Monday, 11 September 2017

LIddell power station

The conversation concerning Liddell power is extraordinary.

The NSW government sold the power station to AGL for essentially nothing. Another VERY important inducement was the pride of coal for the plant. It is lower than the marker price and will continue to be until it ends its operating life.

The Federal Government apparently wants AGL to continue Liddell five or ten years past its operating life.It is not offering thew company extra dosh for this. It is saying it is their civic duty to do so.
One would think if AGL was making easy money from Liddell then it would continue to use the station until it didn't. In other words it can only be closing the plant because the return is not there for its shareholders.
It is extraordinary that the Liberal and National parties are now the parties of command and control, of directing companies what to do.

If the Government wants to do something about power then it could introduce a price on carbon. After all coal is subsidised at present because it does not cover externailites at all. The carbon emissions and pollutants are not covered in its costs.
At worst it should adopt a clean energy target as recompensed by the  Finkel report. This would lead to investment in the industry. Investment that is not occurring at present.
The other great thing of this is you get rid of subsidies.
It would be stupid in the extreme to get rid of subsidies to renewables whilst coals lamentable externalities are not part of their costing structure. It would NOT be a level playing field.

Ben Oquist has an interesting article. John Quiggin does not believe in baseload either.

Indeed he writes about how-to-replace-the-national-electricity-market