Bet on blackouts

Recall how Labour and Greens have modeled their electricity policy on California. Well read this Financial Times article on how people are betting on blackouts there:

This summer may also be when the California grid’s stability finally goes off the cliff operators have been dreading for years. According to my transmission engineering contacts, what had been a bad situation, in terms of the ability of the state’s electricity network to recover from isolated equipment failures, became chronically worse with the federal regulators’ decisions to not allow the giant, 2,000 megawatt San Onofre nuclear plant to reopen. The feds may have done the right thing, but there are not now sufficient resources to take its place.

If California does manage to miss a major series of blackouts (or load-shedding, as they say) this year, through luck and the creative use of Scotch tape, there is little optimism among the operations-level people that those can be avoided in 2014 and 2015. It just takes too long to build the required fixes.

That is the problem once you fuck up the supply of electricity. It’s not like a commodity where you can just order some more. It can takes years to fix the problems caused by a monopoly situation where the Government decides who get to supply electricity and for what price,

The transmission and generation planners and engineers are much less forward in putting out their warnings. They are careful, often rather shy, and don’t like getting into public arguments. If regulators and politicians were to take the recommended actions, rates would be going up, even faster than they are. That’s not a vote winner. At least not until rolling blackouts make the alternative look worse.

Sound familiar?

It’s all right to price power at just the momentary marginal cost of energy, which, effectively, California, Texas and Germany do. That is, if there aren’t mandated requirements, or subsidies, for intermittent renewable laid on to the system. If those are in place, the full costs of transmission and back-up must be paid for somehow. Or utilities will be decapitalised and you get power failures.

And that is exactly what they plan for NZ. targets for 100% renewables, along with pricing for marginal instead of replacement cost.