The great energy debate

**Bushmiller** · 29th August 2015, 08:49 PM

One of the problems with the generation of electricity is that the demand is not constant. We have already seen that there are the "base load" generators who tend to run all the time. They are base load because they are the cheapest. They tend to be cheapest because they are large and there is an economy of scale.

The generators that provide the peaking power are often smaller and more specifically able to respond very quickly to a load demand. They are often gas turbines or gas turbines with an HRSG (Heat Recovery Steam Generator) tacked on to the exhaust end of the gas turbine.

Bear in mind that there is normally a "rolling reserve," which is power capability that is not being used. For example, if station has a capability of 500MW, but is only generating 300MW it can provide a rolling reserve of 200MW.

In the old NSW system there used to be a rolling reserve of 2000MW at any one time to cover sudden and unexpected losses of generation. Today I don't really know what it is, but I would expect something similar.

If the rolling reserve is insufficient to cover a sudden loss of generation there has to be load shedding.....Blackouts.

I thought you might be interested to see a typical generation pattern and pricing from my last two night shifts. The picture cover three days from the 27th to the 29th. I took two snapshots each evening: One shortly after the start of shift and one during the early or late morning when demand and prices had fallen to their lowest. There was other information behind the maps, which could arguably have been deemed sensitive information so I cut most of that away. It related to forecast prices, but doesn't have much relevance here.

The picture on the left is at 1941hrs and on the right 0247hrs.

Z Energy prices 002.jpg Z Energy prices 003.jpg

and on the second night at 1950hrs and 0604hrs:

Z Energy prices 004.jpg Z Energy prices 005.jpg

Some points of interest are:

South Australia is the most expensive state and that partially shows why it has been quicker to adopt alternative energies ( coupled with a lot of wind

).

The chevrons indicate where there is a transmission line (interconnector) between neighbouring states. It shows the maximum capability for both import and export and what the line was carrying at that moment.

Note that NSW was being fed energy from both Victoria and Queensland.

Victoria was feeding power into both SA and NSW

Tasmania was feeding Victoria.

The prices are all per MW/Hr. Divide by 1000 and you have the price per KW/Hr.

Although these are very normal prices, they can be extreme and I have seen -$1000 as well as +$13,800 (as I mentioned in an earlier thread). Ordinarily these extremes are for very limited periods: Rarely more than 30 minutes.

Regards
Paul

**DaveTTC** · 29th August 2015, 09:27 PM

Originally Posted by Bushmiller

......
I pointed out that if I have to work for an environmentally polluting electrical generator this is probably the best one I could choose, but I am looking forward to the day they build a solar plant so I don't have to apologise to people for placing CO2 into the atmosphere.

Regards
Paul

How did that go down?

Dave TTC
Turning Wood Into Art

**Bushmiller** · 29th August 2015, 10:37 PM

Originally Posted by DaveTTC

How did that go down?

Dave TTC
Turning Wood Into Art

Dave

I'm still there

..............for the moment

.

It was a time more for openness and honesty than sycophantic subterfuge

.

Regards
Paul

**FenceFurniture** · 30th August 2015, 12:27 AM

Originally Posted by Bushmiller

I don't have to apologise to people for placing CO2 into the atmosphere.

Regards
Paul

I'm more of a methane man myself, but apologies are still rare.

**Bushmiller** · 30th August 2015, 07:01 AM

Originally Posted by FenceFurniture

I'm more of a methane man myself, but apologies are still rare.

Brett

I thought CO2 would be more than enough for him to digest without getting into methane

.

Regards
Paul

**DaveTTC** · 30th August 2015, 08:44 AM

A very interesting walk i to your world which our world depends on.

Another post from SA. Cant recall who it was but guess he was talking about ETSA and Torrens island

Dave TTC
Turning Wood Into Art

**Chris Parks** · 30th August 2015, 09:52 PM

Originally Posted by Big Shed

As bushmiller said, subsidies of any kind distort the market.

Think back to the LPG installation subsidy, almost overnight the cost of LPG installations increased by the same amount as the subsidy, as the subsidy reduced, the cost of installation reduced by the same amount. To add insult to injury the government then decided to recoup these subsidies by increasing the excise on LPG, which of course affected every user of automotive LPG, not only the ones that "benefited" from the subsidy.

First home owner grants are another prime example, I could go on.

Subsidies are used by governments (of any colour) for political gain, but ultimately it totally distorts the market and all consumers and tax payers finish up paying more than the subsidies ever put in the pockets of the recipients (usually the industry - not the consumer it was aimed at).

Economics 101.

How very true, the first home buyer subsidy is the glaring example of this as is the diesel fuel subsidy for commercial operators. Both distort the market and the industry cops the cream.

**Bushmiller** · 31st August 2015, 07:01 AM

It rather begs the question as to whom the subsidies are intended: The provider or the recipient? I think we know who gets the benefit.

