Australia 2018: the Coal War continues

It should come as no surprise that in the Coal War being conducted by right-wing ideologues and climate change deniers consumers are predicted to be the losers under the Turnbull Government's National Energy Agreement (NEG) and, that Australian Prime Minister Malcolm Turnbull is offering the same illusory $550 per annum saving on electricity costs per household promised but not delived by his predecessor Tony Abbott. 

A COAG Energy Council Ministers meeting on August 2018 will reveal the final NEG design - a design which won't be published until after this meeting.

What is already broadly known about the NEG design appears to support allegations that the aim of this agreement is to cement the dominant position of fossil fuels in the national energy mix at the expense of renewable energy technologies.

REneweconomy, 20 July 2018:

As pressure mounts for Australia’s states and territories to finalise their position on the National Energy Guarantee, a new report has warned the federal government’s policy would fail to achieve its most basic and important function: to lower energy costs for consumers.

The report, commissioned by Greenpeace Australia Pacific, says the Coalition’s NEG would in fact do the opposite – raise electricity prices; as well as bringing investment in large-scale renewables to a halt, and do nothing to combat climate change.

Based on analysis conducted by energy and environment analysts RepuTex, the report models the impact of the NEG under the government’s 26 per cent emissions reduction target, compared to a more ambitious 45 percent target.

In both scenarios, as shown in Figure 17 above, electricity prices are forecast to fall through to 2020 as more than 6GW of renewable energy enters the NEM under large-scale renewable energy target (LRET).

“The increase in low cost solar and wind generation will see the electricity supply steadily become more competitive, with average prices less influenced by high priced gas, and subsequently falling toward $60 MWh in 2020,” the report says.

But under the NEG, new investment in renewables falls off a cliff after 2020, while the impact of the reliability guarantee drives an increase in gas generation, prolongs the phase-out of coal, and makes it harder for key new technologies, like battery storage and demand management to compete.

“The result is the continuation of a coal-dominated market with a fairly static picture for large-scale renewables investment, with gas providing flexibility to meet evening ramp ups,” the report says.

“As a result wholesale prices rise above $70 per MWh after the closure of Liddell, and $80 per MWh after the expected retirement of Yallourn in 2028.”

A more ambitious emissions reduction target, however, of 45 per cent, would provide a signal for investment in more solar and wind, driving prices down by around $20/MWh.

“The competitive pressure from higher solar and wind energy is modelled to push wholesale prices lower, eventually resulting in the closure of excess coal capacity” – around 9GW, in total, by 2030 RepuTex says.

GetUp! Australia

Published on Jul 23, 2018

The crucial make or break meeting of State Energy Ministers is on 10 August. So if we want block Turnbull's dirty energy plan, we need to move right now.

https://youtu.be/JdgLCihZJq8

Go to http://www.savesolar.org to make a free call.

Don't expect your residential electricity costs to come down anytime soon

In three years time the amount of revenue electricity network companies can charge customers will be reduced, which according to the Australian Energy Regulator in its Draft Rate of Return Guideline "could [not would] result in household customers’ bills decreasing by around $30 to $40 per year".

Remembering all the other failed assurances that the cost of residentail electricity would come down, it is a brave individual who takes this latest prediction at face value.

Australian Financial Review, 10 July 2018:

The Australian Energy Regulator has moved to significantly cut the amount of revenue electricity network companies can charge customers in a bid to take the pressure off households and businesses enduring high power prices.

AER chair Paula Conboy said it would reduce average household electricity bills by about $30 to $40 a year….

But energy network companies claim the new guidelines will strip about $2 billion in revenue over the next five years and threaten future investment in the energy sector.

Morgan Stanley said the rule, if confirmed, would cut valuations of listed grid owners such as Spark Infrastructure and Ausnet Services, while adding it "could have been worse".

Energy users welcomed the move as a sign the regulator is prioritising the interests of consumers although Energy Consumers of Australia acting head Lynne Gallagher said the proposed reduction in the rate of return able to be earned on capital could have been bigger.

