News & Discussion: Electricity Infrastructure

[claybro]

Under COAG agreements in the 1990s, public utilities had to adopt what was called the TER Tax Equivalent Regime. That is, they had to pay taxes and do their business accounts like private enterprise. That included allowance for replacement and profit to the States at commercial rates.

So, no. We would not have been left with useless equipment, and we would have had a revenue stream, and we would have had apprentice training schemes, and we would have kept technical know how in the State, and the Government could have kept a lid on prices.

But the state still would have been responsible for funding the replacement of the power plants by now yes? And the "allowance" they would have to set aside to cover replacement plant would have had to come from their profit-or revenue stream as you put it? And they would have to pay tax on their profit-TER as you say? And the profit would have substantially diminished over time as all state owned power plants were fossil fuel? -Seems a very poor business model to me. Better they just took the few billion on offer at the time given the current state of the market for fossil fuel generators.

[Spurdo]

But SA Gas Company was private for most of its existence.

The State Government owned a large shareholding in the company (40/50 something percent?) which was sold to Boral Energy around 92'/93'

[rubberman]

Under COAG agreements in the 1990s, public utilities had to adopt what was called the TER Tax Equivalent Regime. That is, they had to pay taxes and do their business accounts like private enterprise. That included allowance for replacement and profit to the States at commercial rates.

So, no. We would not have been left with useless equipment, and we would have had a revenue stream, and we would have had apprentice training schemes, and we would have kept technical know how in the State, and the Government could have kept a lid on prices.

But the state still would have been responsible for funding the replacement of the power plants by now yes? And the "allowance" they would have to set aside to cover replacement plant would have had to come from their profit-or revenue stream as you put it? And they would have to pay tax on their profit-TER as you say? And the profit would have substantially diminished over time as all state owned power plants were fossil fuel? -Seems a very poor business model to me. Better they just took the few billion on offer at the time given the current state of the market for fossil fuel generators.

No. The whole point of the TER was that such funding had to be internally generated by the utility. External funding by the State government was not allowed, and they were supposed also to pay a commercial dividend, AND pay a commercial rate on any borrowings. This was to ensure that state owned businesses competed with the provate sector on an equal footing. Further, if you look at the recent report by APRA, it establishes that much of the recent price rises were actual price gouges that could have been avoided if ETSA were still in State hands...OR as was done in other states with government owned utilities, prices were raised, and that revenue flowed into the sorts of infrastructure we talk about here, but can't afford, because that money went overseas. That is, the amount of benefit we received from the sale of ETSA amounted to $2bn less than if we'd kept it, up to 2014. The money's gone, the expertise is gone, and we have almost no way of getting it back or stopping the hemorrhage of money overseas unless we do some home grown generation ourselves.

[citywatcher]

So ... the previous Liberal Government sold our power generation and delivery network to the private sector, telling us it would result in cheaper electricity prices and better service.

Instead, prices went up and consistency of service went down.

After years of this, the Labor government of the day agreed with the South Australian people that we'd had enough, and got the ball rolling towards SA owning at least a portion of it's own power generation, to keep the power on in time of high demand, which is when it typically failed.

The Liberals get back in, and sell the newly acquired back-up generation capabilities, telling us it will result in lower prices and better service ....FFS!

They have no regard for the state or the people just agenda

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Yep they have an agenda. An agenda not to p*ss taxpayers money up against a wall and then put the hat out and cry poor to the Feds.

No their agenda is to slash and burn and appoint all their mates and look after the top end of town and fuck everyone else

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[claybro]

No. The whole point of the TER was that such funding had to be internally generated by the utility. External funding by the State government was not allowed, and they were supposed also to pay a commercial dividend, AND pay a commercial rate on any borrowings. This was to ensure that state owned businesses competed with the provate sector on an equal footing. Further, if you look at the recent report by APRA, it establishes that much of the recent price rises were actual price gouges that could have been avoided if ETSA were still in State hands...OR as was done in other states with government owned utilities, prices were raised, and that revenue flowed into the sorts of infrastructure we talk about here, but can't afford, because that money went overseas. That is, the amount of benefit we received from the sale of ETSA amounted to $2bn less than if we'd kept it, up to 2014. The money's gone, the expertise is gone, and we have almost no way of getting it back or stopping the hemorrhage of money overseas unless we do some home grown generation ourselves.

