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Privatisation

The Banality of Evil

December 19, 2018 by James J. Morrison W.G. Dupree Leave a Comment

When we contemplate great evil, who comes to mind? Genghis Khan, Vlad the Impaler, Adolf Hitler, Joseph Stalin, Pol Pot, Alexander the Great, Attila the Hun, Idi Amin, Kim Il Sung, Josef Mengele, Saddam Hussein, Emperor Nero and so on? Too easy. The reasons are apparent, the history unrefuted and the weight of affirming opinions near universal.

We all like to think of evil as insidious, intentional, cruel, focused and malodorous even. Isn’t “evil” patently recognisable by its social maladjustment? That is the comfortable illusion of how “good folk” describe evil to distinguish ourselves from it. So it may be surprising to hear that according to psychologists nobody thinks of themselves as evil. We self-justify actions and beliefs. Folks may hold their irrationality within their mindset, as they persist with the delusion of being the good guys.

Hitler, for example, grew up in a time where he experienced the open expression of anti-Semitism. He didn’t create anti-semitism, it was his honest belief, that the Jews were responsible for the economic hard times of other Germans in the post-war years. Seems almost banal, doesn’t it?

The evils of indecision
The evils of indecision

Chase Replogle writes “Arendt coined the phrase, the ‘banality of evil.’ You can define banal as, ‘so lacking in originality as to be obvious and boring.’ What Arendt observed was that evil feeds not just on extremism, but just as frequently on our banality. Sin works its way deepest into the most boring and apathetic lives.”

We often don’t recognise evil amidst banality as it is human nature to separate “evil” from our apathy, ignorance, “benign neglect”, “thoughtless bureaucracy”, or our an innate desire to please our perceived “superiors”. Aren’t we all just inclined to follow orders? Resistance is hard, besides “who has the time to protest”? Perhaps you vote for the good guys (however or whomever you decide are the “good guys“), and in that single choice, you make once every three years, some may consider their duty complete. “That’s a democracy“, you cry. As though to comfort ourselves we say, “I’ve done the right thing; I’m not evil or fascist!”

Last century’s Version of Fascism

But then who is fascist? Is it what it was or what it will be? How often do we accuse the comparative justification of calling the alt-right “fascist” as being too radical? “Nobody is exterminating minorities in gas chambers” one may say defensively. But recall that Hitler took seven years to bring Germany to war. When was it a step too far?

  1. When he was promoted to Chancellor on a minority vote in a democracy?
  2. When he consolidated the Nazi Party’s control of Germany and secretly rebuilt its army from 1933 to 1935?
  3. When he only talked for years about the possibility of expelling Jews and removing their civil rights?
  4. When he was objectifying women as subservient for reproductive purposes with no place in key influence roles?
  5. When he disengaged from the Treaty of Versailles in 1936 and war-tested his military in the Spanish Civil War?
  6. When he shifted non-german foreigners and Jews into gulags or race specific ghettos?

A thousand banal little steps were undertaken in the decade after the Nazi Party grew from 12 seats in the Reichstag to 107 seats in 1930. By the 1940s his troops were frog-marching across Europe and throwing people into gas chambers. When would you have stopped him or protested or objected in that decade? Neither current parties of the Australian nor American government have been in power as long as Hitler before the war (Jan 1933 to Sep 1939).

When I raised a draft version of the above paragraphs in social media, I was warned, “I think comparison with the holocaust needs to used carefully. The Germans did not just “go along” with the Nazi’s they fought against them until a police state was imposed upon them – while most of the political class stood by till it was too late.” This statement, although, was not entirely valid, as the elite of German society did embrace Hitler enthusiastically.  While it is true that some “good” people resisted fascism, as they do today, many others, including Jews didn’t realise the consequences.  Irrespective of resistance or because of obliviousness the Nazis still marched across Europe, so perhaps it is a moot point. Contemporaneously the problem is, as always, identifying how fascism has evolved.  This awareness is painful for many, as they only want to recognise it in the form it took 80 years ago.

This Century’s version?

Despite refutations of such positions, Perhaps because that was before your lifetime and people are so more “woke” now, it is all very different. So let’s explore into what it may have evolved. Have your responses evolved?

  1. Did you react when Donald Trump seized power via the electoral college on the votes of a minority?
  2. Did you respond when Trump began to refocus on the military?
  3. How about when he spoke of expelling Mexicans and Muslims?
  4. Did his objectifying of women whom he grabbed by the pussy upset you?
  5. Did launching air strikes in Syria or breaking established treaties caused you concern? Paris climate accord, Iran Deal, TPP, or NAFTA?
  6. Did locking children in Gulags and separating many permanently from their parents, upset you?

Australian wannabe

OK, so perhaps America has dysfunctional parallels, but we in Australia are markedly different some may claim.

Our politicians are more subtle and more sophisticatedly communicators than Trump. Still, what were your responses in these circumstances?