"There is no doubt that there could be some disappointment from some consumer groups with this decision, but it is a much better outcome than we've seen in previous years on this issue," Ms Gallagher said....

AusNet said that if the rule is confirmed, the reductions would apply to its power distribution network from the beginning of 2021, in transmission from April 1 2022 and in gas from January 1 2023. Spark said the rule would apply to its various assets in 2020, 2021 and 2023….

Mr Turnbull is also expected to use his speech in Brisbane to talk on the long-awaited Australian Competition and Consumer Commission into electricity prices which is expected to be released this week. The ACCC report is expected to be used as a reason not to call a royal commission into electricity prices as being pushed by the Greens. 

Australian Competition and Consumer Commission, Restoring electricity affordability & Australia's competitive advantage, 11 July 2018, excerpts:

Australia is facing its most challenging time in electricity markets. High prices and bills have placed enormous strain on household budgets and business viability. The current situation is unacceptable and unsustainable. The approach to policy, regulatory design and promotion of competition in this sector has not worked well for consumers. Indeed, the National Energy Market (NEM) needs to be reset, and this report sets out a plan for doing this…….

There are many causes of the current problems in the electricity market. At all stages of the supply chain decisions have been made over many years by many governments that set the NEM on the wrong course.

In networks, the framework that governs regulation of monopoly infrastructure was loosened, leaving the regulator with limited ability to constrain excess spending by network owners. The limited merits review (LMR) regime allowed network owners to appeal regulatory decisions and recover billions of additional dollars from consumers. It led to significant increases in prices, has drawn out the length of time taken for revenue determinations, and has created significant uncertainty around network pricing. In addition, increased expenditure on networks was driven by reliability standards for some networks that were set too high, without due regard for consumers’ willingness to pay for marginal increases in reliability.

In generation, against ACCC advice, the Queensland and New South Wales (NSW) governments made decisions regarding the operation and ownership of generation assets giving rise to concentrated markets. In Queensland, the government consolidated the generation assets of three businesses into two. In NSW, as one example, both generators owned by Macquarie Generation were sold to AGL, missing an opportunity to deliver a competitive market structure by selling them to separate buyers.

Most state governments put in place excessively generous solar feed-in tariff schemes with a view to encouraging consumers to install solar photovoltaic (PV) systems. Under these schemes, the subsidy paid to consumers for the energy produced by their systems outweighed, by many multiples, the value of that energy. Take up of the schemes exceeded all expectations, in part due to dramatic declines in solar PV installation costs. The substantial cost of the schemes continues to be spread across all electricity users.

The main enduring policy instrument for encouraging low-emissions electricity generation is the Renewable Energy Target. While it has been effective at encouraging wind and solar generation capacity installation, it has also distorted the investment that has occurred in the transition from higher carbon technologies to lower ones. The subsidies received for installing wind and solar made the business case for doing so compelling but did so in a way that was indifferent to the ability to provide energy to the market when demand requires it.

At a time when gas-powered generation has become more important with the exit of large coal-fired plants, the extent of LNG exports from the East Coast and government moratoria on on-shore gas exploration and development have stifled the availability of gas at a low price.

Electricity retailers have also played a major role in poor outcomes for consumers. Retailers have made pricing structures confusing and have developed a practice of discounting which is opaque and not comparable across the market. Standing offers are priced excessively to facilitate this practice, leaving inactive customers paying far more than they need to for electricity. Pay on time discounts, which have emerged as a response to attempts to constrain late payment fees, are excessive and punitive for those customers who fail to pay bills on time. [my yellow highlighting]

Australia’s Border Farce lives down to its nickname

Minister for Home Affairs and Liberal MP for Dickson Peter Dutton’s poor oversight and lack of managerial skills is on display for all to see…….

The Sydney Morning Herald, 6 June 2018:

The benefits of the merger of the Immigration and Customs departments and creation of Australian Border Force  haven't been proven and promised increased revenue hasn't materialised, a damning audit report has found.

While the Department of Immigration and Border Protection did achieve the merger effectively, it "is not in a position to provide the government with assurance that the claimed benefits of integration have been achieved," the report said.

