It’s amazing how dewy-eyed and idealistic you can get looking at infrastructure costs. This new costing for upgrading to renewables is a case in point. It’s the sort of thing that would make any climate change denialist rejoice It’s also an irritating obstacle to our move to non-fossilized tech and emissions. New numbers for Australia’s pampered energy suppliers indicate massive costs to upgrade to renewables.
Please be advised – The following includes a massive oversimplification of the technical issues. The trouble is that the tech issues are also the basis for the costs. I may be right, wrong, (or more likely both) about these issues on the technical levels.
That’s not the reason for this article. The biggest issues are all economic and extremely serious. This sort of frivolous costing could sabotage our crucial move to renewables. Historically, the energy sector has been gouging the entire Australian economy for a decade. The gigantic issue for this op-ed is cost, and the dubious rationales regarding who’s paying for what and why.
This is a truly abysmal situation. Australia’s energy used to be publicly owned. Thanks to the usual “everybody else should go broke” conservative ideology and deregulation, prices went up exponentially. These suppliers are now basically cartels. Competition isn’t even a subject for conversation anymore. The overheads to business were sheepishly accepted like a brochure from the abattoir to actual sheep.
The costing is of course based on a range of poles-and-wires scenarios, capacity, storage, and charging people for energy they supply to the grid themselves. It’s more or less standard business-hating, consumer-hating pricing.
The exact ideological position is “Everyone else should pay for whatever it is we do to make money”. It’s one of those idyllic self-inflicted problems that come with all those great numbers.
The “great numbers” are profits based on an entirely uncompetitive market. The rises in prices are almost identical nationwide. The damage to the bottom line in the economy isn’t a factor.
Let’s simplify perspectives in this situation:
- The energy sector was doing quite well, according to it, pre-price rises.
- Anticipated costs were part of the original price rises.
- Now the public is yet again supposed to pay for the switch to renewables, after a decade of massive profits.
Let’s put it another way – No.
Why is this brattish, cossetted sector not supposed to be paying its own costs? We might as well go back to public ownership; it’d be a lot cheaper.
(The states own power nets, pole and wires, and lease them to suppliers. In theory, the grid is publicly owned. It’s just that consumers and businesses are being milked dry in the process.)
This jolly little bit of pre-costing also comes at a time of massive inflation and many other heavy caliber bullets hitting domestic budgets. Why?
It is just another case of dutifully making sure nobody has any money to spend, like health, education, and housing?
The predicted costs
Western Australia alone estimates a cost of $9 billion over the next 5 years. That’s $1 billion more than the network requested, according to ABC Australia. Why, again? The other states will be predictably more expensive.
“New technologies are coming in to handle the renewables”. You don’t say? What, no old technologies? Nobody pedaling furiously to generate power? How odd. How about wearing some of your own costs for the first time ever, bludgers?
So 50-year-old renewable technologies that you’re already using and are already hooked up to the grid will cost that much more? How quaint. How aesthetically pleasing. How utterly unconvincing.
Medium and large-scale batteries are a cost. Do tell. There is a type of electrical technology called a supercapacitor, a woefully underdeveloped type of capacitor which might help. That’s if some battery-price-addled buffoons can be bothered coming up with high-capacity tech when financially they do so much better with prehistoric tech.
Capacity is a thing. The increased supply from wind and solar, somehow, can’t be absorbed by the capacity already in the system for electricity generated by coal? Why not? We had some of the biggest coal generators in the world.
The other problem
The main issue here is that the sector is so used to getting massive handouts like the big price rises that asking for money is the default option. If they had to pay for this mockery of future costs themselves, they’d come up with cheaper options.
A few questions:
- Apart from the energy sector, who else gets their hand held and all costs paid by the public when they have to spend a cent?
- Is this just another desperate attempt by privatization addicts to prove that privatization doesn’t work? If the public has to wear the upfront costs anyway, why shouldn’t the public own the assets?
- Why do these huge corporations need handouts at all? According to the ACCC (Australian Competition and Consumer Commission) cost of supplying energy is at an 8-year low. That would imply that the current system isn’t broken, doesn’t need fixing, and that retail prices are far too high. Any explanations?
- There is an ancient economic term sometimes found on ancient stone tablets on Australian racecourses called “cost benefit”. Where is this cost-benefit? Otherwise, this pre-emptive handout looks like a lousy bet.
So far, the indications are that the sector is expecting to be pampered as usual. To put it as subtly as possible – I don’t buy a word of it. The grid is getting free power, sourced from consumers and nature, and it will cost this sort of money?
The hell you say. Let’s see some hard numbers, and no money until those numbers are visible and verified. Just for the record, freeloaders, or should I say free-capacitors, the rest of the economy urgently needs those billions. Make a case.
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Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
