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.

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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.
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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