The cost of coal and gas has caused the Queensland electricity market to explode

Earlier this week, the Queensland Government was bragging about another big wind farm deal – this time for the 230MW Banana Range project near Gladstone – saying it had boosted the number of wind and solar projects committed in the state at over 50.

The problem is that, despite the state Labor government’s 50% renewable energy target for 2030, the rollout of wind and solar in the Far North has been far too slow.

Queensland has the lowest share of renewable energy than any other state on the main grid. It stands at just 20% over the past 12 months, compared to 25% in New South Wales, 35% in Victoria and nearly 65% ​​in South Australia. Tasmania is 100%.

And because of its reliance on coal and gas, Queensland is the country most exposed to the global spike in fossil fuel prices, and consumers are set to pay dearly for soaring wholesale electricity prices. which are directly related to the cost of coal and gas generation.

Australia’s energy market operator pointed to the ‘north side’ divide in power prices – the premium paid for electricity in New South Wales and Queensland due to their greater reliance coal and gas, and lower prices in southern states that benefit from more renewables.

NSW has a plan to address this issue and has a detailed transition program in place to ensure it has enough wind, solar and storage power to replace most, if not all, coal-fired power stations which are expected to close within the next decade. Queensland has a target (50% by 2030), but no plan.

Australia’s energy regulator has now reinforced the existence of this northside divide, pointing out in its new Quarterly Wholesale Market Review that prices in Queensland quadrupled in the March quarter to an average of 171 $/MWh.

The AER says they nearly doubled again to an average of $283/MWh between April 1 and May 15, and market data shows prices have risen further since then.

Why would that be? AER has the answer.

Black coal and gas generators have dominated market pricing, he says. The price set by coal producers jumped 50% from the same quarter a year ago to an average of $114/MWh, and the price set by gas producers increased 10 times to reach an average of $114/MWh. average of $370/MWh.

Source: AER. Please click to expand.

It’s a staggering number. Even hydroelectric generators became hungry for new market conditions and raised their asking price to a record average of $152/MWh.

Only wind and solar offered moderation, but the state doesn’t have enough of these generators, despite record wind and solar production in Q1, and they rarely get to price it (see chart above) .

The problems associated with soaring coal and gas prices in Queensland are compounded by regular blackouts. The Callide C coal generator that blew up last year is still being repaired – incredibly, replaced by a new coal unit – while, irony of ironies, the extraordinary weather is also taking its toll on the coal supply .

The AER says flooding in southern Queensland and northern New South Wales could contribute to higher priced bids. As an example, he notes how trucks had to transport coal from the Callide mine to the Millmerran power station to relieve a shortage of coal supply.

Additionally, Queensland became a net importer for the first time, as prices were lower south of the border.

The final irony? Queensland – despite the Greens’ extraordinary showing in downtown Brisbane, where they could have won up to three LNP and Labor seats – is home to most of the LNP’s climate deniers and tech troglodytes who have held the seat. Australia’s energy and climate. ransom policy for the last decade and more.

If businesses and households in Queensland want to know who to thank for soaring electricity bills and the appalling state of the electricity market, they won’t have to look far, as the LNP is always calling for new coal-fired generators and smears his face. in coal dust.

Which is not to say that state work should be excused. They’ve been too complacent and too slow to act, and too focused on press announcements and photos rather than getting things done.

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