Surprise: Australia closed a cheap coal generator and electricity got 85% more expensive
Last year one of our largest coal power plants suddenly closed, with only five months warning, catching the market by surprise and taking out 5% of our cheapest generation. (This kind of improbable anti-free-market feat shows just how screwed our national market is). The Australian Energy Regulator (AER) has looked at the effect the closure of Hazelwood had on electricity prices and concluded that closing cheap brown-coal plants and replacing them with black coal and gas will make electricity prices rise. This will come as no surprise to anyone who can count to 100. It was something every second engineer in the country predicted.
Dan Harrison at the ABC reports:
A year on from the closure of the 1600 megawatt-sized plant in the Latrobe Valley, the report from the Australian Energy Regulator found wholesale prices in Victoria were up 85 per cent on 2016.
Because electricity retailers use hedging for wholesale prices, the rise in retail prices is still feeding through. In the wash, the wholesale increase is expected to add 16% to retail prices this financial year compared to last year. After that, through some miracle, the AEMC expects prices to come back down from Exorbitant to Slightly Lower Than Exorbitant in the next two years thanks to an increase in renewables. (And pigs might fly, except there are too many windmills).
http://joannenova.com.au/2018/03/surprise-australia-closed-a-cheap-coal-generator-and-electricity-got-85-more-expensive/
