Feb 22, 2012

Parkinson: our cheap grid is letting us down: that’s not smart

Nothing epitomises the challenges of Australia’s future energy needs as the state of the National Electricity Market itself.

Nothing epitomises the challenges of Australia’s future energy needs as the state of the National Electricity Market itself. Since its inception in 1998, the NEM has been lauded by its supporters as one of the most efficient markets in the world – cost effective and reliable, just like an old Austen A4.

But should a grid be celebrated just for being cheap and cheerful? Or for its ability to act in the long-term interests of energy consumers? On this, the position of the NEM is hotly debated, and it quickly boils down to the same issues that characterise the debate around climate and clean energy policies on local, national and international levels: what’s good and cost effective now? And what’s good and cost effective for the future? It’s the eternal battle over the short and long-term benefits and, sadly, the two ambitions don’t easily intersect.

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7 thoughts on “Parkinson: our cheap grid is letting us down: that’s not smart

  1. Frank Campbell

    yesterday I said here that Crikey was biased and lazy for allowing Parkinson a commenting monopoly on energy policy…

    now it’s a daily dose of Giles the Verbose…

    Parkinson has only one argument: “clean green” renewables are cost-effective and ready to replace fossil fuel powergen.

    This is patently false.

    The govt. knows this, which is why it trumpets the vast expansion of coal, gas etc. The government’s figleafs, “solar flagships” ( two small and very expensive solar plants) are a fiasco- one has been dumped already and the other will soon follow. That geothermal feeling- a billion dollars already wasted on a chimera.

    My favourite Gillard line (apart from “We are us”) is “coal has a fantastic future”.

  2. Mike Flanagan

    And there goes F Campbell the fossil fuel mouth piece that lacks credibility and the ability to present any logic to support his assertions.

  3. Jimmy

    The biggest thing I take from this article is the wisdom of the NBN, instead of doind what it cheapest and best for now, the NBN builds for the future to prevent things like the issues being experienced by the NEM.

    Frank – So now we should not embrace any energy efficiency initiatives?

  4. Microseris

    Both parties are in the pocket of coal and therefore will not look to the future. You only have to listen coal industry stooge Martin Ferguson. This history and the connections go way back when state governments ran energy generation – SEC in Vicco’s case. Coal dictated everything – towns were moved, roads and rivers rerouted, etc. Massive holes were dug and will be left to future generations to manage or remediate. Big coal even boasted they wrote Howard’s energy policy.

    Governments and big business like centralised power generation where everyone is a winner, except the consumer. For the individual there is an alternative if you can afford the set up costs. Get off the grid. No bills, no outages. For the rest, get used to it.

  5. Mike Flanagan

    I do agree. I believe the NBN is one of the best investment this government has done. It will facilitate the geographic diversity of baseload power supply from a variety of technologies without the necessity to have concentrated massive infrastructures.
    The NBN will be intregal in the management of baseload power generated from a variety of sources and also will be very important in facilitating the adoption of smart meters to minimise connsumption throughout the country.

  6. Roger Clifton

    Renewal suppliers who have had the forethought to install storage as well will profit from a free-floating energy market. If prices are allowed to rise sufficiently during periods of high demand, they will allow high-cost suppliers to cover their costs while competing with the gassy closed-cycle-gas-turbines that would otherwise top up supply.

    Such a market would be disadvantageous to renewables suppliers who don’t install storage, so we must expect many noisy voices protesting against the NEM as it evolves. The niche would favour producers who can store energy and then resupply back into the grid at the required power factor — for an appropriate price.

    (Yes, I liked the Austin A40. But I liked the Morris Minor even better – you could swing the passenger seat forward and make love in the backseat at the drive-in. )

  7. jeebus

    If it truly does add $7,000 to network costs for each $1,500 air con unit, then all of these solar rebates and feed-in tariffs actually make a lot of sense, as solar is generating to its peak efficiency when air-con use is highest.

    My neighbours installed 4 Kilowatts of capacity on their roof for $25k ($17k after the rebate), and have calculated that with the current feed-in tariff in QLD, the system will easily pay for itself before its 10 year warranty expires. And that doesn’t even factor in the skyrocketing growth of power bills.

    Cutting back on the solar subsidies was a shortsighted move, as widely installed solar would greatly restrain the peak rates that all consumers pay for electricity.

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