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Electricity and the power of choice - for whom?

Electricity prices are a hot topic. Prices have skyrocketed in recent years and politicians have finally realised that people are struggling to pay energy bills. Power of Choice, an Australian Energy Market…

Australian household energy use increased by more than 30% in the past two decades. ctandjung/Flickr

Electricity prices are a hot topic. Prices have skyrocketed in recent years and politicians have finally realised that people are struggling to pay energy bills.

Power of Choice, an Australian Energy Market Commission report, focuses on measures to assist all consumers better manage their demand for electricity. It was requested by the Federal, State and Territory Ministers responsible for energy.

There is much to commend here, although for many this report will be as complex as the composition of electricity prices and the reasons for price increases. It reflects how complex the regulatory regime has become for Australia’s electricity market.

Demand-side participation

According to conventional economic theory, consumers should be able to exercise choice in a market and have information on which to base those choices. Australian electricity consumers are, in the main, able to choose their electricity supplier but then the choices become much more limited.

Power of Choice sets out a number of ways that consumers can exercise “demand-side” participation in the electricity market. Different electricity tariffs at different times and in different locations to discourage electricity use at peak times is one proposal. Another is to permit big power users to buy electricity from the wholesale market and for consumers to sell their generated electricity (such as from solar panels) to parties other than their electricity supplier. It is also proposed to pay companies to reduce their demand at peak times.

All sounds pretty sensible. If consumers can exercise their choice and change their demand for electricity, the need for more investment in “poles and wires” will be reduced and hence prices will not need to rise, and consumers will be able to reduce their bills. Everyone should be better off. But will they?

The biggest consumers of electricity are industrial users such as aluminium smelters. The top 20 use more than all households put together. Households use about 25% of Australia’s electricity. The balance of electricity demand is taken up by smaller industrial and commercial users.

So the Commission’s recommendations, if agreed to by the responsible Ministers, will be obviously beneficial to the big industrial and commercial users of electricity.

What about households?

There are about 9 million Australian households and their energy use grew by 33% from 1990 to 2010.

Australian households have the highest rates of ownership of refrigerators and air-conditioners in the OECD. Bureau statistics show that nearly 75% use space cooling and 57% have a clothes dryer - both big energy users. And more than 80% of households have a home computer.

About 40% of Australian households have an after-tax weekly income of less than $700. That’s 3.5 million low-income Australian households. These households include older Australians, the unemployed, those disabled or with a long term illness, and those with young children. These are vulnerable consumers with limited financial resources.

Electricity costs account for 75% of all household energy bills. But low-income households spend higher proportions of income and expenditure on their energy than the wealthier. They also have less ability to adjust their electricity demand as they spend more time at home and have insufficient financial resources to make their home more energy efficient.

Power of Choice acknowledges that households have different “capacities”. It says not all will benefit from time-varying pricing because they are unable to adjust their demand and this “could lead to financial distress”.

To manage the impacts for vulnerable customers of the proposed “demand-side” changes, the Commission’s report suggests they have the option of choosing to stay on an electricity price with a flat network charges (that’s for the poles and wires). A (long overdue) review of state government energy concessions which vary across Australia is also recommended along with targeted advice to help the low-income manage their electricity consumption.

The missing link

Disappointingly, Power of Choice doesn’t recognise the further disadvantage for vulnerable low-income households inherent in the report’s main recommendations. The thrust of the report is about giving consumers choices and better information to manage their electricity use. And where will we find that information? The internet.

Yet around 1.5 million low-income Australian households do not have home internet access.

Last month the Federal Minister for Resources and Energy announced the release of an electricity prices fact sheet. This six-pager clearly explains what has been going on with electricity prices and what the Federal Government is doing. But it is only available from the website of the Minister’s Department.

Twelve months ago the same Minister announced the release of fact sheets by the Australian Energy Regulator (AER) to better inform consumers of their rights and the services available to them. These fact sheets are only available from the AER’s website. Websites also are the primary means by which electricity companies provide information to their customers about prices, products, payment methods and energy efficiency.

So for some electricity consumers the Commission’s proposals will be of considerable benefit. But for around 1.5 million low-income households there will be no choices to be made. Choices require information from the internet which they don’t have access.

