hey @USSC i can't see dr robson on twitter. can you please pass this on?
clearly a lot of work has gone into your report, and i don't mean to denigrate it, but there are some big issues that have been glossed over, and some errors, to the report's detriment.
to name a few…
clearly a lot of work has gone into your report, and i don't mean to denigrate it, but there are some big issues that have been glossed over, and some errors, to the report's detriment.
to name a few…
1. US shale gas is found in different geology from australian coal seam gas. the costs of extraction are significantly different, and US gas is often accompanied by (ie. a by-product of) much more valuable oil — we cannot expect our gas to cost the same as US gas.
2. the US electricity market is generally much more tightly regulated than australia's. a side effect of our (botched?) privatisations is that our cost stack has multiple layers with profit margins and costs of capital in excess of those in the US.
3. our gas prices weren't a hot button issue until we linked our market to international markets — "linking" is an understatement: our gas sector is *dominated* by international demand.
aemo.com.au/-/media/Files/…
aemo.com.au/-/media/Files/…
4. we do not have a shortage of gas in australia — only a shortage of cheap gas. our gas companies invested heavily to take advantage of international markets. our regulators failed to protect industry from the price rises. (they were warned.)
5. the RET has been a highly effective environmental policy, currently abating ~30MtCO₂ pa. (it's hard to say whether it has been costly — i'm not aware of any rigorous attempt to estimate the cost. let me know if you come across any.)
6. it is wrong to say variable renewables are unpredictable. i've seen analysis of an extended period of NEM data that found AEMO's renewable generation predictions were more accurate than their demand predictions.
7. i am not aware of any analysis (only uninformed opinion) that makes the case that we have insufficient storage capacity — AEMO's ISP, the most rigorous grid study every undertaken in australia, has only modest storage growth rates through the next decade, ending in ~48% RE.
8. there have not been rapid technological improvements in coal-fired power generation. commercial implementation of "HELE" technology dates from 1949. although we have four such plants, it's extremely unlikely any more will be built in australia — or the US.
9. there is no wholesale market per se for LGCs, but rather a number of agents who make markets for the 12% of LGCs that are traded. the vast majority of LGCs are contracted, at prices far below the "spot" you quote — in most cases new projects receive an effective price of $0.
10. there's an implication that removing the various states' moratoria on unconventional gas extraction will result in lower prices.
hard to square this claim with the fact that international markets set our gas prices.
hard to square this claim with the fact that international markets set our gas prices.
that's a start… i see the report is the first in a series. i hope that subsequent reports will address (rectify?) these issues. happy to discuss.