The merger of the Department of Immigration and Border Protection with the Australian Customs and Border Protection Service took place in 2015, with its functions now covered under the Department of Home Affairs. Controversial at the time, it heralded a move to focus more on guarding the country's borders over resettlement and migration.

In the business case for the merger, the department committed to a "Benefits Realisation Plan," but because the plan was not implemented, the claimed benefits have not been measured and can't be demonstrated, the report said.

While the business case for the integration of the departments promised an increase in revenue from customs duty, less than half of the promised revenue increase has materialised. At the end of 2017, just 42.2 per cent of the extra revenue committed to had been achieved, and the report predicted that at the current rate just 31.6 per cent of the additional revenue promised would be delivered.

When the merger was announced, then immigration minister Scott Morrison promised "hundreds of millions in savings" would be reinvested back into the agency.

Auditor-general Grant Herir slammed the department's record keeping, which the department admitted was in a "critically poor state," and said there was no evidence that the Minister Peter Dutton was given written briefings on the progress of the integration of the departments.

In its response, the Department of Home Affairs acknowledged it had issues with record keeping and committed to making improvements a priority. The report didn't look on this commitment favourably though, pointing to more than 10 years of audits and reviews that have made similar findings.

The problems and their solutions are known to the department, and it has an action plan to address them, although numerous previous attempts to do so have not been successful," it said.

The report also found that the department experienced a loss of corporate memory through the merger.

"Almost half of SES officers present in July 2015 [were] no longer in the department at July 2017," it said.

The report also found that out of 33 consultancy contracts with values of more than $1 million, just 2 were evaluated for value for money, meaning that it was unclear if the other 31 contracts had been value for money.

Spending on consultancy in the department more than doubled in the years after the merger, topping more than $50 million in each of the 2014-15 and 2015-16 financial years…..

The Age, 19 June 2018:

The multimillion-dollar college that trains Australia’s border security personnel has “overpromised and underdelivered” and immigration and customs officials have repeatedly abused their powers, a scathing report has found.

The government-commissioned findings also said many department staff lack the training needed to perform their jobs and “jaws of death” have gripped officials struggling to complete more work with fewer resources.

In May 2014 the Coalition Abbott government controversially announced the creation of the Australian Border Force (ABF), as part of a merger of customs and immigration border operations. Crucial to the new super-charged agency was the establishment of the ABF College, with multiple campuses, to ensure recruits and existing staff “have the right skills to do their jobs”.

Under the former department of immigration and border protection, consultants RAND Australia were asked to evaluate the progress of the merger, ahead of the creation of the Home Affairs portfolio in December last year which combined immigration, border protection, law enforcement and intelligence.

The findings concluded that “clear and unequivocal” progress has been made towards building a “modern border management capability”.

However, success had been “uneven” and in particular, the ABF College “largely remains a disappointment to senior leaders across the department”.

The report involved interviews with senior department officials, who cited concern that the college’s curriculum was “not adequate for actual training needs”.

The college’s use of technology was poor and, in many cases, was used to “automate bad learning environments” rather than improve training.

The college was supposed to train staff across the department, however many officials were not given time to attend courses.

Overall, the college and other training opportunities in the department “overpromised and underdelivered to the detriment of the workforce and the morale”.

One senior official was so frustrated at the problems that he suspended a board examining the issues “until new terms of reference and fresh ideas were developed”.

The report is dated 2018 but it is not clear exactly when it was finalised. The Department of Home Affairs did not answer questions from Fairfax Media on how much had been spent on the college and where its campuses were located. Officials have previously said the 2014-15 budget included $54 million to establish the college and other training measures, and that several campuses would be established including in Sydney and Canberra.

Across the department’s broader workforce, senior officials said staff in many cases lacked “the capability to do the work required of their assigned positions”.

This included customs and immigration investigators “not understanding the law, use of force protocols, and rules of engagement” which in some cases led to “abuse of power,” the report said.

