Further to my blog in mid-March & comments.
April has seen AEMO wholesale prices blast off – click for annotated chart of 9 years of monthly wholesale AEMO prices and I am thinking global thermal coal prices have to be playing a big part. Click for chart of global thermal coal prices.
It will be fascinating to listen to mostly rubbish about electricity prices in the count down to election.
With clocks put back, days shortening, and many occasions of less than 2MW of wind on east coast NEM in the month, extra demands were suddenly created for coal & gas generated power in April. Particularly in the evening. With Liddell part closed and an unusually large number of other cf units out of action around the country, usable power was less available at critical times.
It appears this increased demand along with reduced sources of supply has been the main driver putting up spot prices both quickly and very significantly. The month of May looks even worse.
As more cfps close prematurely (how can government force repair of failed plant in cfps made uneconomic by negative bids from wind/solar generators) this is our future, until many ‘000s of km of additional and unsightly hv transmission lines are forced onto our regions (with their own additional cost to someone) to enable use of more wind/solar. By that stage too, we’ll be into increased system security problems caused by too little synchronous power, needing to be solved with yet more expenditure on a plethora of costly and tricky condensers and the like.
How Ukraine affects the cost mechanics at power stations which have dedicated coal mines I’m not sure.
I blogged in March on AEMO prices rising so some links backing my arguments are there.
Update AEMO monthly electricity prices Govt seems unaware – 16Mar22
In the recent court case in Vic where landowners had a win in court over a noisy windfarm – the Judges comments were scathing about the windfarm. Quotes from the Alinta Boss Mr Dimery are a must read saying how the entire pathway to renewables has been wrongly portrayed as smooth sailing. The Govt carbon farming methods have come in for a roasting from Prof Macintosh. And in recent months landowners between Ballarat & Melbourne were objecting to larger transmission line easements.
It all adds up to a rockier and more difficult and expensive road for renewables. The AEMO daily RRP prices for first week of May in the table below are among the highest I can recall seeing. Weekend prices are usually subdued re weekdays.
I hadn’t seen the Dimery reaction to the Supreme Court wind farm decision, but his comments seem spot-on-relevant to the mad political/psychological scramble going on to replace Australia’s Electricity grid over the next two decades.
Unless we change course, in order to lessen costs and delays to the whole renewable program, it is likely we’ll see legislation to remove grounds for the sort of objections and complaints that leading to this wind farm decision and the western Victorian protests – for the sort of reasons that Dimery put forward.
All this, because of the deranged view that abounds – we heard it on Thursday from Frydenberg’s Teal debate opponent – that unless Australia dismantles its electricity grid, replacing it with renewables for what will surely be many $ ’00s of billions, along with reduced reliability and security, the negative climate impact will be of immeasurable greater cost. As if by us doing this, without it being proposed as conditional in any way on the efforts of the rest of the world (particularly India, China, USA, Russia), Australia with its 1.3% (and falling) of world’s emissions, will avoid that immeasurable cost associated with this ‘global’ hypothesis. So sad.
It would just make more sense, if one were actually convinced by this stuff, to put most of the money into policies and projects to ameliorate the imagined effects; at least until the world’s 50% major emitters are on board too.
Callide B was NOT a hydrogen explosion. The T/G destroyed itself because the circuitbreaker didn’t open and the unit continued motoring without the oil pumps running.
The ABC reported it as a hydrogen fire
CFMEU local organiser Shane Brunker said it looked like the hydrogen-filled generator or the main turbine had a “catastrophic failure”.
“[This may have] caused then an explosion and then ultimately the fire,” he said.
“The scenario of a hydrogen-filled generator exploding or failing mechanically, causing hydrogen leaks and then also oil leaks, is probably the worst-case scenario in a coal-fired power station.
“All the safety protocols were enacted straight away and it was a very speedy and efficient evacuation.
“All the workers have been bused into the community centre in Biloela and everyone has been accounted for.”
>”It will be fascinating to listen to mostly rubbish about electricity prices in the count down to election.” [Warwick, opening thread comment]
Fair enough, Warwick, but I find no fascination in being constantly lied to for decades as an assumed low-info idiot. or more likely part of a powerless group due to its’ small, though informed, numbers.
