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Tesla big battery powerless to stop S.A. price gouging

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“I’ve never seen anything like it; with -$1k to +$14k in consecutive 5-minute periods. Chaos ensued.”

That was the response of a senior Tesla Energy executive this week after the extraordinary scenes in South Australia’s electricity market on Monday, when the fossil fuel generators had a party and prices swung from $14,200/MWh to minus $1,000/MWh in a matter of minutes.

The upshot of these price swings was that the cost of South Australia’s wholesale electricity averaged $710/MWh that day – more than 10 times its recent average.

The price spikes, as we reported at the time, was caused neither by a period of high demand, nor by a shortage of supply. The generators simply profited from a series of network constraints, and a period of low wind and solar output, to fill their wallets.

As we reported on Monday, and again on Tuesday, they were able to do so because most of the gas plants were not running at full capacity and the main diesel generators – three of them operated by the federal government-owned Snowy Hydro – had a price gouging party.

As analyst Allan O’Neill writes in this in-depth observation on WattClarity, most of the units at AGL’s Torrens Island gas station were running, but were dialled down. One of the two big units at Pelican Point was offline.

That gave room for the diesel generators to control the bidding, and enabled everyone – including the Torrens Island and Pelican Point generators – to profit.

The Coalition government, predictably, blamed renewables, or the lack of them, for the price hike. Resources Minister Matt Canavan raised it on Q&A when defending the need for base-load coal.

“One of the reasons power prices are so high in South Australia today was that the gas price was around $10 a gigajoule – which is very high, about three times what it was a few years ago,” Canavan said.

“We, of course, don’t have coal-fired power stations in South Australia anymore. We’re not using or developing more coal. We’ve got to have baseload power as well as renewables.”

Canavan is truly delusional if he believes this has anything to do with the lack of baseload or the cost of gas. It has everything to do with market bidding strategies and the lack of competition.

The irony is that it was the government-owned Snowy Hydro that was at the heart of this bidding strategy, using its three diesel generators to repeatedly push the price up to $14,200/MWh in the first five-minute period of the each 30-minute pricing period.

This guaranteed a price of at least $2,500/MWh for the 30 minute period. But to get their share of the profits, the gas and diesel generators then had to bid the price down to the market floor – minus $1,000/MWh – so they became “must run” generators and get the credit from AEMO.

It’s a classic ruse, and South Australian consumers have been getting screwed by the lack of competition and these greedy bidding strategies for decades.

Rarely, however, does it happen at this scale and this length of time. This bidding was repeated nearly a dozen times over the next few hours, led by utility that is owned by the government that is claiming its focus is on reducing prices.

Never has a claim seemed so hollow, particularly as it is accompanied by calls for new coal fired generation.

The market for FCAS – frequency and ancillary services – has been a classic case. When AEMO has to impose significant network constraint, it asks for 35MW of FCAS capacity from South Australia-based generators.

In a breathtakingly cynical ploy, these fossil fuel generators would inevitably fall just 1MW or 2MW short of capacity, and would then price the last single MW at the market cap, which in the FCAS market is $14,000/MW.

The regulators just stood by and watched: ACCC chairman Rod Sims said last year that it was the “market at work” and this week he produced a 369-page report that claimed there had been little or no market manipulation.

And he said in a speech the following day, it’s OK for big market players to gouge consumers.

“It is not illegal for a company to put their prices up, or even to price gouge, as this term is commonly understood,” Sims said.

But while the FCAS rort was smashed by the arrival of the Tesla big battery, which although only relatively small was big enough to grab a substantial share, that battery has struggled to make a dent in the wholesale market.

That’s partly due to its size – only 30MW/90MWh is available for wholesale market arbitrage – but also due to the market structure, which favours this rebidding.

Unlike fossil fuel generators, batteries like the Tesla big battery at the Hornsdale Power Reserve can charge and discharge quickly. But there is no point doing so in the same 30-minute period because the 5-minute intervals are averaged out, so the price for charging and discharging would be the same.

The gaming in the 30-minute period, which has taken place across the National Energy Market – but has been worst in South Australia and Queensland, where there is little competition – was the main reason why big consumers like zinc refiner Sun Metals pushed for the introduction of the 5-minute settlement periods.

The big incumbent generators like Snowy Hydro, AGL and Engie fought this rule change furiously, and succeeded in having its introduction (first proposed in 2016) delayed until 2021/22 – in contrast to the much more complex NEG and its various obligations being introduced in a fraction of that time.

The battery storage companies and demand management companies like EnerNOC argue that the 5-minute rule is essential to stop the gouging, and to encourage fast-moving technology like batteries and demand response.

AEMC chairman John Pierce finally admitted that the five-minute settlement period would “lower wholesale costs, which should lead to lower electricity prices than in a market with 30 minute settlement.”

Pierce also acknowledged that more accurate price signals would also encourage more efficient investment in flexible technologies such as aggregating distributed storage, new generation gas peaker plants and rapid demand response.

That was after fierce resistance from the incumbent generators, including those at the forefront of the market manipulation on Monday,

“AGL does not consider that there is a material problem with the design of the wholesale electricity market to the extent that changes to market settlement times are warranted,” AGL Energy said in its submission. “Accordingly, AGL does not support the proposed rule change.”