One official said field compliance officers “were doing dangerous jobs without proper training” and another described a junior officer who was “unable to manage shipboard operations due to a lack of proper training and experience”.

Department staff described being held in the “jaws of death” as they juggled an increased workload and declining resources. Senior officials repeatedly raised concern that the ABF received more resources than other divisions but “has not been subjected to the same level of scrutiny”….

As a local member it appears that Dutton is also having ‘workforce’ issues ahead of the forthcoming federal election…..

www.peterdutton.com.au as of 20 June 2018:

Peter is working hard but could use your help.
If you can spare an hour or two to help Peter in Dickson, please join the team.

The most shameful evidence of Peter Dutton's management style is found when one condiders that as Minister for Immigration and Border Protection since 23 December 2014, he currently has ultimate responsibility for the welfare of asylum seekers held in custody. 

As of 26 June 2018 there have been 15 deaths in custody of persons being held in onshore and offshore immigration detention facilities since Dutton became the responsible minister. 

Bringing the total number of deaths in onshore or offshore detention and in the community to est. 64 people since January 2000. 

That is the equivilant of almost four deaths each year on Peter Dutton's watch and around three deaths per year overall.

According to MSN on 21 June 2018; There are nearly 700 men currently in detention on Papua New Guinea, and more than 900 men, women and children on Nauru.

Tweets of the Week

Today DHS told the senate, that so far:

Robodebt has cost $276 million to administer.

And... Robodebt has 'recovered' $279 million.

While they can separate forecast savings for newspaper headlines, apparently it's not possible to do that with actual savings.#notmydebt pic.twitter.com/Q6M6NaY09p

— NotMyDebt (@not_my_debt) May 8, 2018

DHS was asked how many robodebts are awaiting reassessment. They failed to answer. We've heard from people waiting months.

So far 652,898 reassessments have been initiated.

30,953 debts have changed in value or been wiped. That's 30,953 debt notices that were wrong.#notmydebt pic.twitter.com/LJd3WxDJV4

— NotMyDebt (@not_my_debt) May 9, 2018

DHS are including 'prevented debts' in their savings from robodebt.

What happens if a company in the private sector banks a possibly avoided future liability as a cash asset?

See: Blue Sky Alternative Investments - majority of board resigned

Time for robodebt resignations? pic.twitter.com/jsdQVM4NAa

— Sarah Masting (@sarah_masting) May 8, 2018

How we see the cost of living in Australia in 2018

Essential Report, 30 January 2018:

​A substantial majority believe that, in the last 12 months, cost of living (73%) and electricity costs (75%) have all got worse. The only economic measure that has got better is company profits (42% better/12% worse).

Compared the last time this question was asked in February 2016, there has been an increase in the percentage that think electricity costs (up 13% to 75%) have got worse. However, there has also been an increase in the percentage that think company profits (+12), unemployment (+19) and the economy overall (+18) have got better.

51% (down 2% since August) believe that, in the last two years, their income has fallen behind the cost of living. 28% (up 3%) think it has stayed even with the cost of living and 14% (down 1%) think it has gone up more.

64% of those earning under $600 pw and 58% of those earning $600-1,000 pw think their income has fallen behind while 54% of those earning over $2,000 pw think it has stayed the same or gone up.

Australian Council of Trade Unions (ACTU), media release, 31 January 2018:

Australian Bureau of Statistics (ABS), 1 November 2018:

According to the ABS, over the last twelve months up to end September 2017 the Living Cost Index* rose:

2.0% for Pensioner and Beneficiary Households

2.1% for Other Government Transfer Recipient Households

1.7% for Age Pensioner Households

1.6% for Self-Funded Retiree Households

1.5% for Employee Households 

One of the principal drivers to the rise in costs for these groups has been the rise in housing costs due to the rise in wholesale electricity costs.

* The Living Cost Indexes (LCI) have been designed to answer the question:

'By how much would after tax money incomes need to change to allow householdsto purchase the same quantity of consumer goods and services that they purchased in the base period?'

Will you be able to afford your electricity bill this summer?

