Can the electricity system be fixed ?

I’m going to be talking to Steve Austin on ABC 612 Brisbane today, hopefully about COAG’s rejection of the Turnbull government’s National Energy Guarantee. As I said when this policy was cooked up in a matter of a few weeks last year

The most important thing to understand about the federal government’s new National Energy Guarantee is that it is designed not to produce a sustainable and reliable electricity supply system for the future, but to meet purely political objectives for the current term of parliament.

Those political objectives are: to provide a point of policy difference with the Labor Party; to meet the demands of the government’s backbench to provide support for coal-fired electricity; and to be seen to be acting to hold power prices down.

To expand a bit on the first point, this is a policy that won’t survive past the next election. If Labor wins, they’ll need to raise the emissions reduction target and that will entail dismantling most of the elaborate structure of the NEG. If, regrettably, Turnbull is re-elected, he’ll face immense pressure from the backbench to do more for coal. On past form, and the indications of recent weeks, he’ll comply. If it should survive, the policy won’t deliver any significant change from the current no-policy trajectory, because it’s essentially designed to do nothing.

But if not the NEG, what can be done to fix the shambles that is our electricity system? Here’s a very brief outline:

(i) a publicly owned national grid, operated by a statutory authority with a service orientation encompassing the goals of security of supply, affordable electricity, and a transition to a fully renewable generation system
(ii) the abandonment of the electricity pool market, in favor of longer dated supply contracts, with an order-of-merit system of supply management
(iii) a mixture of public and private electricity generation and networked storage
(iv) reintegration of distribution and retail services

12 thoughts on “Can the electricity system be fixed ?

  1. What do you mean by national grid? Transmission only? Transmission and distribution?

    Also, semantically, we don’t have a national electricity system. WA and NT have their own separate systems and aren’t going to be connected to the rest of the country soon if ever. The NEG is not going to apply to them. (Which is curious in itself. It seems as though their electricity generation emissions, don’t count in anything. NT is small enough to ignore, but WA is not.)

  2. Smith9, John’s post is quite clear. By the ‘ National Grid’ we can pretty much take is as all the bl…y wires between the power plants and premises. That’s all we need to know and if that term is not clear in other contexts that doesn’t matter here.
    Nor can I think of a context where the term national grid is too vague – not unless you are about to buy a share in something marketed as ‘the national grid’.

  3. OK, if you wanted to be pedantic it could matter for John’s point (i) (and I coudln’t be bothered checking his other points). If you think it could matter there, please tell us what might inadvertently be left out if we use the wrong definition.

  4. John
    Given the re-publicization of the network is unlikely even under a Labor Federal Gov. do you have a system that might at least work better under the constraints of the current system but possibly with your points 2 and 3 included.

  5. Nationalisation of power plants would only be open to States surely and they are not going there for monetary reasons.
    Thus you need to ensure the current private system works better,
    This MUST include better regulation as it is unlikely to ever have a competitive market.

    The comment on coal is silly.
    Those advocating for coal are doing this for political reasons knowing no money will ever be put there. It would be incredibly easy to argue against putting public money into coal because of the higher cost of electricity it would mean OR the large subsidies it would entail.

    The easiest way to fix up the electricity industry is to put a price on carbon and let the market work it out. That aint gonna happen soon so the NEG is the only policy in town.
    It emphasis on dspatchable power not peak load power and its de facto emissions intensity scheme at least gets us half way there and also importantly gives certainty to the industry.

  6. Initially transmission only, but ultimately distribution also. On the “National”, the designers didn’t and apparently still don’t think about emissions – it was all to do with the grid.

  7. I’m in WA and none of this matters to me. The government already controls everything about our power generation, distribution and pricing and still stuffs it up – we have the highest power prices in the country I believe. Oh and we have a Labor government now too. The suggestions just seem to move the rest of Australia to the WA model.

  8. WA is at the moment ,near Albany, going with wave power for power and desalinisation.

    off the coast of Perth the navy has installed a smaller scale system of the same.

  9. ps.

    as was noted in conversation i participated in recently

    “if you think this mob is bad, the ones they replaced were an expensive , kick and scratch bunch of confident certainty.”

    ouch!

  10. As the govt has shown a reluctance in providing the evidence for their assumptions it’s fair for others to draw their own. Transparency is not a feature of this Turnbull led govt.

    Giles Parkinson argues that In its present form the NEG will not lower emissions, will not deliver cheaper energy and will not deliver certainty. Furthermore, the essence of the NEG is to kill off all further investment in renewables.

    In spite of one’s geographical location the NEG is of concern to everybody. The national transition to clean energy is being thwarted by trumpist extremists – the LNP.

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