I have previously written quite a lot on our electricity sector, our need for renewable energy assets, my enthusiasm for wind energy, but most of all my undying criticism of the stupidity of the electricity reforms by Mr Bradford in the mid-1990s. The formation of the Electricity Commission, charged with some oversight, hasn't helped significantly; it couldn't, because it doesn't change the underlying market philosphy. Recently, a report has been published by the Commerce Commission, suggesting that the so-called "competing" electricity companies have been colluding (not directly, as this would be illegal, but by common interest) by failing to invest in new energy capacity and allowing spot prices to climb during power shortages, such as they have made excess profits of over $4 billion over the last seven years. What a surprise. I have already mentioned in a previous posting one year alone Meridian made such excessive profits that they repaid back to the government two separate tranches of money, $800 million and $300 million, so that, rather more than coincidentally, the Labour government were suddenly able to announce that they had found $1.3 billion for new "roading" schemes, thereby making New Zealand the only country in the world to be using renewable energy resources to subsidise CO2 emissions and global warming by building new roads, and making us the environmental laughing stock of the world (or at least it would be if anyone was to realise what we've been up to).

The stupidity of all this was brought into even sharper focus for me when I read of a proposal for the world's largest pump storage scheme that could be built in the South Island, which would effectively triple our hydro-energy reserves and make dry season shortages a thing of the past. I have previously written (also here) about pump-storage for New Zealand as being an obvious way of incorporating increasing amounts of windpower into our overall generation mix. Indeed, I have looked at the New Zealand atlas several times to see if I can find suitable sites for such an facility. So it was with great interest, and not a small amount of deja-vu that I came across a proposal for the world's largest pump storage scheme in the Manor Burn - Onslow basin in central Otago. You can read about this here, or on the links provided below.

Following on from this "discovery" I contributed to a thread on the Greeen Party "frogblog" on electricity generation. This blog contains quite a lot of information on this proposal, and some arguments about the electricity market. I think my criticisms of this market, appearing as they did, three months before the Commerce Commission's own criticisms, show the power of simple common sense and the use of widely available statistics to back reason. Basically the Commerce Commission have endorsed most of what I've been stating for some time. The major difference of course will be how the Commission and I would deal with the matter. The Commission would never ever suggest that this is a failure of the "market", merely the detail of how the "market" was set up. They will suggest further "competition" and almost certainly treasury and government will be working hard to suggest further "competition" can only be obtained by selling off some of the presently government (ie people)- owned companies. The jewel in the crown of course would be Meridian, a ripe plum for the picking, or a luscious maiden for the ravishing. My own suggestion, previously mentioned several times, would be to admit that the "market" solution has failed, as it was bound to. I would re-incorporate all the government owned companies and Transpower, I would put strict limits on pricing for power, and undermine Contact's profitability. When Contact's shares had fallen to a more reasonable and fair level, say $4.00 per share, the government would buy back Contact and reincoporate it into a nationally owned electricity provider. If Contact does not agree to this I would continue the process until its shares were worth $3.50 and so on. I do not consider this antidemocratic. It is the fair use of sovereign power to correct an injustice. In less than eight years, Contact's shares quadrupled in value, a compound interest return of about 18% p.a, which is well over normal commercial returns for this sort of secure investment. No monetary or infrastructural investment was ever made by Contact that could justify this sort of increase in value. We were, as the Commerce Commission has stated, overcharged for our electricity by about 18% and this has proved immensely profitable. If Contact's shares were to revert to $4, this still represents a doubling of one's investment in eight years, a return of nearly 10% compound per annum. No-one need feel in the slightest bit sorry for Contact sharehohlders. The alternative, and more vicious and less ethical way, would be to no bother repurchasing Contact and just let it fail and buy up any assets that might have long term value for an integrated and renewable energy infrastructure.

