The future of energy generation and storage

[Smurf1976]

If the government is going to put taxpayers money into coal mines or generators then why doesn't it just buy said assets which would be going dirt cheap, and avoid the same problem with the next owner and the next....

At one point the largest mining company in Australia, of anything, in terms of the quantity mined was the Victorian government via the SECV coal mines.

The Vic government also had another, completely separate, operation too many years ago which was simply known as the State Coal Mine.

So it’s been done before......

 

[SirRumpole]

At one point the largest mining company in Australia, of anything, in terms of the quantity mined was the Victorian government via the SECV coal mines.

The Vic government also had another, completely separate, operation too many years ago which was simply known as the State Coal Mine.

So it’s been done before......

It seems, other people have the same ideas...

Albanese government commits $4.7 billion for NSW renewable energy investment

The federal government is adding billions to the New South Wales renewable energy plan as MPs return to parliament to vote on the national energy deal.

www.abc.net.au

"Yesterday, the NSW's opposition leader Chris Minns said he was considering establishing a state-owned energy corporation to have government-owned assets, as he develops Labor's energy policy to take to the election in March.

"Ownership of electricity assets and a reservation policy are things that we need to look at when you are turning over every single rock," Mr Minns said.

Victorian Premier Daniel Andrews took a similar proposal, which involved reviving the State Electricity Commission, to the polls last month."

 

[mullokintyre]

However, Mr Johnston argued their problems were inherently private commercial matters, and it would be inappropriate — even unlawful — for the state to intervene.

Really? Isn't this the same government that effectively legislated Clive Palmer out of a settlement over a $30billion dispute over the Balmoral South Iron ore project between Palmers Minerology and Citic.
Governments are more than willing to intervene in commercial matters when it suits.
Mick

 

[sptrawler]

If the government is going to put taxpayers money into coal mines or generators then why doesn't it just buy said assets which would be going dirt cheap, and avoid the same problem with the next owner and the next....

Because the Govt doesnt want to employ people, it is easier for the private sector to offload workers than the Govt, the private sector dont get the media backlash

 

[SirRumpole]

Because the Govt doesnt want to employ people, it is easier for the private sector to offload workers than the Govt, the private sector dont get the media backlash

Well that just shows lack of guts. As Smurf says it's been done before, the hated Daniel Andrews is heading towards State ownership of assets again, so is the NSW Opposition, Qld didn't sell them off in the first place.

The Libs may not want the odium of employing people, but the 'free market' has clearly failed, so what's left ?

 

[sptrawler]

Well that just shows lack of guts. As Smurf says it's been done before, the hated Daniel Andrews is heading towards State ownership of assets again, so is the NSW Opposition, Qld didn't sell them off in the first place.

The Libs may not want the odium of employing people, but the 'free market' has clearly failed, so what's left ?

Yep privatisation is like globalisation, it works great until it doesn't, it works while the private sector is making money and the public are getting what they want, once one of those fails the system collapses.
Privatisation fails when the privates sector are required to supply the product at a loss, that's why things like power are called an essential public service, because failure isn't an option.
Globalisation fails, when the country you have sent all your manufacturing to, either doesn't want to sell to you any more, or logistically you just can't transport it like with covid. Then even the most basic essential item can't be bought for love or money no matter how badly you need it.
It is about time the Governments grew a pair and re nationalised essential services and also demanded essential products are manufactured at home, or adequate supplies are held available e.g oil etc.
At least vaccines are going to be produced here again.

 

[Smurf1976]

Because the Govt doesnt want to employ people, it is easier for the private sector to offload workers than the Govt, the private sector dont get the media backlash

When it comes to energy, I think Tasmania might have the right model there.

In short, the Hydro is a corporation owned by shareholders and in no context is it the Public Service. Government is the only actual shareholder yes, but it's very clearly set up as a corporation separate from the Public Service in every way.

HT staff are not Public Servants in any context. They are not covered by PS Awards or pay scales, they have no access to PS dispute resolution processes and so on. They are not counted as Public Servants for statistical purposes and nor are they protected by any political promise or agreement relating to the PS.

