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28 responses to “Queensland power generation at the crossroads”

  1. Iain Hall

    The biggest mistake made when it comes to electricity distribution was to sell what was a natural monopoly and then insist to the people that to do would result in lower retail power prices. Its the Peter Beattie government we have to thank for that piece of “genius” and we pay for that piece of bullshit every time we get a bill for our power.

  2. still@downfall

    In today’s Courier Mail, Exclusive: Sneaky power price tactics catching thousands

    “The Energy and Water Ombudsman has asked the Government to stop retailers labelling discounted deals as “plans” rather than contracts – a tactic which allows them to try and sidestep requirements that they alert customers when the discounts are due to expire.

    Energy retailers – including major operators AGL and Origin – have been caught using the tactic. They say customers should contact them and ask to continue on the cheaper rates.

    But Ombudsman Forbes Smith said legislation might need to be tightened after complaints from customers who have had discounts on their bills cut by their electricity providers without warning.”

  3. Katz

    Whatever the role in solar some of thee aging plants have been hanging on waiting for Greg Hunt and the LNP Direct Action program to offer them a fist full of money to do the inevitable.

    So the Tories’ “Direct Action” thought bubble will turn into a renter seekers’ feeding frenzy.

    Hoodathunk?

    Brian, thank you for your fascinating survey of the political economy of Qld power generation and distribution.

  4. Brian of Buderim

    “To me the solution still looks like a larger network, smart, with multiple inputs from renewables and storage capacity, but backed by fast peaking gas.”

    I agree with this comment with some reservations about the last 6 words. A number of inputs from different forms of renewable energy generation are needed.

    Wind generated energy seems to have been dismissed too early by the author. Today’s horizontal-axis generators with their lofty pylons and large, slow moving blades should be seen in the same light as the internal combustion engine between 1900 and 1913: large, heavy, low power to weight ratio, and cantankerous. Today’s wind generators will ultimately be replaced by smaller, more efficient, vertical-axis generators capable of being mounted on a house roof and able to meet the energy needs of that house or small cluster of houses.

    Another form of renewable to that seems to have vanished from our collective memories is the closed system, small scale methane generator which processes kitchen scrap, lawn clippings and human waste producing methane by anaerobic decay. This seems to have all the answers: reduction of the amount of sewage leaving the house, reduction of putrescible waste going to landfill and on-site gas generation for cooking and heating.

    We are in the early days of renewable development. Eventually we will be able to get all our, hopefully diminished, energy needs from a combination of different types of renewable generation. When that happy day arrives, we will be able to stop burning coal, oil and gas and instead use then as feedstock for a low pollution petro-chemical industry.

  5. Sam

    Says Iain Hall:

    “The biggest mistake made when it comes to electricity distribution was to sell what was a natural monopoly … Peter Beattie government we have to thank for that piece of “genius”

    Except that electricity distribution in Queensland is still government-owned!

    Doh!

  6. Sam

    “In our house we buy power from AGL. I’m not sure they do anything other than send us a bill.”

    They also buy electricity from the generators and take the risk that the price they buy it for will not be less than the price at which they sell it to you.

  7. Tim Macknay

    Wind generated energy seems to have been dismissed too early by the author. Today’s horizontal-axis generators with their lofty pylons and large, slow moving blades should be seen in the same light as the internal combustion engine between 1900 and 1913: large, heavy, low power to weight ratio, and cantankerous. Today’s wind generators will ultimately be replaced by smaller, more efficient, vertical-axis generators capable of being mounted on a house roof and able to meet the energy needs of that house or small cluster of houses.

    That sounds like nonsense to me. The main impediment to small rooftop wind generators in urban areas is turbulence created by the large number of obstacles (i.e. buildings and trees). Also, large wind turbines are vastly more efficient than small ones – that’s why they keep getting bigger. It really doesn’t seem likely that technological improvements will change this.

  8. Brian of Buderim

    Tim @ 7. “That sounds like nonsense to me.” I don’t know your background and you don’t know mine: shall we agree to be more gentle with each other?
    I do know that a Google search on vertical axis wind turbine (or wind generation) produces a number of very interesting looking designs, most in commercial production and most said to have been designed for installation on houses and building rooves.
    The interesting thing about vertical axis turbines is that they don’t take up as much space or generate as much down-wind turbulence so they can be installed a lot closer together. The gearbox/ generator is closer to the ground so servicing and maintenance is both easier and cheaper. As well, a turbine farm is not as visually intrusive.