  1. When 41.8% of all voters voted for the coalition in 2016, did you defend and justify the preferences system for its selection of what the majority wanted?
  2. When Abbott started spending billions on faulty American aircraft, late running Submarines and involved us in America’s pointless Syrian war, did our propensity for violence concern you?
  3. When the social dialogue about banning Muslims entered the political fear mongering, did you speak in defence of the vast majority of adherents to a peaceful religious code?
  4. When misogyny became a familiar and recognisable feature of legislation and leadership, did you say this went too far and defended women?
  5. When Indigenous treaties were scrapped, and political impetus arose that sought to have us withdraw from the Paris Climate Agreement were we at all surprised?  Did Morrison’s undermining of Refugee Convention obligations, all while adding to our refugee push-factor in bombing raids in Syria, cause alarm?
  6.  When we against any decent moral code not only locked innocent adults and children in gulags for the “crime” of being foreign and desperate but then began actively resisting efforts to provide medical assistance to children, did any sparrows die?

Policies for the people?

Equality in Australia: How we treat anyone without wealth.
Equality in Australia: How we treat anyone without wealth.

On such subjects, the coalition argues that we need secure border protection for an Island like Australia with minimal 150 km of sea between us at the tip of Queensland and Papua New Guinea to fight off refugees. Even though the majority of refugees fly in and by-pass our secretive “on water matters” border protection. There are many absurdly opposing arguments, such as desperately trying to entwine refugee policy with the war on terror.  Money, alternatively, is unavailable for the likes of education, health, social and legal justice, wage equality, mediocre wage growth and affordable housing, utilities food or justice. This absurdity of fearmongering about refugee crime suggests we need be strong and prepared for an invasion of terrorism in our population but simultaneously drives policy to make our community uneducated, poor, unhealthy, un-housed, oppressed and socially divided.

So just because we can see the correlation between what we thought was the progress towards evil and contemporary examples of the same, does it mean we should rethink real “evil”? I mean, we all accept that these things happen in society. Unfortunate, perhaps, but “evil”. Let’s try to compromise surely. “We are doing this for your security and to save you from the threat of terrorism,” says our politicians. “You will hardly notice it”, they say. Moreover, that last part is right. Like the gradually heated frog in the pot you don’t mainly notice it, and by the time the pot boils, it is way too late.

What we don’t discuss over dinner

The unheeded dark side
The unheeded dark side

“Isn’t that politics”? “I’m not political”. “I disengage from that stuff”. What was it Martin Luthor King said? “All that needs to happen for evil to prevail is that good men do nothing.” Do we by our silence, allow all of that to happen? Perhaps we are too busy to notice the correlations, too compromised by our selfish preoccupations, perhaps we don’t care. However, surely that isn’t bad. Surely that isn’t “evil”.

Amidst the same social media post commentary I previously referenced one gentleman wrote “most people aren’t evil just caught up in their own lives… “ and in this contemporary society this is, unfortunately, both accurate and a misconception.

Distractive Accuracy

Productivity and wages unlinked
Productivity and wages unlinked

“Accurate” because of our history of

  • deregulation of industrial relations has meant more extended unofficial work hours and strangled wage growth,
  • financial deregulation, negative gearing, foreign investment and Capital Gains Concessions has blown out mortgage costs
  • Privatisation and deregulation of Education has made higher education expenses and debt-ridden
  • the privatisation of energy provision, scheduled generation markets and resistance to renewables have resulted in larger utility bills increasing household debt.
It's not like there isn't plenty of issues to raise, provided we can raise ourselves
It’s not like there isn’t plenty of issues to raise, provided we can raise ourselves

Being “caught up in our own lives” is true because of more extended hours with reduced skill sets for less pay and bigger bills. These are the results of deliberate bi-partisan political policy choices. We should never forget that policies designed to redistribute wealth upwards, increase inequality, engage in a civil war on society using the tools of racism and attacks on a range of marginalised groups, have a deliberate purpose.

Misperceived evils

A “misperception” because as an act of self-protection of ego, we protest that we are not evil, just a little compromised, more compliant, obedient or scared of being socially ostracised, perhaps?” As I said before, evil is integral to life’s banality; it is everyday ordinary barely conscious choices we make. It exists in the tiny, tired, “I don’t have the time“, “it’s not that bad“, “there are worse situations” excuses we tell ourselves to support the choices we make. Evil is not in the individual decision but the cumulative. It takes thousands of bad collective small choices made over years, that lead to the exclamation of “how the Fu€ did we get here?” as we watch border patrol march down our streets, while our “authorities” detain and abuse our children and bash our disabled neighbours.

Worry not, you’re safe!

But fret not, if you never raised a voice in protest, then they are unlikely to arrest or hamper you because you played it safe with your daily banality. You remained silenced by indecision and compromise; you respected authority and the status quo; you defended the need for thoughtless bureaucracy and realised it was too much work to improve your knowledge of history and politics. Besides, our administration is acutely aware from their study of your metadata, your phone messages, your facebook posts, and even your TV set-top box that you’re still compliant, malleable, cooperative, collaborators but never, really, truly, magnanimously, unambiguously … “evil”?

 

Filed Under: Politicians, Privatisation, Voting

Scheduled Load Market

August 30, 2018 by Brian Newman Leave a Comment

Executive Summary

This National Electricity Market (NEM) is being supplied with an increasing amount of intermittent power. The current market structure was implemented in the 1990s and was based upon the market being supplied by scheduled generators, typically in the form of large coal-fired power stations. Since that time there have been two key developments, the rapid fall in the cost of intermittent generation in the form of wind turbines and solar PV as well as an implied desire by society to reduce anthropogenic greenhouse gas emissions. This has resulted in an increase in the amount of intermittent generation supplying the NEM. Since the NEM was designed on the assumption that the generators would be scheduled generators, the introduction of an ever-increasing amount of intermittent generation has started to stretch the capability of the NEM to absorb more intermittent generation.