If you click the above link to the frogblog, you can read the entire thread, but I have copied out my contribution and some other's here. There is a map of the scheme at the bottom of this page. My internet pseudonym is jockmoron:

Jockmoron says
February 8th, 2009

The other day I came across a fascinating proposal for the world’s largest pump storage scheme near Ranfurly. The proposal comes from about four years ago, from Prof Bardsley, Waikato University, a professional hydrologist and engineer.

http://www.erth.waikato.ac.nz/staff/bardsley/download/pumped_storage_n ote.pdf

This would involve flooding land in the Onslow-Manorburn depression to make a storage lake 25 km long. There are presently two Dunedin City reservoirs there. This proposal would TRIPLE our hydro energy reserves - one of the real problems for NZ is that our hydro resources are productive, but that the storage of power is not that great. You can read about the background to all this on the site link above. You can also read a presentation about this proposal here. Because it would mostly prevent spillage of water from our existing dams, Prof Bardsley claims this facility would run at 100% efficiency!!

http://www.earth.waikato.ac.nz/staff/bardsley/download/EEA_conference_ pumped_storage.pdf

This presentation contains a few photos of the area with superimpositions of the level of the new dam and shoreline. The area is typical upland moorland. It has a certainly bleak grandeur, but would not likely be considered an area of outstanding environmental amenity. The last comment on this presentation is “but would it fit into the market?”

I sent Prof Bardsley this letter:

Dear Prof Bardsley,

I am sorry to take up a bit of your time and clutter your in-box. However I came across your proposal for a pump storage scheme in the Onslow-Manorburn depression in central Otago, when I googled “pump storage nz” the other day.

Almost four years ago I added to my blog a proposal to see New Zealand’s entire generation capacity accommodated by renewables by 2025, or earlier. You can, if you are interested, read it here

http://homepage.mac.com/j.monro/SustainableElectGenNZ/APlanForElectric ityNZ.html

The main thrust of my proposals were a greatly increased role for windpower, perhaps 30% or more of our entire generation capacity, but also solar power was examined. ( I should explain I have absolutely no expertise on energy matters, but my amateur interest comes about from a strong ethical environmentalism, and the realisation that energy and environmental concerns are going to define the first half of this new century.)

I realised that at that level of windpower generation there would have to be some sort of storage mechanism for storing excess windpower when it wasn’t needed, and releasing it when it was. (We are geographically unable to export electricity directly, we do it by making aluminium, though I don’t think the country gets anything like its due return from this facility). I examined a number of pump storage schemes around the world, though as you know the majority are small schemes designed to provide temporary boosts of power at times of high demand. I wasn’t aware of the Norwegian scheme at the time. But I proposed a pump storage scheme that would allow sufficient power to be stored to meet a good amount of electricity demand on windless days. It would have to be very much larger than other pump storage schemes.

Indeed, I have sometimes persused the New Zealand atlas and Google Earth looking for possible sites, one in the North Island, and one in the South. I wasn’t sure I’d found any. I even wondered about the feasibility of using sea water and a coastal location for pump storage.

So I was most intrigued by your plan for Otago, this seemed to be exactly the sort of thing I was thinking of. Although you mention wind power in your article, there isn’t much in the way of detailed examination, it seems to be proposed so as to provide a more secure hydro storage for dry seasons, which of course is fine. Your scheme, unlike most others, doesn’t involve a lower lake, which would have been an important part of my proposal.

Have you thought more about how such a scheme could be incorporated into a power system with a much higher proportion of wind power? I would be very interested to hear your thoughts. Also, what interest, if any, has anyone from government or the power sector shown?

We now have a major financial and economic crisis and our leadership are running around like headless chickens and infrastructure is now the mantra, as if it were something new and wonderful and how clever they all are to think of this. That infrastructure renewal and devlopment should be a reasoned and continued and strategic part of any functioning society appears to have escaped most of our leadership and their economic advisors for quite some years. It seems to me that examining something like your proposal would be infinitely more productive, valuable and sustainable than spending billions of dollars on new roading, as they say here, which is the most appalling waste of money and resources at this time, and when oil depletion is well on its way to destroying our present economic system in any case.

Anyway, as I say, sorry to take up your time but I would really value your thoughts about your scheme and a much bigger role for windpower, and I would like to examine this on my internet site again. Are you thinking yourself of pushing for a greater interest generally?

Thank you for your time

Yours sincerely,

He replied

Dear John

My thanks for your comments and blog reference.

I regret that because I receive so many e-mails that I can spare limited time.

A pumped storage scheme at Onslow could certainly be large enough to accommodate wind energy. We did simulations on the basis of a release/take up of power up of 1,300 MW, and 10,000 GWh of achievable energy storage. Efficiency was 100% because pumping inefficiency is offset by reduced spillage in the existing power schemes.

