Big storm and no power in SA

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Originally Posted by Tombie

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And kill the contracts that guarantee power generation companies a fixed profit margin at the expense of the consumer.

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Actually, believe it or not, there is a logical reason for this, or actually several related ones. The problem for electricity generators and their customers is that they depend on each other* - if the price is too high, the customer suffers, but if the price is too low, the generator is likely to become bankrupt, which is in all probability going to lead to major disruption to the electricity supply. Further, if there is not some mechanism to prevent the price going too low, the capital cost is much higher due to the risk loading that applies to borrowing, or if the risk is severe enough, makes borrowing impossible, ultimately meaning the generator has to be government owned, tying up government borrowing and either increasing taxes or reducing other government services - and historically, governments, once established as monopoly suppliers of a service such as electricity, they usually treat it as a revenue source, or feather-bed it as a form of pork barrelling, or both, increasing electricity prices.

One of the most common mechanisms that have been introduced to prevent this happening is a guaranteed profit margin. This obviously introduces the probability of gold plating just to increase profit, even if it does limit the reaping of monopoly profits, as it is invariably accompanied by a formula setting rates based on this margin.

* A wide area network with multiple generators should at least potentially make this sort of mechanism unnecessary, and we are moving towards this - but the major generating facilities still represent too large a proportion of capacity in one operation to be able to risk their failure due to bankruptcy, although this may not remain the case too far into the future.

John

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Originally Posted by Tombie

Wonder how much the emissions of 250,000 small generators adds up to [emoji48]

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Bugger all, summed over a whole year. Frivolous trips to the beach/bush/shops/footy etc would annihilate their emissions total every single week.

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Originally Posted by Tombie

Our local Honda dealer is loving it...
So are the local sparkies; fitting change over isolators and caravan sockets to power boards by the container load...

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Good thing that consumers are finally getting pro active about looking after themselves. Having a house/business without power backup is like having a car/truck without a spare tyre. Doable but why would you be so dumb?

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Originally Posted by Tombie

Bring on reliable, base load renewable sources - and bloody quickly....

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Megawatt sized batteries are being installed all over the world in small numbers, that market will grow exponentially over the next few years. One planned for Qld. One for WA Another for WA And another story for WA

And a story from SA too.

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Originally Posted by Tombie

And kill the contracts that guarantee power generation companies a fixed profit margin at the expense of the consumer.

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Agreed, but the power market system is so rigged in the favour of the peaking gas generators it will take a lot more than a polite request from the consumers to change the state of play. I can't see any of the current crop of drongoes in charge having enough spine to tackle the issue.

Yes John, but the kicker is...

Shared network relies on the masses to fund it.. everyone consuming means that everyone pays their portion to keep the network and the generators...

But solar, Off grid etc removes people from this financial equation - they end up only paying supply charge... there is no real margin.

So if the consumption is 10,000 kWh
And there's 100 consumers
That's an average of 100 kWh per user
If the required income is $2500 then it's $0.25 a kWh. That's $25.00 per user (avg).

Now me, Bee Utey and 23 others go solar/off grid...

Now it's 7,500 kWh needed
But there's now a shortfall of $625
So the remaining consumers now have to make that up.. and the price becomes $0.33 kWh

Whilst the cost to produce (fuel) drops, the distribution net maintenance doesn't...

If people who can afford it jump to solar then it is going to squeeze and squeeze the pricing until those that can least afford power are sitting in the dark..

I feel concerned this entire arrangement is not for the good of the people and that we will soon have a major issue to contend with..

I'm also still very confused as to why ALL new buildings aren't mandated to have compulsory:
- Solar
- Water catchment
- Bio recycling (either at premises or community)
- environmentally effective design

These are easy implementations. Just like new dwellings in high fire risk areas in SA must have a minimum spec Water storage tank etc..

I don't think the outlook is quite as bad as you suggest - for example, in NSW at least, there are quite expensive and strict requirements on energy efficiency for new or upgraded houses.