The solution outlined in this paper is to establish another market operated by AEMO in parallel to the scheduled generation market that would be a scheduled load market. The scheduled load market is a market that is designed to operate with intermittent generation. The key operational difference between the existing scheduled generation market and the proposed scheduled load market is that in scheduled generation market the generation output follows the load while in a scheduled load market the amount of power consumed by the loads follows the amount of power being generated by the intermittent generators.

The technology to support a scheduled load market is now relatively mature, with new developments in communications technology (5G M2M) lowering the cost of introducing a scheduled load market.

A key advantage of a scheduled load market is that it gives electricity consumers the option of purchasing electricity at a lower price than the standard scheduled generation type of power that they currently purchase. Other solutions to the issue of intermittent generation can require consumers to pay more for the electricity that they consume.

Power supplied from a scheduled load market can be subsequently used by energy storage facilities to supply the scheduled generation market. Power from such facilities should significantly improve the stability and reliability of supply for the scheduled generation market even when there is substantial penetration of intermittent generation in the NEM supply mix.

The proposed scheduled load market should not be confused with the ability that some large loads currently have to bid their load into the scheduled generation market. These bids are into the scheduled generation market that was established for scheduled generation. Load bids into the scheduled generation market are very rare as there is rarely a situation where an economic benefit can be derived from such a bid. These bids are not related to intermittent generation. The proposed scheduled load market is only supplied by intermittent or non-scheduled generation.

Overview

A traditional electricity supply system that has a large amount of intermittent generation requires either energy storage (pumped hydro, batteries) or fast responding generation on standby (i.e. gas turbines) to cover the periods when the intermittent generation is not producing power. Either way, the solution is relatively expensive in terms of cost per kWh, which adds a considerable amount of cost to the basic intermittent generation cost. An alternative to the energy storage or quick response solutions is the inclusion of a scheduled load market in the National Electricity Market. (Operated by Australian Energy Market Operator but separate from the existing scheduled generation market).

A scheduled load market uses advanced technology combined with an efficient market to deliver a low-cost solution that incorporates intermittent generation into the electricity supply system.

Background

Intermittent generation creates issues with system stability as the level of intermittent generation rises relative to the level of scheduled generation in an electricity market such as the Australian National Electricity Market (NEM) that has historically been supplied with scheduled generation. Scheduled generation is the generation that can be controlled by scheduling its output to a specified level as well as a ramp rate up or down as required to meet the system load demand. Examples of scheduled generation are steam turbine generators and hydroelectric generators. Examples of intermittent generation are wind turbines and solar photo voltaic generation.

In the current scheduled generation market, the output of scheduled generation is continuously adjusted (on a five-minute basis) to match both the load demand and the variation in output from intermittent generation. The Australian Energy Market Operator (AEMO) is the NEM operator. AEMO has mitigated some of the control issue related to intermittent generation by classifying large intermittent generators as semi-scheduled generators. Semi-scheduled generators are required to supply AEMO with short-term generation forecasts. To some extent, his helps AEMO control the scheduled generators to maintain the system in the balance between the energy generated and the energy consumed by the loads (system stability). However, this only results in a modest improvement to system stability and does not resolve the longer-term issue of reduced system stability and power availability associated with increasing levels of intermittent generation.

The NEM physical infrastructure consists of three primary components, these being the generators, the networks and the loads. Typical loads are industrial, commercial and residential. In the current NEM, AEMO controls the output of the scheduled generators to match the demand of the loads and the variations introduced to the system by intermittent generation. Before the growth of an intermittent generation, AEMO only needed to match the output of the scheduled generators with the demand of the loads.

Summary of solution to the security and reliability issues due to intermittent generation

The existing electricity market was designed before the advent of intermittent generation as a source of electricity supply. It operates by having the generation output follow the load demand. Intermittent generation by its nature is not capable of following the load demand and so does not meet the requirements to be classified as scheduled generation.

To address the issue of system control as well as signal the real market value of intermittent generation, this paper proposes the addition of a scheduled load market to the NEM to operate in conjunction with existing scheduled generation market.

In simple terms, the difference between a scheduled generation market and a scheduled load market is that in a scheduled generation market the generation output follows the load, while in a scheduled load market, the load follows the available intermittent generation output. The details of a scheduled load market and how it could work in conjunction with the existing scheduled generation market are detailed in following sections.

A summary of the key consequences of introducing a scheduled load market are given below

  • Scheduled load market consumption follows the output of intermittent generation. Variation in the output of intermittent generation is reflected in the scheduled load market price.
  • The price that scheduled loads would pay for intermittent power is significantly less than the price of scheduled generation power. This reflects the difference in the market value of scheduled generation and intermittent generation.
  • Scheduled loads are not limited to conventional electricity consumers such as industrial, commercial and residential loads, but would also include loads associated with the scheduled generation that have a storage capability. Existing examples of scheduled loads are hot water tanks; pool filter pumps with electric car chargers and cold storage systems also being possible scheduled loads.
  • Since the initial scheduled load market demand is likely to be low relative to the existing installed intermittent generation capacity, the initial price for the energy component of scheduled load electricity is likely to be close to zero. The initial very low price of scheduled load market energy would stimulate the uptake of scheduled load and thus increase the amount of scheduled load in the NEM.

