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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

the closure of coal-fired generation? « Previous | |Next »
October 18, 2012

The Productivity Commission's Draft Report on the regulatory framework of electricity networks is a further nail in the coffin of the Liberal's scare campaign around carbon pricing. It means people not taking their views taken seriously, even though they are entitled to hold or express those views. They've lost the argument.

AdelaidePortPenricepylon.jpg Gary Sauer-Thompson, Electricity Pylon + Osborne Power Station, South Australia

The PC report states:
Electricity prices have risen by more than 50 per cent in real terms over the past five years. Spiralling network costs are the main contributor to these increases, partly driven by inefficiencies in the industry and flaws in the regulatory environment.....Some 25 per cent of retail electricity bills are required to meet around 40 hours of critical peak demand each year....The overarching objective of the regulatory regime is the long-term interests of electricity consumers. This objective has lost its primacy as the main consideration for regulatory and policy decisions...The incentive regulation regime encourages businesses to build too much.
In other words it is the 'gold plating' of electricity distribution networks that is the main problem with respect to rising electricity prices--not carbon pricing or the renewable energy target (RET).

This is in the context of falling demand for electricity and the falling wholesale price of electricity in Australia, which is resulting in coal-fired generation industry making cutbacks through mothballing their plants or taking them offline.

In Renew Economy Giles Parkinson says that the mothballing of one of the units at the Yallourn brown coal generator in Victoria’s Latrobe Valley:

follows the halving of output at Tarong in Queensland, the closure of Munmorah in NSW and Playford B in South Australia, and the seasonal closure (since reversed) of the Northern power station in South Australia. Some of these had hoped to receive payments from the government for the privilege of closing, but have done so anyway despite the withdrawal of the contracts for closure scheme.

That results from a loss of revenue for the coal-fired power stations. There in lies the reason why they don't like renewable energy and for why they want both a stop to the rapid deployment of rooftop solar and the deployment of large-scale wind farms curtailed.

They want to protect their revenue. To hell with consumer choice, customers having some say over their power bills, or reducing environmental harm.

What we have, as Jason Wilson points out at The Drum, is a shrill, partisan and campaigning styles of coverage:

To take a prominent example, across the Murdoch empire, from Fox News to The Australian, we can see an ideological project lining up with niche marketing to produce strident, right-wing outlets which are themselves accused of testing the bounds of civility.This shift has had the consequence of de-stablising liberal-democratic politics, throwing doubt on its ground rules, in ways that we're yet to fully appreciate.

Although incivility, and the conflicts over how to define incivility, will continue, we do not need not take those views seriously that are evidence free or plain deceptions.

| Posted by Gary Sauer-Thompson at 11:23 AM | | Comments (9)
Comments

Comments

"people not taking their views seriously, even though they are entitled to hold or express those views. "

The Liberals need to be able to support their position with evidence, and to deal with evidence which opposes their opinion in a way other than by dismissing it entirely or engaging in misinformation and deception.

The Murdoch media are maintaining the polarization spin because it is good for advertising revenues. They have no time for "fact-checking the Liberal's claims that the "carbon tax" is the cause of everything that is going bad.

"the Liberal's scare campaign around carbon pricing. "

Tony Abbott presented a power bill in parliament last week claiming its near doubling in cost was because of the carbon tax. Examination, after the bill had been tabled in parliament, showed that it stated that her power use nearly doubled and that accounted for the increase in cost.

The bill also stated that the carbon tax was responsible for 9% of her bill's increase.

The Liberals are operating in a fact-free universe and they ignore that there are rules of evidence and argument in public debates on policy issues.

Around one quarter of all our electricity bills are caused by the cost of the infrastructure we have built to meet the “critical” demand peaks that occur for just 40 hours of the year – almost exclusively when people turn on air-conditioners at the same time to seek relief from those summer temperature scorchers.

The Liberal Party and the owners of the coal-fired power stations assert that it is regulation in the form of carbon pricing or the renewable energy target (RET) that is causing the power companies to mothball their power plants.

Its market conditions not regulation---the falling demand for power and the falling price of renewables---that is causing many coal plants to retire. Will this trend continue? If so, then its good for public health and the fight against climate change.

The story that is slowly emerging is one where the fossil fuel energy industry has tried to make a profit and deliver services by aggressively using their market power to block competitors.

Competitors as in energy efficiency, demand management and renewable energy which cannot access the market place easily because of the flawed market signals and the sophisticated use of market power by the incumbents.

The energy industry

Gee privatisation worked well didn't it?


Er, that was sarcasm just in case you thought it wasn't.

fred,
trouble is the NSW and Queensland energy generators are still in public ownership. Only Victoria and SA have privatized theirs in the 1990s.

Secondly, it is the privately owned coal-fired power stations at Port Augusta that are mothballed, whilst the public owned ones in Queensland fight to prevent the takeup of renewable energy.

However, the national energy market is deeply flawed and badly designed.

The electricity sector needs to be bought to account because the energy regulators are often captives to the industry.

It is obvious that clean energy is now a partisan concept between the Left and the Right, given the performance of our own state governments.

Each of the Coalition states have come down hard against the renewable energy target. Only the Labor governments, South Australia and the ACT, appear to support it. Wind turbines already provides more energy in SA than coal power whilst the ACT will be the host of the country’s biggest solar plant, a 20MW facility, soon.