The future of energy generation and storage

[SirRumpole]

What concerns me is that if the area I know about is in such a mess then that seems an amazing coincidence. Almost certainly rather a lot of other things are in a similar state it's just that I'm unaware of the details.

Like sykscrapers cracking up perhaps.

 

[SirRumpole]

And in case you have not been watching, where has the federal Minister been during this supply debacle, or for that matter what has the PM had to say?

"It's a issue for the private sector to fix".

 

[Tink]

“We’ve become a third world state today,”

The Energy Minister says she’s not embarrassed by blackouts on Friday.

Hundreds of thousands of Victorians had their power cut in scorching heat due to “load shedding”.

Lily D’Ambrosio said there wouldn’t be only hours earlier.

Tom Elliott spoke with her on Friday.

https://www.3aw.com.au/tom-elliott-grills-energy-minister-over-friday-blackouts/

 

[rederob]

I'm keeping out of the politics but I'll say that all this does reflect something far broader, which extends well beyond anything involving energy supply.

As I understand it, your comments relate to an industry which operates under a national framework, ultimately overseen by the COAG Energy Council. Please correct me if I am wrong.
If that is the case, then your comments reflect the outcomes of a political process.
You either present the numbers objectively, which you do most of the time, or buy into the politics once you do overstep.
You have feet in both camps.

As a society we've become far too focused on regulations, law and ideology and nowhere near enough focused on science and making things happen.

Even if that were true for "society" it is not relevant to what has been happening in the national energy market unless you want to deny the evidence.
So here's a snapshot of that evidence:

"The National Electricity Market (NEM) is not in the best of health. The immediate symptoms are a power system where reliability risks are increasing, electricity bills are not affordable, and future carbon emissions policy is uncertain."​

That was from a December 2017 Report to COAG. The Report itself was a response commissioned through COAG to specifically advise on the health of the market given the clearly articulated concerns of industry and the States about their being no national policy.
All that has materially changed is that over a year on, and more and more reports to COAG that something needs to be done, the Chair of COAG continues to report that it's doing what needs to be done.

We've got an aggressively pursued illusion of competition in utilities whilst neglecting to make sure there's any power in the first place.

That is something I did not know and would be grateful for your evidence.
I recall the SA Premier a few years ago said he was moving to get the Augusta solar thermal plant installed due to a lack of competition, but have not found a link to confirm it.
I do know there is an aggressive retail market, having had a regular stream of cold canvassers to the door and an unlisted number, aside from occasional spam, wanting me to move from A to B.
There is an undeniable supply problem and utilities should be falling over themselves to capture an increased share of that market.
Far from an illusion of competition, there is a palpable dearth of it.

 

[Darc Knight]

SP claiming others are pushing a Barrow I sometimes worry about that old heart of yours Homer, pushing that anti anything not Conservative Barrow of yours!

 

[qldfrog]

"It's a issue for the private sector to fix".

For electricity, like road, telco, i would usually prefer a national..not state..ownership and management.
The trouble is that Australia has reached such a low in term of government ability and civil servants incompetence that, right now, i prefer seeing agl or engie in control for example than daring thinking of establishing a new federal entity.
Lost competencies can not be gained by 3 months training courses ,and seeing another lawyer in charge or importing a lady from a US PR company to lead it on a gold package is not something to wish for

 

[sptrawler]

You need to learn to read for understanding.
I have shown that you made claims which do not stack up.
You say things without evidence, or hide information that does not support your case.
You probably, at best, have a basic idea of how the system works.
The issue of supply is clearly a massive problem.
What needs to be discussed is how to address this problem.
And in case you have not been watching, where has the federal Minister been during this supply debacle, or for that matter what has the PM had to say?

The situation in Victoria, will provide the impetus to drive the change, whatever that may be.
There are technical limitations, and time constraints, so whatever is decided will probably be a stop gap.
I will watch on with amusement, as I should have earlier.

 

[rederob]

For electricity, like road, telco, i would usually prefer a national..not state..ownership and management.

You mean communism?

