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BLAMING ETSA’s privatisation for high electricity prices — as a recent The Advertiser editorial did — doesn’t solve the problem but it does give clues to what needs to be done.For several years with Tom Playford’s ETSA, South Australia had the lowest electricity prices of any of the mainland states. Only Tasmania, with cheap hydro-electric power, was lower.
Today SA’s price is about the highest, so it is interesting to compare what we had or didn’t have then with what we have now.
We didn’t have retailers, we didn’t have generator bidding, we didn’t have a futures market, we didn’t have a governance bureaucracy costing over $160 million a year but in itself not producing a single unit of electricity, we didn’t have the so-called National Electricity Market which is neither national nor a market.
The Commonwealth has no constitutional authority or responsibility for electricity supply in the states but depends upon state legislation for which SA has been the bellwether and with a few large generators and fixed wiring to consumers who have no choice of supplier it in no way resembles a trading market.
There is no need for a bidding arrangement or a futures market. Any competent system operator would or should know the condition, actual costs and performance of each generator and schedule them accordingly for optimum combined output.
Retailers are also unnecessary. As such they don’t own or operate any part of the generation, transmission or distribution systems and contribute nothing to the production or delivery of electricity.
They send out the bills and collect and distribute the money but they don’t own or read the meters. The money function could almost certainly be done more efficiently by the distributor, who does own and read the meters.
The argument that retailers compete and keep prices down is a farce. The electricity you get comes from the same generator, through the same wires and the cost of producing and delivering it to your premises is exactly the same regardless of whom your retailer may be.
Get rid of retailers, the ridiculous generator bidding arrangement, the futures market and much of the governance bureaucracy, none of which are necessary and we could significantly reduce the cost of electricity.
Wind and solar renewables can increase supply costs because they are intermittent and unreliable. To maintain voltage and frequency and system stability they must be backed up continuously with conventional generation or recoverable storage. This means, in effect, that we have to operate and maintain two systems at the same time.
As well as the obvious problems with our present supply, the closure of the Leigh Creek Coalfield and Northern Power Station mean that much of the electricity on which we depend will come over 800km of vulnerable overhead transmission line from brown coal-fired generators in Victoria.
In the circumstances we now have there is clearly a need for an open and comprehensive public inquiry into cost and reliability and future arrangements for our electricity supply. As present arrangements depend upon SA legislation, the responsibility for such an inquiry clearly rests with our State Government.
So the question is: When is it going to happen?
Bruce Dinham is the former general manager of ETSA.