These people, including the cynical managers of AEMO, are treasonably unaccountable gaslighters. They do it because they enjoy unaccountable bureaucratic power.
Ian18888,
Surely you believe AEMO and the Clean Air Council and the Government who continually tell us that power costs are decreasing.
I only wish someone would let that little secret pass on to the bastards who prepares my monthly electricity invoices.
All of us are probably influenced by the dominant green/left bias in majority of Oz news orgs. Even SkyNews has some presenters that show their green stance. This means that the “renewables industry” gets a favourable and glowing press in most media that we source. This also means that coal & gas and “coal fired electricity generation” tends to be derided and mis-reported in most media despite. In recent days this has been manifesting as beating up the issue of outages & break downs in coal fired generation. When you check the last weeks generation by coal at OpenNem it is clear any outages must have been slight or rapidly corrected or easily compensated for by other units. OpenNem shows coal plus gas gen is a boring near 70% for whatever day you check going back a 7 day period – renewables are near 30% and coal & gas make up near 70%. There is no sign of any run of days where coal or gas outages affected those overall generation proportions.
News of dormant coal mines near Lithgow being dusted off. Looking at global thermal coal prices it is not hard to see why – licence to print money.
The one and only competent non woke CEO AEMO has had was Matt Zema. Matt, an experienced engineer from the Victorian electricity industry, sadly died at the young age of 55 in 2016.
He was well aware of the growing problems “renewables” presented to grid security and economics and at the time of his death had been fighting an up hill battle against the creeping menace of ever more woke bureaucracy/government.
Warwick
Both Cullen Bullen and Invincible lease areas are now in the much extended and gazetted area of the “Gardens of Stone” National Park (just Triassic sandstone outcrops eroded along the joint lines, like the more famous Three Sisters).
Recently I used the gazetted GoS map boundaries to overlay it on the mapped seam resource in that area. Matt Kean has done a very thorough job, as no useful resource is now outside the GoS boundaries. It is very clearly quite deliberate.
Yes Ian there was still coal left at Invincible. Shell could not manage the place and closed the mine down to thwart the union. The Ivanhoe mine across the Mudgee Rd wanted to buy the mine and amalgamate the leases but Shell would not come to the party. I think there was still a couple of million tonnes in the combined leases in pillars, and between the two working areas.
I think the garden of stones is further north and may cover Coalex’s Baal Bone extension. Some description in Wiki mentions limestone outcrops. One of which is likely the Excelsior workings (north of Capertee) which once supplied some limestone to the Lithgow steel works and the cement works Goodlet & Smith at Gladesville Sydney. I remember seeing a bottle lime kiln there, which may have come from Gladesville.
Shoalhaven Coal (Manildra is the owner) tried a few years ago to look at renewing Invincible underground – this resource is now all within the gazetted GoS National Park.
Baal Bone has very little resource left in any case, but the GoS now covers everything, including the small shallow resource of Cullen Bullen directly across the Mudgee Rd.
Open cut resource for Invincible requires benching Triass cliff lines in full view of Mudgee Rd traffic. This is a circumstance that any State Govt cannot now allow to occur, even if dispensation from the GoS could be achieved.
GoS boundaries do not reach the Portland limestone deposits (well, not yet anyway) but these too are pretty exhausted after 100 years of extraction.
Ian I respect your knowledge but I have just looked at a National Parks website and a map indicating baiting in the Garden of Stone National Park. It appears to me that the Garden of Stones park area is well north of Invincible and starts at the south end near Capertee. I have been down a few mines in the area and know the roads around there fairly well. I had many years back a property within the Portland town boundaries were we ran some Barford (Barhmin -Hereford cross) cattle which we purchased from a farmer whose property was near Cullen Bullen. I remember a memorable time having a beer in the Cullen pub with John Maitland (head of the mining union), his off-sider who went on the head the miners union in Qld. plus a couple of coal mine managers. It appears to me that the old Ivanhoe, Invincible, Western Main, (Coalex) Wallerwang & Coalex(Baalbone ) leases are not in a National Park.
Note my pseudonym is about cementing (joining) a friend.
Here is a link to MinView which shows Coal licences plus Nat Parks and the GoS.
