“... and the other was that the NEG wouldn’t mean lower prices.” The only people who disagree with that are Turnbull, Freydenberg and some coalition MPs. Last night, Freydenberg was still saying that the NEG would lower prices by $500 a year. Oh, and a couple of idiot journalists in the Financial Review have claimed that electricity prices have ALREADY come down because of renewable energy. I don't understand, then, why my 'cents per kwh and supply charges have stubbornly stayed where they have always been. Just getting bigger discounts on you account balance does not mean prices have come down - which they definitely have not.

What these 'experts’ are doing is lying to the 80% of Australians an are not-interested-in-politics and who too lazy to investigate the the lies. The rest of us just slip through the cracks.

Someone needs to fact check John Quiggin because his risible rhetoric included statements like the taxpayer wasn' paying for renewables when every boy and his dog knows the taxpayer is on the hook for all the subsidy schemes that got these things on our rooftops anyway.

And as you say, Graham, if renewables were the answer, why is China with its brown coal, coal fields are building more new coal-fired power stations. Even if we can argue they are contributing to climate change and the dire straights many of our farmers now find themselves in?

That said and set aside, due diligence has to inform us that new coal-fired power stations are not the answer, but nuclear-powered ones, which don't spew CO2 into an already CO2 rich atmosphere, are?

Not traditional nuclear operating at (explosive) pressures of 150 atmospheres and above, but MSR and thorium, which is four times more abundant than uranium and is the most energy dense material in the world! Moreover, MSR operates at normal unpressurised atmospheres, as does the water jacket around it, preventing neutron leakage.

Further, these things can be tasked with burning other folks nuclear waste and for a fee of annual billions in walkaway safe MSR's, where the payoff could be retail energy prices as low a 2 cents per KwH. (Robert Hargreaves)

As for thermal coal? It still has a future as fuel, as cooked to release usable methane as a cleaner transport fuel!?

And for the alternative bitumen, we could also create allowing us to retain the 26 + billions we now fork out for fully imported foreign fuel, creating many onshore jobs here as we transition to this cleaner fuel/alternative road surface/industrial lube etc.

And the residual carbon residue from all that may be able to underpin a brand new, highly profitable, carbon-based, synthetic graphene industry?
Alan B

Renewable energy efforts being expensively applied in Australia are being totally cancelled out by rapid increases in Chinese and Indian coal use.

In addition to the sharp rise in China's thermal power capacity in the first graph - here is an INDIAN graph showing a sharp rise in coal fired power plants through to 2025 http://www.researchgate.net/figure/Growth-of-Indian-coal-based-thermal-power-plants-in-MW-1971-2025_fig1_320258131

We are all in one environmental world - with the largest energy uses like China and India having the greatest impact. There is no plastic bubble of environmental goodness covering Australia.

China and India couldn't care less about any deluded moral example Australia is trying to set.

Some Victorians are refusing to turn on their heating, scrimping on food and taking showers at local charities to save money on soaring power bills, according to a disturbing new report….news aug 2017.

Let's just ignore the facts, while arguing the facts?

Graham Young,
Your own work is in dire need of some fact checking, as many of your claims are based on myths. Admittedly very common myths that are regarded as fact by much of the population, but still objectively false.

"Professor Quiggin claims the appropriate rate of return on the network should be the government bond rate. That is nonsensical"

COUNTERINTUITIVE DOES NOT EQUATE TO NONSENSICAL!

Though IMO it's not the most sensible figure, it's much much much more sensible than the current arrangements which allow the financiers to make a huge profit at everyone else's expense.

"The government bond rate is the rate at which the government borrows. If the network return was that rate there would be no profit to the government and no cover for the risk they would be taking in providing the network."

THERE IS NO RISK!

At least there is no risk to the owner of the poles and wires. It would all be passed on to the electricity consumers whether or not they're also slugged with the cost of unnecessarily high interest.

"It would also discourage investment in the network as the government would be likely to get better returns elsewhere."

THE GOVERNMENT IS NOT A CORPORATION!

The main benefits to government are not the direct profit made, but rather the induced economic growth and resultant increase in revenue from taxation.

Having pointed out the crucial difference, I will also add one relatively trivial quibble: if government policy were to borrow at the bond rate and trying to get the best return, the amount they'd borrow would be far higher than what they actually borrow at the moment.

I could go on further, but I'd like to see your response to these points first.

India and China can ignore everything including D Trump's tariff walls. And our moralising!