The Daily Examiner, 22 November 2017, p.5:

Power price hikes have tripled wage growth in the past decade and experts fear more NSW families could have their electricity disconnected this summer.

New data shows the average electricity bill has jumped a whopping 116 per cent from $1282 in 2007 to $2770 in 2017, while the median wage has grown just 35 per cent from $59,723 to $80,382.

The figures, compiled exclusively for The Daily Telegraph by price comparison firm Finder, reveal the average bill jumped 10.5 per cent in the past year alone, while wages grew just 2.2 per cent.

Analysis shows the portion of their wages workers are spending on their bills has grown more than 60 per cent in those 10 years.

Experts are now worried that residents forced to spend a bigger chunk of their wages on electricity could risk disconnections this summer as airconditioner use pushes bills even higher.

While state and federal politicians remain divided on how to tackle soaring power prices, figures from the Australian Energy Regulator show that from 2014 to 2017 the number of customers on hardship programs has risen from 18,293 to 24,921. The number of customers with bill debt has also jumped almost 20,000 in the past year, with 85,801 customers now in debt compared with 68,487 last year.

In the most recent financial quarter there were 7775 electricity disconnections in NSW and 1908 households with their gas cut off.

To put this in perspective, a careful aged pensioner living alone in New South Wales would have easily faced an annual electricity bill in 2016-17 in the vicinity of $1,300-$1,500.

Is the NSW Berejiklian Coalition Government taking the Norther Rivers bushfire risk level seriously?

The NSW Nationals Parks and Wildlife Service (NPWS) manages more than 870 national parks and reserves totalling over 7 million hectares.

With 22 per cent of the Clarence Valley covered by heavily timbered national parks and the entire NSW Northern Rivers region having 10 national parks, at least 9 nature reserves and 2 state forests, the risk of bushfires has always been high.

With climate change raising the fire risk and the NSW Berejiklian Coalition Government stripping the NWPS of personnel and funding, many local residents are beginning to worry.

This is what privatisation did to Australia's household electricity bills

When three eastern and one southern state formed the National Electricity Market in December 1998 Australia had the lowest retail prices in the world along with the United States and Canada.

The rules which underpin this National Electricity Market are created by the Australian Energy Market Commission (AEMC) set up by the Council of Australian Governments (COAG) - through the COAG Energy Council - for that purpose and to advise federal & state governments on how best to develop energy markets over time.

The Australian Energy Regulator (AER) sets the amount of revenue that network businesses can recover from customers for using networks (electricity poles and wires and gas pipelines) that transport energy.

So far so good. There's a defined market and there are rules.

Then the privatisation of electricity supply and infrastructure began in earnest.

It should come as no surprise that this push towards full privatisation, with its downhill spiral in service delivery and uphill climb in cost to retail customers, began and was progressed during the term of Liberal Prime Minister John Howard.

By 2017 the NSW Berejiklian Coalition Government has almost completed its three-stage privatisation of state power infrastructure by selling off poles and wires and, it goes without saying that the retail cost of electricity is expected to rise again next year.

This is where we stand today……………………

[Graphs in Financial Review, 4 August 2017]

The Financial Review, 4 Augut 2017:

The annual cost to households of accepting a standing offer from one of the big three retailers instead of the best offer in the market has been estimated at $830 in Victoria, $900 in Queensland and $1400-$1500 in NSW and SA by the St Vincent de Paul Society.

Mr Mountain said power bills are constructed in such a complex way that ordinary customers without sophisticated spreadsheet and analytical skills have little hope of analysing competing offers to work out which offers them the best deal.

Private comparison websites do not include all market offers and charge retailers for switching customers, while the websites offered by the Australian Energy Regulator and the Victorian government do not provide the tools customers need to discriminate among offers.

Prime Minister Malcolm Turnbull has ordered the Australian Competition and Consumer Commission (ACCC) to conduct an inquiry into electricity supply, costs and pricing, including retail pricing.

The Treasurer should have a preliminary report from the ACCC in his hands by the end of September this year, however this body does not submit a final report until 30 June 2018 with no guarantee that any recommendations will be adopted by government and industry.

