Essay by Eric Worrall
h / t observer; The Australian Energy Market Regulatory Authority has replaced freedom with a regime of coercion and expropriation, in a desperate attempt to stabilize Australia’s soaring energy prices and supply shortages.
Australian energy market operator suspends wholesale spot electricity market to ensure reliability and avoid outages
By political reporter Melissa Clarke and Nicholas McElroy
The Australian Energy Markets Authority (AEMO) has taken the extraordinary step of suspending the wholesale spot electricity market. nationwide.
Main attractions:
- The electricity industry is dealing with rising costs
- It forces AEMO to cap prices and force generators to offer their services
- The wholesale spot electricity market has been suspended for now to try and ensure reliability
The power industry has had to deal with rising costs, forcing AEMO to price limits and force generators to offer their services.
…
AEMO CEO Daniel Westerman said the market suspension would simplify the operation of the electricity market.
We are seeing very difficult times,” Mr. Westerman said.
“It is not possible to operate the system under current conditions and still provide safe, reliable electricity to Australian homes and businesses.
“Right now we see the market cannot cope with all the factors that come into play on it. Honestly, those factors are pretty extreme, from both scheduled generators and unplanned power outages, demand is very high. [There are] confluence of factors at hand. “
The suspension creates a simpler process for monitoring energy generators, he said.
“We are creating a simple process where AEMO has real visibility into which generators are available and when, rather than relying on last-minute interventions,” said Westerman.
…
Read more: https://www.abc.net.au/news/2022-06-15/aemo-suspended-energy-spot-market-amid-power-crisis/101154054
Why do I claim the Australian government has adopted expropriation?
Electricity suppliers claim they refuse to provide services due to government-imposed price ceilings, as that means losses. Now they are being told that they have no choice but to be forced to supply electricity at a price set by the government.
…
A spokesman for the Energy Council of Australia, which represents major power producers including AGL, EnergyAustralia and Origin, said its members faced a “complicated issue” but were looking for a solution. solutions for power failure.
“The price cap inadvertently meant that some plants were unable to recover their fuel costs. Participants are looking for a legitimate way to resolve the issue,” the spokesperson said.
…
I’m sure the energy companies will comply, in the short term. I suspect directors would burn their own companies to avoid being unfairly prosecuted, fined, and possibly jailed. Who wouldn’t do the same in their place?
But what will be left when the smoke clears? What happens when growing companies are forced to burn shareholder capital, operate at a loss, for the political benefit of people who don’t care about their property rights or expect to be treated fairly?
Australia’s fossil fuel electricity market is inherently a dangerous place to invest, given the Australian government’s market-distorting preference for renewables and the Aussie bipartisan net-zero target. There is clearly no place for fossil fuel generators.
In my prediction, the threat of foreclosure would be the last straw on the back of an already battered industry.
In my opinion, after today, no one in their right mind will spend a dime on electrical system maintenance or upgrades, because now everyone knows the government believes it has the right to take over. Perhaps except when the government directs to do so, under threat of prosecution.
In the worst case, capable managers will leave the industry, avoid the risk of going to prison, or even flee the country. The people who replace them will in many cases be people you wouldn’t normally hire. Smart shareholders will sell fossil fuel-powered generator assets, in many cases, leaving companies in the wrong hands or, perhaps worse, into the hands of greedy political opportunists corruption. In time these companies will collapse.
Welcome to Venezuela.
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