The trouble is that Australia has reached such a low in term of government ability and civil servants incompetence that, right now, i prefer seeing agl or engie in control for example than daring thinking of establishing a new federal entity.

There is a "free market" to supply.
It's a regulated market.
Just like the ASX regulates listed companies, generators (ie utilities) need to meet the conditions they agreed to when entering the market.

Lost competencies can not be gained by 3 months training courses ,and seeing another lawyer in charge or importing a lady from a US PR company to lead it on a gold package is not something to wish for

AEMO can only play the cards in her hand.
The problem is that her cards are so old that she's told the dealer the game is stacked against her and she cannot win unless a new deck is opened.
As much as Smurf knows about this industry, I doubt he could play the game any better with a deck stacked against him.

 

[SirRumpole]

You mean communism?

Whatever it takes.

Power companies were owned by the States for decades and no one complained about prices or lack of supply.

Now that they are privatised the energy sector is a disaster.

 

[rederob]

The situation in Victoria, will provide the impetus to drive the change, whatever that may be.

Ok, so please explain how this will occur.
Remember that this issue has not been dealt with for many years, is not confined to Victoria, and requires physical things in place to generate the required electricity. Which utilities are out there offering to build what is required?

There are technical limitations, and time constraints, so whatever is decided will probably be a stop gap.
I will watch on with amusement, as I should have earlier.

Please explain the technical limitations.
The time constraint is superseded by there being no investment decision to put in place a stop gap. You appear to be missing some steps in the process.

 

[rederob]

Whatever it takes.

Power companies were owned by the States for decades and no one complained about prices or lack of supply.

Now that they are privatised the energy sector is a disaster.

Think about your argument.
At what point did the sector begin to fall apart?
As for your solution - "Whatever it takes" - raises the question of who. Who do you have in mind?

 

[sptrawler]

Ok, so please explain how this will occur.
Remember that this issue has not been dealt with for many years, is not confined to Victoria, and requires physical things in place to generate the required electricity. Which utilities are out there offering to build what is required?

Please explain the technical limitations.
The time constraint is superseded by there being no investment decision to put in place a stop gap. You appear to be missing some steps in the process.

Fill the blanks in yourself, you have all the answers.

 

[SirRumpole]

Think about your argument.
At what point did the sector begin to fall apart?

I believe the rot began with the sale of Hazlewood, and the decision by it's (foreign) owners to scrap it on three months notice.

That should have been the warning sign to politicians that the risks of privatisation were not worth the one-off income from the sale, but a few ideologists on the Right then proceeded to screw up the rest of the network.

As for your solution - "Whatever it takes" - raises the question of who. Who do you have in mind?

The States and Federal government should re-enter the generation & storage markets. This is being done with the SA battery and Snowy Hydro 2 and should be continued with extra government owned infrastructure that engineers advise to be the most effective long term solutions.

 

[qldfrog]

I am just afraid at the lost of competences in the government.
their expects are mostly compliance experts ..this is what their role has been for so long and they are
ill adviced in designing or properly supervise new design processes
Hope i am wrong

 

[rederob]

I believe the rot began with the sale of Hazlewood, and the decision by it's (foreign) owners to scrap it on three months notice.
That should have been the warning sign to politicians that the risks of privatisation were not worth the one-off income from the sale, but a few ideologists on the Right then proceeded to screw up the rest of the network.

Let's assume that's when the rot began and that the message was clear.
The purpose of privatisation was manifold, albeit largely sold to us on the basis that our bills would be cheaper.
Privatisation also led to a NEM - what we now have to live with! The framework is supposed to ensure that a viable market for energy is available on commercial basis, underpinned by regulatory guarantees. I don't buy into ideologies: the framework is transparent.
If I follow through your reasoning then it's a problem of the Right, but the nature of the network was already in place.
I suspect if I followed through SP's reasoning then it's a problem of the Left.
Given we had a NEM when Hazelwood closed, it seems to me that the issue was really about how the NEM would foster competition to replace generating capacity. We all know there is a capacity issue in summer on the eastern seaboard. We also know nothing is being done to address the concerns of those who are best placed to step in to fill the gap - and that's States or/and the private sector.

