Strong Choices or Weak Evasions

That’s the title of my review of the Queensland LNP proposal to privatise most of the state’s remaining public enterprises. There’s a report here from the Brisbane Times covering most of the main points. I also did an interview on Steve Austin’s ABC show, sandwiched between LNP Treasurer Tim Nicholls and pro-privatisation economist Judith Sloan.You can listen here

37 thoughts on “Strong Choices or Weak Evasions

  1. @BilB

    That’s a very interesting article. I just read it in full. I even got a laugh. “A roll call of recent NSW energy ministers reads like an ICAC subpoena list.” That’s a goodie! Martin Ferguson makes an appearance as the dolt he always is in supporting the spending. I often criticise Julia Gillard but here she is exactly right. In a keynote speech to the Energy Policy Institute in Sydney, she said;

    “At the heart of all this is a simple market design problem: a clear regulatory incentive to overinvest in infrastructure and pass on costs to consumers.” – J. Gillard.

    Overall, much money has been wasted and consumers vastly over-charged. Heads should roll for it but will they? I don’t know. On the other hand, this cloud has a silver lining. Our gold-plated network is now far more robust and should be able to handle micro and macro renewable energy feed-ins much better. One objection of the anti-renewables lobby just went out the window. You know, “Moan, moan, the network will have to be upgraded so much to take renewables”. Well, memo: “It’s already been done.”

    The other issue is that these huge price rises drive people to renewables. It’s a good outcome in that sense. It certainly drove me to solar PV and solar hot water. And if they lift connection costs, IDGAF! I will just go off-grid. As soon as my private power pole to bring power into my block needs replacing, I can save a few thousand dollars not doing that and go for battery back-up instead. Easy, peasy it would cost less than a small second-hand car so I can defer / never buy my next small second hand car. Bingo! More environmental pluses. This just gets better and better!

    As the article says;

    “The electricity industry calls this situation “the death spiral”. As more people switch to solar energy and use less from the grid, the networks have to recover their costs from a smaller base. So prices rise, which drives more people towards solar, which makes prices rise again, and so it goes. When feasible home battery storage becomes commercially available in the next few years, this death spiral will only accelerate.

    It already has the networks in a panic. In NSW and Queensland, electricity networks are campaigning vigorously to lift their fixed charges; if they succeed, even people who use less electricity from the grid won’t be able to avoid high network costs.”

    The last sentence is wrong though. If network costs get onerous, people can go off-grid. Off-grid is not the big problem some people make it out to be. People can gold-plate and battery back-up their home system for less than the cost of a second hand car. Plus one can make large changes in power use patterns if one has too. There are all sorts of smart things you could do even if you work all day. Time washing machines and dishwashers to run in the daytime. Time crockpots to cook your dinner in the daytime. Have extra solar panels to run air-con all day in an empty house. Ensure units blow over heat-ballast areas like concrete floors with tiles thus cooling them. Come home to cooled, well-insulated house. If batteries still full, smart-system determines that air-con can run a bit longer. If batteries are a bit down, the smart-system implements early air-con shutdown. A well-insulated room with cool “heat-ballasted” floors will stay cool all night anyway.

    This all Too Easy! Bring it on! 🙂

  2. Thanks for reading that through, Ikon, and gasping appropriately.

    I don’t mind paying high electricity prices as that gives me the incentive to go solar sooner rather than later.

    What I do object to is that the windfall being collected by the grid industry is meant to be building the complementary renewable infrastructure to give us 24/7/365 power compatible with rooftop solar. Unfortunately the process is being roadblocked by stupidity and greed, and the funds are going astray.

    The next question is how is this put back on the rails?

    I see the Qld asset sales as neither strong choices or weak evasions. I see them as a hiding the evidence of gross incompetence, which would make them strong evasions, of a different kind.

  3. It’s a shame the Government didn’t run an honest argument ie there’s no real need for the state to own these enterprises anymore and they’d be more efficiently run by private owners.

  4. As the grid industry has been substantially privatised much of those profits are heading towards shareholders, who may be foreign.

