“There is a growing concern that some network reliability standards are too high — which some claim have reflected political responses to isolated major blackouts, rather than systemic problems — with costs that exceed consumers’ willingness to pay.” — Productivity Commission, 2013
How quickly everyone forgets, between institutional amnesia, base politicking (including from the media) and the harebrained climate denialism that appears to be becoming a hallmark of the Turnbull government every bit as much as it was of the Abbott government.
Driven by rising consumer anger at years of massive increases in electricity prices in New South Wales and Victoria, and the Coalition ‘s insistence that it was all somehow to do with a carbon price that hadn’t actually started yet, in 2012 the Gillard government asked the Productivity Commission to look at operation of the electricity sector, what had been driving the big price rises and ways to better regulate it.
Electoral anger about electricity prices at that time was visceral, with voters blaming electricity companies (private and public), regulators they saw as kowtowing to big, often foreign-owned companies and claims of gold-plating and companies rorting a highly complex system. Even regulators themselves admitted that the laws they were regulating were eminently rortable, which led to a round of changes at the state and federal level before the PC reported in April 2013.
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The PC report didn’t necessarily make for pleasant reading for Labor — by then in its death throes anyway — with its call for privatisation of remaining electricity assets (Labor continues its absurd, union-derived opposition to electricity privatistion even now) and its finding that electricity price rises were at least partly driven by excessively high reliability standards.
[South Australia’s blackout explained]
But the PC was adamant: reliability standards were “mostly” too high — they didn’t take into account the possibility of inter-state operations, and they were set with no reference to actual consumer preferences. “State and territory governments, and their regulators, still play too large a role in setting reliability standards,” the PC lamented. It proposed a different system of assessing consumer preferences for reliability and using that as a basis for developing national standards.
Now, invoking “energy security” (in the fine tradition of putting “security” after a word in order to stifle debate), the Turnbull government is using reliability as part of what looks like a return of the Abbott government’s war on renewables. Having initially blamed renewables for the South Australian blackout, the stubbornly incontrovertible role that collapsing infrastructure played in the event forced the government to switch tactics to suggesting — more nebulously — that state government commitments to renewable energy placed different requirements on infrastructure and somehow decreased reliability.
“The number one has to be keep the lights on and SA failed to do that,” Turnbull said yesterday. “At all times energy security is paramount and that is why we need better coordination and cooperation between the states, territories and the federal government to harmonise state and federal renewable energy targets,” said Energy Minister Josh Frydenberg — and by “harmonise” he means reduce state targets to the federal government’s minimalist target. “Events in South Australia do show an urgent need to look at the reliability and stability of the energy system,” on the eve of a meeting of energy ministers from across the country.
[Chris Uhlmann joins Barnaby in blaming wind energy for SA’s blackout. They are dead wrong.]
Transmission and distribution companies across the eastern seaboard will be cracking the bubbly at such statements, because they open up the rich vista of a new era in gold-plating of networks in the name of “energy security”, driving ever-higher consumer prices.
The rich irony, of course, is that the Coalition once used electricity prices as a key weapon in its campaign against a carbon price, but now seems to want to increase power prices as part of its campaign against renewables. Still, just say “energy security” over and over and maybe people will forget about it.