Join the conversation

65 Comments sorted by

  1. Gerard Dean

    Managing Director

    It appears that our Prime Minister agrees with your contention that rising power prices are hurting, because she recently reneged on her promise to close Hazelwood power station in Victoria, which was slated to close to reduce Australia's carbon emissions.

    It was a tough political decision, in view of her previous position supporting action on climate change and with the carbon tax less than 2 months old. The closure would have strained Victoria's power system, wasted hundreds of millions of dollars compensating the station's owners that would be better spent on schools and driven up power prices, further marginalising the poor.

    A tough decision, but the right decision which is good for Victoria's poor, small business, struggling manufacturers and families.

    Gerard Dean

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    1. Ken Swanson

      Geologist

      In reply to Gerard Dean

      Just a shame that yet another promise has been broken by this woman.
      It also shows what a shambles her policies surrounding the carbon tax continue to be.
      The compensation package was meant to more than compensate the poor in the changeover. So what part of the plan has not worked? Or is the whole thing fatally flawed?

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    2. Gary Murphy

      Independent Thinker

      In reply to Ken Swanson

      The carbon tax is responsible for 10% of the electricity price rise.
      The compensation does more than compensate the poor for this increase.

      So what part of the plan has not worked?

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    3. John Davidson

      Retired engineer

      In reply to Gary Murphy

      Wrong Gary: The carbon tax is now 10% of the household price, not the recent price rises.

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    4. Ken Swanson

      Geologist

      In reply to Gary Murphy

      And the closing of the power station that was heating the world and spewing carbon into the atmosphere?
      This is one reason why all the carbon tax money was being raised in the first place. If no purchase then can the tax be lowered and/or dropped altogether. Cannot have it both ways.

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    5. Gary Murphy

      Independent Thinker

      In reply to Ken Swanson

      The reasons for the carbon tax:
      1) Finances the Clean Energy Corporation which invests in renewable energy projects.
      2) Puts a price on CO2 emissions which makes renewable energy projects more cost competitive.

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  2. John Newlands

    tree changer

    I seem to recall on the ABC Great Southern Land show that energy demand had increased 70% from the 1990s, somewhat more than the photo caption suggests.

    PV seems to have created a vicious circle whereby reluctant homeowners install it to get a daytime credit against high night time power bills. If the unregulated feed-in tariff shrank to just 2c per kwh or so as in the US then the outlay will seem unjustified. Could be why Germany dreads the backlash over cutting their national FiT.

    The administrative cost of overdue power bills and disconnections must be hurting the retailers. I suspect they went for 'gold plating' and price rises incorrectly assuming new plant build to exploit the general confusion of the carbon tax . Now it's coming back to bite them.

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    1. Eriks Velins

      Retired

      In reply to John Newlands

      The problem with our rising electricity bills is that some years ago our governments embarked on a process to change our climate (in the absence of any evidence that this was indeed possible) by raising our electricity prices with the enforced use of non-commercial energy.First we had MRET, then 'direct action' and now the carbon tax/ETS.Some groups of consumers were shielded from this change by large subsidies, thereby increasing the cost to those who did not received these subsidies.

      One result…

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    2. aligatorhardt

      logged in via Twitter

      In reply to Gary Murphy

      Actually the wholesale spot price would be fair. But many in society choose to encourage individual investments in distributed generation, knowing that it reduces the need for new peak load plants, reduces new transmission needs, reduces health care costs by eliminating poisonous or contaminating emissions, and provides security against rising fuel prices. So society chooses to pay back those who make personal investments in electric generation.
      http://www.renewablesinternational.net/renewables-payback-7-billion-euros-in-2011/150/537/56285/

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  3. Peter Ormonde

    Farmer

    I am looking at my soggy tear-stained power bill as we speak ... $750 for two of us, and two dogs, living a very spartan lifestyle... well we are if not the hounds.

    And there in a red block of print on the front page is a "message" from the NSW Government. It reads:

    "NSW Govt estimates that Federal carbon tax and green energy schemes add about $316 a year to a typical 7 MWh household bill - see ipart,nsw.gov.au" (Independent Pricing and Regulatory Tribunal)

    How helpful - how constructive…

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    1. Alex Cannara

      logged in via LinkedIn

      In reply to Peter Ormonde

      Wow! And we complain up here at $125/month in summer for gas + electric, for 4 adults, 3 cats, a dog and a gecko (no Aussie accent though).