The States and Federal government should re-enter the generation & storage markets. This is being done with the SA battery and Snowy Hydro 2 and should be continued with extra government owned infrastructure that engineers advise to be the most effective long term solutions.

The States & Cwlth can and do participate, as you outlined.
I doubt Snowy 2 cost Malcolm his job, but it did internally set the fossil fuel lobby against him. My view is that pumped hydro has a role to play in our energy future, but using the off peak spinning power from coal might not be the best way to go about it for large projects like Snowy 2. That aside, we are still about 5 years away from getting any benefit from Snowy 2, so until then....
While not disagreeing with your sentiment, the unresolved issue remains. Specifically WHO (ie. which person) will act?

 

[rederob]

Fill the blanks in yourself, you have all the answers.

You presented ideas and leave them in the air.
Getting used to that here.

 

[basilio]

Basilio,
Some people are so full of BS it is often better to just add them to ignore.
What is the point to even discuss?
PS
As you can see, you are not in my ignore list

Not necessarily. IMV this is a very complex topic. We are effectively talking about the total overhaul of our electricity system to make it clean, reliable, diversified and capable of supplying not just current needs but an electric vehicle industry. Huge call.

SP has a life work history in the power generation field around coal and gas. Why should that knowledge of working power systems be ignored ? On the other hand there is a rapidly emerging wind/solar/battery industry that has challenged the economics, reliability and diversity of historical energy suppliers. And this is still developing.

 

[SirRumpole]

Specifically WHO (ie. which person) will act?

It should come right from the top, ie the PM through his Minister. It's a national issue and you rightly point out that it's not being addressed by the current government, so the only alternative is the Opposition.

 

[Smurf1976]

So far as the politics of all this is concerned, I'll make an observation that ultimately nobody at the political level knows how to fix it.

Politicians collectively created a situation where we have one system owned by multiple entities who are precluded by law from even talking to each other about how to best do things.

Any attempt by government to fix the mess is in practice an attempt to produce a specific outcome from a free market. An outcome that isn't in the financial interests of those required to produce it.

Any COAG or other meeting won't be talking about the detail of how to fix the situation. Rather, it will be a lot of airy fairy words of a theoretical academic nature relating to economics. More of the exact same stuff which lead us to where we are now.

The S&P/ASX200 closed at 5905.6 and yes that has some relevance. If any politician wanted to adjust that outcome, so as to have the close at 6500 on the 30 June 2019, then doing so would be relatively straightforward compared to the electricity mess.

To push the ASX up, simply issue a formal direction to the RBA to make it happen. Buy shares, doing so in a manner which triggers a "buy" signal with common T/A approaches thus getting investors on board and minimising the cost to government. Make sure the media's hyping up the bull market to get the public in and hey presto! Up goes the index. However much you need to spend, just spend it. Print money if you have to but get the index up. It will happen.

In contrast to fix the electricity mess, both technical and economic, you need to control the individual actions of multiple companies some of which are listed companies, some of which are privately owned and not listed, some of which are owned by foreign governments, one of which is owned by the Commonwealth and a number of which are owned by the states.

There's also a vast difference in the technical capabilities of the various entities which range from extremely good to not good at all. Having a system where you know you've got some very dubious operators running bits of it is another problem in itself.

 

[Smurf1976]

Which utilities are out there offering to build what is required?

The only two which have expressed major interest are both government owned but operated as commercial entities.

Snowy Hydro (Australian Government) and Hydro Tasmania (Tas state government) have between them proposed 4500 MW of pumped storage supplying into Vic and NSW.

Both are relying on an assumption that others, that is the private sector, will develop wind and solar generation as the source of electricity for pumping water. Thus far the private sector does seem to be interested in doing it so this seems workable.

Beyond that there's some very limited interest from others. In the NSW and Vic context, Origin are perhaps the most likely to actually go ahead with their scheme (240 MW) given they already have a lot of the infrastructure in place and can presumably afford to build it.