Ultimately government does have control given it's the ultimate owner but there's a very clear distinction between HT and government itself. One consequence being that HT's staff simply don't exist, at all, so far as any question concerning the size of the PS. That avoids the issue of political pressure to not employ people in the Public Service.

So using that model, suppose WA were to hypothetically take over the coal mines via an entity which I'll simply call the Collie Coal Corporation or CCC for short.

The relevant Minister could then answer any relevant question in state parliament simply by stating that no Public Servants are employed at Collie and that any question regarding employee numbers is a matter for CCC management to determine.

If the unions make a fuss then again it's nothing to do with government, go argue with CCC.

Government's requirements placed upon CCC would basically be that they get coal out of the ground in the required quantities, that they do so as economically as practical and that they comply with all relevant laws. How to achieve that being a matter for management.

 

[mullokintyre]

Interesting note from the AFR
If Dominic Perrottet decides there’s a coal emergency, an emergency there is.

And in such an emergency, the NSW Premier will have powers over the state’s black coal that might cause a Chinese central planner to blush.

Changes to the Energy and Utilities Administration law passed on Wednesday give his Energy Minister the power to set maximum prices, decide who coal will be sold to, and control the use of the coal, for any period. In other words, the government can seize control of the whole market.
This isn’t a small industry, either. NSW’s 22 open-cut and 18 underground coal mines produce 236 million tonnes a year and employ 23,000 people, according to research company Coal Services. One of the bigger miners, Sydney-based Whitehaven Coal, is worth almost $10 billion.

The law’s self-declared objective “is to put downward pressure on electricity prices during coal market price emergencies by allowing for the giving of directions in relation to the price and domestic supply of coal used to generate energy”.
All the premier has to do to trigger the powers is to declare an emergency if he believes coal price increases – even if merely projected – or shortages “will adversely affect members of the community”.
Any increase in coal prices will hurt someone, which means the test can probably be met at almost any time. Neither the premier, nor energy minister, is required to consult with any organisation before acting, such as the Australian Competition and Consumer Commission, which regulates competition policy.

Nor do they have to “comply with any requirement of procedural fairness”, according to the law, which would make court challenges to their decisions more difficult.

The penalty for not complying is at least $10 million, although applies to companies not people. If the government doesn’t believe the coal companies are co-operating, it can send in a specially appointed regulator – a coal cop – who has the power to enter offices and demand documents.

NSW Minerals Council CEO Stephen Galilee said: “The bill is unnecessarily heavy-handed and ignores due process.”

The changes were introduced by Perrottet into a specially recalled session of parliament on Wednesday as part of a deal with the federal government to also cap gas prices in an attempt to moderate power price increases.

They were passed by the upper house, with the support of the Labor Party, just before 5pm.

So much for the liberal party being the champion of the free market.
The biggest worry from my perspective is that little wormy creep Matt Kean will have a significant say in this.
Beware the autocratic controlling governments of any political persuasion.
Mick

 

[SirRumpole]

So much for the liberal party being the champion of the free market.
The biggest worry from my perspective is that little wormy creep Matt Kean will have a significant say in this.
Beware the autocratic controlling governments of any political persuasion.

I hear what you are saying about government control, but electricity is an essential service so businesses in that sector can't expect to have free and unfettered control over what they provide. There was a time when State governments owned coal mines and power generators and this worked ok and prices were low and some think that's what it should go back to.

 

[mullokintyre]

I hear what you are saying about government control, but electricity is an essential service so businesses in that sector can't expect to have free and unfettered control over what they provide. There was a time when State governments owned coal mines and power generators and this worked ok and prices were low and some think that's what it should go back to.

