The crises in Australian energy are multiplying by the day:
- gas price shock
- gas imports price shock
- power price shock
- coal capacity shock
- surge capacity shock
But, never fear, the rebates are here!
The current latest round of power bill discounts of $300 for each of Australia’s 10 million homes and $325 for each of the 1 million small businesses, at a cost of $3.5 billion, has helped push the headline inflation rate below 3 per cent.
The Reserve Bank of Australia said that when the discounts end on June 30, the rate will rise above 3 per cent.
But the government is now likely to extend the discounts beyond that as part of its pre-election spending package. The government’s expenditure review committee proposal is weighing up the proposal, according to people familiar with the deliberations.
Finance Minister Katy Gallagher pointedly declined to rule out an extension on Wednesday.
“We’re working through some of the final details for our mid-year economic update right now. Obviously, how we can continue to support households with cost-of-living pressures is front and centre of our thinking,” she said.
The RBA’s hawkish excuse is about to collapse, as it was always going to.
The rebates will need to be upsized as well. Electricity prices are so far up 10% year over year in 2024, which is quite an achievement given that 2023 included the tail end of the Ukraine War profiteering shock.
In March, the AER will lift 25/26 retail prices, probably by about half of that.
Or more. The latest gas price shock is not abating.
And will likely get worse as Asian gas prices climb.
Because Europe is cold.
Temperatures across western Europe will plunge close to zero next week, in an early winter test of the region’s energy systems. Heavy snow is forecast for the Alps.
Parts of Germany and Scotland are already subject to snow and ice warnings on Wednesday, before a milder interlude gives way to much colder weather by Sunday. Plummeting temperatures will hit the UK and France as an area of low pressure moves in from the Bay of Biscay, according to forecaster Maxar Technologies Inc.
Leaving Aussie shoulder-season power nearly double 2023 prices.
Meanwhile, as the East Coast gas export cartel wrecks the economy, all three eastern states are bolstering coal power to end…coal power.
NSW’s largest electricity power station will not return to full capacity until the end of the week after it suffered a further maintenance issue, a delay that heightens the alarm at the capacity of Australia’s energy grid to deal with a return to hot weather.
Origin Energy’s Eraring coal power station has been operating at three quarters capacity since September, when one of four units was turned off for maintenance.
QLD owns its own coal power stations, and the new LNP government has committed to them in perpetuity.
The gas cartel has destroyed Australia’s energy transition, reliability, and affordability.
Yet all Labor can do is incentivise worse by subsidising it.
At some point, we will not be able to afford it.