Quite frankly, it appears the privatisation train left the platform some time ago and there is no way to halt or divert it in order to genuinely benefit household consumers.

Blind ignorance and political opportunism continue to rule the federal corridors of power

“Some MPs are also concerned that a CET would be too similar to Labor's climate policy and would see the Government lose its edge over the Opposition.” [ABC News, 13 June 2016]

The National Electricity Market (NEM) is said to be the longest geographically connected power system in the world, supplying five of Australia’s eight states and territories with electricity for homes, businesses and industries. It generates around 200 terawatt hours of electricity annually, accounting for around 80 per cent of Australia’s electricity consumption, according to the Australian Chief Scientist Alan Finkel.

In December 2016 the Australian Chief Scientist presented the Expert Panel’s Preliminary Report of the Independent Review into the Future Security of the National Electricity Market to the Council Of Australian Governments (COAG).

Six months and one Final Report later, as electricity prices continued to climb and low income households across Australia worry about how they will meet the next power bill, the governing Liberal and National parties are still fighting crazy ideological battles and worrying about their own chances at the next federal election - instead of facing up to the fact that the NEM became highly dysfunctional once the system was essentially privatised as well as the fact that Coalition energy policies are spectacularly failing to meet Australia’s international obligations with regard to climate change mitigation.

I for one am unimpressed with and angered by this display of blind ignorance and political opportunism as I try to hoard my pennies against this winter’s power bill………

Australian Financial Review, 13 June 2017:

Malcolm Turnbull has been hit with a stronger-than-anticipated backlash over plans to introduce a Clean Energy Target in a battle which is fast becoming a test of his leadership, Liberal sources say.

Despite the CET having the support of senior conservatives and other ministers, it did not translate into backbench support late on Tuesday as Coalition MPs at a special meeting discussed the findings of Chief Scientist Alan Finkel and his main recommendation for a CET to be adopted post-2020.

By early evening, sources inside the meeting said only four MPs had so far spoken in favour of Dr Finkel's key recommendation while about 20, including Tony Abbott and junior minister Angus Taylor, were against, and four more unclear.

"It's a slaughter," said an MP inside the meeting "and a lot of the usual suspects haven't spoken yet".

As the meeting rolled on, it was apparent the government would, at the very least, have to design a scheme that enabled so-called clean coal to be designated, in part, as a low emissions energy source. Even so, this is unlikely to placate all the backbench rebels and also runs the risk of Labor withdrawing its offer of bipartisan support because it cannot accept a policy that designates coal as a clean emissions source.

The prospect of doing anything at all is now in serious doubt. Both Nationals and Liberals spoke against the plan, despite it promising to lower electricity prices and the government yet to do any design work.

With Mr Abbott leading a determined group of MPs who believe the government should either do nothing at all, or adopt a scheme giving so-called clean coal equal treatment to renewable energy, senior Liberals said Mr Turnbull cannot risk losing control of the policy process to his nemesis.

Mr Abbott, who had not read the Finkel report, slammed the CET on Monday as a "magic pudding" and "a tax on coal"…..

Labor resolved to oppose the government trying to allow the Clean Energy Finance Corporation to invest in carbon capture storage technology, saying it was "nothing but a hollow gesture to appease extreme right MPs".

Under a CET, existing generators would see out their natural lives and coal use would only fall slightly under a CET.

The Sydney Morning Herald, 13 June 2017:

Climate-change policy has ignited tensions within the federal government, with a group of backbench MPs led by Tony Abbott confronting Malcolm Turnbull over the proposed Clean Energy Target in a special party room meeting.

As one MP in the room put it afterwards: "Malcolm could lose his leadership over this if he doesn't listen to us."….

The disquiet means that Environment and Energy Minister Josh Frydenberg is likely to have little choice but to significantly modify the CET, as proposed in the Finkel review, to keep the backbench on-side as he finalises the Coalition's policy response, which is expected as soon as the end of July.

