Back On The Road Again -- On The Road To Australia -- June 9, 2018

Screenshot of concern:

Some time ago we were following the "electric grid" in Australia pretty closely. I haven't thought about Australia in some time. I assume it's autumn and the "electric grid" should be doing quite well. But apparently I was wrong.

Before getting in that, I'm bringing myself up to date by clicking on the tag at the bottom of the blog, "Road to Australia."

To keep this in perspective, the average price of electricity in the US is about $100 / MWH.

In New South Wales, Australia, recently, the average price of electricity is about $300 / MWH and in the last few weeks has been spiking to $14,000 / MWH. NSW is the most populous state in Australia -- with two-thirds of the country's population; its capital is Sydney.

It is also the home of a number of coal-fired utility plants and aluminum smelters.

The link regarding the $14,000 / MWH spike comes from a site that has followed this closely. I was curious if perhaps the site was "crying wolf." A quick google search brought me to this article, from June 8, 2018, yesterday: Australia's largest aluminum (sic) smelter warns of "energy crisis" as power supply falters.

Tomago Aluminium, Australia's biggest smelter of the metal, warned on Friday that it faced curtailing operations for a third time this week because of power shortages across the national electricity market.

As of Friday afternoon, NSW plants reporting outages or reduced output included the gas-fired Tullawarra power station, Mt Piper coal-fired power plant - both owned by EnergyAustralia.

Also reporting coal-fired power units offline were Sunset Power's Vales Point and AGL's two Hunter Valley stations, Bayswater and Liddell.

The Australian Energy Market Operator (AEMO) issued an actual lack of reserve alert at 5.44 pm only to cancel it 23 minutes later after the market responded with extra supply - and demand eased back ahead of the long weekend.

There are at least three issues here:

• the role coal will (or won't) continue to play in a land where faux environmentalists are in control
• the mix of renewable energy vs fossil-fuel energy for generating electricity
• the lack of understanding, apparently, that renewable energy is not dispatchable; and, storage technology is yet a long way off (and/or very, very expensive in itself)

A fourth issue:

• the Australian grid issue sounds very much like the "oil issue" in Venezuela
• Venezuela sits on the world's largest reserve of oil (and the right kind of oil) and failed this past week to meet its contractual obligations due to central government policies
• Australia sits on some of the world's greatest coal reserves, and  cannot meet electricity demands due to central government policies

A fifth issue:

• if large utility plants fail (for whatever reason) and if aluminum smelters and steel plants fail (for whatever reason) they are unlikely to ever come back -- if they do come back, they won't come back for years -- others may disagree, but it's a huge gamble

Even worse news for the Australians, or at least two-thirds of Australians and their heavy industry  is the fact that politicians appear not ready to solve the problem, but rather are looking at whom to blame. The fact that politicians are looking to blame rather than solve, one suspects this problem will only get worse.

There would be nothing better that Canada would like to see than US aluminum and steel plants get shut down. Along with China, the two countries would have incredible pricing power, affecting everything from the US military to Boeing to American automobile manufacturers.

I don't know the statistics but my hunch is that it is not without good cause Presendent Trump has suggested that a robust steel and aluminum industry in the US is a national security issue.

Not mentioned is the quality and/or specifications of the required steel and aluminum.

In the short term, the viability of the US steel and aluminum industry is at risk if unfair trade practices continue. The big question, of course: if we want "free" trade, why are their any tariffs at all among the G7 countries, China, India, Australia, and so on?

In the long term, even if President Trump is able to save the US steel and aluminum industry by creating a level (or a more level) playing field, if the US takes the Road to Australia with renewable energy, it may not matter at all.

Joke of the day:

Some in Australia want to "fix" the "dispatchable" problem of renewable energy with more non-dispatchable renewable energy:

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A Reminder And Another Inconvenient Truth 

Today (20th century) it is completely impossible, even for a nuclear-powered icebreaker, to circumnavigate Greenland, for the seas surrounding the far north are frozen solid all year around.

However, there is direct evidence that conditions in the early fifteenth century were markedly different from those existing today, suggesting that Greenland could have been circumnavigated by the Vikings. -- 1421: The Year China Discovered America, Gavin Menzies, 2002, pp. 349 - 350.