The (default) strategy determining the secuirty of Australia's energy supply

The matter of Australia's energy supply security has been totally eclipsed by the current debate on climate change. Should we be concerned? What is energy security and how is it determined? What impact will climate change policies have on energy security? Does Australia need a national strategy? This paper seeks to answer these questions by first examining the concept of 'security of energy supply' which has quietly slipped into the energy lexicon and assumed a relatively prominent position without any meaningful discourse about its meaning or assumptions. It is contended that the concept is inherently slippery because of its polysemic nature having multiple dimensions and taking on different specificities depending on the country (or continent), timeframe or energy source to which it is applied. A four-dimensional grid of availability, adequacy of capacity, affordability and sustainability is proposed to assess energy supply security over the short and long term. The paper argues that, in the absence of a national strategy, the short and long term security of Australia's energy supply is being determined by default, by the conjunction of a vast range of existing policies, all of which have been specifically implemented to address other objectives. The impact of existing and potential 'non-energy-security' policies on Australia's supply security is shown by applying the aforementioned four dimensional-grid. A final section discusses the policy antagonisms within Australia's default strategy and concludes that the strongest threat, in the short and long term, to Australia's energy security is to adequacy of capacity

Does the polysemic nature of energy security make it a 'wicked' problem?

Governments around the world are expending considerable time and resources framing strategies and policies to deliver energy security. The term "energy security" has quietly slipped into the energy lexicon without any meaningful discourse about its meaning or assumptions. An examination of explicit and inferred definitions finds that the concept is inherently slippery because it is polysemic in nature having multiple dimensions and taking on different specificities depending on the country (or continent), time frame or energy source to which it is applied. But what does this mean for policy makers? Can traditional policy approaches be used to address the problem of energy security or does its? polysemic qualities mean that it should be treated as a "wicked" problem? To answer this question, the paper assesses energy security against nine commonly cited characteristics of wicked policy problems and finds strong evidence of "wickedness"

Analysing Finance and Production in the Contemporary Capitalist Era

There has been a dramatic restructuring of the global economy as the dictates of neoliberalism have reconfigured the contemporary capitalist system of accumulation which has involved a seismic shift from industrial to finance capital. There have been a number of important contributions to theorising this shift and about the empirical relationships between the ‘financial’ and the ‘real’ at the levels of the nation-state and the firm. To a far lesser extent, the impact of financialisation upon production - at the level of industrial sectors, commodities, firms or global production networks - has been the subject of empirical research. Consequently, articulation of the abstract relations between finance and industrial capital, and the concrete forms that this takes in contemporary capitalist accumulation, are under-theorised. This paper posits an approach to bridge the gap between the abstract and concrete by presenting an analytical framework for empirical research to elucidate the different ways in which financialisation has restructured production and the ways in which finance and production in the contemporary era work together in reinforcement and/or contradiction

Energising the nation: The historical and contemporary framing of Australian energy policy

This paper provides an intervention to the Energy Policy debate about the influence of epistemic frames on energy decisions and particularly, the framing of energy problems. We seek to deepen understanding of how and why different energy problem representations can be formed. Drawing on the social constructionist approach of Bacchji (2009, 2012), we explore the framing of energy policy using the empirical lens of the foundation of Australian energy policy since the early 20th century—the three development stages of Australian electricity provisioning. Rather than offering a direct contribution to the debate about the future of the Australian electricity sector or an alternative classification of differing conceptualisations of energy, we ‘drill down’ into one aspect of the Sovacool et al (2016) classification framework—'the explanation of energy’—by investigating the framing of Australian energy policy from Federation to the contemporary. Using a six-question analytical grid, we examine how debates about energy (aka electricity) have been constructed and reconfigured and represent a key mechanism through which the state has represented, constituted and configured its role in the nation. The paper concludes that the framing and reframing of the problem of ‘energy’ over time reflects broader transformations in the problem of ‘governing’.This paper was prepared for the 14-15 June 2018 University of Sydney workshop ‘Energy: Its Institutions, Networks and Lived Experiences’ funded by the School of Social and Political Sciences, Faculty of Arts and Social Sciences, University of Sydney

