By David French – journalist on the Queensland Times (a greedy newspaper)
RATHER than embracing change, the owner-custodians of Queensland’s power industry have treated it as a cash cow. They have milked the assets for cash, failing to invest in generation, and over-investing in distribution. Those lurks ended, now they are going to hive off the poles and the wires.
At the same time the overall industry has been the domain of engineers and unions, none which (generally and sadly) is particularly well versed in understanding the characteristics of markets.
Let me help all participants with a few facts:
If you increase power bills then people will look for alternatives. Initially they switch off appliances; eventually they move off the grid altogether. Such behaviour is completely predictable.
Forget the (old) 44 cent solar rebate argument. In droves, people are moving away from traditional forms of power generation – the industry has a revenue problem.
Solar stacks up – the estimated life-time return on the solar installation at Suncorp House is 18 per cent. That is without any feed-in tariff and without the Solar Rebate the return would still be around 10 per cent (four times the RBA cash rate!). My much smaller home system is running at 11.6 per cent (8.1 per cent without the rebate).
Coal fired power is dear. Coal fired power stations are not nimble. They are built for peak load, the expense of which is not properly allocated. Note also that in recent years, Stanwell has made most of its profit from selling coal, not power!
The industry needs to change. Nothing is clearer.
As CEO of Ergon, I’d install solar cells on every new house. My teams would service the solar/battery units. I’d sell the poles and wires, and provide finance for households to get off-grid.
Running Stanwell, I’d close two units, install another gas turbine and taking advantage of CQ’s huge exposure to sunlight, I’d install the mother of all solar arrays.
As Minister for Energy, I’d open the floodgates, so that in summer Queensland could take energy from the south, and in winter our sunshine would be powering Pitt and Collins Streets.
The engineers and unions will say I don’t understand and the minister will just ignore me. But I say to them, you cannot win this. While you are wasting time on preserving the status quo, you are missing out on sustainable, efficient and job-creating opportunities.