What they won't be able to ignore are power prices as low a 2 cents per KwH. Or tax reform that creates an effective 8% company tax.

Nor cooperative capitalism that beats the pants of both public and other private enterprise models.

Because that combination rolled out here in our own triple economic whammy. Will undercut their coal-fired economies.

And as our newly turbocharged economy cuts into their export-dependent economy, they will have no other choice but abandon much more expensive coal-fired power.

Someday, somebody in our parliaments will have pollies with desk adorned with signs that read, it's the economy stupid. And should we be led by men and women of vision, able to set aside business as usual politics and petty difference!

Then set their sights a lot higher and for we Australians ahead of foreigners or accompanying pecuniary interests?

And finally understand, it's not about them and their financial prospects but the folk they're elected to FAITHFULLY serve, to the very best of their ability!

Time to face facts as opposed to continuing to flog, politically expedient, dead horses!

For mine that should mean a complete cleanout with all the virtually useless, no hopper incumbents tossed out, but particularly those unable to unite behind their leader, but occupy their time, time we pay for, snipping at their leader the more moderate members of the party and almost every new idea?

Like ideas that would turn a dead heartland into our most productive and drought-proof farmland. In the sure and certain knowledge, the next boom will be the food boom and where we and near neighbour are uniquely positioned to take full advantage of. Always providing we still own our own economic sovereignty and are allowed by our political masters, to decide our best future and prospects!?
Alan B.

You can be sure if Quiggin turns out to be way off the mark it won't cause the slightest embarrassment. The idea seems to be to generate the greatest outrage at the entrenched evils of the establishment. It doesn't matter so much if the argument stretches physical plausibility because the audience doesn't think that way.

That means that people of that mindset won't recant if Germany finds itself unable to shut its last nuclear reactors in 2022. The reasons will be due to some kind of dark conspiracy.

Australia uses a Gwh of electricity every 2 minutes or so. We have perhaps 5 Gwh of batteries and pumped hydro or 10 minutes national power supply in storage. Ergo 100% nice energy via storage must be within easy reach. This is what Quiggin and friends are teaching our young people.

everyone knows that Turnbull is a labourlite pollie who is willing to sacrifice pensioners and low income earners not being able to pay power bills for no other reason than to suck up to the gw fraudsters and UN. Disgraceful that Liberal and Labour have put us in this position. When the Greens/labour get in things will be even worse.

Here are some interesting aspects on the future of coal in China -

https://www.americanprogress.org/issues/green/reports/2017/05/15/432141/everything-think-know-coal-china-wrong/

It matters not how one reads or if everybody who doesn't agree with runner is a proven perverted laborite/commie? Or if you read it stand on your head inside the toilet bowl, where runner get his best inspiration and formulates most of his responses, while (hopefully, occasionally) holding his breath?

At some point not too far ahead in time, the entire world will accept due diligence and abandon coal fire power! NO QUESTION!

The anti-development, anti-industrialisation greens will insist it has to be wind or solar voltaic?

The thundering dunderheads on the extreme right, Jawhol? Will insist and against a mounting tide of proven irrefutable facts to the contrary that GW is a fantasy!

That farmers aren't doing it as tough as they reckon,? After all, we've always had droughts! Moreover, for the most part, are lazy bludgers looking for a handout and free stuff? As the extreme right chant, the government has no business in business, unless it's coal-fired power business!

That there's nothing cheaper than coal-fired power!

And quote private enterprise in the US that reported wholesale power prices from ROM coal and virtual slave labour wages a low a 3 cents per KwH.

Summarily dismiss PROHIBITED thorium on the grounds, they don't know of a current operational power producing reactor! HARD TO DO FORBIDDEN.

Ostensibly, to protect the fossil fuel industry, big nuclear an big pharma from profit harming (theirs) competition!?

Even though MSR and thorium was successfully trialled at Oak Ridge over half a century ago during the fifties, without accident or incident, abandoned in the mid-seventies because it couldn't be easily weaponised!

But could, in fact, be deployed to burn up weapons-grade plutonium and current stockpiles of nuclear waste, (Kirk Sorrenson/Richard Martin/Jam Petersen) all while producing power for less than 2 cents per KwH! (Robert Hargreaves)

And WITHOUT QUESTION our future carbon-free energy, if it has to be reliable, dispatchable, safe and CHEAPER THAN COAL!
Alan B.