      Maybe $300/mo. in winter -- darned Xmas lights!

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    2. Peter Ormonde

      Farmer

      In reply to Alex Cannara

      Not as ugly as it looks Alex - we get our bills every three months - this saves the power companies a lot of money paying someone to walk around checking meters every month.

      And as a result we get this huge slug every quarter. It's becoming quite a serious problem for the pensioners and other on limited incomes - they are becoming obsessed with saving power and saving enough cash for the bill.

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    3. Mark Harrigan

      PhD Physicist

      In reply to Peter Ormonde

      That seems like a lot Peter. My last bill for 3 months was $385 - in a household of two people including one teenager (no dogs). I would be surprised if Victorian rates were half NSW?

      Perhaps you need to look at your consumption? The house I am in is not specially energy efficient though it isn't lousy either. We do have installed efficient low power consumption lighting and various power boards designed to switch off appliances on standby when not in use. Putting those in over the last twelve months, plus being diligent with turnging unused things off, has enabled us to reduce our per person consumption by more than 30% - and I work mostly from home.

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    4. Peter Ormonde

      Farmer

      In reply to Mark Harrigan

      Seems like? Seems????

      Depends a lot on where one is - in the bush here the rates for the poles and wires are a serious cost.

      But I'm getting the meter checked out (another $50 charge thanks) because we are as I said big F Frugal ... no air con not even a fan ... but I have a sneaking suspicion that something is not quite right.

      We get stung 33.5 cents per KWh (peak) and 13.85cents per KWh (off peak) and like I siad $1.30 per day for the poles ... which is pretty much equal to the off peak usage cost.

      I reckon I'll just cash in a couple of thousand of my super and stick 1.5Mws of panels on my roof. Even with the reduced Feed in Tariff think that will have a pay back period of a year at this rate.

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    5. Alan John Hunter

      Retired

      In reply to Peter Ormonde

      I live in the bush in NSW and my bill was just under $400 for 3 adults and a baby.
      Don't worry about the Feed in Tarriff it is only 6 cents, 1.5 Mws should cover your needs.
      I think you need some serious advice on power usage if your bill is that high.

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    6. Alan John Hunter

      Retired

      In reply to Peter Ormonde

      It always amuses me peiole complaining about power bills, when the real energy guzzler is the car.
      Where I live they all drive 6 cylinder juice burners ( especially older folk), and probably spend at least $50 /100 a week on fuel, which is $650/1300 a quarter.
      Mind you they boil 2 litres of water for a cup of tea, and have half the lights on in the house and 2/3 frides and 2 or more deep freezes.

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    7. Peter Ormonde

      Farmer

      In reply to Alan John Hunter

      Short of candles and kero lamps Alan ... I can't think of what it could be - no air con, no dryer, no dishwasher ... quite literally a fridge, stove and off peak hot water .... should be near nothing. After checking about all day I'm increasingly certain that it's the meter. Unless my addiction to the Conversation is costing me a bomb.... worth it though of course.

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    8. Alan John Hunter

      Retired

      In reply to Peter Ormonde

      Its the stove, especally if its an older model, get gas or one of these new fangled elecric things. Whar sort of light bulbs?.

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    9. Peter Ormonde

      Farmer

      In reply to Alan John Hunter

      Compact fluoros ... and not enough to be worth $750 ... I'd have to be lit up like Las Vegas, Alan.

      New stove - old fridge. Was using a freezer at one stage but have shut that down 6 months ago after the last bill. Can't get gas here unless I want to be running into town and refilling bottles etc ... much prefer gas for cooking.

      I'm pretty well decided on strapping up 1.5Kws of panels ... spent a lot of time trying to do the sums and untangle the absurd pricing regimes ... how to kill a…

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    10. Alex Cannara

      logged in via LinkedIn

      In reply to Alan John Hunter

      We live adjacent to Atherton Calif. which has the distinction of consuming more electricity per home than any in the state -- 19MWHrs/year/home. They decided they wanted to be known for better things and have revised their building codes, including reflectivity requirements for roofs, which most of us don't realize is more important to climate than home-induced emissions.

      .