It claimed moving to 5 minute settlement will “cloud” the incentives of fast start generators during a price spike event, because they are not as fast as battery storage and most take longer than 5 minutes to respond. It says this could result in some peaking plants leaving the market.

Snowy Hydro said “there is no material problem that warrants the major costs and disruption that would result from the proposed rule.” It has also opposed demand response on the basis that it amounts to “enforced blackouts.”

Other major generators such as Engie, ERM Power, Origin Energy, Energy Australia and Stanwell also opposed the move to 5-minute settlements.

So how did Tesla go on Monday when the bidding went wild? Hard to say, but it is understood it “followed the peaks”. So it probably made money. But as that executive noted: “The case for 5-minute settlements has never been clearer.”

Imagine if there were more batteries, and more demand response, and even virtual power stations. At least then, when the prices spiked due to need, it would be the consumer that could share in the profits  

Pocket
  • MaxG

    There is no market manipulation! The market works as designed.
    The Feds are in on it — to continue blaming RE, as they evidently bid with their diesel generators. Gas was dialled down… for me a clearly orchestrated, yet, legal maneuver to pillage the public, which is in line with the core values of the neoliberal mob. — Hey, it’s a free market! If the people want to prevent this from happening in other sectors (education, health, super), then oppose privatisation at any level… otherwise you are complicit for the outcome as demonstrated above.
    And just to make this clear: voters supported this government and its actions.

    • Hettie

      Whoever decreed that the highest bid in a peak event should be the one accepted, and not only for that bidder but for all, is a traitor to the Australian People.

      • Graeme Harrison

        Yes, you’d have to say that the NEM has many attributes that run completely contrary to being ‘a free market’.

    • Black Silicon

      It couldn’t have happened without the unreliability of renewables.

      ‘profited from a series of network constraints, and a period of low wind and solar output’

      • MaxG

        OK… the power of words and their composition.

        Is RE unreliable? I mean, is a car unreliable, because it ran out of fuel?

        “profited…” from network constraint and low wind and solar.

        Mentioning the same thing twice with different descriptors (unreliable, and what it really was: low wind and solar).

        • Joe

          Black Silicon, he may have inhaled a bit too much silica and got a touch of ‘Black Brain’ perhaps.

        • hydrophilia

          I am 100% FOR renewables and live off grid without a generator, BUT…
          Assuming the grid still needs some gas peakers etc for now and they are being used less and less, they need to make more and more $ per hour of use… or be withdrawn entirely as uneconomical. I’m sure the 5-minute rule would lower prices, but would it then lead to peaker retirement and cause a spike in prices? Then would this lead to more renewables and storage and lower prices again?
          As with most issues in life, things get more complex as you look deeper.
          My vote would certainly be to go for 5-minute rule and see what happens…

          • Mike Westerman

            You raise an interesting point- I have an article presented at a conference in VN by a Chinese engineer setting out how PHES receives fixed capacity payments which largely underwrite the capital. As a result less arbitrage is needed for economic operations so they buy and sell more often thereby flattening the price curve.

      • How do you figure that. These pricing events were occurring before wind and solar were introduced to the grid.

        • Black Silicon

          The article pointed out they were a factor….did you not read the article?

          • Hettie

            Giles WROTE it, idiot.

          • RobertO

            Hi Hettie I got my head chew off today too. Your right when you say people do not read everything and boy are they quick to point where you are wrong (even if they have not understood what I was trying to say).

            Would I recommend a wood heater in the geographical centre of Sydney today (even though it heats my water, it’s s 22 kw heater bought 1992) no way. To many people burn rubbish wood, to many people burn damp wood, and that help to contribute to the brown haze we see over Sydney. I am lucky that I have access to a 70 year old house that is coming down and I will be going to RC to heat the house in the next few years (I am getting too old to go cutting down trees and collecting firewood).

          • Joe

            Blackie has the ‘Black Brain’ from too much exposure to Silica.

          • solarguy

            LOL, Perfect response, love it.

          • Rod

            Impressive home goal. I would guess that is a regular occurrence.

          • MaxG

            He wrote it 🙂

          • RobS

            Additional supply was needed, the gross manipulation of that fact to gouge the market was completely their choice. They could have simply turned on a generator and left it on until the demand was no longer needed, instead they deliberately pulsed the output to cause huge price spikes before turning them on again to sell power for the rest of each trading black at prices hundreds of times higher than necessary. No one but the fossil fuel plant operators is to blame for this manipulation and profiteering.

          • Hettie

            If the market rules permit such thuggery, the market rules must be changed!

          • Barri Mundee

            The trolls keep popping up under different names. And they mostly have no argument, no facts or evidence.

      • Nicko

        Renewables are intermittent, not unreliable. I expect the same would happen if there was still a coal generator in SA and it went down for some time. Or a gas generator. As Giles suggests.

        You ignore the fault of fixable rules and the circumstances of the network issues on the day. You excuse the cynical profiteering, including by the Turnbull government via Snowy Hydro. You offer no alternative.

        Such is how bigotry works.

        • MaxG

          Nicely said… “intermittent” was the word I was looking for (sorry, I am ESL).

        • Black Silicon

          Renewables are unreliables and intermittent is unreliable.

