While We’re On The Aussies……. More Fun Math!!! Fact Checking Tony Abbott

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From the Conversation, again……

Tony Abbott has said he will scrap the carbon “tax”, leading to a fall in electricity prices.

In his budget reply speech he stated:

We will abolish the carbon tax – because that’s the quickest way to reduce power prices and take the pressure off cost of living and job security.

But will removing the carbon price really lower electricity prices, and if so, by how much?  A reasonable answer would be by around 5%, with an upper boundary of about 10%.

In Victoria, the state with the highest emissions intensity, carbon costs add 2.2 cents per kilowatt hour to electricity costs. Based on typical Victorian consumption of 5000 kilowatt hours per year per year, removing the the carbon costs should equate to a reduction of roughly $110 per year.

Now, this is interesting.  I don’t live in Australia so there are things I don’t know about this.  But, there are things I do know just by reading the last paragraph.  Victoria?  Victoria isn’t Australia.  If 2.2 cents is 5%, then the Aussies are paying about 44 cents a kWh.  (Their dollar and the US dollar are very close in value.)  Seems a tad high to me.  I would also say that 5000 kWh per year seems awful low to me.  But, that’s probably why they didn’t mention the average rate. 

The Australian Energy Market Commission issued a report in March analysing trends in electricity prices and their components. One component is wholesale costs, which increased 14% over 2011-2012 to 2012-2013, the period in which the carbon price was introduced.

However wholesale costs only account for around 37% of retail electricity prices.

Other major components of retail prices are transmission costs, distribution costs (“poles and wires”), and retail costs (which include costs like the Renewable Energy Target).

Over the same period transmission costs went up 27%, distribution by 11% and retail costs by 17%. These components are independent of the carbon price, and account for the majority of hikes in retail electricity prices.

Uhmm….. no, they are not independent of the carbon price.  Because they instituted a cost on carbon emissions, this caused the utilities and providers to seek alternative sources of energy.  Because those alternative sources are not located exactly where the coal generation plants are, there must be an increase cost in transmission and distribution. They have to run new poles and wires to get to the new source……… caused by the carbon price. 

Then the Conversation proceeds with some insipidly stupid rationalization……

It’s worth remembering too that even without the carbon price, electricity prices are predicted to rise. Climate Change Authority research suggests that without the carbon price, the rise would with be slightly smaller, with retail electricity prices just 6% lower.

Oh, because the price of electric is suppose to rise, then one shouldn’t try to contain such costs.  Makes sense to me. 

All the while Australia exports coal like no other.  It’s a good thing there are no poor people in Australia.  This would seem evil to me if there were. 

I’d go to antagonize them about this, but, they’d prolly just close the comments. 

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58 Responses to While We’re On The Aussies……. More Fun Math!!! Fact Checking Tony Abbott

  1. Me says:

    ENRON, somehow, fits in here.

  2. DirkH says:

    If I learned anything about Australia, it’s that The Conversation is their local Khmer Rouge headquarters.

    • suyts says:

      They are so left they almost wrap around. They are supposed academics.

    • Bruce says:

      They do allow token opposition. Sinclair Davidson gets asked, here’s one from couple days ago. Sinc is an economic Austrian and a conservative libertarian. He also reads David Weber, which is a very fine thing indeed!

      One must have a token righty or two when you have so many universities and the Federal government sloshing so much dosh into that worthy outlet. Why, someone might otherwise notice they are to the left of Lenin and cut their budget! I’ll be quite interested when next years Federal Budget comes along, to see what is left in the pot for this pack of idiots (Sinc excepted). The new government will have a mandate to cut the budget hard, and The Conversation is not one of their loudest supporters for some reason I as a poor ignorant Neanderthal righty obviously could not understand.

      • suyts says:

        They all must have their tokens. I haven’t commented over there for a bit, and I was feeling a bit spry for an exercise. When I saw Cook’s article I thought I hit a bonanza! Very disappointed that they’ve closed the comments so soon. 😦

  3. Bruce of Newcastle says:

    The thing you want James is the 20% Renewable Energy Target, or RET, which was passed with bipartisan support in 2009 a month before Climategate broke, when Malcolm Turnbull, ex Goldman Sachs banker and carbon tax supporter, was leader of the opposition. He was turfed out by his party not long after and Tony Abbott became opposition leader.

    The carbon tax has added a fair chunk to power bills, but the ‘poles and wires’ thing is related entirely (in my opinion) to the 20% RET. Especially roof top solar, which was so heavily subsidised that some suburbs’ power infrastruct couldn’t cope on sunny days. Voltages were rising above the danger point where electrical appliances would actually burn out.

