the price of electricity, page-21

"Can you or anyone tell me why power is twice as dear as it was not so

"Projections were made that electricity requirements would be higher than they currently are so over investment in generation occurred."

Gas fired power station were subsides for their generation. As far as I know this has been removed. Coal fired power station weren't entitled to this subsidy.

"We are now in a situation of oversupply so wholesale electricity prices are depressed."
As I mentioned in my previous post wholesale price should be even lower due to excess generation capacity. Power station are/or where paid for 'spinning reserves. This can be viewed as backup system incase a generator drops off-line. It is due to coal fired power station taking anything up to 4 hrs before they could connect to the grid.
With gas fired power station the time is shorter and companies would gladly jump on to the grid because of NEMCO bidding system.

My understanding is that generating companies bid in half hour bocks to get on the grid. The lowest bidder gets on the grid first and the next highest and so on, until the demand is met. Theoretical, the price can jump up from $25 to $12,500 within the half period.
The worst part is the Electricity Industry lobby group, is trying to convince the Regulators that the consumer should be paying for these spikes. You will never find out whether this spike is due to demand or due to a failure of a generator that caused the shortage. Generators were also paid in the past to balance high voltage transmission lines.

"Governments have mandated that the network should perform at a particular level of reliability.
Combining the two means that we have invested in a network that reliability copes with a few days of peak electricity in a calendar year. There was also an incentive for network and distribution owners to over invest in infrastructure because of their guaranteed return on that investment."

Totally agree with these comment! Gold plating should be finished soon.
Like I mentioned in my previous post govt owned distribution entities are forced to become cash cows for the govt and take the heat from their customers.
That doesn't mean privately owned companies are caring about consumers. They have duped or convinced the Regulators that they are entitled a certain return on their investments and are putting forward arguments to increase this percentage. Refer to my spiking comments.

"Add in the subsidies that all users have to pay to those that invest in solar hot water, solar panels and etc along with carbon tax."
This is purely my opinion. Since most of modern power station are out in the sticks, they need to get the power were the demand is. They are restrained due to the capacity of the high voltage transmission lines? Solar has saved tax payers money in QLD, by satisfying the demand and delaying the building of these new transmission line.

I have other points that I could talk about if anyone is interested.

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