          You cannot repeatedly predict or dispatch them, therefore, added truly dispatchable capacity is always needed….so add more baseload assets from fossil sources.

          your ignorance of basic grid assets and capabilities is unsurprising.

          Such is how stupidity works.

          • Rod

            Only in Orstralya is coal considered dispatchable. Such is the stupidity of those who believe the COALition when they make stuff up.

          • JWW

            And coal is not just not despatchable, the old plants in Australia are also very unreliable, as we have learnt from this website and the #coalfail Twitter contributions.

          • Mike Westerman

            LOL…incoherent, inane, illogical. Why do u bother?

          • Joe

            Huh. Silly scribble. Why do you think Wind Farms and Solar Farms are built where they are??? RE is no less unreliable than the 50 plus ‘Baseload Coaler Tripping Out’ events covered in these pages of Renew Economy.

          • Hettie

            Edit that, Joe!
            RE is *far* less unreliable than the Coalers.
            We know what the wind is going to do about a day in advance.
            We know the times of sunrise and sunset, years in advance.
            We have a very good idea about cloud cover well in advance.
            We know that most of the time, wind is stronger when the sun is not shining. And that it is seldom cloudy or calm across the whole country at the same time.

            BUT when Coalers trip, they do it without any warning. 500 mW or more gone from the grid in an instant.
            THAT’S unreliable.

          • Joe

            Exactly right, young Hettie. But dolts ( or Trollies ) like our Blackie don’t want to know about it.

          • JWW

            Have you ever heard of weather forecasts? Both wind and sunshine can be predicted rather well. At least for a few hours ahead. More than enough time to spin up / adjust output of any gas power plant or (pumped) hydro. When price spikes occur without anything unusual happening on neither the demand side nor the supply side, then it is just a case of market manipulation – obvious, isn’t it? In that case, we need more competition in the market or we need to fix the rules. Ideally, we would do both.
            I am disappointed to hear that the SA government is not operating their new gas turbines in competition to the others in the market.

          • Nicko

            It is a more than useful distinction between intermittent and unreliable, unless you are bigoted against clean energy and want to muddy the water with coal dust (is that you, Matt Canavan?).

            As others have said, ‘intermittent’ sun and wind is less unpredictable than coal zealots pretend. Unlike ‘unreliable’ coal and gas generators which go down whenever.

            I am no power engineer, but I can know a facile argument when I see one. (And I did work as a consultant to the old Electricity Commission in NSW on non-engineering things – Liddell was looking old in the 80s!).

            I can see what is happening – solar is going in on households and businesses regardless, the storage era is here, coal can’t be financed, systems are getting better, demand management is beginning in Australia etc.

            You need to adapt your argument to reality, not just ideology or spite at those who (perhaps strangely to you) don’t want to ruin land, water, human health and climate when we don’t have to.

            PS having lived off grid, I understand how sun and backup *should* work. It doesn’t when the opportunity is there for the ‘backup’ to exploit the situation.

            PPS SA wind is working very nicely as I write this.

    • Joe

      The Coalition now have a new slogan… ‘its all renewable energy’s fault’ to deflect responsibility for fixing this abysmal state of affairs. ‘Its all renewable energy’s fault’ sits nicely with The COALition’s other chestnut slogan…’its all Labor’s fault’. Turnbull was up in Brisbane this week for a Press Club talk followed by a Q & A from the media in the audience. He banged on about how awesome is his NEG and banged on about The COALition’s promise to “lower energy prices”. He had a go at The QLD Govt for its part / state owned assets gaming and gouging the market to the detriment of consumers. But now we read in Giles’s article that Turnbull’s baby ‘Snowy’ is doing the same sort of thing. How does Two Tongues Turnbull lie straight in bed at night.

    • Aurellius

      It’s not a political ideology it is a mental illness which then filters down as a toxic type of group think. Look up political ponerology. You will realise they need a diagnosis and treatment asap as all their systems are doomed to failure at the end it’s just that this time they might take out the whole planet.

    • Greg Hudson

      ”Gas was dialled down…”
      Hang on a sec… didn’t the SA Govt buy 5 gas gens to use in just such an ’emergency’ ?

      • Rod

        Unfortunately a sweetheart deal was done with AGL that the “emergency” plant would only be used to guarantee supply.
        There have been a few max spot occasions where they could have jumped in and filled their boots.
        Maybe with the Feds now playing the market, SA can too. But I would bet a slab of pale ale that the generators will be sold at the earliest convenience, going by past experience with the Lieberals.

    • Cooma Doug

      Max
      Do you know about CFD?
      It will push toward the energy transition in the world.
      Initially, fossils will cling to their political influence. But this wont go on well for Australia.
      If we dont adopt a CFD, the world will impose it onto us.

      • Hettie

        Googled CDF. So many different answers!
        Please explain.

        • Cooma Doug

          Carbon Fee Dividend
          It is a key to political neutrality.
          When you research the concept, dont think about the technical aspects of the energy market. Think about the consumer response and what will influence their votes.
          Political denial wont survive this concept that will be a major world trade influence.

    • solarguy

      Can’t disagree.

    • Phil

      Going 100% Off grid was my chess game
      Best thing i ever did as i won the game so far it seems !