  9. Chris

    What Parkinson does not say is that solar cuts in during the shoulder period in SEQ, it does not reduce the peaks, and the peaks are continuing to rise.

    Daylight savings might help at the margins here?

    Does QLD have time of use charging for electricity? That is something that would reduce peak usage. I think the other approach that the networks/retailers are going to have to take is to charge higher fixed connection charges. Maintenance of the network is fairly independent of how much electricity you use (except for perhaps peak periods and TOU tarrifs address that). And most people will be fairly adverse to disconnecting from the grid, “just in case”.

    Tim/Brian – I think there was a study done a while ago that measured wind speeds in a couple of Australian cities. IIRC it concluded that in most cases there simply wasn’t enough wind to make suburban roof based wind systems viable.

  10. Salient Green

    If small suburban based wind turbines were produced in sufficient quantities they would be viable but at present they are extremely expensive for their effective output.
    If I built my own it would be viable. Produced in the millions they would be even cheaper except for the profit motive. It seems that PV technology is advancing too quickly for small wind to ever become widespread. Time will tell.

  11. Helen

    I remember someone, I forget who, making a point by saying “let me know when you see wind generators in Fitzroy.” I keep forgetting to take my phone with me when I walk past the Catholic University with its multiple wind turbines on the roof, in Victoria Parade.
    Heh.

  12. Russell

    One of Perth’s super wealthy women has recently built an environmentally-friendly mansion and has a vertical axis wind generator in the backyard – I cast an envious glance at it each night as I drive past.

  13. Tim Macknay

    Brian @8:

    Tim @ 7. “That sounds like nonsense to me.” I don’t know your background and you don’t know mine: shall we agree to be more gentle with each other?

    The remark wasn’t personal and no offence was intended. I’m sorry if any was taken.

    Russell @ 12

    One of Perth’s super wealthy women has recently built an environmentally-friendly mansion and has a vertical axis wind generator in the backyard – I cast an envious glance at it each night as I drive past.

    “environmentally-friendly mansion” LOL

    I know the one you mean. I doubt the wind turbine produces more than a fraction of the mansion’s electricity supply, though. The Peppermint Grove library also has two of them, which in theory should produce up to 2400kWh per year. Unfortunately they are poorly located, so the actual output is likely to be a small fraction of that.

  14. Anthony

    Brian @ 8. I’m not a wind turbine engineer. However, I have heard such engineers speak on this topic (and have double checked a variety of internet sources) that vertical turbine wind turbines are simply not as efficient as horizontal turbines and probably never will be.

    Not to say that horizontal designs may have some application for backyard DIY or sites where vertical turbines are impractical.

  15. Brian of Buderim

    Tim @ 13. If none was meant, none can or will be taken.

    The point I am making here is that development is continuing and that, given enough time and work, a VA wind turbine can be made that will produce electricity efficiently and cheaply from sub-optimal locations.

  16. BilB

    Excellent technical piece, Brian. Copied and filed.

  17. still@downfall

    Brian in your post you include Powerlink as the operator of high voltage transmission line and mention of the LNG plants being constructed at Gladstone but there has been one factor not included in this calculation of Qld power generation. That is the construction of multiple Powerlink high voltage transmission lines and substations that will create a network supplying electricity for the sole purpose of coal seam gas infrastructure in the north west Surat Basin; an area between the towns of Wandoan & Injune.

    An outfit called Energy Users Association of Australia in August 2011 predicted significant rises in the price of electricity in Qld 18 months before the 22.6% electricity price rise as recommended by the Qld Competition Authority. A major factor pointed by EUAA for these rises will be Powerlink’s involvement with coal seam gas projects.

