The incredible political toxicity surrounding the issue of climate change and carbon pricing seems to have acted to blind us from a rational debate about how we efficiently produce and use energy, and its role in Australia's international competitiveness.
There are some incredibly important issues surrounding the energy sector and international competitiveness relating to competition and market power, government versus private ownership, the implications of the resources boom for economic structure and workplace labour practices. But these are being drowned out by an ideological crusade against anything that accepts climate change is a legitimate problem.
Yesterday there were reports
Boyne Aluminium Smelter in Queensland will cut back production over summer by 14,000 tonnes of aluminium. It attributes this cutback to the abnormally high electricity prices which Queensland has been experiencing.
Queensland has seen increases in wholesale electricity prices -- particularly over last summer and also increasingly this summer -- which substantially exceed price rises in the other states with cheap coal generation (New South Wales and Victoria). The rises far exceed anything that could be explained by the impact of carbon price, as illustrated in the chart below from the Australian Energy Regulator ...
Wholesale electricity prices across the states of the National Electricity Market