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The future of energy generation and storage

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We sold huge reserves off WA to China a few years back for 4 cents a litre.

Theses resources in fact belong to our future generations.

System is stuffed, just enjoy the party
 
explod said:
We sold huge reserves off WA to China a few years back for 4 cents a litre.

Theses resources in fact belong to our future generations.

System is stuffed, just enjoy the party
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Do I detect some cynicism there plod ?
 
SirRumpole said:
Replacing them, with combined cycle gas systems would seem a viable option.
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Gas would have been a dead easy option if we hadn’t sold it all overseas.

Qld gas is contracted overseas.

SA and Vic are rapidly running out.

WA and NT kept enough for WA and NT but not the rest of the country.

Tas doesn’t have any so far as is known.

Imports work but too expensive for base load power.

Options = get fracking big time in NSW or ar least partially shut the LNG export plants in Qld.

What a mess.....
 
The big problem with coal is that we’ve closed the wrong power stations.

Wallerawang was in decent shape and Redbank (both in NSW) was barely run in but we closed both and are trying to keep Liddell, which has plenty of issues, going a bit longer at huge expense.

Northern in SA was one of the better plants certainly but it was closed. Meanwhile it’s no secret that the comparably sized Torrens Island A (gas) isn’t in good shape.

Anglesea in Vic was old but actually pretty efficient compared to quite a few others, because the coal had a lower difference between HHV and LHV (getting technical there - in layman’s terms it burns with greater efficiency) and had a few more years left in it. Meanwhile we’re trying to get another 14 years out of the already 45 years old and becoming somewhat problematic units 1 & 2 at Yallourn.

So we’ve closed some perfectly good plants that had another 5 - 35 years left in them without any real difficulty but kept others which are in poor enough shape that they can’t even reach rated output safely and that’s when they’re working.

There should have been a plan.....
 


http://www.reserveourgas.com.au/how_would_a_gas_reservation_policy_work
 
A few years back I followed and played some companies into fracking in the US. They almost all failed but not before being hailed up from a few cents to 30cents, some to a dollar and then collapsing. Those on the inside would have made a fortune.

I wonder and fear that similar could be behind some of this.

My first ever investment was in an explorer in Qld called Exoil, 1968. Was shearing up there at the time. We got in at 10 cents and at the pub we were told it was not looking good, I sold at 85 cents but did not trust trading for 30 years after that.

And yes I'm a sceptic.
 

If the price fluctuates with the market then there is no consistent direction for competitors. A good investment for solar today will be cr@p tomorrow.

IMO the domestic price should be some median of prices over the last 10 years or so, it will still fluctuate but those fluctuations will be smoothed to a longer term trend and will give a better investment signal to the rest of the market.
 

Prices don’t have to fluctuate daily , retailers contract with suppliers for contacts that last for years, but pricing of those contracts should be driven by market forces, not regulated pricing.

There is no reason why local retailers shouldn’t compete for contracts with the export market, the local retailers always have an advantage anyway, simply due to location.
 
Value Collector said:
I think it should be sold at the market rate
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There are plenty of buyers who'd love that to happen.

Problem is the gas companies won't sell at market rate because they've locked in deals overseas. End result is that even the likes of Rio Tinto, a very large company, has serious trouble getting gas as does pretty much everyone else.
 
Value Collector said:
There is no reason why local retailers shouldn’t compete for contracts with the export market, the local retailers always have an advantage anyway, simply due to location.
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The trouble with that argument is that you look at it from a purely commercial point of view, from the IPA bible.

Gas and power are essential services that everyone has a right to access at an affordable price.

If you had a stack of wood in your backyard that you had to heat and cook with would you let someone else come in and take it, sell it to someone else, give you a pittance in return and let your own family freeze ?
 

The supply issues are a result of red tape and restrictions.

Get rid of the red tape and let the drillers drill, and there will be more than enough gas.
 
SirRumpole said:
Gas and power are essential services that everyone has a right to access at an affordable price.
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If you switch the word “affordable” to “market” I agree with you.

