An Aussie 'Dreamtime' Ponzi Scheme

Peter Smith15 Nov, 2023 2 Min Read
Oz's past is also its future.

At 6 pm on Saturday November 11, twenty-six gigawatts of dispatchable power was being delivered across the whole of Australia’s National Electricity Market (NEM). Of this about fourteen was generated by coal, four by natural gas and four by hydro. Solar and wind together accounted for just three, or only about 12 percent of supply. I didn’t cherry pick this observation, just tuned into the applicable site when writing.

The NEM encompasses most of the eastern half of Australia. It principally leaves out the state of Western Australia because no connectivity is in place or planned. The distance is too great. Therein lies the rub for Australia as a whole. It’s an island. It can’t buy power from its neighbors when it runs short.

States can buy power from other States. South Australia, with no coal, regularly buys power from States still with coal: Victoria, New South Wales and Queensland. No accident about that. At the same time, the transmission infrastructure is not up to carrying the inter-State heavy loads envisaged in the brave renewable-energy future, nor is it in place to carry power from far-flung wind and solar eruptions. Thus the need for an additional 10,000 kilometers of high voltage transmission lines, of which little is yet built. But even if it were built, a fault line is in the making. A Ponzi scheme, if you will.

Interconnectivity works only because somewhere in the network of State and regional grids there is capacity to generate excess power to share. In Australia that excess power comes largely from coal. Coal, however, is being driven out by government fiat. Nuclear power is banned by law. Natural gas is the putative savior. However, true believers in the "climate emergency" don’t like gas either. In any event, the two largest gas producers, Woodside and Santos, are finding it extremely difficult to bring new gas on tap as learned judges fall under the thrall of indigenous spiritual mumbo-jumbo; the latest in early November.

Her honor Justice Natalie Charlesworth put a hold on the construction by Santos of an undersea pipeline from its offshore Barossa project. Why? Purportedly, it “would damage Sea Country, dreaming tracks [and] songlines.” The court heard that a ship had left Darwin Harbor the previous night and was hours away from beginning work on the pipeline. It mattered not. In an Australian future morphing into Aboriginal Dreamtime, it’s hard to see companies being willing to risk investing in massively expensive gas projects.

Australia’s fanatics aren’t worried. In their imaginary world, it will always be windy and sunny somewhere and, if not, there is hypothetical pumped hydro, batteries, and green hydrogen to fill in. It’s a complete delusion that no body of psychiatrists, however eminent, could ever dispel. But real life eventually undoes Ponzi schemes. And soon enough on widespread windless nights when all States are coal-less and gas-challenged there will be no excess power to share. The whole racket will come tumbling down.

After a career in economics, banking and payment-systems management, Peter Smith now blogs on the topics of the day. He writes for Quadrant, Australia’s leading conservative online site and magazine. He has written Bad Economics, of which, he notes, there is much.


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One comment on “An Aussie 'Dreamtime' Ponzi Scheme”

  1. Let the Eco-Freaks produce their own Power using their own stupidity it would last for years

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