Extract from The Guardian
South Australia’s energy wars really began with the privatisation of
the electricity network in the 1990s. It’s worth looking at what we’ve
learnt since then
Blackouts,
when I was a kid, were fun. The emergency candles would be collected
from under the sink, Mum would crack open a packet of cards, or the
Trivial Pursuit box, and in the newly low-lit illumination of our
surroundings, we’d eat squares of chocolate and indulge low-tech
amusements as if stolen into an unexpected, folksy holiday.
But to imagine a whole state blacked out, from horizon to horizon, erases the folksy glow from the childhood blackouts of my mind. In these hard-wired times, there’s a doom aesthetic that accompanies ideas of total darkness. This may be why last week’s state-wide blackout of South Australia – amid a terrible storm – has had such a heightened, emotional impact on the national imagination.
For South Australians, the shadows of the event were double: there was not only material darkness, but re-immersion into that state’s angry history of energy politics. The rapid and false claims by Barnarby Joyce and Nick Xenophon, among others, that the state’s high renewable energy targets were to blame are but the latest manifestation of ideological energy wars waged on South Australians. Hostilities began in the 1990s, with the privatisation of the state electricity commission, ETSA. The state’s power network that blacked out last week is not a public asset, but owned and operated by Hong Kong based private company Cheung Kong Infrastructure Holdings, calling itself SA Power Networks.
Evidence has not emerged that any lack of network maintenance caused the towers to blow over or the lights to go out, and South Australia was certainly lucky to escape catastrophe. But given that the royal commission into Victoria’s Black Saturday fire disaster in Victoria did attribute blame for five of the most lethal fires to eroded maintenance standards in the wake of cost-cutting privatisation “efficiencies”, questions about the wisdom of selling off essential services like electricity – in South Australia or anywhere else – are timely and valid.
Because not only are there are proven cases of safety standards being eroded through electricity privatisation, we also know that Australians typically reject privatisation.
The privatisation of ETSA in South Australia was a brutal political battle and it followed an established privatisation narrative. Three out of four South Australians were opposed to the sell-off of the state asset when first mooted by then-Liberal premier John Olsen in the late 1990s, as a means of recouping funds lost to the obliged bail-out of the failed State Bank.
Olsen even went to the 1997 election promising that state power would not be sold. With the convenient post-election discovery of some kind of budgetary black hole – stop me if you’ve heard this one before – in 1999, Olsen convinced two Labor members of parliament, Terry Cameron and Trevor Crothers, to rat out their own party and back him in. While Labor in South Australia had taken a stand against privatisation that, in the era of economic rationalism, had not always been taken elsewhere, it was with the support of Cameron and Crothers and an independent upper-house MP – one Nick Xenophon – that the asset was sold.
Privatisation is often spruiked to populations as a mean of deriving greater efficiencies from services, leading to lowered prices. Not only is there no evidence to suggest that privatisation has consistent or meaningful effects on lowered prices, but economist John Quiggin has identified that the ETSA sale has cost South Australians between $1bn and $2bn in lost revenue, as well as their control of an monopoly essential asset.
The ideological right similarly like to insist that a transition to renewable energy will drive up consumer costs – and, again, blamed the technology itself for the surge in South Australian electricity prices in July. But it was the privatised SA Power Networks who’d markedly increased power prices. The company exploited Australia’s flattery of private monopolies to squeeze four-and-a-half-times more profit out of each customer in South Australia than it can manage from its sister operation in the UK. And not a single apologist for privatisation backed down when a report found that the July price surge was in part down to energy companies “gaming” the system.
Australians are hardly alone among populations who see the transference of assets under their own democratic control to private corporate interests as unfair.
Why Liberals and other modern conservatives insist on privatisation is a matter of a small-state ideology broadly articulated by neoliberal political economist, Friedrich Von Hayek. Von Hayek’s thesis is that the state’s responsibility is to create opportunities for private competition rather than run systems of social service itself.
In Australia, the structure of the electricity grid and power distribution means ownership of power can only be a monopoly, whether privatised or not. But so doctrinaire is the insistence on neoliberal “competition” that the function of the Australian Energy Regulator is to effectively pretend that there is a competitive market, and instruct the monopoly-owners to price accordingly.
It says something that the head of the ACCC – a longtime advocate of privatisation – has come out against electricity privatisations as dangerous to the local economy. But under the Liberals, Australia is a country repeatedly exposed to ideological nonsense at the expense of material reality. The false attribution of blame to renewable energy for the blackouts is not only a case in point, but provokes an important question.
This is the climate change era, where extreme weather activity has wiped out the power supply of an entire state, set other states on fire, saturated yet others with floods - so shouldn’t essential services like electricity something be subject to democratic control? Do we really think that our best interests as a community be served by handing infrastructure over to a false economy of profiteering private interest?
The Western Australian treasurer, Liberal Mike Nahan, is eyeing electricity privatisation with the pretext of his own state’s record debt and deficit. In Queensland, the LNP’s Tim Nicholls is making noise about privatising power if he wins the next state election. One has to wonder if the willingness of the Liberals, Nationals and their ilk to shout at the impossible boogeyman of wicked wind energy is an urge, conscious or instinctive, to distract us from listening to a clearer message – that an ideological priority of privatising electricity leaves communities vulnerable. There are, I fear, dark times ahead.