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    11. Christine Harris

      student

      In reply to Peter Ormonde

      I would check your offpeak hot water system - sometimes they are set to boost throughout the day (using peak power rates) and you might need to switch this off. Also some of the newer electric hot water systems just automatically go on throughout the day if needed - I found one that was only heating for on average 1/2 an hour overnight based on off peak power usage - thus it was doing a LOT of heating during the day using peak power as a 400L storage tank (which this was) would need at least a couple of hours heating every 24 hours in Bendigo in winter (where this was).
      I would also consider getting solar hot water if you're using electric hot water.
      I do doubt it will be metering issues - but would love to hear if it is.

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  4. Geoff Russell

    Computer Programmer, Author

    Excellent article. Can I speculate that without a privatised electricity supply, the infrastructure rebuild would have been considered an investment in the future and Governments would have financed it as usual with tax revenue, thereby regressively spreading the burden.

    I'm interested in what impacts the grid rebuild required if renewables dominate electricity supply? ... In Germany, renewables are only running at 25% of electricity but have already destabilised the grid and the massive subsidies…

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    1. Geoff Russell

      Computer Programmer, Author

      In reply to Jane Rawson

      Hi Jane, yes I've been reading Mike's blogs and they are very informative. I'd be also very interested if you could find an engineer to run through the nuts and bolts of dealing with unreliable components in the grid. What physically happens when a significant proportion of, for example, wind power just disappears from the system when the wind stops blowing ... or appears when it starts. My newish computer UPS has a voltage read out on the front telling me the voltage at the powerpoint and I've been amazed at just how much it goes up and down during the day.

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    2. Gary Murphy

      Independent Thinker

      In reply to Geoff Russell

      Wind conditions can be fairly accurately predicted in advance (more accurately than variations in electricity demand can). So that the already existed coal-fired power stations can start up to cover the shortfall in times of low wind generation.

      That is how wind power in the short to medium term can reduce greenhouse gas emissions; by reducing the amount of time that the coal power stations need to be running.

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    3. Alex Cannara

      logged in via LinkedIn

      In reply to Gary Murphy

      You might want to talk to power engineers, Gary -- gas/coal plants aren't throttled easily or cheaply. Even some solar thermal plants can't take the heat shocks of passing clouds.

      One of the great wind scam examples in the western US happened a Spring ot two ago when a storm moved through our Columbia basin. All the wind investors there were licking their FIT chops and pumping into the ISO as hard as they could. The wind output rose so high, they tried to get the ISO to throttle back a combustion/nuke plant or two. The ISO rightly said:: "no, you feather your props".
      ;]
      And yes, they're prop-generators, not what engineers call "turbines".

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    4. Mike Hansen

      Mr.

      In reply to Geoff Russell

      "My newish computer UPS..." Actually Geoff Uninterruptable Power Supplies predate the use of renewables on the power grid by a few decades. That should give you a hint that a large number of the claims made in the Spiegel Online article that you linked to are overhyped.

      For example "... for high-performance computers, for example, outages lasting even just a millisecond can quickly trigger system failures." Datacentres connected directly to the grid - I do not think so.

      In fact this link (in German) from the German Network Agency shows a more reliable grid in 2011 than 2006.
      http://www.bundesnetzagentur.de/cln_1931/DE/Sachgebiete/ElektrizitaetGas/Sonderthemen/SAIDIWerteStrom/SAIDIWerteStrom_node.html

      That said, it is certainly the case that adding renewables to the grid is presenting challenges - but your suggestion that these are insurmountable is not true.

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    5. Geoff Russell

      Computer Programmer, Author

      In reply to Mike Hansen

      "newish" just meant recently bought. My previous UPS didn't have this neat little display. I was also skeptical of the claim in the Spiegel article about the computers and outages but I've had one website trashed at a cheap hosting service due to what they said was a power supply spike.

      I didn't mean to imply the challenges of adding renewables was insurmountable ... just expensive and time consuming. The article talked about using "consumer choice" to reduce peak by giving incentives to people…

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    6. Gary Murphy

      Independent Thinker

      In reply to Alex Cannara

      Well I don't know how weather forecasting in the US works Alex - but here in Australia we can predict wind conditions up to a day in advance! Now I'm pretty sure that is enough time to shut down or start up a gas/coal plant.

      "great wind scam" - seriously? The regulator made a decision to favour combustion/nuke generation over an abnormally high wind generation. And that is a 'huge scam' is it?

