zzsstt wrote:So what happens to people and businesses under such a regime? When talking about large scale switch-offs, in industry, does that not mean you suddenly have workers who are unable to work? Doesn't this create problems?
Yes there is a loss of production in the short term and yes that means a bit of wasted time by workers.
But it comes down to this. Australia is a high cost country and these businesses export virtually all of their production. Adding to that, Tasmania being "in the middle of nowhere" adds shipping costs higher than that which would occur if the same industries were somewhere like NSW or Qld.
So in short, these businesses wouldn't be operating at all if they didn't have something to offset these economic disadvantages. That's where the idea came from. One of them did actually close down at one point, due to ongoing losses, and it's no secret that the others are struggling financially too. The high AUD has been a big factor there, along with the other issues.
So if they can get electricity most of the time, and get it for 3 cents per kWh or thereabouts, then that tips the balance and makes them viable financially. There's no "subsidy" in that price, it's just case of the generator selling to industry most of the time, and grabbing big profits where it can by selling that same power to others when conditions permit. You don't have to sell too much at $12.50 per kWh in order to be able to sell the rest cheaply to industry whilst maintaining the average price as seen by the generator at a level that makes a profit for them too.
The other aspect is that the "technical" load shedding facilitates the generator getting supply at either a very low price (typically under 2c / kWh excluding carbon tax) when it's available. Ramp southbound flows from Vic - Tas to the max, taking the risk of the link going down (and DC links are generally quite unstable), safe in the knowledge that there's a "fail safe" that will maintain supply to homes and small business when, not if, there's a trip. The same approach also enables operation of the system so as to maximise the use of water and wind that would otherwise need to be wasted in order to have sufficient generating capacity online and maintain system security in the event of a fault. Whatever is gained that way, has effectively zero cost (ie 0 cents per kWh) to the generator.
So it's basically about (1) grab whatever power is available at very cheap prices either from Victoria or from local resources that would otherwise go to waste and (2) sell a bit back at incredibly high prices when the opportunity arises. That then enables supply to industry at very cheap prices, without which they wouldn't be in operation and many thousands of jobs would be gone (and losing thousands of jobs would be a disaster economically and socially in a relatively small place with unemployment already approaching 9%).
The saving on power costs is far more significant than any wasted time by workers. If you can take 1 cent / kWh off the power price, then that's a huge saving in a business where electricity is the single largest expense.
I should point out that I'm referring to large industries which buy directly from the generator (not via a retailer) and which are connected directly to the transmission network. Individual consumption of these customers ranges from 100,000 kW to over 300,000 kW on a 24/7/365 basis apart from the 1 or 2% of the time that supply is switched off.
Getting a bit off the original topic here, but anyway.....