CHOICE membership

Electricity Price Increases


#101

One of my wife’s sisters lives on an acreage outside Mareeba in FNQ.

When her husband tried to get a PV system installed, he was told by Ergon that there was already too many PV systems on properties along his country road and he would not be able to feed-in to the grid at present.

He could either pay to have the power lines upgraded himself or wait until Ergon finally upgraded the network in his area.

Gold plated prices for scrap iron service.

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#102

…pay somewhat more and go completely off grid. He might help himself as well as helping Ergon with their ‘yesterdays’ network. Just a thought to pass along.


#103

He could also set up a zero export system, as these are easy to set up with the right inverter, and many have been in use for years in areas with dodgy* mains.

*Dodgy as in local transformer too small/ voltage tap set too high, or undersized mains cables.


#104

Blame the governments? All off them! Except perhaps WA.

A significant cost in the electricity market is the cost of short term peak power. The ACCC has previously considered the impacts of gaming of the supply by several of the generators to maximise profits as a contributing factor. It is a consequence of the NEM pricing mechanism for the supply of peak power. Much of this comes from electricity generated by hydro - low cost and natural gas higher cost.

The ABC has a very confronting article on the situation relating it to the export of gas and its impact on domestic supply.

The demand for our exported LNG is driven by its convenience of use, value and critically environmental benefits. As a substitute for coal or other hydrocarbon fuels LNG is much cleaner burning and produces lower carbon emissions helping to reduce the carbon footprints of the importing nations.

The USA and GB generate a significant proportion of their power from natural gas. Recently the USA produced electricity for a week with coal being less than half the energy source, while GB went for a whole week and burnt no coal at all to produce electricity.

It would seem Australia is now in a difficult position due to politics, of not only paying more for electricity, but also unable to make better use of our own massive lower carbon energy resources. LNG is a direct a step towards better environmental outcomes. Politically sovereign risk says this cannot be undone, however the news item points out it is all of our politicians who need to account for the mess.

At the same time Australia’s LNG industry contributes fugitive gas emissions of methane from the industry and CO2 from the processing to our national green house gas emissions inventory. All of this to the GHG emissions benefit of a foreign user! The financial benefit to the nation as a percentage of the exported value of the product is also debatable.

There is a totally different consideration on the hotly debated impacts of fracking, used widely in all gas production. The effects impact on water resources and agriculture.

Is this also a climate change issue that will have longer term impacts on Australia and all consumers? Short term as suggested by the ABC it is on our power costs and local employment.

Economically Australia has a long history of exporting low value resources at bargain prices for low levels of economic gain. The alternative of retaining those resources and exporting the content as value added products produced locally now appears even more challenging? Is this a consumer issue? Perhaps only if consumers can’t afford to consume!


#105

These issues are still alive but somewhat muted in NSW. The state has but one production gas field at Camden which is very small and will close in a few years. After spending half a billion or more at Gloucester AGL abandoned it and the Santos project at Narrabri hangs by a thread.

Coal seam gas was sold to us as the new clean green transition fuel that produced less greenhouse gas emissions per megajoule than coal (only true for the burned component) and it would be cheap and plentiful and create thousands of jobs into the bargain. The industry told us that the local gas would be for domestic consumption not export.

What they didn’t say was the availability of local gas nearer Newcastle, Sydney and Wollongong would free up other reserves to be sold overseas and save them transport costs. They didn’t mention the linkage to the OS market would force up local prices with many negative effects including the perverse consequence of the additional availability of fuel for the global energy market making domestic electricity more expensive rather than less. And the jobs only last for the construction phase, as QLD boom towns now head to bust, but the other consequences last much longer.

None of the golden promises turned out to be true in NSW. The NT has yet to find this out as they dream of royalties and jobs, jobs and more jobs.


#106

A 600 plus page report on the National Electricity Market does not auger well for the electricity industry.


#107

What about the poor consumer, is that where the auger is being inserted?

It is not certain the ABC report quite hits the nail on the head evenly?
Of course it is likely the 600 pages contain some additional details. Bedtime reading anyone?