Regards
Paul

**johnc** · 31st August 2015, 10:53 AM

Subsidies distort markets but are useful if used to give new technology the start it needs to gain critical mass to reduce production costs through technological improvement and larger production runs. Diesel subsidies for farm users aren't a big deal because it is effectively the removal of the road tax for off road use. Diesel rebates for heavy haulage are a different matter, that is distorting the market and discouraging to a certain extent alternatives such as rail (debatable it makes any difference given the logistics of efficiency between the two) Subsidies such as the first home owners grant went into a market that was already under pressure, bit like using petrol to supress a fire, wrong economic lever, they needed to increase supply but instead increased demand pressure, prices lifted as a result.

**ian** · 31st August 2015, 01:37 PM

Originally Posted by johnc

Subsidies distort markets but are useful if used to give new technology the start it needs to gain critical mass to reduce production costs through technological improvement and larger production runs. Diesel subsidies for farm users aren't a big deal because it is effectively the removal of the road tax for off road use. Diesel rebates for heavy haulage are a different matter, that is distorting the market and discouraging to a certain extent alternatives such as rail (debatable it makes any difference given the logistics of efficiency between the two)

I'm not sure that's correct.
The diesel fuel rebate for rail is about 39 cents per litre, for heavy haulage it's about 13 cents.
Rail gets the Fuel Excise refunded in the same way that farmers, miners and general industry does on the basis that the fuel is for non-road use.
The heavy haulage "rebate" is, I think, a repayment of the difference between the road user charge (the road damage component of the heavy vehicle registration fee), set at about 25 cents per litre and the "road component" of the excise which is about 40 cents per litre. In part the "rebate" is intended to encourage the take up of newer, cleaner diesel engines.
The balance of the excise -- about 10 cents -- is for general revenue purposes. Economists might term it paying for the externalities of fuel use.

**johnc** · 31st August 2015, 02:40 PM

Originally Posted by ian

I'm not sure that's correct.
The diesel fuel rebate for rail is about 39 cents per litre, for heavy haulage it's about 13 cents.
Rail gets the Fuel Excise refunded in the same way that farmers, miners and general industry does on the basis that the fuel is for non-road use.
The heavy haulage "rebate" is, I think, a repayment of the difference between the road user charge (the road damage component of the heavy vehicle registration fee), set at about 25 cents per litre and the "road component" of the excise which is about 40 cents per litre. In part the "rebate" is intended to encourage the take up of newer, cleaner diesel engines.
The balance of the excise -- about 10 cents -- is for general revenue purposes. Economists might term it paying for the externalities of fuel use.

I don't think it is clear cut, rail provides its own roads, but are tracks subsidised?, To what extent are road taxes spent on roads and how much extra tax payer money goes into roads. Fuel subsidies are a very muddy pond. Higher not lower Diesel prices should encourage a shift to ever more efficient diesel engines, yet lower diesel prices encouraged the shift from petrol heavy haulage truck to diesel power plants originally, why do we continue to subsidise heavy haulage fuel. Most of this is rhetorical, there really isn't an answer other than politics plays a big part.

**Chris Parks** · 31st August 2015, 03:34 PM

The price of diesel went up when subsidies were introduced, I rest my case.

**ian** · 31st August 2015, 07:32 PM

Originally Posted by johnc

I don't think it is clear cut, rail provides its own roads, but are tracks subsidised?,

brief answer is yes, rail tracks are subsidised.

Most interstate track in Australia is owned or controlled by the Australian Rail Track Corporation -- a Federal Government body funded in part by tax payers.

"in 2014–15 over 78 per cent of all [Federal] infrastructure expenditure is to be spent on roads. Rail receives approximately 13 per cent." source: http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/BudgetReview201415/Infrastructure

13 % of about $5.8B is around $750M.

The track user charge paid by rail operators is, according to the National Transport Commission, competitively neutral with heavy haulage's road user charge which is collected through the fuel excise system.

Originally Posted by johnc

To what extent are road taxes spent on roads

this is as good an into as any
http://www.news.com.au/finance/money/under-the-pump-where-your-petrol-taxes-are-really-going/story-fnagkbpv-1226298533026
summary
Drivers see only nine of 40 cents-per-litre spent on roads (more typically, over time the spend on roads has been around 50% of the fuel excise revenue)

Originally Posted by johnc

and how much extra tax payer money goes into roads.

none

Originally Posted by johnc

why do we continue to subsidise heavy haulage fuel.

I argue we don't.
the "rebate" is supposed to return the difference between the full fuel excise and that proportion of the excise "deemed" to represent a road user charge similar to the track user charge paid by rail operators.

Originally Posted by johnc

Most of this is rhetorical, there really isn't an answer other than politics plays a big part.

**Chris Parks** · 31st August 2015, 08:40 PM

With all the talk of SA and its move away from coal we have this http://www.smh.com.au/it-pro/busines...23-gj5ktn.html

Imagine a farm dam covered in one of these, the evaporation would be cut down and you get solar power as well.

**Big Shed** · 31st August 2015, 09:19 PM

They may have to find a way to keep the birds off though, water birds are messiest poopers there are.

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