With all the mounting evidence, to the contrary, & all the totally failed predictions of fraudsters promoting global warming, you have to doubt either the intelligence or follower traveller morals of any one who can say, "The thundering dunderheads on the extreme right, Jawhol? Will insist and against a mounting tide of proven irrefutable facts to the contrary that GW is a fantasy!"

I obviously can mot know why anyone who seems intelligent would hitch their wagon to the UN. or clowns & con men like Turnbull But some do, & appear to be totally glued on for ever.

Incidentally the quote is not the way to win friends or influence people. Insult is the last refuge of someone with no scientific argument to offer.

"New coal costs more than the combination of renewables plus storage". How was such a claim developed? There are to my knowledge no grid systems comprising just solar and wind (which are presumably the renewables of interest here) firmed with storage, either batteries or pumped hydro. So there's no basis for reliable costings. I know that the gossip tends to make the punters think that storage is an everyday component of grid-scale energy systems. It isn't. The fashion for battery storage has reached ridiculous levels.

Insult is the last refuge of someone with no scientific argument to offer. Must have been addressing the "man" in the mirror when you came up with that one Has?

Overheard conversation between a conservative and a liberal.

Con: we must maintain a pocket of poverty to suppress wages and demands for better conditions.

Lib: but these folk are our customers and if we suppress wages growth? Who's going to keep demand up at healthy levels and keep turnover turning over?

Con: Repetition of the last statement.

Lib: you don't get it if our customers have more money in their pockets then so do we!

Con: Yeah? well, they're not getting it from me!

Lib: nobody wants yours, we just need to export more! And grow wages by growing the economy! And that only needs affordable reliable (cheaper than coal) carbon-free energy and water!

Con: Carbon-free power? What clean coal?

Lib: *&^#@%^(!)

Don't need to get insulting, I know how an economy works, just sell everything to price gouging, tax avoiding, profit repatriating foreigners for a fee for me and mine.

We'll be alright and that's all that really matters. I'll donate a stained glass window to the local church and that should keep the great unwashed happy along with free to air footy! You've got to know these what's important to these folk and the hot-button issues that burn them, then play on that for all your worth, while we accrue personal fortunes?

. LiB: what about the growing homeless, the poor and downtrodden?

Con: show them where the bleeding heart's soup kitchen is and chuck in a couple of bucks into the poor box. We've always had pockets of poverty and always will, it's inevitable!
Alan B.

Malcolm (return bill) Turnbull, is in an invidious position! Damned if he does and damned if he doesn't. And wedged on energy policy between Tony Abott and co and his own moderate libs on energy policy!

And simply can't go cap in hand seeking the support of labor this close to an election, just to get a compromise through, nor can he leave until after the election? Given how many more seats he could lose to Labor!

And most of those now in doubt seems to be among hard-line conservatives who in truth want the Paris accord scrapped? To differentiate themselves from Labor and pick a bun fight on energy prices?

Well, all possible if the topic was nuclear energy and power prices as low as 2 cents per KwH. All they need is to understand the following! and with highly credentialed scientific support, i.e., Professor Robert Hargreaves, Kirk Sorenson, Jam Petersen, Richard Martin and several other highly credentialed experts who ha made public domain docos, that could be used to educate the public during a longish campaign?

Thorium is safer than coal cleaner than coal and cheaper than coal! And where we need to be heading if we have any real intention or prospect of not only decarbing the economy, but quite massively turbocharging it as well! Labor will invoke a sh!t storm and protest on idiotic ideological grounds, while ministers, who having got up to speed on Thorium based energy, can extoll the safety aspects and the massive price differentiation/hip pocket nerve, plus the PROVEN health spinoffs!

And the POSITIVE economic and environmental implications! And with a Labor party in complete lockstep against it without a leg to stand on to prove why not! And satisfy Tony and co, who just want a great big bun fight with Labor!?
TBC Alan B.

Cont. And still with a viable policy for coal! As CLEANER, CHEAPER future transport fuel! and more than possible with thorium 2 cents per Kwh energy!

And rolled out in shipping container sized modules mas produced in factory assembly plants over th next two decades to replace aging coal-fired power plants over the next two decades or so and in their place new plants that process coal to produce cheaper replacement alternative fuels and fertilizer etc.