Previously most of the now aged generation and supply would long ago have been paid off.
The debt should be long gone and only the bare operating costs remain.

The NEM should be delivering some of the cheapest electrical power globally, given the rest of the G20 has been investing heavily in power generation. And our thermal coal is world class and cheap.

Another observation might be that a large portion of the paid off assets have subsequently been sold to private enterprise. The sales were not trivial. Now the cost of the capital commitment of the new owners has been added back into the cost of electricity.

Even government owned assets are required to make a profit based on an assumed competitive environment and capital payback. Otherwise it would be unfair on any private company trying to compete and make a profit, (National Competition Policy?).

The ACCC has previously put a cost on the “gold plated” network upgrades and anticompetitive pricing around peak demand periods. Gaming the system legally is how it was described by some.

What is causing high prices today is due to all of the above. There is no major financial burden currently that new investment in a large scale power station would impose on prices, yet.

Looking forward the report appears to canvass a range of issues. However it is difficult to see how the future needs and strategies for delivery of electrical energy can be addressed if the fundamental failures to date are not also turned around. AGL and others have done very well out of their customers, effectively having to pay twice for much of the asset base, previously in public hands for nil profit? :thinking:

Will consultation and a considered approach follow, or should the 600 pages be consigned to my virtual fireplace in a vain attempt to stave of the winter cold?

There is a likely outcome we will be paying for a third time to keep the lights on, and yes, the report warns it is likely to cost more, public purse or private.


#108

As Gorden and TheBBG say: Just go completely off grid. In the long run it will probably be more reliable and you can potentially save money.
Just make sure you have adequate solar generation backed up with plenty of battery storage. For the unusual extended low sun periods it may be worthwhile to have a small generator.
BUT make sure everything is professionally installed, stay away from any thought of DIY, it is just too dangerous!

There will be a big upfront cost, but for the saving, there will no more monthly charges for just the privilege of being connected to the mains. No need to worry about whether those mains are adequate and need to be upgraded - at your cost maybe? And, no worries as I mentioned of those mains failing and losing all power!

Remote and rural locations are the perfect places for going ‘off grid’!


#109

An interesting article regarding claims by the Energy Efficiency Council that Australia could substanially reduce energy consumption and emissions by adopting best practice as other countries have already done.


#110

Could, but won’t. Our governments are welded to the notion of getting coal dug up and sold or used. They seem to have zero interest in doing anything substantial about transitioning to renewables. Of course the householder can do a lot in terms of energy use reduction… I’ve managed to keep my electricity bills at the same level as I was at in 2011… but I can’t do any more… out of options. Can’t afford solar, can’t afford energy efficient a/c. The best I can hope for is to save enough to get my HWS replaced. I’ve pretty much stopped using a clothes dryer at all (used to use it for everything, after knickers began disappearing off the line, now I string them about the house, charming!)

NSW could do something about getting cars off the road, by making it legal to use electric powered scooters. I’d switch over in a heartbeat. Sure, we still have to plug in to electricity, but it would still be a huge saving in terms of energy and pollution.

I’m rambling… sorry.


#111

You are not rambling.

Totally believable, if?..

A reasonable suspicion is many Australian households are already a long way down this path. Hence the likely gains may be much less than imagined.

Drawing a comparison without some measured reference points leaves the suggestion open to differing interpretations.

Firstly to extreme optimism, that we can do much more as consumers to reduce our energy use and hence costs, and even lower our household carbon footprint.

A second more cynical view point is that we can by adopting more energy efficient strategies hang on to high carbon energy sources without wasting money on enterprise level change. A HELE power station or two might then be seen as a good idea!

It might help understanding to see some real data points introduced to the discussion, otherwise it becomes a rather ‘point’ less discussion? :wink:

What are these golden opportunities?
My vote - :biking_woman:t2:

P.S.
An unintended consequence of saving money by using less is the size of the national energy economy potentially decreases, causing businesses to earn less, invest less and employ fewer.