Living in a state that did not privatise its electrical infrastructure, I can confirm that retail prices are probably about 40% less than SA. But this is not only about pricing, it is also about reducing our carbon footprint. WA is not in a national market. Much of the electricity produced is generated by local coal and prices are stable and supply never interrupted. However at some point, WA needs to address its carbon footprint, and renewable uptake has been slower than the Eastern States. Now the state government is making noises about raising prices and allowing private players to supply renewable energy into the market. But here is the conundrum, because as renewables start to take more market share, the state generated power will diminish in demand, and therefore the value of the state owned power stations will substantially diminish, as will the revenue from state generated power. I can't see going forward how they can have it both ways. Ageing generating infrastructure that will require replacement, competition from private renewable generators with little/no fuel input costs such as mining the coal, decreasing revenue from less market share, rapidly decreasing plant and equipment value and increasing maintenance costs all to be worn by the WA taxpayer. The state government here has already flagged that prices will increase going forward. I would say the lack of privatisation here has actually held back renewables, so Im not sure why proponents of renewables would resent privatisation. This is the same position SA would have been in now had it not sold ETSA. The revenue generated over the last 2 decades, would all be required now to construct new plant, and without the benefit of a saleable asset all in a volatile national market.

[SBD]

Either the state or the state-owned enterprise would also have been responsible for demolishing and disposing of the Port Augusta power stations and remediating the Leigh Creek Mine. The bad publicity given to Alinta for the ash clouds over the town would have been directed straight at the state government. Most reports say the Leigh Creek mine was getting harder to extract coal from, so if we built a new coal power station, we would also have needed to establish a new mine, probably with a new town as FIFO workers for the State would not be acceptable. I'm quite happy to have sold a working power station and made it someone else's problem.

[PeFe]

claybro wrote: ↑Wed Oct 17, 2018 8:52 pm
Living in a state that did not privatise its electrical infrastructure, I can confirm that retail prices are probably about 40% less than SA. But this is not only about pricing, it is also about reducing our carbon footprint. WA is not in a national market. Much of the electricity produced is generated by local coal and prices are stable and supply never interrupted. However at some point, WA needs to address its carbon footprint, and renewable uptake has been slower than the Eastern States. Now the state government is making noises about raising prices and allowing private players to supply renewable energy into the market. But here is the conundrum, because as renewables start to take more market share, the state generated power will diminish in demand, and therefore the value of the state owned power stations will substantially diminish, as will the revenue from state generated power. I can't see going forward how they can have it both ways. Ageing generating infrastructure that will require replacement, competition from private renewable generators with little/no fuel input costs such as mining the coal, decreasing revenue from less market share, rapidly decreasing plant and equipment value and increasing maintenance costs all to be worn by the WA taxpayer. The state government here has already flagged that prices will increase going forward. I would say the lack of privatisation here has actually held back renewables, so Im not sure why proponents of renewables would resent privatisation. This is the same position SA would have been in now had it not sold ETSA. The revenue generated over the last 2 decades, would all be required now to construct new plant, and without the benefit of a saleable asset all in a volatile national market.

For what I know about WA, the current electricity prices are heavily subsidised from prevoius policy arrangements from WA state governments, but as that subsidy is removed the prices will creep up.

There is no reason in my mind why WA cant run on solar power during daylight hours.....yes now....not in the future but now.
That state is blessed with so much solar activity during the day (even in winter) that it defies belief that WA doesn't have more solar farms, the previous Liberal government showed no interest, and even the current WA Labor goveernment is really behind the eightball in the renewable energy uptake.

[rubberman]

Either the state or the state-owned enterprise would also have been responsible for demolishing and disposing of the Port Augusta power stations and remediating the Leigh Creek Mine. The bad publicity given to Alinta for the ash clouds over the town would have been directed straight at the state government. Most reports say the Leigh Creek mine was getting harder to extract coal from, so if we built a new coal power station, we would also have needed to establish a new mine, probably with a new town as FIFO workers for the State would not be acceptable. I'm quite happy to have sold a working power station and made it someone else's problem.

All that is true. The difference is that ETSA would have had to make provision for doing that and keep the lights on. The private operator charged a high price anyway and just walked away after making no provision for keeping the lights on, and pocketed the difference.

In addition. ETSA had the technical capacity to do everything you listed. So, where was the problem? I'll suggest the problem was that while both ETSA and the private sector could deal with the eventual demolition of the power stations and mine closures, only ETSA would have developed a working alternative in the meantime. Engie just closed it all and walked away.

You say selling it made it someone else's problem. Exactly whose problem do you think it is now that Engie has walked away leaving a hole in our generating capacity?

If the ALP hadn't stepped in at ths last minute and done a whole lot of stuff with Elon Musk, and buying some generators who do you think would be having power problems right now? How exactly was the power shortage and high prices going to be addressed?