The characteristics of a Scheduled Load Market scheduled load

In a scheduled load market a scheduled load is a load that does not require electrical power on demand for the power to be useful for the consumer. An example of a load that could typically be a scheduled load is storage hot water heating, while an example of a load that would not be a scheduled load is house lighting. The storage hot water heating could either be in the form of electric-only hot water systems or as an electrical boost for solar hot water systems. The charging of electric cars is a load that could also be a scheduled load.

The electricity networks have operated ripple based controlled load control systems in Australia for almost sixty years. The ripple system remotely controls contactors on a consumer’s switchboard, switching the controlled loads on and off. This control load service has been primarily used for hot water loads and is frequently referred to being an Off-Peak service, which is misleading since it is more than a contactor that connects and disconnects a load. The network ripple based controlled loads service switches loads that are connected to a distribution centre transformer in a sequence to avoid overloading the distribution mains. An arrangement that had a similar effect would be required for a scheduled load market. (It may be possible to use the existing Transmission Node Identity (TNI) associated with each National Metering Identifier (NMI) to sequence loads to avoid overloads in the distribution system when operating a scheduled load market. If this does not allow for adequate sequencing intervals, then each NMI’s distribution mains identity would also be required).

Water heaters and electric cars are examples of scheduled market loads that can be either residential or commercial loads. Industrial loads could also be scheduled loads if the industrial process does not require power on demand.

Another possible type of scheduled market load is an energy storage type of load that could operate as a source of scheduled generation. Examples would be pumped hydroelectric or commercial battery facilities. Such facilities could purchase energy in the scheduled load market and sell energy as a scheduled generator into the scheduled generation market with the price differential financing the capital cost of the facility. This would effectively convert intermittent generation into scheduled generation.

Scheduled load market operation

A scheduled load market is similar in operation to the existing scheduled generation market with the differences between a scheduled generation and a scheduled load market identified below along with the issues intermittent generation creates in the operation of a scheduled generation market.

In Australia, AEMO is responsible for operating the scheduled generation market. AEMO does this by sending dispatch orders (via telecommunication systems) to scheduled generators based upon their merit order position (which is based upon their bid price) and transmission network constraints. The merit order for scheduled generators is primarily determined for every market time interval based upon the scheduled generator’s bids for each market time interval. A scheduled generator which is higher in the merit order may not receive a dispatch request from AEMO due to a transmission constraint, so the dispatch request is sent to the scheduled generator that is next in merit order that does not have a transmission constraint. Semi scheduled generators (intermittent) typically bid at zero $/MWh and so are usually the first in the merit order of dispatch with only transmission constraints limiting their output. The difference between the total load demand and the intermittent generator’s output is supplied by the scheduled generators.

Scheduled generators receive both generation level and ramp rate dispatch orders from AEMO. AEMO does this to balance as closely as possible the system load demand with the scheduled and intermittent generation supply. AEMO sends updates in ramp rates to the operating scheduled generators every 5 minutes. As the difference between the load demand and the intermittent generation output shrinks with increasing penetration of intermittent generation, it becomes progressively more difficult to use scheduled generation to meet the difference between the total load demand and the output of the intermittent generation. The factors, which cause this to happen, are the lumpiness of the minimum output levels of scheduled generators, the limits on the ramp rates of the scheduled generators and the possible rapid changes in the output of the intermittent generators. The normal changes in load demand can combine with changes in the output of intermittent generation to result in the required ramp rates for the scheduled generators to be increased to a level that is greater than what the scheduled generators are capable of meeting. The final issue with increased penetration of intermittent generation is that it cannot be relied upon to meet the needs of loads that require scheduled generation. Since the price of intermittent generation is currently the same as scheduled generation, there is presently a very small financial incentive to use intermittent generation to supply power to storage type loads (such a pumped hydro or batteries) which can be used as sources of scheduled generation.

The scheduled load market would be operated by AEMO. It would operate by AEMO sending dispatch orders to scheduled loads based upon their position in the order of merit with transmission constraints included in the dispatch process. This would use a similar (if not the same) communications system as dispatch orders to scheduled generators. A key difference between a scheduled generation market and a scheduled load market is that in a scheduled generation market the lowest bid price is first in the merit order with the sequential position of the other generators in the merit order based upon their bid price, while in the scheduled load market the highest bid price is first in merit order with the sequential position of the other scheduled loads in the merit order based upon their bid price.

In the current scheduled generator market, only large generators are required to be scheduled generators, and these generators are also required to have specified generation ramping capability that can be adjusted at 5-minute intervals by dispatch commands from AEMO. In a scheduled load market, there would be many small loads which would not have consumption ramping capability. However, large industrial type scheduled loads would be required to have five-minute update intervals as per the scheduled generators. The bidding in the scheduled load market would not be as dynamic as the bidding in the scheduled generation market as the position of a load in the merit order would also be dependent upon distribution factors. In reality, one would expect that most small scheduled load consumers would tend to set and forget their scheduled load bid price. Since there would be a large number of small scheduled loads, each scheduled load consumer would have to fit into the available merit order price slot closest to their bid price. (Very small price intervals increments would achieve this).