And SAVE SOMEWHERE NORTH OF 26 BILLION PER for currently fully imported oil and refined transport fuel. Then there is bitumen and many carbon-based products like lampblack and highly profitable manufactured graphene

And all doable with Power costing as little as 2 cents per KwH! And in the process create methane of purer quality than current CNG? Which can power any conventional engine as CNG.

Other products could include ammonia/diesel alternative and an alternative Jet fuel or power kero. Some of which could be exported!

There's no downside here, but may require some government as financiers and facilitators of the cooperative enterprises tasked with manning said operations and power plants etc.

Well, the hard right would have put their hand in the taxpayer's pocket to pay for a new coal-fired power plant or two? Where's the real difference? And best of all because the FREE MARKET, PRIVATE ENTERPRISE, cooperative business model isolates and eliminates all union involvement!

And because the manufactured CNG would cut transport emission by around 40% and where desirable piped into the home or factory where it could be used in ceramic fuel cells, where the exhaust product would be mostly pristine water vapour. Or could be used to rekindle our own glass industries etc!

And with thorium deployed, power plant CO2 emissions by 100%!

Tell me Has, WTF is wrong with any of that? And or have you even bothered to read or look at any of the exampled experts on U tube and google tech talks?

Take a butchers before you ever once again take me to task for accurately describing you and your likeminded ilk!
Alan B.

Aidan,

The bond rate is 1.5% and anyone that thinks this rate of return is acceptable is an idiot as it allows nothing for variable conditions and upgrades.

Secondly, the privatisation of the networks dramatically dropped the price of power mainly because private enterprise managed to dramatically reduce running costs while improving service thus both dropping prices, making a profit and paying tax.

Shadow,
1.5% is acceptable rate of return when there's no risk whatsoever. Provision for variable conditions should be included in the base cost not the financing cost, as should preparation for upgrades (but the upgrades themselves should be financed separately). Allowing the infrastructure companies to profit from the financing of the infrastructure is unnecessary and inefficient.

Is your claim about the effects of privatisation based on reality? It looks more like a theoretical claim by someone versed in the dogma of privatisation and unaware of the problems! Where is the evidence of a substantial drop in the price due to privatisation?

A report on a book Dumb Energy by Norman Rogers turned up on my
screen today and the author demolishes wind and solar as viable systems
for electricity generation.
The book is applicable to the US but looking at the figures quoted
and the subsidy methods it seems reasonably applicable to Australia.
Unfortunately the web site it turned up on does not display it again.

However here is an Amazon page I found for the book.

http://tinyurl.com/y8e7bjvh

What I had previously had two large extracts from the book which were
quite interesting. If they pop up again I will add them here.

Aidan,

No risk at all, what bollocks, there are always risks such as plant failure, strikes, etc. As for privatisation, the price of power in Victoria dropped significantly after privatisation. The Hazelwood power station was a textbook case. After privatisation, a professional management was put in place that essentially halved the workforce and dramatically improved the reliability and output of the plant.

Shadow,
When I said there was no risk, I was referring to the owner of the poles and wires. Whatever happens, there's no financial risk to them because the cost will always be passed on to consumers.

However, thinking about it a bit more, I concede there are two theoretical exceptions:
firstly the 'death spiral' where they overcharge consumers so much that more and more people decide to go off grid. Highly unlikely because of economies of scale, but not completely impossible. Secondly, gross mismanagement - they could overpay their shareholders so much that they don't have the money to meet their financial obligations. Again highly unlikely - indeed I'd class it as fanciful were it not for the historical British example of Railtrack.

It appears Victoria's electricity privatisation did decrease prices - a result not replicated in the other states. Do you know why Hazelwood was being operated so inefficiently prior to privatisation and whether it had always been like that?

Graham,

If you look at what is happening all around the world, you might notice dramatic climate divergences from normal. Yes, today and many past months these divergences have been and are impacting millions of people and billions of dollars of infrastructure.

Do you understand what is happening today in much of Australian farming? Do you care? How about we’ll over 70 fires in NSW, and Qld, and Vic, during this winter? Can you visualise the strength of 500 fires in BC in Canada? Do you turn your back on Arctic fires in Sweden? Greece? And much, much more.

Do you care?

This is Climate Change writ large.

Oh, and numbers of lawsuits against FF industries by youth groups in the US are having success!

Your comments on renewables versus coal are rediculous without taking CC into account. Regardless of your organisations sponsors, CC must be the driver of electricity generation planning.

The fact that you cannot, or will not, address CC, renders your comments worthless.

You could run education sessions for your organisations sponsors.

