In Australia, the National Electricity Market is rapidly becoming dysfunctional, with power shortages, blackouts and soaring prices making headlines.
Private companies are refusing to invest in new fossil fuel generators to replace those that have closed. This “investment strike” is due partly to uncertainty about carbon pricing and partly to increasingly volatile spot prices received by generators.
If South Australia were a country, its citizens since July 1 would have been paying the highest residential electricity prices of any nation in the world, edging out Denmark.
Throughout most of Australia, the new financial year brought spiralling energy charges. For an average Canberra household without rooftop solar, the combined cost of electricity and gas over 2017–18 will rise by $580.
The public debate over the problems of electricity supply displays a curious disconnect. On the one hand, there is virtually universal agreement that the system is in crisis. After 25 years, the promised outcomes of reform in the electricity industry — cheaper and more reliable electricity, competitive markets and rational investment decisions — are further away than ever.
