SA renewables frame-up covers for fossil fuels electricity prices heist

Hysterical anti-renewable headlines aren’t necessarily a surprise from The Australian and other News Ltd publications. But the cynicism of the attack on South Australia’s renewable energy industry in their pages is still astonishing.

The Australian on July 25 published Matthew Warren of the Australian Energy Council – a peak body for “major electricity and downstream natural gas businesses” – blaming renewables for “higher costs and increased risks around reliability” in South Australia.

An article in the same edition of The Australian quotes Liberal Senator Chris Back calling for a halt to “subsidies” for renewable energy (does he mean the sale of Renewable Energy Certificates?) while an inquiry is held into their costs – just before the article mentions that the interconnector which can supply a quarter or more of South Australia’s electricity was offline for an upgrade when electricity wholesale prices spiked to their allowed maximum, $14,000 per megawatt-hour, on July 7.

Renewable energy in SA is mainly wind farms, which are typically on fixed-price “power purchase agreements.” The large generators in South Australia are gas-powered, typically one of the most expensive electricity sources in the market. Renewables actually mean less gas is burned, and overall reduce the number of expensive price peaks over the year.

The Australian (and Matthew Warren) are strangely silent about this, and about the other source of high prices: large electricity generators going offline. Mysteriously, large generators like Pelican Point went offline during recent price spikes, only restarting after an appeal to its owners, Engie, by the state government.

All this has occurred while gas prices are at a high, and companies are looking for gas to pipe to Gladstone to meet LNG export contracts. While Engie and Origin have said their gas power station outages were because it “wasn’t economic” to run them, it would be interesting to know what specifically it was that made them “uneconomic.”

Although the Australian Energy Regulator is charged with checking up on these kinds of mysterious outages to try and ensure that the market is not being manipulated to artificially increase prices, it may not always be easy to prove and it usually takes a long time to settle – by which time, the current political storm may have already reached whatever dismal conclusion the vested fossil interests are gunning for.

Meanwhile, the gas export industry and the vested fossil interests in the big generators get to profit from the crisis, while blaming their renewable competitors. Will they get away with it? Not if the community wise up to the reality behind the confidence trick. The undeniable popularity of renewables plus a wider understanding of the truth about the market manipulations might just hasten their demise.

One thought on “SA renewables frame-up covers for fossil fuels electricity prices heist

  1. Offline for upgrade to interconnector event was notified well ahead of time. Owners of Pelican Point Engie(Gdf-SUEZ) are also owners of Hazelwood, so conflict of interest. Similarly when AGL, Origin etc schedule or unschedule outages of coal fired generators, shortage of supply causes extortionate rise auction price. Cost of brown coal energy input Hazelwood is next to nothing($3.00/MWH?) but output is paid whatever auction price up to $14,000/MWh. When few big corporations, like oil, aluminium etc, held world to ransom, they were considered nasty; the term “cartel” describes their antics. Time for word cartel to be revived.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s