  5. @BilB

    I do object to what you object to and I always have and will object to privatisation of natural monopolies. However, in this case the milk is spilt. So we have to learn and even re-nationalise down the track if that can be pushed through. At the same time, we can look at the positives, a system gold-plated to take renewable power feeds and people pushed to renewable power. The greedy power corps. may be caught up in their own nets. Yes, I know perps have headed to the hills, or the gated communities, with great stashes of transferred (read stolen) wealth. That will ever be the case while we run unfettered capitalism.

  6. @HistoryinTime
    Probably because they know that won’t fly, for two reasons:

    1. They won’t be run more efficiently by private operators; and
    2. There is a need for them (and any other natural monopoly) to be in public hands to avoid profiteering.

    Most of the electorate is aware of this, so that’s why the politicians are using their dishonest excuses rather than the “honest” reasons you suggest.

  7. Ikonoclast – I am not as enthusiastic as you about the “environmental pluses” of everyone disconnecting from the grid. As you note, the system has been “gold plated to take renewable feeds”. There may be an economic incentive for stand-alone power but I am guessing that the shift to batteries carries some serious environmental consequences (and would appreciate someone that knows either disabusing me or elaborating on my theory). Storing the power we generate “in the network” seems to be more environmentally efficient, especially now that the network has been so scandalously gold plated.
    And yes, this really is a powerful (groan) teachable moment about the perils of privatizing natural monopolies.
    (BTW: for those that can’t read and prefer a podcast, RN carried a version of Jess Hill’s report on Background Briefing last year titled “The price of power”.)

  8. Dave Lisle,

    “Storing the power we generate “in the network” seems to be more environmentally efficient, especially now that the network has been so scandalously gold plated.”

    I think this is right – it’s going to be better to have a RET system especially with smart meters and so on – in periods where energy generation is poor for instance it may be more socially responsible to limit energy consumption in the homes of healthy and fit people in order to divert more energy to hospitals, nursing homes, elderly or inform people living in their own houses etc.

  9. The next part of this is, Ikon, that the prices were pushed up

    to pay for the gold plating

    the gold plating is done and paid for

    the prices should now come down by the same amount that they went up by.

    The sly part of what will happen now is that the reconditioned assets are poised to return a real profit to the shareholders,….presumably the Qld taxpayer….., but they are being sold off at that exact point where the profits should role in……or the prices should come down…….or they should carry on and build the renewable infrastructure at the urgent rate that we know is needed.

    This is what I meant by the one dimensional approach to this by all commentators. We are being hurried through this process in the form of an early election so that the ideologues can play out their fantasies at the public expense.

    Then comes their get out of jail phrase….”you voted for it”!

  10. Campbell Newman uses the word “string” 23 times in one interview, part of which is below:

    “We have a strong plan … one other point I make today is the opposition leader can talk about jobs until the cows come home, and she has been doing a lot of that, but I make the point, you cannot create jobs unless you have a strong economy and you only have a strong economy if you have a proper strong economic plan and you have a strong stable government to deliver that plan,” he told reporters on the Sunshine Coast while announcing the duplication of the railway line between Beerburrum and Landsborough.

    “That is what the LNP is offering. We have an economic plan. We have a strong team.”

    String, string, string, string, All you need is string…

    Personally, I think he is just stringing you Qlders along.

  11. Am glad I found this up and thank the posters (eg BillB) for opening much of it for me.

    Quiggin traces the trickery back through the figures and terminology, back to bigoted intentions and greed.. for my part, I feel like the person with a computer having a fault explained by a techie. I dont get the esoterics because I’m not trained/never learned..typical ozzy.

    But correct me if my impression isnt that óur Dreamtime is ending, that we are in an análogous postion to native Australians two centuries ago: ‘”elite”sources are now interested in a clumsy harvesting of places like Qld rather than a cultivation of real potential, akin to and driven by the same mentality that brought about the destruction of the Goose That Laid the Golden Eggs.

    Yet, these are the same people who try to berate the ALP and Greens for robbing future generations of a fair chance at life.

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