      And looks like the solar FIT is about to be halved in NSW as per an IPART recommendation. So that On Grid offset game is now looking rigged unless you double your panel count.But they are even limiting that in some areas as the grid cant take more than 25% Solar contribution to total demand

      Throw in growing Time of use metering with the ability to turn off air conditioners and we now have the equivalent of restrictions

      This is a 100% predatory business model pure and simple.

      • MaxG

        Agree… if one can manage to stay at one place and set themselves up for the long run, then paying the cost for off-grid is a worthwhile undertaking. Seems it worked for you… and it certainly did for me.

        • Hettie

          It’s horses for courses.
          Batteries are still pricey, and to have sufficient battery to cover long periods of dark weather, ruinously costly for most.
          Best value comes from getting the biggest system your wallet and roof will accommodate, and staying connected. Do everything possible to improve the energy efficiency of the house, and manage it thoughtfully.
          The grid is your battery. Yes, it costs to stay connected, but it would take 20, 25 years for the connection charge to equal the cost of a Powerwall, and still you would run out of power if it rained for two weeks.
          Use power as much as possible during sunny hours, but know that even the derisory feed in tarrif mounts up, can eliminate your power bill and more. No grid, no feed in tarrif. Perhaps a small battery 4 or 5 kWh for the dark hours, and to cover the very rare blackouts. But not quite yet. Prices will fall.
          So going off grid if connection would cost $40,000 makes sense. In town? Not so much.

    • nakedChimp

      free markets are markets WITHOUT cartels/monopolies/oligopolies.

      What you’re looking for are captive markets or regulated markets.
      And yes, those bear monopoly profits.
      And that’s exactly what is happening.

      We DO NOT HAVE free markets.

  • Peter G

    It would be great to see the regulators mandate some demand side management technologies for consumers benefit in SA – perhaps ripple control of agreed discretionary loads? Or allowing small consumers with batteries access to wholesale pricing – now that would be fun!

  • Barry Alternative Fact Covfefe

    Liars vs reality, voters choose comforting lies then scapegoat when the pain hits.

  • Graeme Harrison

    If AGL is against the change, then (without even understanding the complexity), all Australian consumers should be IN FAVOUR of the proposed change. Ditto, when telcos did not want number portability, it was clearly in the consumers interest to have it. And with banks not wanting number portability, you can guess – yes, all Australian consumers should be in favour of it. Simples!

    • Hettie

      Ummm, AGL is more progressive than most. Replacing Liddell largely with renewables, now offering 20c FiT, fixed for 2 years, when the rest of NSW is going below 10 c.

      They can see the future will be low coal, and are moving with the times.

      The 5 min settlement period is another matter. A bit like employees being informed their pay is to be cut by 50%. I think we would all scream a bit at that. But what was reasonable in days when much adjustment had to be done manually, (30 minutes), is ridiculous with today’s computerised switching.
      30 minutes can’t now be justified, nor can the glacial slowness of the changeover.

      Hey go. We vent our irritation and frustration here, but how much do we achieve, I wonder? Talk to most people about clean energy and their eyes glaze over. Point out that they could eliminate the power bill, they perk up, but sag sgain before taking action. Too sad.

      • MaxG

        Yes, your last paragraph resonates with me…

        Sometimes I wonder if I lost it; today I googled my assertion that ‘democracy is dying’ and was surprised about the number of articles / sites writing about this topic (19m without quotes, 220k with quotes around the three words)… and I came across this one: https://www.theguardian.com/commentisfree/2017/jul/31/democracy-dying-people-worried-putin-erdogan-trump-world — starting out with: “Democracy is dying – and it’s startling how few people are worried” by Paul Mason.

      • Greg Hudson

        It is all fine and dandy to say AGL is offering a 20c FiT, but that is not the whole picture. One has to also know what they are charging (screwing you) to buy from the grid… IMO

        • Joe

          Greg, I’m in Sydney and have done some comparisons. AGL is better than the other 2 big energy sharks ( Energy Australia & Origin ). AGL kills ’em with that 20cent FiT guaranteed for 2 years. AGL’s other charges DSC and Usage tariffs are more than competitive.

        • Hettie

          It’s not so difficult, Greg.
          Set up a simple spreadsheet. Columns for kWh in, kWh out, total days, in case you’ve not had your solar a whole year.
          Your sums should cover only the time since install.
          Total the days, the import, the export. Then multiply each total by your current prices, and in the line below, by the AGL prices.
          Add dad cost to import cost, subtract export payment. You now have a true comparison, based on your actual usage history. The higher end figure wins. Assuming you are getting credit balances.
          if your are in debit, the lower figure wins.
          What’s best for you depends on the balance between imports and exports. And that depends on the size of your solar system.

    • Joe

      Ha, ha, ha….spot on!

  • Hettie

    You are early to the inbox today Giles.
    POETS day, of course. Enjoy your weekend.

