Giving power back to the people by giving power back to the people

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Is it any wonder AGL has scrapped its plans to build a 200-400MW gas-fired plant in South Australia (SA). Once again SA Premier Jay Weatherill’s complete failure to roll out sensible and sustainable energy policy is on full display. Instead of admitting his plans have caused SA to have the country’s most expensive, yet most unreliable electricity supply he used AGL’s common sense strategy to boast his own $550mn plan to offset the catastrophic failure of his own making was nothing short of a master stroke. Weatherill boasted,

“If there are big power companies squealing, the plan is working…it is a finely calibrated plan, it’s been carefully crafted to go as far as we can to actually drive competition but also not scare away investment…We’ve been screwed for too long by large power companies, it’s as simple as that…We’re taking the power back for the people of South Australia. A few people are upset about that because they’re not going to be able to make their enormous profits out of South Australians and if they’re squealing about that we’re happy…Large power plant companies screw ordinary South Australians. Increased competition is what drives down prices, not somebody just essentially maintaining their current monopoly position by upgrading plant and equipment.”

SA scrapped its coal-fired power and relies on wind power for 40% of its electricity. When the wind doesn’t blow, SA relies on backup power from neighboring Victoria, which has its own ridiculous renewable energy targets. Victoria has announced the closure of the Hazelwood coal-fired electricity plant which constitutes 20% of Victoria’s power on March 31st. So Victoria’s ‘pipe’ of backup will all but disappear.

What gets me is that it was Weatherill, not the private sector that “took power away from the people” (literally). Weatherill’s virtue signaling by means of thrashing private industry is a woeful attempt to take the moral high ground when in reality he is just being sanctimonious.

The bigger risk is this ‘back-up gas-fired generator’ should it ever be built will be run on an intermittent basis when power becomes a problem. The batteries don’t have anywhere near enough life to power a blackout for any reasonable period of time. Sadly, large scale machinery like this can’t run on an intermittent basis. It is much like a commercial aircraft. If aircraft sit idle on a tarmac for a sustained period of time, high precision parts get gummed up and require expensive maintenance to get back to working order. Those planes parked in the Arizona desert at the end of GFC that airlines thought to bring back into service cost $1.5mn/year each to maintain. Tyres have to be rotated every two days to prevent flat spots, fuel tanks have to be kept full, engines run and hydraulic controlled surfaces moved daily and windows require special sealants to prevent premature aging.

Same for a gas-fired power plant. It isn’t like switching on the Weber BBQ and expecting the thing to ignite. It would paradoxically call for higher running costs to operate periodically than run at constant load. So even if Weatherill can hand South Australians cheaper prices for their electricity at the plug (highly doubtful) they’ll be slugged through higher taxes elsewhere to pay for the higher upkeep of the gas-fired plant.

Is the finely calibrated plan working? If this is a finely calibrated I would hate to see what a half-baked plan looks like to Weatherill. Giving power back to the people is exactly that – give power back to them.

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