Why do governments sell these things off in the first place?
partly its due to ideology- namely the private sector are more efficient yada yada yada.
Its also partly due to the amounts of money required to build, maintain and operate them.
if the Government wants to control coal prices, buy all the coal mines from the owners.
If the government wants to control power prices, buy all the generation from the owners.
Trying to control it by fiat is not the way to do it, once you bring in these laws, governments feel the need to use them.
The existing government, despite all the platitudes about it being only used in extreme cases, have absolutely no control over what future governments might do.
Power corrupts, absolute power corrupts absolutely.
Mick

 

[SirRumpole]

Why do governments sell these things off in the first place?

Well, basically because Peter Costello told the States that they don't get any money for new infrastructure unless you sell the old stuff.

Some dId, some did not.

 

[sptrawler]

Well, basically because Peter Costello told the States that they don't get any money for new infrastructure unless you sell the old stuff.

Some dId, some did not.

Just about every western country did it, including the U.K, it was a bit like globalisation, it seemed like a great idea at the time.
In reality the States made a lot of money selling their generating infrastructure and it is now near worthless, no one thought in the 1980's that renewables etc would be viable.
It was only in 2009 that the solar panel manufacturing plant in Homebush, Sydney, was shut down, it is amazing how far technology has come in such a short period.
But back to the issue, IMO essential services should always stay in public hands, because they are required whether they make a profit or not and that is the reason that the private sector are in a mess they own the superseded plant.
They don't want it, but we the public need it, so the Government is now going to have to pay simple really.
Just another failed brain fart, to add to the long list of them.

 

[sptrawler]

Well the penny is dropping, there isn't many options, whether people like it or not.

Japan turns back to nuclear power to tackle energy crisis

Japan confirmed a major nuclear power policy shift on Friday to tackle an energy crisis more than a decade after the 2011 Fukushima disaster prompted it to idle most of its reactors.

www.reuters.com

TOKYO, Dec 16 (Reuters) - Japan confirmed a major nuclear power policy shift on Friday to tackle an energy crisis more than a decade after the 2011 Fukushima disaster prompted it to idle most of its reactors.

Public opinion has been hostile towards nuclear energy since a massive earthquake and tsunami triggered a meltdown at the Fukushima Daiichi power plant, but the mood has shifted due to soaring energy costs amid the prolonged war in Ukraine and repeated power crunches in both summer and winter.
Quake-prone Japan, which previously said it had no plans to build new reactors, will now seek to replace decomissioned ones and extend the lifespan of others, the industry ministry said.
The stark policy turnaround comes after Prime Minister Fumio Kishida said in August that Japan would look at developing next-generation reactors, instructing the industry ministry to set up a policy plan to widen use of nuclear energy by the end of this year.

 

[Smurf1976]

Why do governments sell these things off in the first place?

Having witnessed the debate since the 1990's, my observation is there's a cultural problem in Australia generally when it comes to leadership.

Tell someone you're doing x and the response of most will be to request a source. That is, where did the idea come from? What book's it in or what website it's on or who else just did it?

The idea that you've actually worked it out from scratch is a concept that goes straight over the heads of many, they just can't grasp the idea of doing that (since they've absolutely no idea how to go about doing so).

That culture leads to a tendency to copy things and when it comes to our energy policy, well practically every aspect of it was taken from the UK. Ideology, market design and so on that's where the primary influence came from for all of it.

Now suffice to say the same approach to leadership also extends to business in general, including listed companies. Some actual innovation and leadership yes but a lot of "cut & paste" in practice especially in big business.

 

[sptrawler]

That culture leads to a tendency to copy things and when it comes to our energy policy, well practically every aspect of it was taken from the UK. Ideology, market design and so on that's where the primary influence came from for all of it.

Now suffice to say the same approach to leadership also extends to business in general, including listed companies. Some actual innovation and leadership yes but a lot of "cut & paste" in practice especially in big business.

A lot boils back to the fact Australia has an inherent inferiority complex, we have punched well above our weight, because we have been a very adaptable, ingenious, clever and unique relying on our wits and ingenuity.
Now we follow overseas models for everything and wonder why we are going around the S bend, it is really sad IMO, we have no none else but ourselves to blame for the demise.
I'm trying to teach the 7 year old grandson his 3 x tables, it's hard work, he would rather be playing games on his electronic console. ?