Privatising didn't make our problems somebody else'., We have paid through the nose with some of the world's highest power prices, and still ended up having to come up with a solution ourselves to finding new power supplies. Sounds like we paid twice, and it's still our problem. Although now, we have lost the technological capability to deal with it.

Brilliant. Simply brilliant. Well, when we look at our power bills, at least we know who to blame.

[SBD]

Either the state or the state-owned enterprise would also have been responsible for demolishing and disposing of the Port Augusta power stations and remediating the Leigh Creek Mine. The bad publicity given to Alinta for the ash clouds over the town would have been directed straight at the state government. Most reports say the Leigh Creek mine was getting harder to extract coal from, so if we built a new coal power station, we would also have needed to establish a new mine, probably with a new town as FIFO workers for the State would not be acceptable. I'm quite happy to have sold a working power station and made it someone else's problem.

All that is true. The difference is that ETSA would have had to make provision for doing that and keep the lights on. The private operator charged a high price anyway and just walked away after making no provision for keeping the lights on, and pocketed the difference.

In addition. ETSA had the technical capacity to do everything you listed. So, where was the problem? I'll suggest the problem was that while both ETSA and the private sector could deal with the eventual demolition of the power stations and mine closures, only ETSA would have developed a working alternative in the meantime. Engie just closed it all and walked away.

You say selling it made it someone else's problem. Exactly whose problem do you think it is now that Engie has walked away leaving a hole in our generating capacity?

If the ALP hadn't stepped in at ths last minute and done a whole lot of stuff with Elon Musk, and buying some generators who do you think would be having power problems right now? How exactly was the power shortage and high prices going to be addressed?

Privatising didn't make our problems somebody else'., We have paid through the nose with some of the world's highest power prices, and still ended up having to come up with a solution ourselves to finding new power supplies. Sounds like we paid twice, and it's still our problem. Although now, we have lost the technological capability to deal with it.

Brilliant. Simply brilliant. Well, when we look at our power bills, at least we know who to blame.

Alinta (Flinders Power) has not walked away, it is in the process of destroying the power stations and restoring the mine. I don't know if ETSA would have done anything different about the ash in the lake drying out. That can only be speculation.

Alinta has plans for a new power station at Reeves Plains, but hasn't found anyone who wants to buy its production yet. Engie reopened the full capacity of Pelican Point, and is building Willogoleche wind farm (it also owns Dry Creek gas and Canunda wind farm). AGL is building Barker Inlet power station because it is planning to close the oldest part of Torrens Island in a few years time.

The ALP did what it could to get re-elected. SA sends a lot more electricity to NSW than we get in return (and the Hornsdale wind farm output is contracted to the ACT). A few months ago, NSW was close to load shedding, SA was not.

Are there any government-owned wind or solar farms in Australia?

[Waewick]

Either the state or the state-owned enterprise would also have been responsible for demolishing and disposing of the Port Augusta power stations and remediating the Leigh Creek Mine. The bad publicity given to Alinta for the ash clouds over the town would have been directed straight at the state government. Most reports say the Leigh Creek mine was getting harder to extract coal from, so if we built a new coal power station, we would also have needed to establish a new mine, probably with a new town as FIFO workers for the State would not be acceptable. I'm quite happy to have sold a working power station and made it someone else's problem.

I think the other upside is the replacement of the stations, imagine if we have some Cory Bernardi types and had already started building new coal fired power stations, heck we've lost 4 Prime ministers over energy policy all because conservative forces in the country can't let go of coal.

The must annoying part, if we had gone with the Rudd/Turnball agreement all those years ago, we more than likely wouldn't have had the issues we have today. (that is not suggesting either were great PM's or people just that there was a bi partisan approach)

[claybro]

For what I know about WA, the current electricity prices are heavily subsidised from prevoius policy arrangements from WA state governments, but as that subsidy is removed the prices will creep up.

There is no reason in my mind why WA cant run on solar power during daylight hours.....yes now....not in the future but now.
That state is blessed with so much solar activity during the day (even in winter) that it defies belief that WA doesn't have more solar farms, the previous Liberal government showed no interest, and even the current WA Labor government is really behind the eightball in the renewable energy uptake.

Because the current WA state government made an election promise not to sell the WA power network, precisely because of the revenue stream, training and existing skills the network provides. (fair enough-that is the exact argument against SA having sold ETSA). The premier of WA is on record as saying that they do not want to destablise the commercial viability of the existing network, by introducing too many renewables too quickly given that they need to maintain both supply and cost competitiveness in a heavy industry reliant state. Had the former Liberal government stayed in power (never likely) the system was to be privatised, broken up with figures bandied around at $12-$14 billion dollars, and then we would have seen more rapid penetration of renewables. If you are a fan of rapid renewable rollout, you should also support the privatisation of the system, allowing the flexibility to introduce new technologies, without the direct financial risk to the state. And by the way, I do agree that there is not a place on the planet that is more suitable for renewables. It is nearly always sunny, and ALWAYS blowing a gale.

