Here is everything I have been talking about all in one go.
The Australian Energy Market Operator will use some of its emergency powers to ensure sufficient electricity supplies in NSW as hot temperatures coincide with a spate of outages at several coal power stations, leaving the state at risk of blackouts.
In a notice to Australia’s energy industry, AEMO said it remains short of the reserve capacity of electricity it needs to ensure stable electricity supplies in NSW, and as a result it intends to begin negotiations with companies to reduce demand – a scheme known as the Reliability and Emergency Reserve Trader.
The use of the so-called RERT scheme, rarely used by the Australian Energy Market Operator, underscores the vulnerability of NSW’s energy grid caused by increased demand from households as some of the state’s largest coal power stations experience a spate of maintenance issues.
The precarious state of electricity in NSW is being exacerbated by an unusual heatwave, which sees temperatures up to 12 degrees Celsius above average for this time of year.
Origin Energy’s Eraring coal power station – which generates about 25 per cent of NSW’s energy – is operating at only three quarters capacity as one unit remains offline due to planned maintenance.
Mwahaha. So, here is what is really going on.
- The media has absolutely no idea what it is talking about.
- NSW is short of electricity because the gas cartel has wrecked security of supply meaning there is not enough backup gas peaking power to offset coal retirements.
- Eraring is already publicly subsidised to stay open as an offset. But Eraring owner Origin (a founding member of the gas cartel) has zero incentive to maintain it or build out alternative renewable plus gas peaking power because crisis means higher profits for its gas supply.
- The heat wave excuse is bullshit. This is the National Electricity Market off-peak season. It’s #$%@ing November, not high-power-consuming July.
In short, owing to years of gas cartel-wrecked energy transition, the NEM now has insufficient surge capacity even in off-peak periods.
It all comes back to the same basic principle. Only gas can supply the dispatchable power needed to back up renewables as coal retires.
In its absence, distorting the economics of dying coal-fired power only incentivises permacrisis for power supply.
That is, coal power stations are run past their use-by date unprofitably as intermittent power grows, with owners waiting for government payments to fix it.
If it is not fixed, brownouts and blackouts for industry will become commonplace all year.
This will hollow out production all the more. Eventually, we will be importing the air we breathe. If we can even afford it at all as utility bills skyrocket.
The RBA is already refusing to cut rates because of this. The underlying mortgage structure of the economy can’t take it. Fiscal solutions are temporary.
This is now an outright national crisis, with solutions taking years.
We need an emergency energy summit to crush the gas cartel with domestic reservation or export levies to trigger investment in gas peakers for a solution to arrive in four years.
And we are not even talking about the problem.