The length of the meeting and depth of feeling is likely to cause a re-think by the Turnbull government as it looks to implement a CET, with coal and gas likely to be given more favourable treatment.

ABC News,13 June 2017:

Tensions between Liberal factional rivals Tony Abbott and Craig Laundy boiled over at the conclusion of Tuesday's party room meeting, in which dozens of Coalition backbenchers raised concerns about Alan Finkel's energy report.

The special meeting was called to give Liberal and National MPs more time to debate the chief scientist's recommendations, including the introduction of a Clean Energy Target [CET] to encourage the development of low emission generators.

While the three-hour meeting was described as "positive" and "constructive", the ABC has been told Mr Abbott and Mr Laundy had a "very heated exchange" that lasted around 15 minutes after MPs and Senators filed out of the meeting.

It is understood it followed a minor altercation during the meeting when Mr Laundy took issue with Mr Abbott for interjecting while he was on his feet.

The former Prime Minister was one of about 10 MPs who expressed "serious misgivings" about the introduction of a CET, while a handful spoke in favour of the policy.

The Sydney Morning Herald,  13 June 2017:

The evening's first questioner had nearly summed things up.

"I think many of us will remember four years ago we had an election and saw the Coalition more or less win on the promise that by slashing the carbon tax every family in this country would get $500 back. 

"I don't know about you, but in our family we didn't see this $500. I have seen prices of electricity rising every year since then. And, you know, actually experts around the world are telling us that putting a price on carbon, on pollution, is the most efficient way that we can deal with the challenge of climate change. 

"It actually works, it's very simple - people who want to pollute, that's fine, you want to pollute, but then you pay. Then you reward those who don't. Simple. My children understand that system."

The Australian, 14 June 2017:

The federal Coalition has put its dysfunction on display again.

Always up for a brawl on climate change, Liberals and Nationals MPs have thrown themselves into an internal row that tells Australians to look elsewhere for leadership.

In public, MPs assure voters they have a way to keep power bills down. In private they rip each other to shreds because they do not know what to do.

Tony Abbott interjected so often throughout the meeting that Craig Laundy, a frontbench ally of Malcolm Turnbull, called the former prime minister out and asked that he show respect to those who wanted to speak.

As utility bills get harder and harder to manage for those on low incomes, this comes as a slap in the face

In roughly five to six weeks time electricity prices are expected to rise for many people in Queensland, New South Wales, the Australian Capital Territory, South Australia and Tasmania.

Households are expected to pay up to $300-$400 more a year, with the rise in wholesale electricity prices making up est. 45 per cent of a domestic supply bill.

As low-income renters, pensioners and the unemployed struggle this winter with the choice of trying to stay warm without heating or face an impossibly large electricity bill, they might like to remember that all this was very avoidable.

First Prime Minister Abbott and then Prime Minister Turnbull (along with all their MPs and senators) had the chance to keep energy costs lower - but blinded by ideology they refused to do so.

This was The Sydney Morning Herald reporting the Turnbull Government's failure on 8 December 2016:

The Turnbull government has been sitting on advice that an emissions intensity scheme - the carbon policy it put on the table only to rule out just 36 hours later - would save households and businesses up to $15 billion in electricity bills over a decade.

While Malcolm Turnbull has rejected this sort of scheme by claiming it would push up prices, analysis in an Australian Electricity Market Commission report handed to the government months ago finds it would actually cost consumers far less than other approaches, including doing nothing.

It finds that would still be the case even if the government boosted its climate target to a 50 per cent cut in emissions by 2030.

Depending on the level of electricity use and the target adopted, modelling by Danny Price of Frontier Economics found costs would be between $3.4 billion and $15 billion lower over the decade to 2030.  Costs would be $11.2 billion lower over this time assuming average electricity use and the existing climate target.

Australia's national gas shortage mirage

It is a case of now you see it now you don’t, courtesy of a rapacious gas industry and the governments which blindly support it............

SHORTAGE!

Australian Petroleum Production & Exploration Association (APPEA) , media release, 28 February 2017:

Australia urgently needs more gas supply and more gas suppliers to head off a supply shortfall forecast for 2019.