However when you say “everyone” you probably mean “some people” eg Australian citizens.

When I say “everyone” I truly mean “everyone” eg all citizens of the globe.

I don’t much care whether the gas is boiling potatoes in Bendigo or rice in Tokyo, both families need energy and the best way to supply that energy and guarantee future supply to “everyone” is to allow the price to be affected by supply and demand, and allow the drillers to drill.

The family in bendigo will always have pricing power over Tokyo, simply due to logistics.
 
Value Collector said:
Prices don’t have to fluctuate daily , retailers contract with suppliers for contacts that last for years, but pricing of those contracts should be driven by market forces, not regulated pricing.
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I have no problem with that and I don't think anyone would but the gas companies should be forced to offer such contracts which, in recent times, they have been refusing to do.

Truth is the gas companies over invested in the Qld LNG plants and trying to avoid writing off a few $ billion. That's ultimately what it comes down to.

Australia is the only country in the world which exports gas under a free market arrangement. Everyone else imposes various rules which ensure supply is physically available, either at market price or some other price, to local users. Australia's the only one where local users need to physically ship gas from overseas as is proposed for both NSW and Vic.
 

Again, it’s red tape.

They invested in export plants because they believed they would be allowed to keep drilling.

I was invested in he drillers when they were proving up so much gas that they literally had to invest and build gas power stations just to use up the gas, the export terminals were just a way to get rid of all the gas they were drilling, but then the governments stopped the drilling and the flow of gas has slowed.
 
Value Collector said:
The supply issues are a result of red tape and restrictions.

Get rid of the red tape and let the drillers drill, and there will be more than enough gas.
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Pointless drilling more when they'll just send more of the stuff overseas as they're already doing with 70% of what comes out of the ground.

What happens 30 years from now when there's nothing at all left apart from whatever is kept off limits from the drillers who would export if they could?

Anyone who thinks we've got enough gas to last 100 years is in for one hell of a shock. We did until we tripled the rate of extraction.

I'm not generally in favour of red tape but I just can't see how more of the same is the answer. If a 200% increase in production hasn't fixed the supply issue, because they've just siphoned off all that into exports, then how does a further increase do any good when they've already built the capacity to export that as well?
 
Value Collector said:
When I say “everyone” I truly mean “everyone” eg all citizens of the globe.
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Well that's jolly altruistic of you, or if I'm being cynical better suited to your investments, but my own selfish view is that we use our own resources to benefit our own citizens first, like every other country besides us does.
 
The "market" approach would work a lot better if we were talking about a market that works the same way it works with oil.

It's these decades long locked in contracts that cause the problem with gas. It gives rise to a situation where even paying double the market price won't get you physical supply.

Other countries, including the major oil and gas exporters, have a workaround whereby they deliver a % of the contract volumes which can be and is frequently changed at short notice. So you contract for 1 million tonnes and they'll tell you what % of that will be physically delivered and generally it's not 100%. OPEC members change the figures literally every month (well, OK, sometimes it's the same figure but they set them as such monthly).

So there's a solution that works for others. Gives a market and gives certainty of domestic supply. Just gets rid of the notion that contract volumes are fixed - a notion that really only exists in Australia anyway.
 
Smurf1976 said:
It's these decades long locked in contracts that cause the problem with gas. It gives rise to a situation where even paying double the market price won't get you physical supply.
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I was involved in the early days of CSG exploration and extraction including the first commercial horizontal drilling by CH4 for our gas supply (and btw, it was considered there was no need for fracking.

A problem with the big players diving into CSG production was that they had little experience with it, over estimated the amount that could be extracted over time and underestimated the rate at which it could be extracted. When the export contracts were signed a few of us reckoned that the required supply volumes could not be achieved. Hence the fracking to accelerate the extraction rate (doesn't materially increase the amount extracted per well), the now shortage domestically and the need for most of the players to purchase gas overseas to meet their contract commitments.
 
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