    • Ren Stimpy

      On POETS day in a week that was briskey
      I piss off early and grab a neat whiskey
      Then three or four more
      Then stumble in through the door
      Where I’m either angry at politicians, or frisky

  • BushAxe

    Where’s the evidence of Snowy/Engie/Origin/EA rebidding Giles? Monday events where completely driven by AGL’s actions, by mid morning all the other retailers had all their peakers running to reduce their exposure to the spot prices which was eventually damped when the second half of Pelican Point returned to service after being out of action for many months. AGL’s clearly decided to maximise others exposure to spot prices while they still have the upper hand, because they are increasingly looking exposed in the future due to the lack of investment in new generation. Industrial customers are actively encouraging the construction of a new CCGT at Pelican Point and which will render Torrens Island and AGL uncompetitive in SA. Market forces are driving change because they’ve had enough.

  • Paul Surguy

    So that means SA has had the highest power prices under the state LIBERAL party since Federation higher that the labor gov, now that is interesting

    • Rod

      Just like their Federal mates, it will be “Labor’s fault” for at least 5 years thanks to Ruprecht spreading his bullshit and the gullible unwashed believing it.

  • Shilo

    I am interested in why the big battery would have wanted to bring the price of power down?.
    Is it being operated for the good of everyone.
    Just a while ago, there was a story about how it makes money buying low and selling high.

    • Glynn Palmer

      Shilo, buying low and selling high is the business model of storage.

      Looking at the AEMO chart for SA for spot price and demand, the lowest price and demand period is generally, but not always, 3:30 – 4:00 AM. The AEMO forecast price for Sunday 15 July for 3:30 – 4:00 AM is less than $30/MWh. Looking at Opennem for this time slot, SA wind share is at its highest and gas at its lowest with a little bit of imports. This is when it is optimal to charge up and absorb some of the excess generation. On the other side, the price at 18:00 – 18:30 on Friday 13 was $374.79. This is when it is optimal to discharge into the grid.

      The absorption charge when demand is at its lowest and discharge when demand is at its highest provides a smoothing service to the grid that flattens the peaks and troughs and consequently makes the generators more efficient which reduces generation costs.

      • Ren Stimpy

        It will undercut the gas peaking hostage-takers – more and more so as batteries become cheaper in an established pattern of cost reduction. This will affect the profits of all the generators, but it’s particularly interesting how it will affect the coal generators. One thing is for sure, there won’t be another coal power station built in Australia.

      • Shilo

        So the battery or battery operators only have the good of the power price at heart. Bring on more battery’s.
        (P.s. just roughly I am thinking to break even, with capital and running costs, a battery needs a fair price difference. Around 5 to 10% loss going in and depending on heat, age of the units, an average of over 10% coming out, without applying a MLF to them. But on a bad very hot day the loss will determine if they bother sending any out. Meaning the losses on a very hot day could be well in excess of 25%)

  • Cooma Doug

    There are more issues to consider. Its not just settlement time. There are availability bids required also and they have a big imact. The ability to force on plant by AEMO are important security and reliability tools and could be just one item adjusted to change the game.
    I cant say enough how complicated this situation can be and people at high levels across the industry dont get it. It isnt greed or politics that causes the complexity. It isnt knowledge driving the politics.
    There are dozens of steps to be taken. Most people in the media dont understand the concepts. Most people in the power industry dont understand it.

    • Hettie

      So if you were in the position to do so, how would you rewrite the rules about what mat be done in a potential LoR situation, Doug?
      You clearly understand the complexity better than most, and have a good idea of what could be done, if the driving force were preserving an essential service, not making profit for shareholders.
      This is Friday, so you have the weekend to think about it.
      🙄 🤔 😖 🙂 😃

      • Cooma Doug

        Ok ill put some detail on here later on weekend. In the mean time change the terminology of “load shedding” to load shifting and load sharing. Then split them up into 6 different products with speed of operation, energy quantity, power level, location and voltage control considerations.

        After you sit quietly a while thinking about that there will be solutions appearing out of the blue. The market rules designed to encourage the best technical outcome will happen.

        At the moment it is still all about forcing the energy down the line without asking the question, do you need it?

        • Ray Miller

          Food for thought Doug, but following on, the small customer (be it many millions) only sees a constant cents/kWh with little or no signal or incentive to move/shift the loads which can be shifted.

          The whole system needs the treatment.

          • solarguy

            No incentives, really Ray. Have you not heard of TOU tariffs? There certainly is incentive to shift loads out of peak tariff period 50cents/kwh as an example.

          • Ray Miller

            Point taken, but essentially how many customers are on this? What should happen is the highest 10% of users per year should be moved to TOU including the maximum demand charge. It is a waste of resources moving at the early stage the low end users as they contribute little to the problem and most likely unable to shift their loads anyway.

            The other side of the coin is the customer interests need to be taken into account avoiding the exercise being just to get more retail $’s. Assistance to increase the service efficiency and shifting load times. Many appliances for decades have had delay timers but little use is made of them.
            The issue is complex but little to no effort is being made to resolve the issue, meanwhile the peaks (price and demand) just keep getting larger.

  • Roger M

    Looks like planned interconnector outages should take into account the wind forecast. The incumbents are almost certain to rort the system if they can. From opennem – average sell price for last week from the battery was $553 and buy price $83, nice little earner.

    • Brunel

      Hope the new interconnector with NSW cuts power prices.

    • Hettie

      I wonder how high spot prices would have gone *without* the battery?

  • bedlam bay

    Just another blatant gaming of the system. The fossil boys have managed to stop the introduction of the 5 minute rule which give the battery boys areal chance to force out the fossils. A real FREE market for the neoliberals (hypocrites)..