Tony153, whether climate change is real or not is irrelevant.
Watch the eroei of oil and coal and its decline over the last 100 years.
Wind and solar it is now realised can never provide reliable supply
of electricity. We are faced with the longer time necessity of a change
to nuclear energy, uranium or thorium. Fusion is still 50 years away.

Just stop flogging a dead horse.

The purpose of government investing in infrastructure is when:

1) The infrastructure will generate public good in excess of the value of the asset, and,
2) Private enterprises cannot or will not build run and maintain this infrastructure cheaper than the government.

As private enterprise can and does build and run power plants cheaper than the state, there is no justification for the state to get involved beyond providing oversight.

Tony153

Firstly the lawsuits against fossil fuel companies are not doing well, in fact, they have been tossed out.

http://www.sciencemag.org/news/2018/06/us-judge-tosses-climate-lawsuits-california-cities-says-science-sound

Secondly, Graham has not challenged the concept of Climate change only the wildly incorrect claims by a renewables advocate. The problem with CC crusaders such as JQ is that they are perfectly willing to sacrifice the good in favour of the perfect.

HELE plants using black coal emit about 50% of the CO2 of the existing plants, and nuclear emits zero. Until it is possible to build cheap and reliable storage, renewables will be going nowhere.

It is disappointing that Graham has failed to respond to my criticism. What I posted was just the start, so if anyone wants to see more, let me know.

___________________________________________________________________________________

Shadow,
You've missed the crucial third factor in the case of government ownership v private enterprise: the best outcome for customers isn't always the most profitable for the owners.

With wind or solar power it makes sense to sell whatever's generated. Indeed that's usually also the case with baseload coal, as in your Hazelwood example. But for peakload generation it's a different story - even if you can generate electricity profitably, it's often more lucrative to hold out for a better price.

"...even if you can generate electricity profitably, it's often more lucrative to hold out for a better price."

Thank you, a very good reason to encourage investment, hence competition, in reliable electricity provision. With the current state of technology this can only arise from thermal sources.

Modular nuclear is a wonderful emerging thermal option, if only Oz would legalize it.

Aidan,

That's why you have competition so that the company that generates power at the lowest sells the most, and there is a race to supply the cheapest power.

What is guaranteed to screw over consumers is to subsidise the most expensive power generators by forcing the distributors to buy all the power they generate at a huge price which gets passed on to the consumers and forcing the other generators to compensate for their unreliability.

Luciferase,
I hope you're right about modular nuclear, but I'm not counting my chickens.

>Thank you, a very good reason to encourage investment, hence competition, in reliable electricity provision
That's one way of looking at it. Another is that government investment could go further than private investment because less competition would be needed.

If you haven't seen it yet, I suggest you see Bob Katter's rant about the effect of privatization on electricity prices near the end of this week's QandA.
___________________________________________________________________________________

Shadow,
I'm well aware of how competition works in theory. The problem is that we don't have so much of it that racing to sell the cheapest power is automatically the best strategy. It's often still more lucrative to go with high margins than high market share.

The cost of subsidising renewables is a small fraction of consumers' electricity bills, and is likely to fall to zero in the next decade - see http://reneweconomy.com.au/the-rapidly-disappearing-subsidies-for-wind-and-solar-in-australia-42300/

Reliability and despatchability are not the same thing. And while I'm not a fan of the current system of subsidies, it does make sense to prepare other generators for the situation they'll be facing in future rather than trying to replicate the economic conditions of the past.

Aidan,

It is more lucrative for the power companies to run with high margins which is exactly why they love renewables, they are guaranteed a high price and to sell every watt they can make. While the subsidies are shrinking, they are a long way from disappearing. When they are forced to compete directly and not sell power when it is cheaper elsewhere, then they will be directly competing.

Still, there is virtually no scenario where public supplied power can offer lower power prices than privately owned power without subsidies.

I thought that the concept of the NEG was good in that it forced the power companies to guarantee supply by buying sufficient dispatchable power.

What I find interesting, Aidan, is your passive-aggressiveness towards nuclear innovation, eg SMRs which are imminent while you're not "counting chickens" over them, yet you hold unswerving faith in a future storage breakthrough to achieve the 100% renewables dream/fantasy.

Just for interest: https://www.forbes.com/sites/jamesconca/2018/08/29/how-far-do-you-have-to-run-after-a-small-modular-nuclear-meltdown/#6dce3fc7393f