APPEA Chief Executive Dr Malcolm Roberts said the report released today by AiGroup shows customers will pay a heavy price for government bans on developing new gas supply.

“Gas is no different to any other commodity – you restrict supply, you push up prices,” Dr Roberts said.

“We have the bizarre situation of State governments banning new gas projects and then complaining about higher gas prices.

“The Australian Competition and Consumer Commission, the Productivity Commission and a host of independent commentators all agree that stifling supply can only lead to higher prices.

“Yesterday, the ABS released data showing gas exploration is at its lowest level since 2005.

“Today, the AWU is calling for the Commonwealth to force Australian gas producers to tear up their contracts.  We need billions in investment to unlock new gas supplies but the AWU’s approach would kill investment overnight.

“There is no shortage of gas which can be developed to supply all of our local and export customers.

“Just as our agricultural industries have the capacity to supply export and domestic markets, so does Australia’s east coast gas industry.  Our LNG exporters are also the major suppliers to the domestic market.

“People concerned by the impact of higher gas prices on local customers should be arguing for the removal of unnecessary restrictions on developing new resources, not more heavy-handed regulation.

“The AiGroup report simply reinforces what APPEA has been saying for years – that gas customers will pay higher-than-necessary prices if restrictions on developing new gas projects continue.

Dr Roberts said it was ironic the AWU’s call for intervention to renegotiate export contracts came on the same day that domestically‑focused Cooper Energy and the APA Group announced a $605 million investment in developing the Sole Project to supply east coast gas market.

“Changes that increase the cost of exploration and production in Australia will place future investment – like that required for projects such as Sole – at risk,” he said.

WHAT SHORTAGE?

We find that although a “gas-price crisis” exists in eastern-Australia, a gas-supply shortfall is very unlikely to occur. Our review finds that the size of AEMO’s forecast shortfall is very small, amounting to no more than around 0.2% of annual supply.

In addition, only eleven days after announcing its supply-gap concerns, AEMO essentially closed the gap when it published, on its website, updated (lower) electricity-demand forecasts that therefore lead to less demand for electricity generated by burning gas. [University of Melbourne, Australian-German Climate and Energy College, Tim Forcey and Dylan McConnell, 2017, A short-lived gas shortfall]

However, it is also important to note that the total gas supply in Eastern Australia has expanded rapidly in recent years, and the key domestic issue is more to do with the gas price that is now dictated by linkages to international trade, than the supply.

In addition the combination of falling renewable and storage costs means alternative options for the electricity sector will be cheaper than developing relatively expensive unconventional gas resources such as coal seam gas. [University of Melbourne, Australian-German Climate and Energy College, Dylan McConnell, 2017, IS THE AUSTRALIAN GAS SHORTFALL A MYTH?]

The Guardian, 18 May 2017:

A predicted shortage of gas for electricity generation in Australia from 2018 will not eventuate, and the recent surge in domestic prices will not be mitigated by opening up new coal seam gas fields, according to a new report.

In March, the Australian Energy Market Operator (Aemo) predicted that without national reform, Australia would face gas shortages, which would drive power outages, in 2018 and 2019.

“If we do nothing, we’re going to see shortfalls in gas, we’re going to see shortfalls in electricity,” Aemo’s chief operating officer, Mike Cleary, told the ABC at the time.

Despite being described by some as “major”, the actual shortfall of electricity from the gas shortage amounted to the equivalent of less than 24 hours over a 13-year period, according to the new report by Tim Forcey and Dylan McConnell at Melbourne University’s Australian-German climate and energy college.

In any case, less than two weeks after Aemo predicted the shortfall, it published an updated forecast of how much electricity would be needed in the period. It downgraded the previous forecast and completely wiped out the predicted shortage.

The Melbourne University report, which was commissioned by the Wilderness Society and Lock the Gate, also noted that later in March Shell announced it was proceeding with its “Project Ruby” that involved 161 gas wells in Queensland, and also would have closed the shortage, if it were real.