The Forum > General Discussion > Is Ideology making South Australia a failed state?
Is Ideology making South Australia a failed state?
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The pricing of electricity is completely independent of whether the network or power stations are independently or privately owned.
The network buys power from the producers with a certain amount based on contracted prices and the rest (about 50%) based on the spot prices, where the spot prices are based on bids for power in 10 minute segments. The power generators typically submit graded bids with small amounts at $0 (for coal generators to keep the turbines ticking over) and increasing as the cost of putting more power on line increases, (gas turbines are far more expensive and only kick in at peak demands). The higher the deficit in demand, the higher the peak prices.
The peak demand periods normally occur between 5pm and 8pm, and if there no wind, there is virtually no renewable power available, and the deficit is huge, with power prices spiking to levels never seen before.
As I said previously, the prices are impacted in 3 ways:
- Subsidies this increases household costs by 10% and large users by much more.
- Networks have to be expanded to reach new generation sites. Note that these networks have to be designed for 100% capacity when renewables supply on average 30% or less.
- Cheap coal and gas cogen baseload generators trying to load match with renewables increases their cost and reduces their output. This generally leads to their closure.
Just look at this basic comparison:
http://www.euanmearns.com/wp-content/uploads/2015/08/europeelectricprice.png