    If you lived here what you would have seen is a whole pile of enormous ugly galvanised transformers being put up on power poles all over the place. There are three of the things within 100m of my house alone. These were required to allow the power to run backwards fast enough to keep local voltages down. Fortunately the NSW state govt FIT’s have now been dropped from 60c/kWh to 8c/kWh, so take up is much reduced. But I still get cold calls from solar installers since the capital cost is still heavily subsidised by Canberra.

    Abbott is promising repeal of the carbon tax because he can. He is again threatening the nuclear option of a double dissolution today in the Australian newpaper to focus the Senate’s mind on the mandate he has. But unfortunately repealing the RET is not going to be politically possible for a while yet.

    As to charges I pay 24.4c/kWh for run of the mill power from Energy Australia (Oz dollar is down a lot in the last couple weeks due to Soros shorting it, now worth only 97USc). But we also get a facility charge and sales tax on top. Those rates would not fall when the carbon tax is repealed.

    A very long detailed article on this area for hard-case Australia watchers is here at Quadrant Online, which is the equal and opposite of The Conversation, except they get about $30,000 annual grant from the government where The Conversation gets soomething like $10 million/yr after you count the subsidy from the publicly funded universities.

    • Me says:

      Amperage does that

    • suyts says:

      So…. how much does the sales tax and facility charge add? And, how much does an average Aussie use? Is 5000 kWh reasonable for a yearly average? I come closer to 15,000.

      And, yes, the source is from an entirely different place….. so poles, wires and all the neat things which comes with it is mandatory.

      Yes, the RET is the culprit, but all of it is hand in hand.

      Is it a foregone conclusion that Abbott will be the next PM for Australia?

      • Bruce says:

        Polls have the ALP party still in the cellar. Quote from an ALP backbencher couple days ago:

        “Even if we gave them gold bars they would still say it was fool’s gold. They don’t believe us.”

        For those not into Oz politics (an acquired taste!) Abbott is leader of the opposition Liberal Party in coalition with the National Party. The coalition is called the “LNP” for short.

        Centrebet had LNP at $1.05 and the ALP at $9 a couple weeks ago.

      • Bruce says:

        Another fun quote:

        Labor’s budget this week is like the pyramid of an Egyptian pharaoh, says one of the party’s federal MPs: “Gillard is building the monuments for her legacy, and she’s sacrificing us slaves in the process…”

        Wouldn’t it be fun if Dem members of Congress would say things like this about Obama?

    • Bruce says:

      Detail from my latest bill:

      13.3c/kWh for off -eak hot water (which is being phased out – they don’t have the courage to force us paleo electric hot water people to install solar hot water yet, but all new houses must be solar)
      24.4c/kWh for general usage
      62.8c/day service charge
      10% GST on top of everything.

      Then over at AEMO wholesale price is about $55/MWh. It was about $33/MWh the day before the carbon tax came in. South Australia jumps all over the place because they have something like 20% coming from wind (the state government has been lefty for quite a while, and they have the best wind locations in the country…but not enough backup for calm days, where they have to buy power from us rapacious capitalist eastern states).

      You can get discounts of 8-13% if you agree to a 3yr contract and the cold callers ring up incessantly. I always say I’m waiting for the election (which I am), which shuts them up.

      I don’t know the average household power usage, my water bill has it (0.52kL/day) but not my power bill.

      • suyts says:

        Good heavens!!! Your bills are as convoluted as ours!!!

      • Bruce says:

        I should add that CFL’s were made mandatory quite a few years ago.

        Also there’s no combined heat and power supply, heating is electrical or combustion of some sort. I caught a bit of a show on one of the commercial channels last night where they were interviewing pensioners – they all were forced to turn down heating and rug up. One old guy said he has been wearing a blanket over his head. Welcome to the socialist utopia of Australia!

  4. PhilJourdan says:

    As an Economist, I love this line: It’s worth remembering too that even without the carbon price, electricity prices are predicted to rise

    Yes, and a fire will burn without throwing gas on it as well. But it sure will burn a lot better when you do add gas.

    • Bruce says:

      The $23/t carbon tax is due to rise by 5% on 1st July, which even the lefty Sydney Morning Herald says today is insane, since its supposed to be linked to the EU price in a couple of years time…of $4/t.

      On the other hand Michael Pascoe the business journo who wrote this may’ve gone off the reservation as SMH has already disappeared the article off the main page.

    • suyts says:

      Thanks Phil, that’s what was needed. When I see things like what you quoted I get a ‘deer in the headlights’ look. There is a talent for responding to abject stupidity. Sometimes, I’m simply at a loss. That’s where you guys come in!!!