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    7. Alex Cannara

      logged in via LinkedIn

      In reply to Gary Murphy

      Gary, the 'scam' mentioned is one of many events. If you want an honest evaluation of wind and other 'renewables', read David MacKay's book or the Wind Farm Scam by Allison.

      As I said, talk to a power engineer about your guess about turning big plants up & down just to allow higher cost, subsidized power onto the grid.

      Then too, recall that each installed peak MW of windmill requires 700 tons of materials that must be processed by fossil fuels. Read a Siemens datasheet, for example and the…

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    8. Peter Ormonde

      Farmer

      In reply to Gary Murphy

      Gas can be switched on pretty quickly Gary - not so coal which pretty much must be kept spinning round the clock taking 3+ days to bring into full operation. These are BIG plants. This is what I've been told at least so I could be askew, but there is a solid relationship between wind and a gas back-up for this very reason.

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    9. Michael Hay

      retired

      In reply to Gary Murphy

      Hydro would be better, it's 24/7 stuff and could eliminate coal-fired generation. Someone needs to think outside the norm.

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    10. Peter Ormonde

      Farmer

      In reply to Michael Hay

      Some water and a few decent hills would be handy Michael ... bloody flat dry place this by and large - not much potential for hydro sdaly - some small scale localised microhydro set-ups but no more Snowy's I'm afraid.

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    11. Mike Hansen

      Mr.

      In reply to Gary Murphy

      The data from the National Energy Market shows that overall in eastern Australia, wind while still relatively small (< 5.0%) is displacing higher cost black coal.

      "For the past six years, gas-fuelled and wind generation have steadily grown, the hydro supply has fluctuated with rainfall, and total demand rose for the first two years, since then it has steadily fallen. All adjustments have been accommodated by changes in output from black coal power stations."

      http://www.climatespectator.com.au/commentary/emissions-gone-wind

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    12. Geoff Russell

      Computer Programmer, Author

      In reply to Gary Murphy

      Of course, this is LCOE. Suppose I have a choice between 2 cars. One will cost me 96.8 cents per kilometer but only runs sometimes and at a speed of its own random choosing, while the other runs 24x7 whenever I want it but will cost 112.7 cents per kilometer. LCOE doesn't take into account things like this. Nor the cost of redesigning your grid ... nor ... etc, etc. It's just not a good measure.

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    13. Gary Murphy

      Independent Thinker

      In reply to Geoff Russell

      But the first car has a 5 star safety rating and runs on air. And the second...

      Also - while we are talking about things the LCOE doesn't include: decommissioning; disaster risk insurance; extremely long-term extremely toxic waste management; uranium mining; fuel enrichment; weapons proliferation.

      China installed 20 GW (that's ~20Twh/yr) of wind power in 2011
      http://en.wikipedia.org/wiki/Wind_power_in_China

      That extrapolates linearly(?) to 200Twh/yr in 10 years.

      "South Korea's nukes are designed for 60 years and will more than likely run for 80."

      Do you think that is an advantage? That means they will be stuck with the same technology for the next 60-80 years. That is why countries are still operating 1960s nuclear technology. With relatively cheap/short lifespan renewables you can take advantage of new and better (and cheaper) technology over time.

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    14. Alex Cannara

      logged in via LinkedIn

      In reply to Gary Murphy

      Gary, not sure what this "doesn't include: decommissioning; disaster risk insurance; extremely long-term extremely toxic waste management; uranium mining; fuel enrichment; weapons proliferation." refers to, but all civilian nukes pat decommissioning per kW installed and any loans/indruarnce is paid out of rates, typically with 5-year depreciation. As a result of utility, WANO, INPO and IAEA cooperation.nuclear power in the western world is far more profitable than combustion, when the cost of environmental…

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    15. Alex Cannara

      logged in via LinkedIn

      In reply to Michael Hay

      Michael, the Chinese built 3 Gorges dam. It can supply 10% of their power. They don't have 10x more rivers to dam and tens of millions of people to displace, farmland to sacrifice, earthquakes to risk, etc.

      Hydro is being removed in the US, because it affects more important things, such as fisheries. And, even our biggest projects were improperly forecast, thus Hoover & Glen Canyon dams are about 1/2 full now because the region's rainfall was overestimated decades ago.

      Hydro is often good, but no solution.

