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The Forum > Article Comments > While the big birds fight, manufacturing jobs flee Australia > Comments

While the big birds fight, manufacturing jobs flee Australia : Comments

By Graham Young, published 29/4/2019

It's an issue that appears to be missing from this federal election, with the two major parties brawling over issues of pay and tax, but what is the use of either if you're out of a job?

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Aidan: How much gas (and how much cost) can be saved by taking advantage of cheap electricity at times when the wholesale price is low (bearing in mind that these times are likely to get more frequent as more solar panels go up)?

Tragically, the time for taking advantage of cheap electricity in Australia well and truly passed when our politicians foolishly promoted the change to uneconomic, unreliable, intermittent weather-dependent renewables at the expense of low-cost, reliable coal-fired power.

Australia will pay dearly for the shortsightedness of our misinformed politicians. As more coal-fired power is shut down, disinvestment in our industries and consequent substantial loss of job opportunities are bound to follow.
Posted by Raycom, Tuesday, 30 April 2019 3:05:45 PM
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Raycon, you're copying Hasbeen's mistake of assuming the simplest explanation to be true even though it doesn't actually fit the facts.

There's still ample scope for taking advantage of cheap electricity in Australia. Earlier today the wholesale price of electricity in SA was below zero. It's since risen to 28c/kWh before falling back to around seven. It is forecast to fall below zero again tomorrow. As more solar panels and wind turbines are installed, we can expect to see electricity wholesale prices fall further, and as more batteries are installed we can expect to see the price become less erratic.

We did have cheap power all the time once, but even if you ignore the externalities, the age of coal power being cheap is drawing to a close. Policy changes and privatisation extended it as the plant owners were able to sweat existing assets, but there's a limit to how long they can do that profitably. Power from gas also used to be cheap but it isn't now - in addition to the higher gas prices because of exports, the generation companies have far too much market power, and keeping supply constrained is the most lucrative strategy even though it's the opposite of what would bring the most public benefit. And the government fools people into thinking renewables are to blame for this.

Solar and wind power used to be very expensive (though efforts to pay for them only made up a small proportion of electricity bills). But now with experience, technological improvement and economies of scale, they've become cheaper than coal. Alas doing nothing is still usually the most lucrative option for the power companies.
Posted by Aidan, Tuesday, 30 April 2019 6:04:50 PM
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Yes Aidan, not only a raw prawn, but a very stupid raw prawn.

Give companies access to the resource & let them produce & they will produce & supply for any price that is profitable. Give then enough & they will supply you at ate lowest possible price. It is idiotic to refuse to allow your own resource to be harvested, then expect to force companies operating in other jurisdictions to supply you at a price you prefer. If you won't use your own, you have no right to expect discounts from others.

You obviously prefer the bureaucratic, socialist, communist approach of dictating markets & controlling markets & suppliers. You don't want the stuff extracted, but want to restrict companies extracting in other jurisdictions to suit your stupidity.

I doubt there can be a more ridiculous approach to resource use. Have you ever thought of growing up & joining the real world?
Posted by Hasbeen, Tuesday, 30 April 2019 8:53:13 PM
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Dear Hasbeen,

You wrote;

“Give then(sic) enough & they will supply you at ate(sic) lowest possible price.”

Australia pays more for its own LNG than Japan. The corporations which you are so busy singing the praises of have reemed this country while blokes like you applaud them for ripping us off. We have had a whole suite of politicians so beholden to mining industry donations just let them do it.

Are you really this thick?

This is the real world mate.

“Australia is on track to eclipse Qatar as the largest exporter of gas by 2020, but is expected to only earn $600 million in 2018 - the same amount of revenue the government earns in beer tax every year - compared to Qatar's $26.6 billion.”
http://www.smh.com.au/politics/federal/staggering-90-billion-lost-in-resources-tax-20180305-p4z2uv.html

Tell you what, what if the 26 billion dollars we are foregoing to help your corporate mates was instead used to subsidise cheaper gas prices for our industries would that make you happier?
Posted by SteeleRedux, Tuesday, 30 April 2019 10:03:21 PM
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Aidan: … you're copying Hasbeen's mistake of assuming the simplest explanation to be true even though it doesn't actually fit the facts.

The facts are that dozens and dozens of new coal-fired power stations are being built around the world.

You should have realised by now that the cost of electricity rises with increased penetration of weather-dependent renewables -- that has been the experience in the rest of the world. That will become even more pronounced in Australia with higher penetration of those renewables.

Let's hope you do not own shares in the producers of allegedly negatively-priced wholesale electricity.
Posted by Raycom, Wednesday, 1 May 2019 1:50:03 PM
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Wow, Hasbeen, I hadn't realised you were that ignorant of how businesses operated!

They aren't content to make a small profit; they try to maximise their profits. They won't supply the domestic market with gas for less than they can sell it for to international buyers (when the transport costs are taken into account).

Indeed if a business is content to make a small profit rather than trying to maximise its profits, it becomes a takeover target. We've seen this happen in the gas industry in 2008 when BG (which has since been taken over by Shell) tried unsuccessfully to take over Origin Energy then successfully took over Queensland Curtis LNG.

Are you suggesting we should try to expand the gas industry so much that we bring international prices down in order to make domestic gas cheaper again?
If so, you should be aware that we don't have an infinite supply of it, and dumping it all on the international market now will mean it won't be available for future generations.
But if that's not what you mean, how do you imagine abolishing restrictions would lead to lower domestic prices rather than more exports?

>It is idiotic to refuse to allow your own resource to be harvested, then expect to force
>companies operating in other jurisdictions to supply you at a price you prefer.
Huh? You seem to be implying that we're not allowing our gas industry to develop, and that I'm suggesting trying to force companies to import gas at less than it's worth!

We're not refusing to allow our gas to be harvested; our industry is big and still expanding, and we're one of the world's biggest gas exporters. We could, if we wanted to, impose some export restrictions to make domestic gas cheaper, as the USA has done. A few years ago I opposed this; with hindsight I think I was wrong, and I support it as a short term measure.

As for your ludicrous assumptions about what I “obviously prefer”, they're too stupid to reply to now, but I may respond later.
Posted by Aidan, Wednesday, 1 May 2019 3:14:10 PM
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