The Electricity Commission is aware of the possibility of the scheme, as are the main generators - I have presented the scheme at a number of energy and hydrology conferences. It would never be built, however, in the present electricity market as it would yield no economic return to the builder because the seasonal electricity price variation would no longer exist.

On the positive side, last winter’s power scare has prompted the suggestion of seasonal security of power supply being built into the market - which would favour pumped storage. If you go to the Electricity Commission web page and go to available documents, you will see a document reviewing the 2008 winter. Comments on this review are open until Feb 20. You might wish send the EC your own comment, supporting the establishment of a revised electricity market incorporating security of supply with penalty for failure to deliver electricity.

Regards

Earl Bardsley

to which I sent this reply

Dear Earl,

Thank you for your prompt reply, it is appreciated. Your comments just go to show how absurd the electricity “market” is. It really is Alice in Wonderland stuff. May I post your reply to my blog?

I may send a comment to the Electricity Commission’s web site, but as I have an implacable antipathy to the whole stupid idea of an electricity market in New Zealand in the first place, and would only suggest the whole lot should be nationalised and re-integrated and all the directors sacked, equally I may not bother, but thanks for the suggestion.

Regards,

John Monro

Out of all this correspondence, note Prof Bardsley’s comment ” I have presented the scheme at a number of energy and hydrology conferences. It would never be built, however, in the present electricity market as it would yield no economic return to the builder because the seasonal electricity price variation would no longer exist.”

If this an accurate observation, and I have no reason to doubt his expertise and experience, then this is literally absurd. The market was set up, supposedly, to enable us to have a more efficient electrical network, and lower prices, that is exactly what Max Bradford promised for his reforms and what they have manifestly failed to deliver. I won’t go into my arguments against these reforms here, but anyone interested can search my own blog. Here we have a proposal that could, at one stroke, solve all our electricity security problems, and additionally be incorporated into a much greater output from renewable wind energy resources. Yet we won’t consider it because it won’t fit into the market!!! Because the proposal would at a stroke stop the absurdity of “spot prices” and wildly swinging electricity prices, so there would be nothing to trade and there would be no need for a market. Businesses and farmers and consumers would actually get a reliable flow of reasonably priced electricity that would allow them to make long term plans and investment, and isn’t that exactly what we need? At some point someone at the top is going to have to ask the question “isn’t the market supposed to serve the community, and not the opposite, the community serving the market?” I have been asking this question since the electricity reforms, and I have known from the very beginning what the answer is.

This occasioned comment from others in the thread.

Trevor says: February 8th, 2009 at 6:24 pm

The Onslow-Manorburn Clutha pumped storage system has been mentioned here on other threads, but thanks for sharing your correspondence.

Another South Island idea was Lake Benmore/Lake Aviemore, which doesn’t add to our storage capability but does allow excess generation from wind, wave and run-of-river hydro to be stored for later use. Since Benmore is already one of our major generators, most of the infrastructure is there.

I haven’t heard of any North Island locations. However the existing geothermal generation in the North Island has scope for expansion into a load-following mode rather than running at high capacity factors.

Trevor.

Jockmoron says:
February 8th, 2009

I searched Manorburn and pump storage on this blog site, but can’t find any other threads. But I suppose my point in posting is not so much about the scheme itself, though I think it’s fascinating, and is just the sort of thing I’ve been looking at myself and, after all even Prof. Bardsley admits the scheme needs a thorough examination for its feasibility, but it is the true absurdity of the market preventing examination of the merits of the proposal in the first place; it is, as I say, literally crazy. I mean, here is the opportunity to treble our energy storage capacity and have a constant source of electrical energy at a reasonable and fixed price. What more could a country desire? What massive competitive advantage could accrue to having such a system in New Zealand? Yet apparently we won’t even consider it because we’ve set up this delusional market system and voluntarily tied ourselves up in an ideological straight-jacket.? What sort of cloud-cuckoo-land country is this? This bizarre thinking will bring us all down, indeed, it is doing so already.

Trevor says: February 9th, 2009 Trevor gave a few references for other discussions on this matter on the frogblog. I have removed some here, but they can be found on the blog.

http://blog.greens.org.nz/2007/10/18/big-wind-to-the-rescue/

You might be interested in this discussion:
http://blog.greens.org.nz/2008/12/01/the-writings-on-the-dam-wall/

Incidentally, the Onslow scheme would add about 3 times our existing storage, so it would actually quadruple our total storage (12,000 GWH vs 4000 GWH)

Trevor.