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    16. Alex Cannara

      logged in via LinkedIn

      In reply to Gary Murphy

      What about MacKay's book, Gary? It's title seem threatening to you?

      Maybe Hargraves chapter on our vast Texas wind 'farms' is lying too?
      http://www.thoriumenergycheaperthancoal.com/
      Avert your eyes from the nuke parts.
      ;]
      Note that wind 'farms' do not include externalities, as now being discovered in our midwest, where crop losses due to windmill bird & bat deaths are projected to exceed the value of the power produced.

      Wind has inconvenient truths, just like combustion.

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    17. aligatorhardt

      logged in via Twitter

      In reply to Alex Cannara

      Nuclear power is not accommodating to demand loads, unable to very output when needed. This the one reason why base load power is being installed less often. http://cleantechnica.com/2012/01/03/baseload-power-gets-in-the-way/

      We see the reason why nuclear power plant operators are against the wind industry, as it cuts down the profit margins for peak pricing. http://www.midwestenergynews.com/2012/10/23/low-electricity-prices-lead-dominion-to-decommission-wisconsin-reactor/

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    18. aligatorhardt

      logged in via Twitter

      In reply to Alex Cannara

      Bird deaths from turbines is not a significant issue,a shown in numerous studies. As far as thorium reactors, the cost is not competitive, and the technology is largely unproven. Reactors also have huge emissions in their construction, and in the supply chain. http://www.abcbirds.org/abcprograms/policy/collisions/index.html

      http://theconversation.edu.au/thoughts-from-a-thorium-symposium-4545

      http://thinkprogress.org/climate/2012/07/15/516179/wind-turbines-waste-much-less-energy-than-fossil-fuels/

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  5. Alex Cannara

    logged in via LinkedIn

    The truly sad thing is that we were to be done with combustion power by 2000, at least up here... http://tinyurl.com/6xgpkfa

    We like to blame Nixon,but more hands ruined our soup.

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    1. Michael Hay

      retired

      In reply to Alex Cannara

      I had a 2.2 kw solar system installed 2 years ago and, in its second year it has reduced the bill for my all-electric home (3 adults and a cat) from the potential $330/month, with no solar, to $137/month. I do get the 60c tariff credited to my account and apparently will for another 12 years. However, I find that I have the capacity to use only 1750 kWh out of the solar generation of 3000 kWh. Now that the feed-in tariff has been reduced to either 25c or 8c depending in where you are situated, and…

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    2. Geoff Russell

      Computer Programmer, Author

      In reply to Michael Hay

      This is the perfect example of how the best choices for an individual with money maximises the damage to society as a whole. As the article said, only a quarter of electricity is used by households, so if all household added a couple of panels it would make little difference to greenhouse gas emissions but the feed in tariffs would be crippling, just as they are in Germany which will now pay out 100 billion euros over the next 20 years to people like yourself for a miserable 18 terawatt hours of…

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    3. Mike Hansen

      Mr.

      In reply to Geoff Russell

      "The feed in tariffs were brilliantly devised to massively redistribute wealth to the already wealthy while pretending to make a significant contribution to tackling climate change."

      This is not true. Geoff - even nuclear spruikers such as yourself should occasionally tip your hat to the truth.

      Top solar PV suburbs in Melbourne - Caroline Springs, Deer Park, Burnside, Hoppers Crossing, Tarneit, Truganina, Wyndham Vale, Mambourin, Mount Cottrell.Calder Park, Sydenham
      http://www.cleanenergycouncil.org.au/mediaevents/media-releases/April-2012/110413/VIC.html

      All in Melbourne's outer western suburbs working class mortgage belt.

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    4. Geoff Russell

      Computer Programmer, Author

      In reply to Mike Hansen

      So you think that nobody in working class suburbs has money? Not even 1 in 10? Do you have an income by suburb data table? I take it as obvious that the 40% of households getting under $700/wk are struggling to make ends meet and will rarely have the cash for panels. I admit I can't prove this, but it's kind of obvious. But if you have data to the contrary then I'm happy to admit I'm wrong. You haven't presented any.

      Are the 600,000 disconnections per year in Germany happening to rich Germans…

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    5. Michael Hay

      retired

      In reply to Geoff Russell

      Geoff, you assume that some kindly angel is going to put up the money for a huge economically viable solar or wind system. Don't bet on it. In the meantime we small operators who scrimp and save to save money in the long term will just have to do our best - selfishly.

