Cold snaps and blistering electricity prices downunder — where one state burnt $2.4b in electricity in May

Cold snaps and blistering electricity prices downunder — where one state burnt $2.4b in electricity in May

And the bonfire continues

As cold fronts sweep across the south east of Australia electricity prices are setting records nobody wants to set. The wholesale prices for electricity –across a whole month — soared past $300 a megawatt hour in three states of Australia. In NSW the cumulative cost of wholesale electricity for May alone worked out at $2.4 billion dollars. It’s enough to build a power plant. Back in 2015, before Hazelwood old brown coal plant closed and Australia installed more renewable energy per capita than anywhere else on the planet, the average price in NSW was $35/MWh. Back then it cost  $260 million for  the whole month. (And Hazelwood wasn’t even in NSW. ) The point is not about one coal plant, but about how recently the system still worked. Hazelwood coal plant in 2017 was 53 years old and still selling electricity at $30 per megawatt hour when it was shut down. Since then the whole grid has so much more capacity yet so much less ability.  There’s no resilience left. A few speed bumps wiped out the whole road train.

 

Wholesale electricity prices are higher across the Australian grid than they have ever been

The graph comes from Tristan Edis at WattClarity who blames the current fiasco on coal and gas producers selling at international market prices. What he misses is that the excess of wind and solar at subsidized prices and “favoured” priority mean that cheap baseload providers have been driven out of the market and we had no other alternative. It’s exactly what the Soviet-genius energy comptrollers were aiming to do. But on top of that the unloved baseload generators that haven’t been blown up already aren’t being repaired and maintained properly. Plus the expert climate modelers said that winter nights would be warmer and they aren’t, and coal was a dead asset, not a $400 a ton asset. Gas wasn’t worth exploring for and we’re a nuclear free zone. When coal and gas hit bonanza prices, Australia should be reaping in the dough. But we need brown coal or nuclear plants to pick up the load and long term infrastructure that is well maintained.

A sneak peak at June prices shows that things are a bloodbath. The average price for the first nine days of June is $440 in NSW and $520 in Queensland. (See the AEMO)

 

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June 9, 2022 at 02:59PM

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