Insider says:
February 9th, 2009

jock

The Onslow scheme wouldn’t work in the current market because it would cost $1b to build for very little relative benefit.

All markets have incentives in them that encourage people to balance opportunity with cost, recognising that money is a limited commodity and has a value. There is nothing stopping anyone building Onslow. The fact it doesn’t feature anywhere in any investment plans for the next 20 years should tell you that it might not be quite the dream investment it is claimed. Bardsley himself says he is unsure if it is feasible from an engineering perspective.

It’s unlikely to be a constant source of power - it can only deliver the energy potential in the water stored. Despite popular perception, there are not massive water surpluses available to build up a significant level of storage and it is only those short term surpluses that will generate power.

There are a lot of other things you can do for the same money that will deliver a lot more to the power system. Personally I favour spending money on things that can be more immediately useful than some dream scheme.

Insider says:
February 9th, 2009

The problem with the idea is that it says it will store 10kGWh of energy when full. It doesn’t state what the excess water value is for the Clutha. If that is only 100GWh per annum that means it would take 100 years to fill the lake. Even at 1000GWh (which is a lot) that is 10 years to fill AFTER construction (probably a 5-10 year project itself). And to prevent the reservoir falling you can only ever use the amount of water coming in. SO hardly unlimited and certainly not a short term response.

So let’s park it and save the money, or spend it on other energy forms.

jockmoron says
February 9th, 2009

Insider, look, that’s all fair enough if what you say is true, this pump storage scheme is only a proposal, and won’t have had full engineering studies, costing etc. But why do you say “in the current market”? Isn’t the whole problem that the “current market” isn’t working, so why should one defer to it?

We are told that every year we will need an extra 1.5% energy generation capacity. This means a doubling of our energy resources within about 45 years, if this rate of increase were to continue. Even now there is a very destructive proposal for a dam in conservation land at the Mokihinui River, if I’ve spelt it correctly. This dam, costing at least $250 million, will provide only six months of our increased power generation needs. We need urgently to consider how we can utilise the resources we have already invested in, rather than drowning yet more pristine valleys and installing windmills on every ridge and hill in the country.

This proposal offers a possible way out of this problem. Of course it isn’t a constant source of power, pump storage schemes aren’t supposed to be. It’s a way of evening out electricity output with demand. Most pump storage schemes are designed to do this only for a few hours at the most. But if we wish to see a high proportion of wind power in our renewable sector, we may be looking to a proportion higher than 20-30% - after all even now we produce nearly 40% of our power from fossil fuels, and we are spilling water over dams - though that’s partly due to the scandal related to the transmission lines in Cook Strait. An isolated electricity system like ours, with no capacity to import or export electricity, will have to consider how we can store windpower, and a large pump storage scheme like this may be ideal. I don’t know, it needs to be worked through.

But what really makes me peeved is, according to what you are writing and to what Prof Bardsley has stated, we won’t even look at this proposal because ultimately it makes our “electricity market” redundant. Never mind that this market isn’t working anyway, this is, as I have stated, an absurd ideological straight-jacket.

You also say it would cost $1 billion for very little benefit. How do you know:? Of course no company has invested in this, even if they were free to do so, just like they haven’t invested in productive assets for years. We live on a knife edge of shortages, engineered by these companies, in a form of loose cartel, so as to maximise profits. Contact Energy shares you know have more than quadrupled in less than eight years. Meridian has paid massive sums to the government in excess profits. It suits the companies to run our electricity supplies like this. But does it suit the country? Tiwai Point had to close some pots because of inordinately high spot prices, and it is likely that Meridian, and therefore us, have had to compensate Rio Tinto for this, though we won’t know by how much because all the agreements between Meridian, (ie us) and Rio Tinto are secret. It could have been tens of millions of dollars, who knows? The cost to the country in excessive electricity prices must, over the last few years, amount to many billions of dollars. (Added June 09 - HAH - FOUR POINT THREE BILLION DOLLARS, ACCORDING THE COMMERCE COMMISSION - I think my many billions isn't that far off, why not employ me instead of the Commerce Commission?)