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    6. Geoff Russell

      Computer Programmer, Author

      In reply to Michael Hay

      It wasn't my intention to imply angels could do the impossible ... build economically viable large scale solar and wind at a rate fast enough to give us a chance at avoiding the worst of climate change, but rather to show that we need to go nuclear as quickly as possible. Australia has pretty much dropped the ball and will need to spend valuable time building a nuclear skills base, but there isn't really any alternative.

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    7. aligatorhardt

      logged in via Twitter

      In reply to Geoff Russell

      Most people in Germany are appreciating their investments in wind and solar power. Over 60% of renewable energy is owned by individuals and small groups. That is allowing all of them to profit from their investments. The cost of maintaining the older nuclear plants was a major consideration in the decision to phase them out. The money is better spent on energy efficiency and renewable energy sources that run without fuel input, and without high external costs. The cost of new nuclear power is higher than solar, and far higher than wind. With inter connection of grids, power shifting helps level out variable sources. http://www.energyboom.com/solar/solar-power-helps-drive-energy-prices-down-south-australia

      http://www.renewablesinternational.net/merit-order-effect-of-pv-in-germany/150/510/33011/

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  6. Gavriil Michas

    logged in via LinkedIn

    Just a rhetoric question to contribute to your really very interesting article:

    Would be required a technological or a political solution in order to have a low cost price advance for electricity production, implementing economy of scale (lowering the electricity unit cost by the increased production demand) for the energy sector?

    In other words:

    Would it be much better effort for a long term strategic national competence to invest more in fusion technologies, like muon catalyzed fusion research and how to control sufficiently alpha sticking particles ) for power generation plants, or the carbon tax collection is adequate and already enough as an emission penalty in order to compensate the physical environment ?

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  7. John Newlands

    tree changer

    A more general point that needs making is that of price increases by government owned or regulated service providers. At least in Tasmania it seems the State government has told councils to increase property rates (in some cases by 250%) and the latest incarnation of the water authority now seems intent on becoming a major earner for the State. From what I gather electricity and gas prices are regulated in every State with what seems like a clear bias towards the providers not consumers.

    There would riots if breakfast cereal went up the amounts we see in government regulated charges. Maybe it's time Canberra cast a steely eye over them, perhaps adjusting Commonwealth funding to the greedy States.

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    1. John Davidson

      Retired engineer

      In reply to John Newlands

      John,

      Raising the price of services is one of the few ways left for state governments to fund the things they do. Any better suggestions?

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    2. Michael Hay

      retired

      In reply to John Davidson

      Yes, rearrange the current Federal/State funding model. The Feds should finance infrastructure and the States should conduct the operation. Then arrange the finances to suit. Maybe change the Income tax system to being a tax on income, rather than a levy on what one cannot deduct.

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  8. John Davidson

    Retired engineer

    My recent article in RenewEconomy suggests that it may make sense to avoid most of the need for power system upgrades by gradually converting air conditioners to off-peak power. (People's comfort would be maintained by adding cold/heat storage to the air conditioner system.)
    Apart from solving the peak power problem, storing cold during the cooler parts of the day reduces power consumption considerably. See: http://reneweconomy.com.au/2012/the-case-for-moving-air-conditioners-off-peak-82794

    For data on daily temperature ranges for various towns in Aus see http://www.australia.climatemps.com/ The data suggests that night time temperatures will be low enough in most locations for the cold to be stored without needing to run the heat pump.

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  9. ERIC KELLY

    retired

    "...If consumers can exercise their choice and change their demand for electricity, the need for more investment in “poles and wires” will be reduced"

    Can someone please enlighten me: doesn't investment in poles and wires follow customer numbers rather than customer consumption?

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    1. Alex Cannara

      logged in via LinkedIn

      In reply to ERIC KELLY

      In the US, the regulators require power distribution to reach almost any customer, per the Rural Electrification Act of the 1930s.

      The local regulator sets standards for equipment installed, so a neighborhood may have wires thick enough to serve N customers per mile, and transformers designed to handle 5kW (4-5 homes) spaced appropriately. Local building codes may allow for larger power interfaces on homes, so the distribution system there will double each transformer;s capacity.

      For business/industry…

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