Another key difference between the scheduled generation market and the scheduled load market is that in the scheduled generation market a generator is expected to be able to meet dispatch requests from AEMO. In the scheduled load market, there would not be a requirement for small scheduled loads to meet dispatch requests. Large scheduled loads (typically industrial type scheduled loads) would be expected to meet dispatch requests as well as having specified load ramping rates.

The following chart shows how the current scheduled generation market operates on a hypothetical day.

current scheduled generation market in a hypothetical day
current scheduled generation market in a hypothetical day

In the above chart, the red line shows how the load demand and hence the total generation varies over the day with relatively low levels of intermittent generation. The green line shows the total of the wind and solar PV generation (i.e. intermittent generation) while the blue line shows only the wind generation during daylight hours. The difference between the red line and the green line is provided by scheduled generation.

If higher levels of intermittent generation are introduced into the scheduled load market, then the difference between the load demand and the intermittent generation can become problematic at the level of the intermittent generation which in energy generated terms is significantly less than 100% of the total energy generated.

This is illustrated in the following chart. Under the current market arrangements, there would be a period where the intermittent generation exceeded the load demand. This type of problem can be rectified by the output from the intermittent generators being curtailed. However, this results in increasing the cost per kWh of the energy generated by the intermittent generators. The ramp rates for the scheduled generators are very high in the scenario, and they may not be able to operate with high enough ramp rates to meet the requirements of the market loads. The stability of the network may be difficult to maintain with such rapid swings in the difference between the load demand and the intermittent generation output.

Higher renewables introduced into the scheduled load market
Higher renewables introduced into the scheduled load market

 

If a scheduled load market was introduced, then the following is an example of how the generation could meet the load demand over a typical day. The chart below shows a fairly extreme situation where the wind generated at night is exceeding the schedule generation market load demand, and the daytime intermittent generation is relatively low due to clouds and low wind generation during the particular day. The presence of a scheduled load market absorbs the large swings in an intermittent generation so that the scheduled generation does not have to be rapidly ramped up or down as shown by the dotted red line.

Some of the energy absorbed by the scheduled load market could be used in energy storage facilities such as pumped hydro or batteries which can then be used to supply the scheduled generation market with the price difference between the two markets funding the capital cost of the energy storage facilities.

High wind generation & Low Solar hypothetical generation example
High wind generation & Low Solar hypothetical generation example

The final key difference between the scheduled load market and the scheduled generation market is that the price for paid for energy consumed by the scheduled loads would be their bid price.  While in the scheduled generation market the bid price by the last generator dispatched in the merit order is paid to all scheduled generators which is then the wholesale price for the market interval.

The reasons for this type of pricing approach is that it gives certainty to load consumers as to the price that they pay for scheduled load power and that scheduled load is typically optional which is not the case for scheduled generation bids.

Scheduled GENERATION market
Scheduled GENERATION market

The differences between the market interval bidding prices for the two markets are shown below. Note that the price scales are different.

Scheduled LOAD market
Scheduled LOAD market

 

 

The intermittent generation not sold through the scheduled load market would be sold through the existing scheduled generation market at the scheduled generation price. AEMO would not target all of the intermittent generation for use in the scheduled load market; it would target a portion of the intermittent generation based upon the price in the scheduled generation market. It could be a simple linear inverse relationship or possibly a more complex relationship if that were found to be necessary. The key point is that when the price of electricity in the scheduled market was high, then AEMO would only target a small amount (and perhaps zero) of the output of intermittent generation for the scheduled load market. An example of such a control relationship is given below.

 

Let

P = Percentage of intermittent generation available for the scheduled generation market

S = Scheduled generation price ($/MWh)

 

  • P = 100 – S/500

This relationship would be valid up to the $500/MWh level. ($500/MWh used for example purposes). Above the $500/MWh, all of the intermittent generation would be available to the scheduled generation market.

The storage type scheduled loads would likely use the opportunity of high prices in the scheduled generation market to sell the stored energy that they had previously purchased at a much lower price through the scheduled load market.

A schedule load market does not currently exist. Establishing a small pilot of a schedule load market would be the best way to develop the larger market. It is likely that retailers would be used to sell the solution to customers in such a pilot. If retailers were reluctant to participate in such a trial, a possible alternative would be to approach aggregators who could then approach customers independently of retailers.

 

The following two charts demonstrate the difference between a scheduled generation market and a scheduled load market.

The two market model differences.
The two market model differences.

Elements of a scheduled load market

The current players in the Australian electricity market would have the following roles.

Consumer loads – Requests a scheduled load price from their retailer and have the required equipment installed in their switchboard to service an approved load.

Retailer – Submits scheduled load prices and sizes for each NMI to AEMO.

Networks – In addition to the TNI data they would also supply distribution mains data for each NMI to AEMO. A unique distribution mains identifier for each distribution mains phase may also be required.