It’s a loss to the national economy that we don’t manufacture most of what we purchase to improve our energy efficiency. Although some consumers might suggest the local retailers and distributors make up for it through high markups to cover their inefficiency and margins on borrowed capital. The businesses doubtless suggest higher costs are down to red tape, taxes and expensive wages for staff?

Another aside asks how to encourage the uptake of more energy efficient practices and reduce costs to consumers. The need to provide the necessary investment raises the option of means testing government funding to favour lower income residences with a zero cost of changeover?

Perhaps relating the possible reduction in demand within the NEM and also interconnecting grid can deliver a much more significant financial saving. The cost benefits of making the existing infrastructure capacity go further could be worth quite a large government funding program!

Are the opportunities sufficient to avoid political derailing through debate over providing benefits to the 40% of Australian’s in low income households vs the 50% in the middle?

There are alternate arguments for prioritising expenditure from the public purse on zero emissions outcomes in preference to lower emissions technology.

Another more liberal and conservative argument might be that the public purse should fund nothing, given the user always pays, let the users who can and so choose self fund. It’s a market decision what happens next? Likely also not the first time a market has set a course to self destruct!

Irrespective of leaning asking households to pay more to export surplus to the grid aligns most strongly with the last mentioned direction? :rage:


#112

Inducing consumer paralysis: how retailers bury customers in an avalanche of choice.

The article applies to mobile phone and internet plans as well as electricity supply but I thought that it was most applicable in this thread because (almost) everybody needs power and because of the large amount that retailers extract from us using this technique.

I was peripherally involved at the time the NSW electricity market was deregulated and heard all the arguments about how competition between retailers would bring down prices and ensure service was good. What did we get? A choice of smaller scale middle-men that don’t actually produce or add anything but do their best to not compete on price, or vertically integrated larger organisations who manage to manipulate the whole system from generation to your door.

I would like to bring up a plot that I have mentioned before, that is major policy shifts need to have a post implementation review built into them, including the cost of performing the review. Then the public would be better informed about the real consequences of grand plans that are foisted on us and be in a position to assess the judgement of the Ministers and governments that put them forward. Council amalgamation is another broad-brush policy change that seemed to get a tick despite a dearth of evidence that it would have the claimed effect of saving money.


#113

Interesting article… I was almost tempted to switch from my very ordinary “plan” with energy australia, until I did the comparison myself and found that I was actually paying a lower kWh price than my friend who switched to a fairly complicated Red Energy plan. He’s paying nearly double the rate I do. I’m now getting fairly substantial discounts which I wouldnt get from other suppliers, as well. shrug I’m one of those who simply has the default. I’d like to get away from AGL for gas, though.


#114

On AGL and gas, as an aside.

We can compare a property we lived in recently that has town gas and our current on bottled. Same occupants with gas for all cooking and hot water needs.

Bottled gas including rental and free delivery is less than half the cost of town gas bills, if like us your usage is low. 2.2 bottles per year at $140 per bottle and $30 rental. (Approx $350 annual total)

Depending on supplier (Origin in our prior instance) the daily cost of connection is approx $280pa (77c pd) before any gas is consumed. There is also a variable charge rate for gas that effectively discounts higher consumption. ( 5.4c/MJ drops to 3.4c/MJ rounded rates). These are current rates!

One of the family when purchasing a replacement stove/oven converted from a reticulated town gas to a bottled supply. The only cost was for a gas fitter to install a bottle connection point to replace the town connection, and change the jetting for the gas heater/HW. A less than 12 month payback!

P.s. we have a Woolies 9kg swap bottle on standby on a second gas connection for when the big bottle empties.


#115

I’ll have a look at the next bill, I am not sure about the annual supply rate. I use both gas and electricity for cooking, I’d probably like to switch to electricity for cooking permanently (I periodically break out a portable twin hotplate as a temp measure and then go back to the gas)… since getting my Netatmo weather gadget, which measures indoor CO2 as well, I find that the levels go up too far when cooking… with electricity, its nowhere near the same levels (1800ppm vs about 8-900ppm). The expense of converting from gas to electric is defeating me at the moment, I need to get my HWS sorted first.