Like night follows day, adding chaotically intermittent wind and solar to your grid sends power prices into orbit. South Australians know it: they suffer the world’s highest power prices as a result of their 50% RET.
Other Australian states are heading in the same direction. Victoria’s great wind rush has already sent prices rocketing: wholesale prices jumped 19% last financial year. Part of a trend (see above) which is all set to continue.
The effect of surging power prices is economically insidious. Electricity is a critical input to a range of businesses, such that rising power prices reduce margins, squeeze profits and limit the opportunities to employ staff and otherwise re-invest in those businesses. Ultimately, profits become losses and a date with insolvency and a liquidator soon looms.
On the consumption side, households being belted by ever-rising power costs naturally reduce their spending on everything else.
Not that the…
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