But to imagine a whole state blacked out, from horizon to horizon, erases the folksy glow from the childhood blackouts of my mind. In these hard-wired times, there’s a doom aesthetic that accompanies ideas of total darkness. This may be why last week’s state-wide blackout of South Australia – amid a terrible storm – has had such a heightened, emotional impact on the national imagination.
For South Australians, the shadows of the event were double: there was not only material darkness, but re-immersion into that state’s angry history of energy politics. The rapid and false claims by Barnarby Joyce and Nick Xenophon, among others, that the state’s high renewable energy targets were to blame are but the latest manifestation of ideological energy wars waged on South Australians. Hostilities began in the 1990s, with the privatisation of the state electricity commission, ETSA. The state’s power network that blacked out last week is not a public asset, but owned and operated by Hong Kong based private company Cheung Kong Infrastructure Holdings, calling itself SA Power Networks.
Evidence has not emerged that any lack of network maintenance caused the towers to blow over or the lights to go out, and South Australia was certainly lucky to escape catastrophe. But given that the royal commission into Victoria’s Black Saturday fire disaster in Victoria did attribute blame for five of the most lethal fires to eroded maintenance standards in the wake of cost-cutting privatisation “efficiencies”, questions about the wisdom of selling off essential services like electricity – in South Australia or anywhere else – are timely and valid.
Because not only are there are proven cases of safety standards being eroded through electricity privatisation, we also know that Australians typically reject privatisation.
The privatisation of ETSA in South Australia was a brutal political battle and it followed an established privatisation narrative. Three out of four South Australians were opposed to the sell-off of the state asset when first mooted by then-Liberal premier John Olsen in the late 1990s, as a means of recouping funds lost to the obliged bail-out of the failed State Bank.
Olsen even went to the 1997 election promising that state power would not be sold. With the convenient post-election discovery of some kind of budgetary black hole – stop me if you’ve heard this one before – in 1999, Olsen convinced two Labor members of parliament, Terry Cameron and Trevor Crothers, to rat out their own party and back him in. While Labor in South Australia had taken a stand against privatisation that, in the era of economic rationalism, had not always been taken elsewhere, it was with the support of Cameron and Crothers and an independent upper-house MP – one Nick Xenophon – that the asset was sold.
Privatisation is often spruiked to populations as a mean of deriving greater efficiencies from services, leading to lowered prices. Not only is there no evidence to suggest that privatisation has consistent or meaningful effects on lowered prices, but economist John Quiggin has identified that the ETSA sale has cost South Australians between $1bn and $2bn in lost revenue, as well as their control of an monopoly essential asset.
The ideological right similarly like to insist that a transition to renewable energy will drive up consumer costs – and, again, blamed the technology itself for the surge in South Australian electricity prices in July. But it was the privatised SA Power Networks who’d markedly increased power prices. The company exploited Australia’s flattery of private monopolies to squeeze four-and-a-half-times more profit out of each customer in South Australia than it can manage from its sister operation in the UK. And not a single apologist for privatisation backed down when a report found that the July price surge was in part down to energy companies “gaming” the system.
Australians are hardly alone among populations who see the transference of assets under their own democratic control to private corporate interests as unfair.
Why Liberals and other modern conservatives insist on privatisation is a matter of a small-state ideology broadly articulated by neoliberal political economist, Friedrich Von Hayek. Von Hayek’s thesis is that the state’s responsibility is to create opportunities for private competition rather than run systems of social service itself.
In Australia, the structure of the electricity grid and power distribution means ownership of power can only be a monopoly, whether privatised or not. But so doctrinaire is the insistence on neoliberal “competition” that the function of the Australian Energy Regulator is to effectively pretend that there is a competitive market, and instruct the monopoly-owners to price accordingly.
It says something that the head of the ACCC – a longtime advocate of privatisation – has come out against electricity privatisations as dangerous to the local economy. But under the Liberals, Australia is a country repeatedly exposed to ideological nonsense at the expense of material reality. The false attribution of blame to renewable energy for the blackouts is not only a case in point, but provokes an important question.
This is the climate change era, where extreme weather activity has wiped out the power supply of an entire state, set other states on fire, saturated yet others with floods - so shouldn’t essential services like electricity something be subject to democratic control? Do we really think that our best interests as a community be served by handing infrastructure over to a false economy of profiteering private interest?
The Western Australian treasurer, Liberal Mike Nahan, is eyeing electricity privatisation with the pretext of his own state’s record debt and deficit. In Queensland, the LNP’s Tim Nicholls is making noise about privatising power if he wins the next state election. One has to wonder if the willingness of the Liberals, Nationals and their ilk to shout at the impossible boogeyman of wicked wind energy is an urge, conscious or instinctive, to distract us from listening to a clearer message – that an ideological priority of privatising electricity leaves communities vulnerable. There are, I fear, dark times ahead.
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