Two of These States Are Not Like the Others

South Australia:

  • Like Tasmania, is the very definition of a dependent State. Its gross state product per capita is $58,000, which is $10,000 below the national average.
  • Like Tasmania, needs other states to prop up it finances via the GST distribution:

In its latest decision the Commonwealth Grants Commission (which determines the breakdown of the GST) has decided that Western Australia should get just 29.99 cents in the dollar of revenue.

This is the lowest share ever by any state by a long way.

New South Wales receives 97.7 cents in the dollar and Victoria just 89.3 cents. The rest of the states all receive more than the share they would receive on a pure per-capita basis. Queensland gets $1.12, South Australia $1.36, Tasmania $1.82.

The only reason that Weatherill and SA — partially — get away with their, again to stress, quite literal wind insanity, is that SA has a long extension cord into Victoria. And what exactly is that cord ‘plugged into’? Why, Victoria’s brown coal power stations in the Latrobe Valley.

On Christmas Day, according to the average price tables published by the Australian Energy Market Operator (AEMO), the Regional Reference Price (average spot price) for a megawatt hour of electricity in South Australia was $91.67.

The corresponding prices in New South Wales, Victoria and Queensland were $37.33, $20.38 and $36.20.

The average daily spot price for a megawatt hour of electricity in December 2015 was $62.19 in South Australia, $43.37 in New South Wales, $46.84 in Victoria and $42.08 in Queensland.

On December 17, the average spot price for a megawatt hour of electricity in South Australia was $259.59, while on December 26 it was only $5.06.

It is clear that South Australia has the most expensive and most variable power on the eastern states grid.

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Wholesale prices in the state have frequently been above $1000MWh since the state’s Northern coal-fired power station shut in May, and last Tuesday they approached the $14,000MWh National Electricity Market limit.

The extreme prices are putting intense cost pressures on South Australian industry at a time when car assembly is closing down and the state’s economy is the weakest on the mainland.

BHP said escalating electricity costs and “the security and reliability of power” were significant concerns for the sustainability of Olympic Dam.

BHP has reduced energy consumption at Olympic Dam “with minimal impact to production” to cope with the high prices, while Arrium has also taken steps to reduce its energy use.

“All over South Australia you’ve got industries sitting back thinking – if they’re energy intensive – to themselves ‘can I continue?’, and that’s jobs,” Mr Frencham [managing director of Dow Chemical in Australia] said.

The entire state was plunged into darkness on Wednesday afternoon after lightning strikes struck transmission lines, causing the Victorian interconnector to shut down.

Those that can’t join the dots here need brain transplants.

Most telling is this statement from South Australian Premier Jay Weatherill:

‘This was a catastrophic weather event… they have had cyclones in Queensland that have caused less damage than occurred here,’ Mr Weatherill said. 

That’s the point Jay (you nitwit) – you’ve just had a storm which doesn’t even come close to a real cyclone, yet your state’s entire power system has wet itself. Why is that?

That’s two states now that have completely destroyed their energy security, with Victoria just itching to join them:

Victoria’s dirtiest power station will shut down permanently as early as next April, in a blow to the Latrobe Valley that could cost up to 1000 jobs.

The owner of the Hazelwood plant, French energy giant Engie, is expected to hold a board meeting on October 19 or 20 to finalise a decision to close the aging brown coal-fired plant.

But Fairfax Media believes the company has already told the state government it is likely to close the plant, which supplies up to one-quarter of the state’s electricity, next year, potentially on April 1.

(For the full story on Tasmania’s energy scandal, go here).

All I can say is that you get the government you vote for. Good luck South Australians, Tasmanians* and Victorians. You’ll need it.

 


(Feature image courtesy of Renew Economy. NB: this image only shows power generated and doesn’t include the truckloads of dirty coal South Australia and Tasmania need to import from Victoria to keep the lights on).

(*) – Yes, I’m well aware that Tasmania currently has a Liberal State government, but the damage was well and truly done before it came to power in 2014 – following 16 years of Labor.

 

 

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4 thoughts on “Two of These States Are Not Like the Others”

  1. Of course one could drill down one more level to discover the answer to the question “Why is government interference, which causes economic distortion and the resulting mayhem, allowed to bludgeon the populous in these two states in particular?” (There is a Japanese technique widely used to determine root cause called ‘as why five times’).
    At that level one finds the fascist mentality of the greens and the environmentalism cult in the psyche of too many voters (not a majority; but just enough useful idiots to upset the apple cart at election time).

    Like

  2. A good post that should enlighten those fro whose eyes it removes the wool.
    However, to drill down to ROOT cause, one must consider the economic distortion caused by the Alice in Wonderland insanity of the RET and the the resultant REC’s, which cretins like Whetherill to retain power.

    Like

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