The Impacts and Consequences for Low-income Australian Households of Rising Energy Prices

There is limited understanding of the impacts and consequences for low-income households of the substantive increases in household energy prices since mid-2007. The average increase in Australian household electricity prices from 2007 to 2013 was nearly 83% with the highest experienced by NSW households (108%) and the lowest average increase for those living in the ACT (71%). This study provides a substantive evidence base of the lived experiences of low-income households as a result of rapidly rising household energy bills. The study comprised: an online survey completed by 372 respondents across Australia during the period 1 February to 30 November 2012; and, focus groups and interviews conducted with 130 participants in the capital city and a regional centre of the four most populous States during October and November 2012. There has been anecdotal reporting by the media, welfare agencies, community organisations and charities of the deleterious effects of rising energy prices. The findings of this study indicate the nature of these damaging effects is widespread and systemic. The well-being, health and lifestyle of low-income Australian households are suffering from the cumulative effects of ever-increasing electricity bills over a sustained period of many years which has compounded the circumstances of these vulnerable households. Never or rarely leaving home, using only one room, shorter (or occasionally, no) showers, watching less television, going to bed fully clothed (or early) to avoid the use of heating, families using a common sleeping room when cold, rarely having friends or extended family at home to avoid using cooking appliances and/or the room temperature being uncomfortable – these are some of the ‘strategies’ that low-income households have adopted to ‘manage’ their energy use as they endeavour to control the size of bills. These actions are far more extreme than the commonly promulgated measures to improve household energy efficiency. As a result of cutting expenditure on essentials such as food and reallocating expenditure on other items to be able to pay energy bills, and making relatively severe changes in household practices to reduce the size of energy bills, these households are suffering physical discomfort, reduced physical and mental well-being, loneliness and social isolation, strains within household relationships, and distress about the social and emotional well-being of children. The awareness of energy efficiency measures is strong and nearly all households have tried to reduce their energy use in response to rising energy bills. Barriers to further reductions in energy consumption are no financial capacity to afford energy saving appliances or household repairs/improvements (which is most problematic for renters), the need for health-related use of heating and cooling and life support equipment, and the presence of children. Households are loathe to cut heating or cooling too much in case it affects the health of children or exacerbates existing health vulnerabilities. The dominant policy measure to assist low-income households with energy bills are rebates, concessions and temporary financial assistance provided by State and Territory governments, generally as an absolute amount (lump sum) rather than a proportion of a household energy bill as is the case only in Victoria. More subtly, this assistance shifts the problem to one of poor financial management and individual (lack of) responsibility. At least 2.3 million low-income households are regularly receiving some form of State Government concession or rebate on their electricity bill. Yet all States record a higher proportion of residential consumers being disconnected for non-payment of bills in 2011-12 compared to 2007-08 which strongly signals the increasing ineffectiveness of these measures. Access to assistance measures requires self-identification and hence the need for information. Yet many eligible households are ignorant of programs because they do not have internet access where information is most commonly provided, mobile phone costs and call waiting times prohibit them making contact with an energy supplier, or communication difficulties are experienced when contact is made which leads to frustration and an unwillingness by the household to spend further time trying to engage with their energy company. Payment plans and hardship policies are further types of assistance for households experiencing energy hardship. Under the new, and partially implemented, National Energy Customer Framework (NECF) energy retailers are required to implement customer hardship programs which are generally framed around payment arrangements for energy bills owing, ongoing use and the avoidance of disconnection. Households who have used such plans to date generally consider the payments were unaffordable, being set too high and not reflecting their capacity to pay. Overall, the study’s findings pose a number of critical issues for government and policymakers. There is strong evidence of the inability of low-income households to become more energy efficient. Effort to reduce household energy use is widespread but has been highly concentrated on low-cost practices like the installation of low-energy light bulbs. The barriers to reducing energy consumption mean the scope for further – and substantive – improvements in the energy efficiency of these households are highly constrained. More minor changes to household energy behaviour will not result in sufficiently significant changes being reflected in lower energy bills and will undoubtedly aggravate already diminished levels of health and well-being. There is a problematic relationship between low-income households and energy retailers. This relationship is framed by companies providing customer information on websites, the use of 1300 or 1800 numbers for customers to make telephone contact, and the customer experience encountered when discussing payment difficulties or a payment plan. Nearly 1.5 million low-income households do not have home internet access. From 1 January 2015 calls from mobile phones to an 1800 number will be free. In the meantime, call costs pose a significant barrier to contact and information. The new NECF requires a more proactive approach by energy retailers to assist those likely to experience energy hardship although the success of this approach is as yet unknown. A further critical policy issue is the purpose of energy bill assistance. Current assistance, the monetary value of which varies considerably across Australia, is reactive. Assistance is directed at the bill which is the end-point of household energy use. Thus this assistance does not help low- income households manage their energy use to achieve the maximum possible energy efficiency level for their circumstances. Measures for widespread, long-term improvements to the energy efficiency of housing occupied by low-income households are also non-existent. Energy efficiency measures are limited in scale and focus on household behavioural practices to reduce energy use. The effectiveness of current energy bill assistance would appear questionable given, for example, the increasing rate of residential electricity disconnections and the findings of this study. But to understand the ‘effectiveness’ of current measures will require a systematic evaluation drawing on data which should be held by all Australian Governments even if not publicly released at this time. Nevertheless, such an evaluation would only deal with current reactive measures and not provide preventative or remedial policies; preventative in the sense that low-households are ‘prevented’ from falling into energy hardship and remedial in the sense that households are ‘removed’. Energy hardship is caused by a conjunction of factors – low income, energy prices, the condition of housing, and the capacity to adopt different household practices to manage energy use given its size, composition and needs. Given the current extent of energy hardship, as evidenced by this study, there is a high need for reactive policies – and undoubtedly an improved level of assistance - to continue until preventative and remedial policies are implemented and successively operated for some years. Thus the threshold question for policymakers is whether there is the political will to directly address and eliminate energy hardship or whether the only form of assistance will remain reactive, fragmented and increasingly ineffective

