We are paying too much for gas. The east coast gas industry – which could be described as a cartel – has consistently set the prices for the Australian domestic consumer and our governments have allowed them to.
The Australian Competition and Consumer Commission has written report after report showing that Australians pay much more for gas than we should, and for substantial lengths of time we have paid more than our Japanese customers for Australian gas. Cartels, incidentally, are an illegal market structure as is the price-fixing that so clearly occurs.
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But our future (read that as the right pocket’s profits) is coal and fossil fuels. Reality is demonstrated by government policy to ‘solicit’ support (votes).
This might be The Blueprint for coalition policy, not that previous governments have not stayed mostly along similar policies, albeit for slightly differing reasons.
A dollar for a business is important. A fair go for Australian consumers less so. TweedleDee and TweedleDum seem to agree.
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Gas giants blasted for ‘unacceptable’ delay in price rules pact
In its push for a “gas-fired” economic recovery from COVID-19, the Morrison government had set a February deadline for gas giants to agree on a new set of rules that gives more bargaining power to buyers and addresses long-held complaints that their domestic customers are being charged more than their customers overseas.
“Amazingly, we are now at the end of March and users have yet to see a copy of the code,” said Rod Sims, chairman of the Australian Competition and Consumer Commission (ACCC).
Mr Sims is afraid of using the C-word in a family newspaper. Go on Rod, be brave, if it walks like a duck, and quacks like a duck it’s a cartel.
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Japan, one of Australia’s major trading partners, is accelerating its pivot to solar, wind, and hydrogen. And it wants that hydrogen to be green — not grey or blue, but green. Japan plans to halve its gas usage in power generation by 50% by 2030. The Japanese government has committed to net zero by 2050. The Australian government has not.
On the domestic front, gas was responsible for 6% of electricity generation whilst renewables provided almost 30% in the past 12 months. These figures vary from state to state, but make the point that gas is playing a smaller and smaller role in Australia’s home use.
Coupled with medium term reductions in export quantities, the future doesn’t look so good for the gas industry.
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Sometimes it’s important to look at the detail. The majority of electricity generation from gas is to meet short term peak power demand, and cover for intermittent short falls.
There are several alternatives that can replace gas in that role. They include new additional pumped storage, large scale batteries and distributed battery integration. There are also proposals for hydrogen based options and stored thermal energy proposals.
The IEC roadmaps to 2050 and those of some Governments retain a component of gas powered generation. The near future includes gas. Just not as much as has the industry might hope for.
Note:
Electricity generation only provides approx 1/3 of all Australian energy needs. We’re really at 1/3 of 30% or 10% renewables, for the past 12 months period referred to by Renew Economy.
Missing from the commentary by Renew Economy in the gas generation vs Solar PV and Wind discussion is the need for ongoing and additional investment in storage for these renewables to compete against gas. Our Governments are not the only ones able to spin.
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The EU has entered that dizzying spin.
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