So why are you saying that $1 billion wouldn’t produce any benefit? If it does what it is claimed to do, it could reduce electricity prices to the basic minimum, the cost of production, which for many hydro schemes is almost zero (they were paid for years ago) plus say 10% profit, and even more to the point this minimum wouldn’t change. The benefit to the country would be enormous, to the power companies not at all. But who runs the country, us, or the power companies?

Cheers,

John

Jockmoron says:
February 9th, 2009

Insider,

I have just read your follow up posting about the capacity of this facility and how long it would take to fill it. I don’t believe your figures are accurate, to me they are out by least a whole order of magnitude. The Clyde Dam for instance has enough water to produce 432 MW, which is likely to represent about 2000 GWh per annum (approximately you can multiply by around 5 to convert MW to annual GWh) . If there’s enough water going through the Clutha river to provide this amount of power, then your statement that only 100 GWh of power could be saved each year in this pump storage facility must be out by a factor of about 20? Even supposing you left half the water in the river, you could be out by a factor of 10. But then don’t forget the head of this lake would be over 700 metres, and the Clyde Dam produces its power from a head of 100 metres, so theoretically the same amount of water that flows through the Clutha river could provide seven times the power of the Clyde Dam, once it’s filled, which by my rough approximation from above might be about ten years. According to Prof Bardsley, he suggests a power output of this facility of about 1.5 GW. which is about 3.5 times the power output of the Clyde Dam, but because the head is seven times as high, only half the volume of water is required to produce this amount of power so if the river is flowing at half volume, that could easily be incorporated in the normal maximal flow rates for the Clyde river. . That sort of fits in with my calculations. But perhaps we should be checking all this with Prof Bardsley, he is a professional hydrologist after all, I can’t see how he wouldn’t have thought of all this before committing himself to pen and paper. I note his outline paper says he will be exploring this further, but as this was four years ago, and we don’t yet see the calculations, we don’t know whether this is because there is some query about the viability of the project, or because he feels it’s not worth it in the present way the electricity market is set up.

Another way to look at this would be to calculate how big the storage lake would be and work out how much water would be available to fill it. However Prof Bardsley gives no details as to the size of the proposed storage lake, except it could be up to 25 km long. Lake Dunstan, which is 25 square kilometres, took 18 months to fill, with the full flow of the Clutha river. If the proposed lake was 3 times the size of lake Dunstan, and it took half the flow of the retained flow of the river when it was filling, it would take nine years to fill.

Finally, according to Wikipedia, the average discharge of the Clutha river is 570 cum/sec = 570 x 60 x 60 x 24 x 365 = 1.8 x 10 power 10 cum/year. In one year the full flow of the river this river would approximately fill a lake 25 km long x 5 km wide x 100 metres deep.

I think all these calculations show that it would be quite feasible to fill this storage lake well within ten years.

John

Insider says:
February 9th, 2009

John

I would say the current market is largely working. we just got through the worst hydro sequence in 70 years without power cuts. Australia is having rolling power cuts because their system can’t cope at a time of high demand yet no-one is saying their system is broken. we do get overly precious and self flagellating at times. History and as Liberty says cuts were more likely in a centralised system.

The system is not always on a knife edge. The wholesale price of power and large interisland transfers shows that to be untrue. The high reliance on hydro means we sometimes have management issues but they are often perception of risk and system gaming IMO rather than real. Last year was real but it was extreme. The lesson is we should be less reliant on hydro.

The system is not bias against Onslow. It is bias against any project with high costs and huge uncertainties. That is not unique to this industry or this country. If people who are experts at building and running power stations don’t see any merit in Onslow why would you consider the taxpayer is better informed and placed to do it? We almost bankrupted the country in the 80s by doing that.

Using my $1bill and your own 10% profit number that one project alone would generate $100m profit, no matter how much power it generated. That is a brilliant investment - no risk, guaranteed profit. but imagine the cost to consumers if it never generated a MW because we had a sequence of good inflows into the other lakes - someone has to pay those guaranteed profits. Madness

I wouldn’t worry about growth - there are about 4000MW of gneration in progress. Ironically more wind may mean more spill as must run wind displaces hydro in the SI. But that will mean less efficiencies even if you capture the water. It will mean huge increases in cost as you double up assets.