As far as requiring solar on all buildings, it needs to be pointed out that some buildings are not going to be able to produce useful amounts of power because of either their roof area or lack of insolation, for example by shading of buildings on south facing slopes.

But I agree that long term there is a likely issue with the network as you note, and I suspect that eventually you will end up with a charge for availability rather than actual connection, as with water and sewerage.

But also, some of these new developments, including batteries, may actually end up by being used by networks to lower their network costs to make the advantages of going off grid less, by being able to pay more for feed in and charge more for off peak.

John

Bit of confusion in here. Generators and transmission/distribution networks are different entities.

Generators, be they coal, gas, wind or treadmills, are subject to the prevailing spot price which changes every five minutes.
There are no guaranteed margins for them. They wear the risk.

The retailer who sells you the energy is also subject to the spot price and also wears that risk.

You, the consumer, to the extent of your contract, have a fixed and 'guaranteed' price.

The networks, well that's a different story and one that illustrates the problems in monopolies on essential infrastructure.

As some have pointed out there is an argument that networks will be squeezed by declining demand for connection. But think it through - if or when the abilty to store and release via battery arrives, there will be increasing demand from those wanting to buy and sell energy.

This is what financial markets refer to as 'liquidity' - more participants, a better spread of risks, more freedom for participants (you included) to make your own choices, take your own risks and be subject to price as you see fit.

It also means more competition. You could hedge your risk with the guy next door if you like.

That's a way down the track but ultimately the networks' survival is (generally) in the consumers' interest.

This is how markets should and do evolve. It just takes a while. Generally, the more markets are regulated, the longer it takes for price to find equilibrium and thus the longer prices are distorted.

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Originally Posted by Tombie

Well the big storm is knocking us stilly over here on the Eyre peninsula and now SA power has lost its connections and the state has gone dark...

Pity we shut down Pt Augusta power stations!

https://vimeo.com/184647430

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Going right back to the start of this important and interesting thread, and thanking Tombie,

Why did Alinta shut down the 540mW station at Pt A?

Old age or political directive?

In the 'old days' where the state still had a responsibility to deliver basic services like water, electricity, sewerage, postage, etc there would have been a 'succession' plan whereby infrastructure that was coming to the end of its use by date would already be ready to be replaced, planned and in the construction phase ready for a seamless transition.

Was the closure of the Alita just a symptom of privatisation, i.e. just a bottom line decision with no regard to what would, years ago, have been looked as a responsibility to running a community service?

Just interested, DL

Essentially- they get substantial rebates on renewables.

With PtAA they asked for assistance for the train line and running costs and were rejected so shut it down.

Under the job for life agreements there's now a few workers being paid full salary to sit at home... [emoji6]

The station was ok. Only one was operational and wasn't a full load station, was only serving base/peak..

I guess the question still is would it have closed before the modern era of private ownership of the plant, the network and the retailers?

Or, would there have been a better, more structured transition to renewables without the side issue of privatisation?

DL

It's hard to argue that privatisation of itself forced PA's closure because stations have also been built since deregulation began.

It's also difficult to believe governent-controlled assets would see a smoother transition to renewables because that same sorry lot drew up the rules and incentive schemes to arrive at where we are today.

Not that I think there's anything particularly wrong with the current situation. The market does have some stupid quirks but the big blackout did occur in a 50 year storm.

And even so, AEMO should have been better prepared for the contingency by leaving headroom on the Heywood interconnector and scheduling gas genetators prior. That's their job, they are legally bound and someone there should receive an almighty dressing down. The market really was in a better position to respond than is immediately apparent. Someone just cocked up.

The immediate problem for SA is wind and the volatile pricing it creates. When it blows, prices can be negative for lengthy stretches - ie. users are being paid to take power. That's a pretty strong deterent for investment in baseload generation.

Heres the problem.

they rely on wind generation...

they need a constant source of wind...

easy.

build a riding track around the wind farm, If the weeks worth of riding I've done this week is any indication they could pay me say $40 an hour plus food to go and ride around the bloody thing and there would always be wind because I've had nothing but head or quartering winds all week.