    We note that Powerlink has proposed some large capital expenditure that is project related, eg work to augment the transmission network to meet expected growth in demand due to coal-seam gas and coal projects. Powerlink believe that the projects on which this expenditure is based are very likely to go ahead. We are not in a position to comment on the specifics of these projects or to assess the likelihood of them proceeding and we would certainly not wish to see outcomes that interfere with such projects which are important to the Queensland economy. However, we would make the following points in relation to this:
    We are under the impression that coal-seam gas projects can self-generate electricity from the gas which they produce and that it is generally accepted that this is more economic that connection to the grid. If this is so, it is difficult to understand why the proponents are seeking grid connection? We would urge the AER to thorough investigate this to ensure that the associated capex is necessary and likely to go ahead. It would also be worth examining the connection arrangements, capital contribution arrangements and shared network arrangements.
    Powerlink have said that the grid backbone extensions associated with some of these projects will not result in higher TUoS charges and even result in lower charges compared to the alternative. We would urge the AER to carefully consider this so as to ensure it veracity and that efficient and cost reflective transmission charges result

  18. philip travers

    Queenslanders,do not be over critical seeing the prospect for cyclone activity is at least for the coming season is normal to extreme.Adding that, that behaviour has by correlation determinants with the Sun’s activity possibly even further extended to influence in land events.KeelyNet2013 last look, showed a storage battery system ready up and able to be sold into the Chinese market.Perhaps engineers in these corps,are being given the wide berth,as some may in executive ranks don’t want them suggesting anything re the problem[as a similarity] of the dam matter that busted the ALP out of office.Be ready for the worst and source even yourselves for whatever reality.To decide to volunteer your own skills for the grid under extreme conditions,rather than to undermine existing workers,may also mean with cooperation with experienced workers,disconnect before the cyclonic behaviour does.Local ownership of power lines,as government can do that,would be a worse result,unless it is done by a convenient for all increase in citizen ownership as right,and a form of civil and community defence.More extreme earth happenings could make the grid a saver carrier of electricity than the blown away standards of adhering between cycles of harsh cyclone activities the solar panels to anything,in conditions that make large trees almost bury themselves where they grow. A standard engineering approach there will not be able to assess what actually will occur,if it is a very fine and acceptable guide .

  19. still@downfall

    Brian @ 23. No you or any other LP regulars aren’t mugs. It is so frustrating that the urban media doesn’t pick up on these issues that are having a major impact on the locals but also a lesser impact on those in metropolitan areas, in this case by increased electricity prices.

    The alignment you flew along would be the northern extent on the Injune end and further north on the Taroom end of the CSG developments. It then extents much further south across the better grazing and cropping land to south of the Warrego Highway.

    Some links from the rural press about these Powerlink developments:
    Cattle producers launch petition against CSG powerlines
    Powerlink project sparks concern
    Powerlink approach slammed
    Wallumbilla north residents’ unequal battle with Powerlink

  20. Sam

    Brian 21, if Energex is just a distributor, then it is not a wholesaler of electricity. A distributor neither buys nor sells electricity. It just transports the electricity along the poles and wires between the transmission lines and your house. That electricity has been sold by the generator to the retailer, who sells to you.

    “My larger point is that there should be a direct commercial relationship between the consumer and the network owner/operator.”

    Why? The only time you need to talk to the network owner/operator (that is, the distributor) is when there’s a blackout and you want to know when the power will be restored. Other than that, it is only the retailer that is of interest to you.

  21. ArchCC

    Hi everyone,
    This is a bit of a long one, but I think I can help clarify a few things:

    if Energex is just a distributor, then it is not a wholesaler of electricity. A distributor neither buys nor sells electricity. It just transports the electricity along the poles and wires between the transmission lines and your house.

    Energex does provide demand-side management services, such as peak-load interruption, which are sold into the NEM wholesale spot market, so I guess you could call it a wholesaler. I don’t know that it owns any actual generation capacity, though it could have invested in some small generation to help it maintain network stability at peak times.

    That electricity has been sold by the generator to the retailer, who sells to you.

    Yep, the retailer takes the risk on the wholesale market price, plus is charged “use-of-service” (TuoS and DuoS) fees by the transmission and distribution companies for moving power around, all of which adds up to your final bill. Oh, plus the healthy margin they add on for themselves.

    I’m struggling to see how that would help if debt remains the same.

    The legislation around the distribution (and transmission) companies implies that they earn a profit based in part on the value of their capital (the other part is a premium on capital investment). So a write-down in the value of the distribution network would reduce the amount they earn, and reduce the cost passed on to consumers. Since the DistCos and TransCos are state owned, this also means the Qld Govt would face a capital write-down and treasury dividends would be reduced. Hence the Govt’s reluctance.