    • Greg Hudson

      By fossil boys, you mean Snowy Hydro… and it was actions like this gouging, plus a 43% price hike in the power I was buying from them (through their retailer Red Energy) over a 2 year period that broke my camels back. IMO as a Govt owned bunch of rorters, they should be shot, drawn and quartered, drowned then beheaded (for starters)…

      • bedlam bay

        The state governments together with the federal regulator were in on this scam for many years. Just think that Australia had low and competitive gas and electricity prices 15 years ago.

  • Chris Fraser

    A poor showing by Snowy Hydro and Rod Sims. They are both against the spirit of the Law.

  • neroden

    Wow. The linked piece by Allan O’Neill explains the details of the rort very very clearly and very very specifically. AGL was rorting everyone.

    Until 5-minute settlement is established (which should have happened years ago), this can’t be fixed. Even if there’s competition to AGL, they all have incentive to cooperate on the rort, until 5-minute settlement is established.

    Best move for South Australia is to leave the NEM. Or threaten to leave unless 5-minute settlement is established *this year*, and then carry through with it. Once out of the NEM, they can establish 5-minute settlement.

  • Ian

    Nothing building coal fitted firedstations to replace those lost and stop subsidising “renewables” won’t fix. That’s what most of the world are still doing. I know renewables are a religion but CO2 is not pollution. The science had been manipulated.

    • Eric

      Go and speak to the top scientific organizations, for example the US National academy of Science and The Royal Society. They have as members the best scientists from all fields including climate and meteorology. They put out a joint statement a few years back stating that human induced climate change was real and caused by human created greenhouse gases including CO2.

      If you have some new evidence to support your above claim they might like to hear about it.

    • Hettie

      Don’t be a fool.

    • Barri Mundee

      Rubbish! Nothing more needs to be added.

  • Eric

    The problem South Australia is confronting and the rest of the system is how to maintain a service while your revenue decreases.
    Until enough storage is put into the system, fast response generators are our only backup but as more storage arrives(ie big batteries etc) the economic case for those diminishes so when they have an opportunity to make money they will gouge more.

    I think this is why the fed government is considering underwriting new coal and possibly gas turbines. It is simply not economically viable for the private sector to build these assets which will be redundant in 15 -20 years anyway.

    As was pointed out in another article rooftop solar and batteries will drive out coal. The government can’t rely on the private sector to maintain and aging fleet of coal generators while they slowly go out of business and we still need them to provide power until enough renewable and storage is built.

    I think it is dawning on everyone that the government will have to take control of some energy generating assets

  • Chris Reed

    We all know it’as all the fault of coal, and if you disagree the ‘Believers’ will be happy to let you know why you are obviously wrong!
    Meanwhile, back in the real world, working class families get to choose between eating & heating.
    Remember California and ‘ The smartest men in the room’?
    Australian politicians are obviously smarter than that though, and the lessons of ENRON have been well learned, otherwise we Australians would be getting the same treatment as our Californian compadres eh?

    • solarguy

      Some working class people don’t engage brain when faced with high power bills. They waste power in so many ways, e.g. my neighbour who receives $1800 lecky bills, can’t understand why, but goes to bed with air cons running. He asked my advice on saving money, gave it to him, what has he learned……SFA.

      Some can’t be told and so can’t be helped.

      • Chris Reed

        Some working class people have to choose between eating and having electricity at all – I wonder how many fall into each camp Solarguy! I also wonder what your motivation may be.
        Too many vested interests selling solar to really be able to comment fairly – So who pays YOUR bills??

        • Hettie

          Chris, that comes very close to being offensive. What to say is true, that some have to choose, but many put themselves into more stress than they need to, by failing to do the common sense things that would reduce the cost of both food and power.
          How often have you seen poorly dressed people in a supermarket, their trolleyspiled high with bottles of Coke and packs of potato chips? The thought of drinking tap water would not occur to them, and coke costs more than beer.
          I know several people, not so poor, and seemingly reasonably intelligent, who insist on having a window open in the depths of an Armidale winter, temp 11C, for fresh air, and fan heaters going flat out. There is much that can be done to reduce the power bill. Those who pay rent are the worst off, with houses that leak heat from every surface and landlords who don’t give a rat’s.

          • Chris Reed

            Hi Hettie, We here in South Australia were saddled with an AMAZING ‘Renewable’ system which unfortunately did not (And arguably still does not) work. Thus it is extremely unsettling to hear that YOU assume that ‘Poor’ people are also fools who are unable to curb their profligate lifestyle to enable them to heap excessive profits on ‘Energy’ retailers.
            Also, as you claim to now be a ‘Pensioner’, I am guessing that YOU raised your kids using CHEAP fossil fuel generated electricity, and now that YOU no longer have the problem of feeding, clothing and schooling a family YOU are quite prepared to get into the ‘Solar Rebate’ trough, thus passing the impost on to those still struggling with kids.
            Just for the record, I actually worked in the ENVIRONMENT DEPARTMENT of a major company based in outback SA, and guess what, they generated their own power on site using OIL & GAS, I was also advised by one of the ‘Architects’ of the SA debacle NOT to invest in solar until the storage problem was solved – Lithium storage batteries ARE NOT necessarily a ‘FRIENDLY’ answer you see .
            A fool I may be, but I am not silly enough to sit still while we are all being ripped off by GREEDY power retailers.