No argument with your calculations but you have missed that I said surplus water - ie water not destined for another use including power generation by ohter dams. Anything you divert for storage is not available for generation. Therefore, unless you are willing to buy the water, it is unlikely you will be given it unless it is surplus to requirements, such as teh recent spills by Meridian and Contact because their lakes were too full. Those spills are very rare.

And you are right, Bardsley does not address this point so my numbers were purely hypothetical but they illustrate a significant weakness in the proposal no matter how large the numbers actually are.

Trevor says:
February 10th, 2009

The Onslow-Manorburn storage system will not be economical for a number of years, simply because we have cheaper alternatives. While we are burning gas for peak generation and to cover winters, any project that can use off-peak electricity instead of gas (or coal) is likely to be more economical than this storage system. I am sure that there are a lot of industrial and commercial uses of gas that could use cheap electricity if it were available, at little additional cost.

One use of cheap excess electricity is hydrogen production via electrolysis. While this is often thought of in terms of a storage system with fuel cells to convert it back to electricity, the losses and costs make this very uneconomical. However there are applications for the direct use of hydrogen which are cheaper and more efficient than using it in fuel cells. It does not appear to be widely known that New Zealand has at least two sites where hydrogen is produced from steam reforming of natural gas - the oil refinery and Petrochem’s ammonia-urea plant in Taranaki. These sites could use any hydrogen produced from excess electricity. However I suspect that there are cheaper alternative uses of that surplus electricity.

I’m not saying that the large pumped-storage systems won’t work or won’t be needed, just that their time has not yet come.

Trevor.

jockmoron says:
February 10th, 2009

Hello,

We seem to be talking seriously past each other. I am proposing a 100% electricity generation by renewable resources. I am not accepting our present generation by gas or coal, or worse, increasing generation from either source. The government’s own projections see us producing 10% of our electricity by coal in 2035. I can’t accept this. To deal with global warming requires advanced nations to reduce their carbon emissions by 90% and the sooner the better.

So any resort to fossil fuels to generate electricity is not acceptable to me, nor to the planet. It is claimed fossil fuel use is “cheaper”, you cannot tell me this because you are not including the cost to our climate. i can’t prove what is happening in Victoria is due to global warming, but if even less can one deny that it may be. What we are seeing fits the projections of what we should expect in a global warming world. What cost is our security, our food or our lives? Until you actually recognise this, claims about fossil fuels being cheaper are specious.

New Zealand, with its relatively small population and bounteous wind and solar resources, should be showing real leadership. I am not arguing the merits or not of this scheme as such, but I am strongly arguing against our present market, and this markets ability to prevent long term planning and its shutting down of the sort of debate that is required to ensure a 100% renewable energy future, of which this scheme could be an important part. I am equally opposed the market’s reliance of fossil fuels, its inability to deliver effective mechanism for energy efficiency, its active opposition to distributed electricity generation, etc. . It hasn’t delivered what is was supposed to deliver, even conventional economists and commentators, not known for their left wing or ecological views, are starting to question the wisdom of our electricity “market”. But to call it a market is to misname it. It is a highly constrained and artificial trading scheme set up by a particular political dogma, which to survive has to support the dogma that created it. This dogma even now is bringing the world economy to its knees.

John

Insider says:
February 10th, 2009

John

Thanks for clearing that up. It is not “the market” that is preventing anything. It is just a thing. It’s people that make decisions. Energy efficiency is hampered mainly because the costs are greater than the perceived benefits. what that telss me is that power is cheap. So much for the market not delivering. Ironically it was a dogmatic belief in the future of distributed generation that has led to a reputed grid underinvestment by the central planner of transmission.

You are right it is not a true market - that might be why it has been less effective in some areas, but it is freer than many. WHat is has delivered is a more reliable power supply than we have ever had. You may not believe it but the data proves it. It has also delivered some of the cheapest power in the world. Unfortunately Max Bradford said it would reduce prices, which was never going to happen due to the way power is charged for. But it may be argued that price increases have been minimised.

But in case you missed it, there has been widespread anger at recent price increases for power. People do not have unlimited money. And it is all well for you to rail that it is not doing what you want, but what the market does is minimise the ability of people like you from imposing the costs of your grand designs onto others because you think you know better. As I said, there is nothing stopping anyone proposing and doing exactly the things you want. But they don’t. Why? Because people like me are not willing to pay. That may be shortsighted but it is reality. Your leadership is my 15% cost increase.