[PeFe]

Ever wondered why there are no huge wind farms (or solar farms for that matter) on the west coast of Eyre Peninsula?...where storms first make contact with Australian mainland after crossing the Great Australian Bite/Southern Ocean.

From Renew Economy

Grid choice for S.A.’s Eyre Peninsula locks out mega wind projects

Hopes to unlock the major wind resource on the west coast of South Australia’s Eyre Peninsula, and build some of the biggest wind farms in the country, appear to be dashed after the local transmission company ElectraNet chose a more modest spending option.

ElectraNet announced on Thursday that its favoured options was to spend $240 million building a new double-circuit 132 kV transmission line from Cultana to Port Lincoln, via Yadnarie, by the end of 2021.

It says this will be virtually cost neutral, because it means it won’t have to spend money on an upgrade and ongoing maintenance of the existing line – and will unlock some constraints that limit the output of the two existing wind farms on the peninsula – Mt Millar and Cathedral Rocks.

It says, however, that while the new line could support up to 500MW of new wind generation, south of Yadnarie at the half way point, it sees no value in a bigger, more expensive line to the west of the peninsula, where huge wind resources of 4,000MW have been identified.

It also chose against a big battery near Port Lincoln, at the end of the peninsula, to replicate the Dalrymple battery soon to be commissioned next to the Wattle Point wind farm on the Yorke Peninsula, and also rejected creating a series of micro-grids.

A so-called “green grid” unlocking at least 4000MW of “easily harvested” wind – and latterly solar – developments – has been proposed for at least a decade, and was the subject of a big study by Macquarie Group and others in 2010.

But its prospects have diminished in recent years, largely because of extensive developments elsewhere and the falling cost of solar, and was largely ignored in the recent Integrated System Plan put together by the Australian Energy Market Operator, which chose to focus on renewable energy zones in the state’s mid north – around the existing Hornsdale and other projects – and the state’s far north.

Meridian Energy had described the Eyre Peninsular wind resource as the best in the country. However, Electranet notes that higher capacity factors of Eyre Peninsula projects were offset by higher “marginal loss factors” – the degradation of capacity due to transport over long distances.

AEMO had rated the wind quality at the two zones at about the same level, and favoured the mid-north because it was close to the main grid and demand centres.

ElectraNet also makes it clear in its analysis that the investment and regulatory case “is now driven by the relief of constraints on the existing wind farms on the Eyre Peninsula – namely Mt Millar and Cathedral Rocks.

Full article : https://reneweconomy.com.au/grid-choice ... cts-25183/

[SBD]

So a key driver for more wind generation near the edge of the network is more load near the same edge of the network.

The full article contains one sentence about new mines in general.

It says there will be the ability to upgrade the Cultana to Yadnarie section to 275 kV at a later date, which could add another 500MW of wind capacity south of Yadnarie, but says that any decision to upgrade that capacity will rely on the need to cater for greater loads, such as new mines.

It does not mention specifically the Iron Road project which has an approved mining licence and Major Project Status for a mine south of Wudinna and a port on the east coast of Eyre Peninsula.

I wonder if new consumers are allowed to use any network that is already in place, but are expected to pay for any upgrades or new grid extensions that are needed to support their demands. On that basis, Iron Road is probably required to pay to get electricity from Yadnarie to its mine and port, and ElectraNet is responsible for having electricity there to provide. Maybe Iron Road and an electricity generator might share the cost of a line that supplies the mine and provides the feed in for a new wind farm.

[Jaymz]

Hope some of you can get around the paywall. In a nutshell, it says the former Labor Govt has spent around $610 million to outright buy diesel generators, for a 1 in 10 chance of blackouts this summer.

Makes a mockery of their so-called renewables image, not to mention that is a serious amount of cash..... think the Adelaide Oval redevelopment.

https://www.adelaidenow.com.au/news/sou ... 3bf9c208e8

That price tag is over the entire lifespan of the generators, which was 25 years.

The way I read it, was $495 million upfront to buy the generators.

[Spurdo]

Hmm, after the purchase of those generators and the deal with that solar thermal plant, I'd have thought that the Greens/Labor supporters would have been calling for Jay's resignation for even dare entertaining the thought of investing in "big bad eeeevil baseload generation" as those types seem to have some bizarre hatred for on-demand energy.