AEMO – Determines the order of merit and schedule load price for each scheduled load. Operates the scheduled load market through dispatch signals and meter data from scheduled loads. Calculates each market interval price for intermittent generation energy sold through the scheduled load market.

Metering – Interval meters with remote communications and integrated contactors would be required for scheduled load market load circuits. The general supply metering could remain the same. However, the M2M communications solution used for the scheduled load service could also be used to send the general supply metering data back to the market participants.

Communication – A low cost, ubiquitous and secure M2M communications solution would be required for a scheduled load market to be implemented.

 

Consequences of introducing a scheduled load market

The introduction of a scheduled load market for an intermittent generation would be a gradual process with a trial being the preferred initial approach to eliminate any bugs before a full rollout. The initial scheduled load price would be very low (the energy component of the consumer’s scheduled load price would effectively be zero for consumers given the current large and rapidly growing supply of intermittent generation) which would spur the uptake of the scheduled load service. The scheduled load service would eventually replace the existing controlled load service currently operated by networks. Since the initial amount of energy sold through the scheduled load market is initially going to be small, the impact on the average price that intermittent generators would receive for the power that they generate would initially be small as well. However, as the market for scheduled load expanded, the average price that intermittent generators received for the energy that they generated would fall, potentially to a value significantly less than that received by scheduled generators. This difference in price would effectively indicate the difference in value between intermittent power and scheduled power. Since the cost of intermittent generation has fallen over time and is expected to continue to fall (in real terms) the long-term lower price for electricity generated via intermittent generation should not be a significant issue for intermittent generators.

The electricity consumer would benefit from the wholesale price in the scheduled generation market having a low soft ceiling due to the presence of a large amount of intermittent generation as well as the consumer having access to low cost scheduled load electrical energy.

—-//—-

 

Glossary

AEMO – Australian Energy Market Operator

Intermittent Generator (Non-scheduled generation) – A description of a generator whose output is not readily predictable, including, without limitation, solar generators, wave turbine generators, wind turbine generators and hydro-generators without any material storage capability

Scheduled Generation – Electrical generation that can be controlled to a specified output level and output ramp up/down. AEMO must be notified of the availability of each scheduled generator for each scheduled market trading interval. A scheduled generator may submit dispatch offers (i.e. bids) for each trading interval.

Scheduled Load – In the existing scheduled generation market a load that can be dispatched into the market. In a Scheduled Load Market, a scheduled load dispatch is directly linked to intermittent generation output.

Semi-scheduled generation – AEMO classifies a generator as being semi-scheduled if its output is intermittent and has a nameplate rating exceeding 30 MW.

Filed Under: Privatisation

457 to?

April 28, 2017 by James J. Morrison W.G. Dupree 1 Comment

“We are bringing the 457 visa class to an end”, announced Mr Turnbull after Easter, “…We will replace it with two new temporary skills visas.”  With a quick sleight of hand, Turnbull re-branded the much criticised 457 visa with two – as yet unnamed – programs to bring foreign workers to Australia.  Though new rules and security checks were mentioned, he ensured that he would guard us against the impending “threat of permanent citizenship” of intelligent and skilled foreigners whom our employers have sought out.   Rest assured, Turnbull has proclaimed he will keep us safe from having people of this calibre, stay in Australia.

Malcolm will be in search for a new visa number
Malcolm will be in search for a new visa number

As Australia returned to work after the Easter long weekend, Malcolm Turnbull reminded us we were a nation of immigrants, but we should not be overrun by too much more. With the Australian workforce apparently foremost on his mind, Turnbull told the nation (first via Facebook) that the 457-visa program was being scrapped for two new innovative temporary foreign worker schemes to tackle our unemployment issues. In restricting that program and although unnamed, he proposed two new visa programs with fewer job role options, new market tests, English language, skills and experience requirements.

Malcolm doesn't appear to like 457 changes?
Malcolm doesn’t appear to like 457 changes?

The first reminder that comes to the fore concerning these new reforms that “put Australian’s first”, is a reference to the similar policy  I’ve previously heard. Didn’t Julia Gillard propose something similar herself in 2013? Didn’t Malcolm Turnbull criticise her for striking at the “heart of the skilled migration system”?

457 in decline?

Leaving Turnbull’s change of perspective aside, the numbers of 457 workers in Australia have been a subject of much speculation and false rhetoric by politicians seeking to introduce alternative facts and in some cases, outright bigotry. 457 visa numbers have been following a pattern of decline in the last few years but a significant aspect of that in the annual cyclic pattern.

Regarding the 2016 decline of numbers in Australia in any quarter – providing you limit your scope – it looks significant. The first quarter of 2016 (March) there were about 177,390 people in the country working under 457 visas.

Annual patterns of 457 workers in Australia
Annual patterns of 457 workers in Australia

Since then it dropped slightly to 170,580 (June), up a little to 172,187 (Sept), and dropped significantly to 150,219 (Dec).  Now, while these last figures may create the illusion of a significant fall, you need to look at the seasonal pattern of numbers over the last few years. Stepping back and reviewing the last seven years, a pattern emerges for every year. (Rising sharply, slight fall, slight rising, sharp decline) The pattern – as graphed here – will show you that it is about to jump back up again, so there is a deception inherent in quoting the last quarter’s figures of any year as indicative of where 457 numbers are or will be. 457 visa data have a predictable annual cyclical pattern. Turnbull’s timing made before the Department of Immigration released the last quarter’s figures creates the short-term illusion in media reporting that the coalition is indeed clamping down on 457 workers.