          • Mike Westerman

            Chris – you are justifiably angry about the price of power. But if you have the time you could dig out https://www.sapowernetworks.com.au/public/download.jsp?id=1083 and other reports from 2005 on, and you will see that the price premium in SA is completely unrelated to renewables penetration. You will see that the AGL monopoly is gradually being unwound, and more recently prices are falling as more generation is being added following Engie’s withdrawal of Northern PS from the system. The new generation is cheaper in today’s terms than the coal it has replaced, and as pumped hydro is added that downwards pressure will continue.

            I would gauge, from my own observations of friends and relatives being challenged in making ends meet, that the biggest and most obvious pressure is coming from taxation policy driving up house prices and rents, and the withdrawal of funding for services. In education this has resulted in significant increases in a whole range of fees and charges. On the whole, if you wish to effectively and justifiably direct your anger on a root cause, write to those politicians more interested in the growth in wealth of those with capital and the gross inequalities that brings, while undermining the job security and conditions of labour.

          • Chris Reed

            Hi Mike – I would reply on 3 fronts – Firstly are you seriously trying to say that this problem only started in 2005? If you draw the line for comparison based on where the evidence is best suited to your argument then we do not have a problem, yet the very nature of the article we are commenting on contradicts your point of view.
            The fact that the current generation of battlers are facing a ‘Perfect Storm’ financially is indeed due to many factors, back door taxation being a major player here wherein public assets are sold on the open market, the proceeds squandered and the taxpayer (I.E. those of the working class who PAYE every week) forced to pay exorbitant prices for a once well run set of PUBLIC utilities.
            My 3rd point is simple economics – Once upon a time you rarely saw an advertisement for power here in SA – We had ETSA and arguably THE BEST system in the world – So no money was needed (Invested) in advertising to sell it. Now a huge amount is spent on advertising – Where would the need for this arise if not from a very lucrative cash cow that overcharges (Yes, even the regulator says we are paying too much) for what is in essence a basic necessity of life. Where does the revenue stream to pay for the advertising come from I wonder?
            We also have the HIGHEST priced electricity in the developed world here in SA right now, today, and the battlers, trying to raise a family and save for a home of their own are paying for it.
            Like I said previously, many people now have to choose between heating and eating, even if they do ‘Waste’ money on Coke & potato chips for their kids!

          • Mike Westerman

            Chris – your first point is simply a false inference: I used the 2005 report to counter your narrative that renewables were somehow the cause of high SA prices, when clearly the largest price premium of SA prices over those of other states occurred well before there were renewable in the mix. There is also little doubt that if competition is unleashed without a market structure that both protects the vulnerable and sends the right investment signals. A clearing house for energy only of the type we have does neither and coupled with the ability of states to tax consumers thru their power bills has led inevitably to our current situation.

            My point was that the reason why our electricity market produces a result antagonistic to “battlers” is precisely the same reason the housing market does so – it’s nothing to do with a new technology like renewables displacing an old one like coal or gas, but rather deliberate policy settings by government that are focussed on assisting capital accumulation rather than providing fair returns on labour. Railing against RE seems to be common in conservative circles as part of a cloak of identity, something I find confounding.

            I don’t agree with people having to chose between heating or eating, but it is a false choice: the real choice is demanding leaders who lead and are not afraid to argue on evidence. Leaders who genuinely support workers, not watch on while inequality reaches levels last seen during the great depression. Even Treasury admits this: https://treasury.gov.au/publication/economic-roundup-issue-2-2013-2/economic-roundup-issue-2-2013/income-inequality-in-australia/

          • Hettie

            Now you are way beyond offensive. If you choose to misinterpret my remarks about how SOME people, poor and not so poor, add needlessly to their costs of both food and power, then launch into a confected attack on my integrity, do not expect such outrageous behaviour to go unchecked. That is absolutely unacceptable.
            Please apologize.

          • Chris Reed

            So Hettie, like many of your generation YOU believe that YOU have the right to comment on anyone else (I am NOT dyslexic so I did NOT misinterpret your comments regarding ‘Poorly Dressed’ working class shoppers and their cart contents) without them having the right to be either offended or reply to your misguided and massively offensive comments.
            There is nothing confected about my earlier response to YOUR outrageous statement and I sincerely recommend you both DELETE that post and offer a BLANKET APOLOGY to every battler currently trying to raise a family in the current economic environment.
            But we digress, the power price structure is now generally accepted as being toxic and in need of change – It is called PUBLIC WILL and only when our political masters in Canberra recognise this as a potential threat to their gravy train will anything be done to change the status quo.
            In the meantime, self interested parties will continue to push for the dismantling of the existing power generating infrastructure – How many ‘Fossil Fuel’ or Nuclear power plants are China, India, Russia, the USA et al building whilst we tear ours down do you think?
            And finally, it is NOT the current generation of battlers who have driven this once great country to it’s knees, most of the culprits are now sitting pretty in their twilight years offering inane comments about what todays generation are doing wrong – Sound familiar??

