Shh! Despite a bloodbath quarter for electricity prices, hated Brown Coal still sells at just 4c per KWh

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By Jo Nova

We’ve never had another third quarter this expensive

Despite setting price records — averaging $200/MWh across the whole quarter for the whole five-state National Energy Market, there’s like a code of silence around the price of brown coal. The ABC is happy to evangelize about 30 minute “renewable energy records”, but they don’t mention that the three-month total system costs went off like a bomb.

Somehow Australia has all that free cheap green power and yet the wholesale costs exploded. The system broke:

No other Q3 has ever been this expensive.

But one unmentionable fuel type was still cheap

The average wholesale price for all generators last quarter was 20 cents a kilowatt hour (or $200 per megawatt hour), but brown coal generators were still able to supply during that same incendiary quarter for just at 4c a KWh. That was the average “winning bid”. So last quarter brown coal was one fifth the price of black coal, and one sixth the price of gas or hydro, and no one is talking about it.

The cheapest prices were from brown coal. (Far right)

Imagine if Australia had a free market in electricity?

Ponder for a moment, if households were allowed to choose the generator, they wanted to buy electricity from? Imagine if there was a company that sold brown coal power direct to the customers?

Obviously, the government would have to ban it, or regulate it away, or everyone would buy itIf nine out of ten households just wanted cheap reliable electricity, and they could get it, the free-market grid would be full of coal plants. If the solar and wind plants had to pay for the extra transmission lines, the batteries, and the backup generators as one package, there would be a tiny niche market for rich-hipsters and Gucci-grid show-offs.

Brown coal or lovely lignite is immune to the international crisis in energy stocks. It can’t be loaded on container ships (it burns spontaneously). It is our insurance, our cheapest baseload power, our back-up in times of war or inflation.

And we still have 300 years of coal left to burn (of both the brown and black stuff). If we started now, we could have cheap electricity in less than ten years.


AEMO Reports

Q3 2022 Quarterly Energy Dynamics, PDF

Clean Energy Regulator 2022, Small-scale technology certificates

via JoNova

November 26, 2022

Shh! Despite a bloodbath quarter for electricity prices, hated Brown Coal still sells at just 4c per KWh — JoNova