Workers come and go. Totals expressed in net movements of visa entrants – over periods such as a year – hide the significant seasonal change in numbers in the country. So when it is stated that 33,340 of the 40,100 primary applicants lodged 457 visa requests in the first quarter of 2016 were successful and that this is a decrease from the same time last year, what is notably absent is how many 457 workers left. This is also dependent on which quarter you choose. So pointing out that – during the third quarter of 2012 under Gillard – that 35,452 foreign workers entered the country, ignores that only 14,665 came in the last quarter of 2009. The coalition cherry picking numbers from specific quarters to disparage Rudd/Gillard’s record – that in actuality had both the highest and lowest intake of 457 Visa workers – is perhaps a tad disingenuous.

Annual cycle aside, it is still true to say the average number of 457 workers in the country since the coalition took power has been larger than the number of government recorded job vacancies in Australia.  To keep it in context, the last 457 worker totals released by the Immigration department said there were 165.9K vacancies in Dec 2016. 457 workers had done their customary annual December quarter drop to 150K, down from 172K in the previous quarter. Unemployment at the time (Roy Morgan’s figures) was over seven times that amount at 1,186K or 9.2%. If you added Morgan’s December underemployment numbers to the unemployment, then you reach a number nearly 16 times the vacancy rate at 2,584K. I am not going to entertain the ABS figures because of their inherent inaccuracy.

So even if you threw out all the 457 visa holders in December representing less than 1% of the workforce and made all their jobs available, it would have little impact on the 2.5 million both under and unemployed. This is particularly the case, as the presumption is there are no available Australians in the market who have the skills necessary to fill these roles. This begs two questions.

  1. Why is it so?
  2. Is it so?

Why 457?

Introduced by John Howard in 1996, the 457 Visa program has been beset by concerns about fraud, corruption and need. Fraud, we will get back to, but the need for it is still a failure of policy. Howard claimed it was to enable employers to address labour shortages in the Australian market and yet after 20 years; we still need to address skill shortages? You’d have to wonder after 20 years, about an economy and a national policy framework that has so failed to raise the skill levels in Australians, that we still need 457 visa workers. How is that “in the national interest” as Mr Turnbull so frequently repeated? A medical degree takes 6yrs, engineering 5yrs and a commerce degree 3yrs.  So what has the government been doing for the last two decades?  Why have we been unable to educate and upskill our population?  Why is this foreign labour market even necessary? To answer that, we need to go back initially to Howard and ask how he began to prepare our children.

As a western nation which once boasted of free education for its population, the growing restriction of education to the people has had consequences for our labour market. Howard changed how education was funded by allocating considerable funding to private schools and undercutting public schools. Students drifted away from public schools to the better-funded private schools, where they could afford the luxury. The public education system retained a community of poorer demographics with less time or capacity for higher education and an increasing inequality of educational results. The social class division between the affluent and the underprivileged then began at school for children. Two decades later the Program for International Student Assessment (PISA) survey shows Australian children falling behind in education.  Segregated our schooling system by either academic or social class boundary have been largely to blame for our children’s poor performance. Our ranking for investment on the OECD league tables for education is 22 out of 37 1n the OECD.  Small expenditure is followed by weak results.

Whitlam onwards.

Leaving high school for TAFE or University has done little to revoke the class distinctions established by Howard’s redistribution of education funding. Whitlam abolished fees for TAFE and university students and provided support for apprenticeships through the National Apprenticeship Assistance Scheme (NAAS). Hawke reduced funding and re-established costs to students as well as changing labour market programs around apprenticeships and introduced traineeships as a significant response to rising youth unemployment. Trade apprenticeships flourished as the government focused on traineeships. Mr Keating started governments down the neo-liberal path of privatising the public sector.  The problem with privatising the public sector was that these were the main generators of apprenticeship training such as electricity utilities, telecommunications, defence industries, rail, roads, and Australian airlines.  Howard also continued to undermine the public sector which contributed to a reduction in skills training – via public sector apprenticeships. Howard quickly consolidated apprenticeships and traineeships under a single umbrella and wrested it away to unions and into the hands of employers. Skewing support for apprenticeships profoundly in the interests of employers was followed by a decline in training delivery, apprenticeship completions, pay and conditions.  None of which was aided by the further dismantling of the industrial relations system, through the introduction of enterprise bargaining.  While Rudd and Gillard dismantled Howard’s “work choices”, they still followed the traditions of the Hawke/Keating legacy by “make[ing] concessions to the big mining companies, reduc[ing] corporate tax, and restrict[ing] unions rights and push[ing] through spending cuts to maintain a budget surplus.” The decimation of manufacturing under Abbott destroyed yet another training base for trades and reduced the intake of apprentices.  The budget cuts of his administration also severely impacted apprenticeships.  Tracking the causes, consequences and level of damage to our employment economy have been made all the more complicated by Abbott’s savage dismantling of expert advisory panels as compiled by Sally McManus.