Australia's National Electricity Market: Bidding rules, market power and wholesale electricity prices

Wholesale prices for the generation of electricity markedly increased in 2022 and 2023. These costs, the most significant component of the final electricity price paid by consumers, were estimated, by the Australian Energy Regulator, to be 30-40% of a typical residential bill in 2022-2023 and 50-60% in 2023-2024. This substantive rise has been driven by increases in wholesale charges of up to 68% in 2023-2024 and follow increases of up to nearly 50% the previous financial year. These wholesale price increases have been driven by: • Generation companies exercising market power through the supply bidding and rebidding rules governing Australia’s National Electricity Market, and • Generation companies negotiating contracts in the parallel markets for financial contracts which inform the prices these companies bid to supply generation capacity. The Australian Energy Market Commission, and affirmed by the Australian Energy Regulator, interprets the National Electricity Law—that underpins the market’s bidding and rebidding rules—as permitting the transient (temporary) exercise of market power not sustained market power over a period of time. These two regulators, which administer the National Electricity Rules (NER) and review the performance of the National Electricity Market (NEM) respectively, are not transparent about their definitions of ‘transient’, ‘sustained’, or ‘period of time’. Market power is market power, transient or sustained. The exercise of market power, over any period, produces outcomes contrary to a competitive market which is supposed to yield the lowest possible prices for consumers. The NEM was purportedly designed to be a competitive market. It is a market, however, with high concentrations of generation capacity across all its regions which make it fertile ground for uncompetitive behaviour. The vulnerability of the NEM to market power, and its persistence since the NEM commenced in December 1998, has been recognised by regulators, market participants and all Australian governments. Changes have been made to the NEM’s supply bidding and rebidding rules and new forms of market performance monitoring have been implemented. Yet these have not prevented the record increases in wholesale electricity prices during recent years. Bidding behaviour to supply generation capacity, in conjunction with the speculative behaviour of generation companies in the financial contract markets about future electricity prices in the NEM, present exemplary evidence of ongoing price gouging and unfair pricing practices