As for Victoria, Australia has been a hot country for a long time. Bushfires are not new

jockmoron says:
February 10th, 2009

We’re going to have to agree to disagree on so many things really, we’re definitely not going to come to any satisfactory intellectual agreement.

You say it's not the market that's preventing anything, it's just a "thing". What "thing"? The simple fact is that Max Bradford, for the National government, split up the then publicly owned generating network, sold two parts off to private investors, kept three as supposedly competing state companies, and said, wonderful, this is the way to run our electricity system. It is not a "thing", it was a deliberate, but naively thought out policy, according to the economic dogma that at that time ran the world. To call it a "thing" is an intellectual cop-out. There must be a thousand different ways to run an electricity system, we have a particular one which I contend isn't working at all well, and could be run a lot better, particularly if we were to seriously consider our long term environmental future.

You contend it was the overstated benefit of distributed generation that undermined expenditure on our transmission system. Please provide the evidence for this statement. The under-investment in transmission infrastructure is repeated around the world where these "market" style reforms have been introduced. It is obvious that private, or even in our case, state-owned companies, will, without strong regulation to force them to do so, fail to invest in infrastructure to maximise profits. These companies have fought tooth and nail against forcing distributed generation, and still do. The last thing they want is competition or the dilution of their monopoly. I don't blame them, that's the nature of private competitive business but it is exactly what you'd expect in a "market" system and why I continue to disagree with you.

You say that our electricity market has delivered some of the cheapest power in the world. But so it should, the fact is that about 60% of our generation capacity is hydro, the capital cost of all these schemes was paid for years ago, by our parents and grandparents - the cost of our baseload hydro must be measured less than a couple of cents a unit. I wonder what Rio Tinto are paying, certainly up to the last agreement last year, they were paying about 3.5 cents a unit. And while our industrial users have benefited, domestic consumer prices have rocketed, and we are now around the middle of the OECD. But even business customers are now complaining when spot prices are shooting up and down, and it's affecting their business. I don't feel in the least sympathetic, they were happy to see their costs fall whilst consumers were picking up the tab, but now they're in the same boat they are most aggrieved.

But then you go and undermine your whole thesis by saying people are angry about soaring electricity prices!! And that we don't have unlimited money! Where is your logic? This all started by looking at scheme which may or may not allow our hydro reserves to be tripled, at a stroke keeping prices to a stable minimum. I was supporting examination of this proposal, and I was pointing out that having an electricity market that wouldn't allow this to happen was absurd, and you have shot me down in flames, yet now you are angry about high consumer electricity prices!! It's bizarre. I am actually trying to help you in your financial need, Insider.

Your say energy efficiency is hampered because the costs are greater than the perceived benefits. It depends how you measure them. If we can save a beautiful valley being drowned by another hydro scheme because we are being required to install energy efficient lamps, or if insulation warms homes and reduces our third-world levels of rheumatic fever and ear and chest infections in children then these costs may well be worth it, if someone goes to the bother of measuring them. But then our present economic system isn't very good at measuring the worth of a pristine valley or the health and comfort of a child. Energy efficiency improvements may take ten or more years to break even, but that doesn't mean they are not worth doing, again, our present economic system very much overstates opportunity costs, and understates long term benefits. You are doing exactly that when you say "People like me are not willing to pay. That may be short-sighted but it is reality. Your leadership is my 15% cost increase" Well, talk about arrogance. It isn't my leadership, it'll be this country's leadership. If your fellow citizens take on board that the planet is worth saving, then you'll just have to put up with paying more for your power, just as you pay duties on your petrol. You might then find that an investment in energy efficiency make some sense.

Insider, you are so last century. The resources that you seemed determined to rely on are failing us, and the planet that supports us. You admit yourself to be short-sighted. Well, at least you're honest, it's your reality, but it's not mine, and if I have my way, it won't be most other people's. You'll then have to learn to lump it and accept the world has changed, for the better.

And Insider, I'm sorry to see you are a global warming contrarian. This thread has gone on long enough so I am not going to take you up on this, but it is yet another example of your inability to let go of the intellectual and emotional investment you've made in the status quo - I don't know how old you are, but it is likely you'll take your unchanged ideas to your grave, rather like Marie Antionette or Tzar Alexander!!