More bad luck for the renewables industry. Despite providing free energy from the sun and wind, electricity prices keep rising relentlessly, shockingly fast. Even doubling wholesale costs in South Australia and Victoria.
It was supposed to be cheap to collect low-level-energy across hundreds of thousands of square kilometers. Who knew that subsidized, unreliable energy would induce volatile pricing, allow the players to game the system, create obscene spikes, drive out the cheapest providers, require expensive battery storage, more frequency control, more maintenance, just as much back up supply, $400 million dollars worth of extra diesel generators (and the rest) and extra long transmission lines? Who knew? — Probably thousands of engineers.
Spot the pattern? Every other nation with lots of renewables has expensive electricity and our forward market says there’s more price rises coming.
If you think our economy is flaming out now, wait ’til we reach the 23% RET target, and pay for the $1 billion interconnectors and the $4 billion extra hydro storage that we didn’t need when we had enough coal power. Then, after we reach the bottom, we’ll have to pay more to build new USC coal baseload, just to keep up with Indonesia, because we were too frightened to upgrade the old cheap plants; and it’s too frightening for any investors to do it for us.
High energy prices make everything else more expensive too. How much of the rise in hospital services, education, and beer is due to the higher costs of energy? Last week Victorian hospitals couldn’t even afford to keep all their lights on. The only thing that high energy prices don’t push upwards is wages.
Costs now (blue) versus a year earlier (red).
How come the wholesale price of power doubled in SA and Victoria over the last 12 months but declined in Queensland and NSW? Didn’t someone say renewables are cheaper now?