The combination of factors including the dismantling of education, expert advice, the industrial relations system and the public sector meant that a four-year apprenticeship in the building trade gets replaced by a shallow sixteen week CBT course as the bare minimum for that particular role.  The results were described as “a disaggregation of skill which is ‘modularised’, ‘flexible’ and ‘atomised’ … [that] will ultimately leave skills ‘fragmented’ at their core.”

Many apprenticeships as a means of training up in skills for increasing levels of youth unemployment have mostly vanished by comparison. For example, Federal funding for NSW Tafe reached it’s zenith in 2011 and after that decreased.  Deregulation of training provision meant funding to non-TAFE, and private providers increased by 20%. The consequence of this produced the rise of dodgy private providers of vocational education and also the unscrupulous practices by some private providers which have become a scandal in Australia.

No matter the skill training, your always schooled in Finance!
No matter the skill training, you’re always schooled in Finance!

Add too, what Abbott euphemistically referred to as “Fee Deregulation”. Attempts to rectify the class based education system via Gonski funding were scrapped, and the vocational training sector simply received new student loan systems, all of which has done little to encourage Australians to “buy” education. The result has been a drop-off in the teaching in Australia as students fall by the wayside, get ripped off or – even if they do complete their degrees – are faced with indexed debts that limit their employment capacities.  All this in a market of decreasing full-time jobs, low vacancies and huge competition from other under and unemployed members of the workforce. Skills shortages have been a function of deteriorating access to Education driven by political policy.

Is there a skills shortage?

The distribution of 457 visa workers
The distribution of 457 visa workers

It is, of course, true to say we do have skill shortages. The question as to what extent any occupation is genuinely suffering from a talent shortage – is problematic. Questions arise as to whether the request for that skill just represents an opportunity for an employer to take advantage of a compliant, cheap and de-unionised workforce. Most reports whether from Flinders University or the National Institute of Labour studies  have all rather reflected the opinion of the Flinders University report that “Despite the attention paid to skill shortages, the evidence used to evaluate their incidence and the causes and responses by firms remains thin.”

The problem predominately is that the labour market testing for skills shortages will still be conducted by employers – not by an independent panel.  Employer “testing” will do nothing to affect the corruption at the core of exploitation of 457 workers.

Turnbull has announced that 216 job roles that are not covered by the renamed 457 visa scheme. The problem is that Turnbull’s new visa jobs list would affect just 9 per cent of the current 457 visa holders. So mostly he has cut an already redundant list of skills requirements – at least a quarter of which have had no application for in the last year. Turnbull has not addressed the issue of employer rorts because the determination of a genuine skills shortage has been so easy to defraud. Underpaying 457 workers has been pervasive amongst dishonest businesses.

In the absence of a plan to rectify education, the public sector, independent labour market analysis, unemployment, jobs and growth Malcolm Turnbull’s reinvention of the 457 visa scheme does little to aid Australia out of the economic malaise. Without attention to this issue now,  we’ll be obsessing over skill shortages and “temporary” foreign workers in another twenty years.

Filed Under: Employment, Privatisation

Electricity costs

July 8, 2015 by James J. Morrison W.G. Dupree Leave a Comment

The struggle to deny Climate Change
The struggle to deny Climate Change

Remember women of Australia how Abbott’s reward to you as Minister for Women was to give you a $550 bonus reduction in your electricity prices so you could buy a top of the line iron to smooth your husband’s shirts!  Well, I hope you all remain climate sceptics and have not added to your household either air conditioning or solar panels. As you all “know” the earth is cooling not heating up so you might need that air-conditioner and neither you need that set of solar panels on your roof. Because with the cost of electricity plummeting and the earth cooling such things will be unnecessary in the Australian household. To encourage this behaviour, the electricity authorities have come up with a way to reward those of you who believed prices would plummet and climate would get cooler.  <sarcastic sigh> Now while Murdoch’s papers, are notorious for getting things slightly out of kilter, it would seem there is a new agenda for electricity pricing.  One that you “believers of climate change” and “disbelievers in the Minister for Women’s generosity” may find yourself at odds.  Oddly this article from Murdock press is supported by the AEMC government document I’ve attached herein.

http://mobile.news.com.au/finance/money/increase-cost-for-families-running-an-airconditioner/story-fnagkbpv-1227195669476

http://www.aemc.gov.au/News-Center/What-s-New/Announcements/New-rules-proposed-for-distribution-network-prices

Before you drop into the belief that any of the discussion in the AEMC paper is fair, you need to engage a little thinking & reading between the lines!  Think financial capacity in a heating climate …

“The goal would be to curb usage on the hottest days.” …. Umm who are the most economically vulnerable and physically susceptible to death by heat stroke during these “hottest days?” during which “we” are encouraged to curb usage???  Notice how the article says…
“The AEMC’s Mr Smith said: “This is about consumers taking … more of an ownership for their outcomes.”

The difference between equal and equity
The difference between equal and equity

Corporate avoidance speaks for “we are not here to provide a service equitably for the community“.  We are not the guilty party we are transferring guilt for our decision to the consumer.  The monkey is on your back now.  You (not us) are the party guilty for the result, and we are absolved of all responsibility for our decision!  How is their approach equitable?   If you have a problem with your definition of “equity”, have a look at the image alongside here.

Filed Under: Privatisation

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