    This all comes back to the fact that the network companies are proxy tax collectors for the state Govt. I’m not saying that the alternative is a good thing, where a private company gets hold of the revenues (as in Vic and SA), but it has to be remembered that the Govt’s aims are not completely aligned with that of electricity users.

    An outfit called Energy Users Association of Australia in August 2011 predicted significant rises in the price of electricity in Qld 18 months before the 22.6% electricity price rise as recommended by the Qld Competition Authority.

    Well, there is that, but the main point is that DistCos and TransCos have a statutory right to cover their expenses, so unless the Govt wanted to violate its own laws, it had to raise the tariffs eventually. The promise to keep electricity prices down was a particularly blatant campaigning manoeuvre, ahem, lie.

    “My larger point is that there should be a direct commercial relationship between the consumer and the network owner/operator.”

    Why? The only time you need to talk to the network owner/operator (that is, the distributor) is when there’s a blackout and you want to know when the power will be restored. Other than that, it is only the retailer that is of interest to you.

    Yes, there should be a closer connection between users and network service providers. The current NEM legislation mandates a particular tariff structure that does not allow DistCos and TransCos to interact with electricity users through their regular bills, but only via specific subsidies (e.g. some offer payments for direct load control i.e. interruptable hot-water or pool pumps). The TuoS and DuoS charges make up about 50% of your overall bill, but there really is no feedback to users on how their patterns of energy use over time are contributing to ever-increasing peak load requirements. There are also other stability and safety problems, like voltage rise, caused by increasing amounts of residential PV, which the DistCos have to deal with using the blunt instrument of more capital investment. In either case, the costs are recovered by (fairly) uniform tarrifs, which convey no information to those causing the most pressure on the network — all because that’s what the legislation requires.

    On a bit of a tangent, I believe that the network companies are not being greedy or exploitative when they ask for tariff deregulation. They know as well as anyone how the tariff structures imposed on the industry are stifling the kinds of innovation that would benefit everyone.

    Some overseas DistCos that operate in less regimented regulatory regimes are being very innovative in this space: check out Vector (Auckland’s distribution company) who are giving away batteries to residences as part of their PV packages. They understand that the future will be in meeting peak load though clever technology, not through more poles and wires.

  22. Kerry

    Inexperienced staff in rural issues within Powerlink Qld are costing the government owned corporation millions. Currently 212 kms of high voltage transmission lines and seven substations are being planned in a massive web in North West Surat. The highvoltage infrastructure is yet to be constructed or given the nod as community infrastructure. It is solely for the use of the Coal Seam Gas Industry and their shareholders and costs need to be met by the CSG industry. All coal seam gas employees we have spoken to agree with this. There is no way this is for public benefit. Whether designated community or not, the Coal Seam Gas infrastructure will proceed and no jobs can possibly be affected but the back pockets of all Queenslanders will be impacted through increased electricity costs if this type of development is not fully funded by the Private Coal Seam Gas Industries. The impacts on local rural businesses and families have largely been unrecognised and instead of redrawing appropriate plans to avoid these impacts, time constraints by the Coal Seam Gas Industry are being used as excuses to forge ahead with unsuitable alignments. The Coal Seam Gas Industry will have pressure from their shareholders to make sure their gas reaches Curtis Island in a timely manner, but this will be to their detriment if they do not slow down and reassess poorly planned alignments. The compensation for these poorly thought out alignments will be massive and a little more time spent by experienced staff who understand rural issues could save all Queenslanders money. To add insult to injury, each and every substation is being ‘gold plated’ for possible future development that has not been requested by the Coal Seam Gas Industry at this time. Where does all this cost ultimately go back to, the everyday Queenslander and their cost for electricity. When Peter Costello said Powerlink Qld should be sold, he may be right. Real business people should be in charge of this type of infrastructure and this type of development should come under a second tier in the Acquisition of Land Act 1967 to ensure the private resource sector covers all costs. It is time for the legislation to change to keep pace with the booming resource sector and stop treating this type of infrastructure as if it is an essential service that must be subsidised by all Queenslanders.