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Avoiding New York-style power failure « Previous | |Next »
August 29, 2003

I see that Australian Business Council for Sustainable Energy is calling for a smarter approach to the use of energy in Australia through better demand management. It says that encouraging greater energy efficiency was a better way to avoid New York-style power failures that only rely on building additional capacity to meet growing national consumption. They call on CoAG to address the issue.

It is unclear what greater energy efficiency means. Less airconditioners? A levy on airconditioners? Greater use of solar power?

An editorial in the Australian Financial Review (subscription required, 26 08 03, p. 62) also calls on COAG to get stuck into energy reform to make the National Electricity Market (NEM) operate more efficiently. The AFR envisions a world where:

"...generators would compete with each another to supply electricity into a seamless national transmission grid. This grid would deliver lower prices to businesses and households across eastern Australia, averaging out demand and supply to make blackouts less likely, with a thinner margin of reserve capacity, and constributing dramatically to national welfare."

Hmmm. I presume that non-eastern Australia--eg., South Australia--would subsidise the lower prices in eastern Australia, and that national welfare is equated with eastern Australia. No doubt the bureaucrats and economists can crankout the numbers on the utilitarian calculus to justify such inequities.

But the AFR does have a point. As it points out the reality is that the electricity market is a fragmented one comprising a series of regualtory fiefdoms, with insufficient transmission capacity connecting them, and muted price signals. Unlike the Business Council of Australia, the AFR has no concern at all with the ecological sustainability of the national electricity market.

Nothing happened with respect to electricity at CoAG. The state premiers did a symbolic political number. They walked out in protest at the reduced public hospital funding by the Howard Government, which shows little willingness to discuss reforms to address an increasingly dysfunctional health system. So the rest of the CoAG agenda was not addressed.

| Posted by Gary Sauer-Thompson at 1:09 PM | | Comments (0)