Recent weeks have shown an electricity market that is drowning in its own desire for profits. To make sure the profits soar, the free market is letting we, the people, freeze.
No doubt some voters out there will be energetically praising the success of this free market model and how successful it's been, despite residents in NSW being asked to turn off electrical appliances in recent weeks and power bills expected to rise by more than 10 per cent in coming months.
People will have views about whether electricity networks and generators should or should not be in public hands. Without entering that debate, I hope that we could all agree that a government can really only instruct a publicly-owned entity on what to do and how to do it, while a government has extremely limited power to instruct a private company on what to do and how to do it.
And let's not ignore that whether an electricity asset is owned publicly or privately, in either case it is driven toward a profit. But the big difference is that a government elected by the people is more likely to take action following public pressure and outrage at limited power supply, foregoing some profits for the sake of self-preservation.
A reliable electricity supply starts with the size and skills of the workforce, it extends through to the maintenance and reliability of the machinery, and it covers times when the inputs (e.g. coal) may be more expensive than the returns. For a company driven entirely by profit the main game is to shrink the workforce to its minimum size, limit spending on equipment and maintenance, and never - I repeat, never - run the business when it's losing money.
In recent weeks we have seen electricity supply limited by scheduled maintenance of some generators, some breakdowns of generators that have been poorly maintained and coal prices being at all-time highs on the global market. Imagine how cheap our power could be if coal dug out of our state was reserved for our use first. Ditto the gas!
It seems to me that our electricity supply and network is a bit of a basket-case at the moment. The recent shock to supply requires some serious thinking about where we are heading. The trouble is, Humpty Dumpty has fallen off the wall and putting it back together, partly privatised and partly publicly-owned, will require us all to consider the worthiness of a free market approach where profits are far more important than people.
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