is true and the driver of that change was far more about regulations and leadership than it's about ownership.
The big shift is the focus has shifted from cost minimisation to revenue maximisation. That's the crux of it, the entire mindset has shifted dramatically.
That's because of regulatory change, not ownership change indeed it's occurred even where ownership remains unchanged. They all have an order of magnitude greater overhead costs today in the modern regulatory environment, and far less pressure to contain costs than was historically the case.
Trouble is everything to do with energy, resource and industrial economics has become so heavily politicised as to make rational public discussion effectively impossible. That which is fundamentally a technical and accounting exercise has turned into something more akin to religion.
Hence I've decided to limit what I say going forward. It ends up interpreted as a political comment, rather than an economic one, and I don't think that's really doing the forum much good.
Noting for the record that pretty much everyone with knowledge has already completely walked away from publicly commenting on it anywhere. Everyone who could help solve it has given up trying, because you just can't win with politics and religion and unfortunately that's what it's come down to.
Is that about "gold plated" poles and wires?That's because of regulatory change, not ownership change indeed it's occurred even where ownership remains unchanged. They all have an order of magnitude greater overhead costs today in the modern regulatory environment, and far less pressure to contain costs than was historically the case.
cheap AND reliable , for me , i have had a gutful of blackouts , brown-outs and general downtime because someone in planning had the insight of a golf ball ,Well I think everyone who consumes energy wants it at the cheapest price
If governments are going to own power assets then they need to appoint experts to the board of the ownership authority and take their advice, not indulge in their own fantasies.but you can count government to run infrastructure into the ground , then flog it off , because it can't afford to replace it ( they wasted all the profits )
Just one exampleIf governments are going to own power assets then they need to appoint experts to the board of the ownership authority and take their advice, not indulge in their own fantasies.
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