          • Hettie

            Other readers can see Chris’s comments.
            I have now blocked him.
            Perhaps one of you might tell him, because he can’t see this.

        • solarguy

          What a complete utter bullshit statement that is, “having to choose between eating and having any electricity at all”.
          Running a fridge, TV and some lights doesn’t cost the average punter much at all.

          If anyone has their power cut off because they choose to: Leave lights, heaters, beer fridges with nothing in them and other appliances on 24/7, clock up a huge bill and then also choose to gamble, drink and or snort their wages up their nose don’t have my sympathy and are f..k wits.

          But they bitch and moan that electricity is too expensive, well off course it is if they’re wasting 50-60kwh/ day. After all the booze, drugs and gambling costing $hundreds each week is indispensable to support life!

          And what is this other crap statement, “I wonder what your motivation may be,” Motivation for what exactly”

          I don’t get any power bills Chris, because SOLAR and BATTERIES, always leaves me in credit and I paid for that with my hard earned, which wasn’t pissed up against the wall.

        • solarguy

          I don’t know what happened to my original reply, but here is v.2.

          Nobody has to choose between eating and heating if they didn’t waste power, some halfwits leave heaters etc running 24/7 and clock up stupid amounts on their power bills, e.g. $2500.

          My motivation for what exactly?

          My SOLAR and BATTERIES make credit up to $210/q, zero charge and I paid for that SOLAR from my hard earned. I don’t pay a cent.

          Some will spend money on booze, drugs and gamble, but winge like bitches when the power bill turns up. That’s one reason why they get diconnected

          • Hettie

            Ummm, there are almost 800,000 people out of work. And to be called unemployed, you can’t have even ONE hour of paid work a week. 16 jobseekers for every job, so it’s not going to wash to say that you can get work if you want it. More like 1.5 million underemployed.
            Newstart allowance for a single adult, including maximum rent assistance, is close to $350 / week. Now, tell me again about your solar system? Remember that it’s virtually impossible to get a loan if you’re unemployed, and impossible to get solar if you’re renting.
            So easy to forget how little some people have to get by on.
            And unemployed people who have a mortgage get no rent assistance at all.

          • solarguy

            Well Hettie my dear, where should I start with my reply.
            In the first instance, not having a shot at the unemployed! Been there myself, actually was on DSP for 15yrs, so I know what struggle street feels like and wasn’t talking about unemployed to Chris, so please thoroughly read what he said about working class people. Get on track!

            Having been part of the Labor family all of my life, I have never forgotten where I have come from, Christ knows that we haven’t got far up the ladder for all our hard graft, me and my family and have fought like bloody trojans to even get here, still have mortgage and only one step away from complete financial f…king disaster.

            So, NO solarguy Not Rich. A tight rope that I didn’t think we would have to walk near retirement age, but survival trains hard and we will have to keep on fighting, because we are survivers.

            It has become clear as crystal that people think automatically, that, if in solar industry = must be rich, NO not in my case or thousands of others.
            I will end my rant with this statement, so there is no mis understanding and I don’t mean you Hettie, you’re switched on.

            If anyone is on a low income and you can’t afford solar, then for Christs sake, don’t waste power over heating the house, put on warm clothing, take the chill off the air with the heater, turn off and reacquaint yourself with a hot water bottle and a blanket while watching TV and turn every thing off when you go to bed. And that also means the bloody heaters.

            That’s part of what I was on about, it’s not rocket science.

          • Hettie

            All good, and I certainly agree with your last points, which echo what I was so rudely attacked for saying.
            Perhaps I am over touchy about the impact of relative poverty on the number of choices that must be made, the things that get crossed off the list of what is available.
            Chris Reed seems determined to be offended. Much like the #notallmen brigade, who interpret the call for men who snigger at misogyny to instead call it out, the way the disgusting David Lionhelm did, as a statement that all men are rapists. And I know I misspelled his name.
            I wonder, she said, meanly, if he lives on potato chips and coke, leaves windows open while the heater is on, and took offense because of that?
            Whatever, there are plenty of people who go hungry because of power bills, but more importantly, rent taking so much of their meagre income. It is outrageous in this rich country.

          • solarguy

            I can tell you some things about how our family has done it tougher in the past, but not here and not now, but it was traumatic and quite unfair and government designed it that way. Something that I will have to push once again to change.

            What do you want to know about our solar?

          • Hettie

            What I meant by that sentence was that to those who are really struggling, solar is not an option. I was being sarcastic. My bad.

          • solarguy

            Well always good to be a straight shooter, that way I will know.

            No solar isn’t an option for some and all the more reason to be smart about energy use.

          • Mike Westerman

            Hettie – I’m always in two minds with those who seem to carry that bundle of ideas about climate change/power prices/unions/immigration/religion – what holds those disparate notions together. It’s certainly not knowledge or evidence! So is it worth engaging to try to get change: are they part of the rusted on Abbott crowd for whom it is a waste of breath, or are they just disillusioned and dispossessed and able to be won over, to refocus them on the real enemy that stymies reform? I’m doing “conversations” with a group called Climate for Change who try to hold discussions with those in the latter camp. It’s surprising but affirming that many can be motivated to for example, email their pollie. Maybe I’m just too optimistic!

  • adam watt

    It’s Australia, this country is rediculous in so many ways .