 

[Belli]

Report from ANU research on prospective places for solar and wind farms.

Australian Solar PV and Wind Heat Maps

Contact

re100.eng.anu.edu.au

 

[sptrawler]

Obviously Genex renewables, isn't a screaming buy, or maybe the reality isn't as attractive as the dream, who knows.

Atlassian billionaire Scott Farquhar pulls $346m bid for renewables group

The consortium of Scott Farquhar’s Skip Essential Infrastructure Fund and US equity firm Stonepeak called off the takeover on Wednesday morning.

www.smh.com.au

The proposed $346 million takeover of Genex Power by Atlassian chief Scott Farquhar and US private equity firm Stonepeak has been called off, the renewable energy company announced on Wednesday.
In an announcement to the ASX, Genex said that after extended discussions, the consortium had decided to walk away from the 25¢ a share bid which would have taken the company private.

 

[Smurf1976]

Obviously Genex renewables, isn't a screaming buy, or maybe the reality isn't as attractive as the dream, who knows.

There's really two big problems with anything hydro from a private sector investment perspective.

First is the extremely long timeframes involved. This is an industry where you spend a decade building then a century operating. There's no "get rich quick" aspect here, not even slightly. It's a long term, low return, low risk situation.

Second is the variability of financial returns. Over a century it's almost bulletproof. Whether you make any profit this year or next is anyone's guess.

From an engineering perspective hydro ticks all the boxes and does so an order of magnitude better than any other presently available storage technology.

From a financial perspective though, well in the Australian context about 90% of the hydro industry is in government hands and it's a reality that both major (government owned) hydro operators have faced plenty of criticism when it comes to finances. They do make money but, as critics would quickly point out, the % returns aren't at all impressive.

Therein lies a fundamental difficulty. What's good in an engineering sense, and the only realistic way to get to a fully renewable electricity supply, isn't going to see too many lining up to invest since on a strictly financial basis it's just not that great.

Genex had great difficulty getting the project over the line to be built at all and even that happened only once government money was tipped in.

It's a bit like the business model of suburban streets. Society needs them, they bring massive benefits, but those benefits mostly accrue to society overall. The road itself doesn't make the money.

 

[sptrawler]

There's really two big problems with anything hydro from a private sector investment perspective.

First is the extremely long timeframes involved. This is an industry where you spend a decade building then a century operating. There's no "get rich quick" aspect here, not even slightly. It's a long term, low return, low risk situation.

Second is the variability of financial returns. Over a century it's almost bulletproof. Whether you make any profit this year or next is anyone's guess.

From an engineering perspective hydro ticks all the boxes and does so an order of magnitude better than any other presently available storage technology.

From a financial perspective though, well in the Australian context about 90% of the hydro industry is in government hands and it's a reality that both major (government owned) hydro operators have faced plenty of criticism when it comes to finances. They do make money but, as critics would quickly point out, the % returns aren't at all impressive.

Therein lies a fundamental difficulty. What's good in an engineering sense, and the only realistic way to get to a fully renewable electricity supply, isn't going to see too many lining up to invest since on a strictly financial basis it's just not that great.

Genex had great difficulty getting the project over the line to be built at all and even that happened only once government money was tipped in.

It's a bit like the business model of suburban streets. Society needs them, they bring massive benefits, but those benefits mostly accrue to society overall. The road itself doesn't make the money.

Which brings us to the Origin Energy buyout, is someone trying to wedge the Australian public? OMG. ?

 

[sptrawler]

At one point the largest mining company in Australia, of anything, in terms of the quantity mined was the Victorian government via the SECV coal mines.

The Vic government also had another, completely separate, operation too many years ago which was simply known as the State Coal Mine.

So it’s been done before......

Also Victoria being a large user of coal generation, that they sold off for a huge sum, wouldn't do too bad buying it back for a song.
What's the old saying? There's only one Alan Bond moment in your life. ?