By Jo Nova

It wasn’t supposed to be this cold and windless in Australia

For some reason that no climate model can explain, Australia has run out of wind power three months in a row, which means we had to use more gas than expected. It’s also been colder than climate models predicted, despite global emissions being higher than ever in history. For some other reason that no rational adult can explain, the State of Victoria banned gas drilling for most of the last decade (to reduce the beachy-weather days in eighty years) and thus, as night follows day, the state is running out of gas. Ergo, predictably, it is also facing blackouts, cost blowouts and manufacturers dependent on gas are warning they may have to close down, or move to the US, where gas is still cheap.

If only the climate models could predict temperatures and wind even a month in advance?

The AEMO (our electricity grid manager) says Victoria will run out of gas before winter runs out of bite. Apparently Victorians are pulling twice as much gas out of their main storage as they can afford to at the moment. Not only does Victoria need the gas for electricity, but 80% of Victorian homes have gas for cooking or heating. And then there is manufacturing, not just in Victoria but most of Australia as gas prices rise all over the East Coast.

Who needs explosives and fertilizer, anyway?

Orica — one of the largest gas users in the country warned it may have to cut production and jobs in Newcastle due to the gas shortage. Since they supply explosives to the mining industry, and Australia is a big quarry, the repercussions would spread quickly.

By Perry Williams, and Rhiannon Down, The Australian

The nation is facing a deepening energy crisis on two fronts, with gas shortages so acute that Vic­toria’s main storage plant is set to run out by the end of winter and one of Australia’s biggest manufacturers warning it will slash jobs and close factories if supplies ­remain short.

German Morales, Orica’s president for Australia Pacific and sustainability, told The Australian that “there is not enough gas and there is not affordable gas”.

“Clearly if we fail to secure long-term gas at a reasonable market price, we may be put in a position of rethinking what is the manufacturing strategy for ammonia in Australia,” he said. “The Australian gas price is significantly more expensive than that you can buy in other jurisdictions, such as the US. That’s making it very difficult to justify manufacturing in Australia.”

And we thought wind generation was bad in April and May but June may be worse.

The awfulness of the fickle wind is upon us and reaching into our wallets. This was the total contribution of 11.5GW of wind generation to our national grid this month. Paul McArdle from WattClarity said the capacity factor for wind is as low as 21%.

 

Not-so-coincidentally on June 4th and June 13th when wind generation was exceptionally low, average prices in the whole system doubled (See below).

And this is a major problem with an electricity market that isn’t designed to find the cheapest solution for consumers. Cheerleaders like the CSIRO will still be saying “wind is cheap” when it’s obvious the lack of wind in a wind-dependent-system is very expensive. But these price spikes that were caused by wind turbines will be slapped on coal, gas or hydro, whatever rescued the grid, not on the wind industry. The more wind fails, the “higher” the prices are for its competitors. Neat eh? If only the “experts” at the CSIRO understood how unreliable wind drives up the cost of everything else on the grid.

Those prices are awful and often obscenely high across all five states… On June 13th wind generation fell to just 88MW at lunchtime, and was low all day. The spike this produced is obvious.

Some of the lows like June 20th caused mayhem because they were hitting at dinner time when solar power has gone to bed. Back before the subsidized renewables gold rush, prices would average $30/MWh across the whole grid — not just all day, but all month. This month so far, average prices respectively are SA $197, Tas, $287, Qld $132, Vic $182, NSW $165.

It takes some skill to run out of gas when we are also one of the Big Three LNG exporters in the world, but the Australian government has achieved this. Incompetence knows no bounds:

 

 

But hey, winter might be warm from now, who knows?

Not to belabor the point, but if we had decent climate models, we would know.

Gas price cap train wreck on the way

by Saul Kavonic, The Australian

The gas industry is scrambling to try to squeeze out any incremental supply, going as far as blending extra LPGs into the gas stream to eke out an extra per cent or two of production. Every lever to lift supply has now been pulled.

Australia’s energy market is one hiccup away from a major crisis, again. The gas market train wreck – long visible on the horizon – is now in front of us. Set in motion by Labor’s hostile gas policies since 2022, there are no easy levers left to pull to keep the lights on, while also keeping us warm in winter, and manufacturing jobs going. And it is only going to get worse in the years ahead.

If we run out of gas, we’ll just have to burn diesel, or sit in the dark, banging our heads on a cold wall.

Image by ThankYouFantasyPictures from Pixabay