Nearest Portland is AUTH359 IVANHOE COAL PTY LIMITED 1987-06-24
EL5712 SHOALHAVEN COAL PTY LTD 2000-04-10
EL6007 SHOALHAVEN COAL PTY LTD 2002-10-08
EL6856 CENTENNIAL SPRINGVALE PTY LIMITED; BOULDER MINING PTY LTD 2007-08-08
EL7517 SHOALHAVEN COAL PTY LTD 2010-04-16
EL8618 SHOALHAVEN COAL PTY LTD 2017-07-12
EL8619 SHOALHAVEN COAL PTY LTD 2017-07-12
World thermal coal price getting near US$400t – intergalactic!! – click for larger map with a few of my annotations image
Sorry cementafriend – you’re wrong here.
The GoS Stage 2 SCA Reserve is available as a PDF as from February 2019. These boundaries include almost every skerrick of useable Lithgow Seam resource now available for sensible extraction.
www.environment.nsw.gov.au/topics/parks-reserves-and-protected-areas/park-management/community-engagement/walking-tracks-and-trails-in-national-parks/gardens-of-stone-state-conservation-area/gardens-of-stone-state-conservation-area-draft-plan-of-management
As I commented before, these new boundaries are quite deliberate.
I have uploaded a map emailed by ianl8888 which he describes as [this is the actual situation, with mine lease boundaries overlaid on the State Govt “Master Plan”. This overlay is where the actual Lithgow Seam deposits are. Observe where these deposit (lease) boundaries are in relation to the new “Master Plan” to understand my comment on the deliberate sterilisation of remaining coal resource with the extension to the GoS.] Click for best resolution of ianl8888’s map in another TAB.
I assume that decisions over sterilising coal resources into the park were made before the world thermal coal price started going into orbit late 2021. It would be of interest for the record to have an estimate of the quantity and value of coal sterilised that was agreed to by the previous EL owners. It may be true that NSW Gov is aware of coal resources elsewhere that are as yet not spoken for. I think it is also true that coal mining has many enemies and the Fed Election next Saturday may mark a watershed in those matters.
Warwick
Thanks for publishing that overlay map. I had meant to revert here yesterday afternoon, but as McMillan or someone said: “Events, dear fellow, events …”
GoS Stage 2, as depicted in that buff colour on the overlay map, has been agreed to by State Cabinet but only on the gazettal list as of now, not yet actually gazetted as I had mistakenly said above.
While the prices for higher quality thermal are still beyond belief, they have dropped about 20% from their peak 6 months or so ago (that was la la land stuff). In the area of GoS, washed Lithgow Seam comes close to world benchmark quality, but the Katoomba Seam (top of the Permian sequence) is really only moderate/mediocre quality – Asian generators have learnt well enough how to blend it.
The Aus banks insist that current thermal prices will be a short-lived pan flash and not worth transgressing their “climate change” mantra, so finance is difficult to source. At the moment, Indonesian interests are investing in the Hunter rather than Aus-based funding.
In my view, the real danger from GoS Stage 2 is the damage that will be done to Mt Piper Power Station fuel supply. Mt Piper supplies about 1/3rd of the power to the western Sydney Basin but due to the Wran Govt “saving” capital during its’ construction, it has no capacity to accept fuel by train. If GoS Stage 2 sterilises local supply (as it is designed to do), only highway truck movement from much further afield is then available – and this is politically unacceptable now to any State Govt.
I am sure the myriad & influential anti-coal interests will always find a reason to talk down the coal price. I can just offer a few obs. WRT my chart of the Global thermal coal price linked in this blog and recent historic events. I see there was a peak in the price of approx $130 in early 2011 – then the price slid for 5 yrs to a trough ~$50 in early 2016 – Midway during that long price decline Russian backed rebels expanded their influence in the Donetsk basin region of eastern Ukraine. Then during late 2016 there was a sudden short-lived price spike (similar to a dead-cat-bounce) doubling to just over $100 before that retreated and the price ended 2017 back at ~$100 again. A little hump was made at ~$120 in early 2018 before the price underwent another slide with a trough touching $50 again in early 2020. I have opined that this price slide is reflected in our AEMO wholesale electricity prices.
Now a new phase of the story from David Archibald who wrote “Further to Peak Coal for the Chicoms” 26Nov2021 –
I will blog this now and finish it later but I am sure you can see the drift.