#Energy

Market failure?

AustralianActuary Business ,

Oh dear. The Australian Energy Market Operator has suspended the market. The Operator says the market was “impossible to operate”. Does this constitute a market failure? It’s definitely a failure of something.

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I say it’s not a market failure. That’s because it’s not a real market. The authoritarian left often decries market failure as reason for Government intervention in all manner of ways. Well, here’s an example of a highly restricted and distorted pseudo market failure right in front of our eyes at a time when the energy supply is tottering on the verge of blackouts.

The reason for this failure is precisely due to years of Government intervention, mismanagement and lies. Goodness knows what happens from here, but mark June 2022 as the month in which the creaking facade masquerading as an energy system in Australia crumbled.

Energy production in Australia

AustralianActuary Economics

Update from 17 June, 5:30 pm AEST: coal and gas are currently producing 78% of Australia’s electricity supply.

We need more renewables, obviously. Look at the contribution to Australia’s energy supply over the last 48 hours. After decades of subsidies to promote windmills, solar panels, hydro schemes and biofuels, the total output of renewable sources is woefully tiny. Not enough subsidies, I expect.

Source: Australian Energy Market Operator

Give the customers what they want

AustralianActuary Business

The best way to succeed in business is to give the customers what they want. This announcement from Rio Tinto clearly pleases one campaigner from the Conservation Foundation, but I’d be surprised if she is a Rio customer.

Source: Australian Financial Review

Rio customers looking for a supply of aluminium that is high quality, reliable and low cost are unlikely to be pleased with the outcome of this decision.