  5. Scott says:

    5000 kWh/yr isn’t unreasonable, though I have no idea what the average is. I actually got my first full month’s electric bill in the mail today and I was at 14.06 kWhr/day last month (14.9 in the abbreviated first month), which averages to 5133 kWhr/yr. That’s for a house of 2600 sq ft, with 2500 sq ft of that finished.

    That said, didn’t run any AC and very few fans. I’m also a nut about turning lights off like crazy. I’m guessing our fridge is our number 1 energy use. The numbers will probably up a bit in the summer, but I’m still working on optimizing our stuff. Because it gets down to 60 F at night here even in the summer (high altitude), crafty setting up of fans can cool the house very well, leading to little/no AC use.

    In my previous place…~750 sq ft condo, our average use was in the range of maybe 3000 kWhr/yr. But that place was very small for a family of 3. Additionally, I’ve no idea what the average household is like now.

    Oh, and my electric rate is $0.081/kWhr. Sorry for your 3x higher rate Bruce.

    Just my numbers, though they don’t pertain to Australia at all, LOL.

    -Scott

    • Me says:

      The average is what James said per year and I am a Canuck so to speak, or for me that is what the average is!

      • suyts says:

        I’d have to go back an check ,but my experience in the utility business says 15,000 is frugal for most. I was sort of proud of it, until Scott came along!!!

        • Me says:

          You did say 15000 kwh per year?

        • Me says:

          Does Scott live in a warmer part of the climate?

        • suyts says:

          I usually run about 1200 kWh a month…. give or take. Scott lives in high altitudes….. I think. Up in the mountains. It’s different in high altitudes. It doesn’t get hot like on the plains. But, it does get cold. Gas or propane usually does that….. so the electric would be low, but the other fuels would be higher.

        • Me says:

          All I know is I live farther north and what you said was about My average. If I ever have to go to 5000 kwh per year, there is no way it can happen. I don’t even have an electric hotwater tank or electric heating so where does that go from there. 😉

        • Me says:

          It goes down for me, that’s where it goes!

        • Me says:

          And there are people worse off than me here. I don’t know how they are making ends meet.

        • philjourdan says:

          When I had a 1000 sqft house, and a very limited income, 15k was about right. Now that I am older, the kids are grown, and I am better well off, I am not frugal.

    • Bruce says:

      Eight cents…!

    • suyts says:

      Scott, your position is unique. With you heating would come into play. If you heat with gas or propane, then your electric wouldn’t be as much as others. I heat with gas, and for now, my electric is low. But, I live in Kansas. I know from June to Sept, in a normal year, my AC is going to run. On the months that I don’t cool, I usually avg about 500 kWh a month. Fridge…. dryer, microwave, TV. Summer is a different thing. This year, so far, has been surprisingly tolerable. Even cool for this time of year. We’ll see how July and August play out.

    • philjourdan says:

      Ok, here’s mine (Central VA). We have gas for hot water, so it may not be totally representative. 5 people in the house. 2700 sq ft. Over the past 12 months, we have used 27,000 kwh.

      Now we are not frugal so we are probably on the high side (a TV in every room, and usually more than 1 on, however they are the new ones that burn a lot less energy).

      5,000 seems awfully low.

  6. david says:

    Do not all costs for wind and solar have to include the cost of a dependable back up, utilised or not.

  7. kim2ooo says:

    House electric WITH security Light $54.00 month
    Second security light $25.00

    LP Gas winter $135.00
    Water $14.00

    God Bless Coal! 🙂

  8. Walter Royal says:

    I live in NH and the rates here are some of the highest in the US at $0.161/kw. I use 1400kw/m although at least 600kw of that is strictly for farm related expenses ie. water heaters/de-icers, pumping, incubators, brooders/heat lamps, lighting, electric fence, etc. We don’t have TV and try to do as much for ourselves as possible. Our plan is to replace our coal heat with pellets this year and buy a hammer mill and pelletizer over the next couple years so our heat will drop to about $400/season instead of $1500/season. We are still researching vertical axis as opposed to horizontal axis wind generation and are planning a hybrid battery/net metering storage system. Eventually we intend to be able to cut ties to the grid completely. I hate being under anyone’s control.

    • DirkH says:

      In that case you need to make sure that the inverters support an “island mode”. Normal solar inverters and normal wind turbine electronics will only feed into an existing grid; they will not build up a grid themselves. This is a safety feature.

      • Walter Royal says:

        Those are the 110v and 220v output units. Any of the 12-36v units are set up for a battery system and you need a step up xformer to feed the grid. We still haven’t decided which way to go but are leaning toward the 220v units and net metering as the initial primary power then build a battery bank and tap off the primary to charge the bank. With enough storage capacity we can use inverters to produce 220v ac to power the farm during outages or totally off grid as we choose. Thanks for the info and even though I already knew it putting it out there may help some other folks.

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