I have friends in Melbourne who treated a (paper) appreciation in the value of their home like it was a lotto win - borrowing money from their mortgage to finance a very expensive holiday and then later on buying a luxury 4WD. They were congratulating themselves on how clever they were at the time because they got these things at a much lower interest rate but the car is now worth a fraction of what they paid for it and the holiday a distant memory - meanwhile they'll be paying off those things for decades to come because it got lumped on their mortgage.

So, the only way people like that could come out on top would be to treat their house/investment property as a speculative asset and sell it for a massive capital gain that wiped out all their consolidated consumer debt. It seems many people probably did do that, but those days are fading into the past since the short term capital gains are cooling off. If you keep the house, you're paying all of it off, that's for sure, and the real cost of being in debt - the ongoing interest etc. - is almost always ignored.

They would have been better off with a short-term loan at a higher rate, they probably would have actually paid less in interest. I think there's actually a lot of ignorance out there about the real costs of mortgage re-draw; it's actually not a good idea unless you're using the money to improve the value of the property.

Redraw has now become the go-to method of managing faltering household finances. First they max it out on the credit card(s), then transfer it to the home loan via redraw - until they reach their redraw limit and are forced to make drastic cuts to household spending or liquidate their houses, hopefully getting enough capital gain to clear all the debt. Home loans are now bulging with what is really unsecured consumer debt. These are people whose mortgages were approved based on assumed capital growth in the houses they bought to begin with rather than the strengths of their own incomes. Everyone wants to borrow or cheat his way into wealth, or even just the image of wealth. How cute our flawed nature is.

Talking of mortgages and honesty:
http://www.abc.net.au/news/2017-09-11/500b-dollars-of-liar-loans-in-australia-ubs/8892030

What could possibly go wrong?

We were repeatedly told that Australia was not like the US because we didn't have a big subprime mortgage problem.

There are now indications that our subprime mortgage market is much bigger than acknowledged, because it is mostly hidden by falsification of loan applications by applicants, brokers and bankers. The lackadaisical approach of financiers is probably attributable to an expectation of ever-increasing capital growth. They must have assumed that it wouldn't matter if the loans went bad because the houses could simply be sold for a profit. To an extent, they were right, but that approach doesn't work forever, hence the tightening of lending ocnditions (albeit too little, too late).

Anyone whose loan application was falsified by a broker or bank can challenge a future foreclosure in court and may get to keep their house. It's already happening on a small scale in Australia. But that only solves one small problem in the big picture of the mess that is our economy.

When in town today I took notice of a couple of things:
1) I drove past about 7 shops in the main shopping centre that were empty or for lease
2) 10 in the port area were for lease and one was having a closing down sale
3) the sewing hobby shop is closing down (backs onto the railway line)
4) about 1/3 of the factories/warehouses are empty.  Businesses are moving to different premises as the savings in rent pays for the move inside 6 months.

If the economy is so strong how come the town has the most empty business premises in over 20 years (in both real and percentage terms).

Also as there is no IT award people are being paid the minimum wage and only given casual work.  There is  a turnover of barista's and other hospitality/retail staff as it's all casual at minimum possible rates.  

housing prices in neighbouring towns are dropping as the factories, tourism and rural suppliers are closing.  As the population dwindles the shop keepers find it harder to make ends meet so put off staff who leave town to find work so there are fewer people to buy things at the shops....

these are not indications of a strong economy

Redraw has now become the go-to method of managing faltering household finances. First they max it out on the credit card(s), then transfer it to the home loan via redraw - until they reach their redraw limit and are forced to make drastic cuts to household spending or liquidate their houses, hopefully getting enough capital gain to clear all the debt. Home loans are now bulging with what is really unsecured consumer debt. These are people whose mortgages were approved based on assumed capital growth in the houses they bought to begin with rather than the strengths of their own incomes. Everyone wants to borrow or cheat his way into wealth, or even just the image of wealth. How cute our flawed nature is.

It's pretty clear-cut that in Melbourne there's been 20 years of very reliable house price growth and that you are probably on a winner if you bet that your property value will go up - particularly inner Melbourne where my friends reside. When they said they were borrowing money from their mortgage to have a big holiday I just smiled and congratulated them... the 'old' me would have probably warned them they were going to be paying it off for decades but I realise now-days that you shouldn't pop someone's bubble just because you don't agree with their choices. Hell, I've made some big mistakes with money myself in the past, who am I to criticise.

However I wouldn't do a re-draw for the simple reason that I'd be worried that you're increasing the time that the mortgage has to continue to be paid and in that time interest rates are almost certain to go up; better if you can outright pay off the mortgage or get it down to a negligible level so that you aren't still dealing with it when you are approaching retirement.

It's pretty clear-cut that in Melbourne there's been 20 years of very reliable house price growth and that you are probably on a winner if you bet that your property value will go up - particularly inner Melbourne where my friends reside. When they said they were borrowing money from their mortgage to have a big holiday I just smiled and congratulated them... the 'old' me would have probably warned them they were going to be paying it off for decades but I realise now-days that you shouldn't pop someone's bubble just because you don't agree with their choices. Hell, I've made some big mistakes with money myself in the past, who am I to criticise.

However I wouldn't do a re-draw for the simple reason that I'd be worried that you're increasing the time that the mortgage has to continue to be paid and in that time interest rates are almost certain to go up; better if you can outright pay off the mortgage or get it down to a negligible level so that you aren't still dealing with it when you are approaching retirement.

The sensible thing to do would have been to wait a bit longer and save the few grand required for the holiday. Of course, you can't tell people that, and so they have to be allowed to pay the extra money. It is unfortunate that the truth, or an honest opinion, can totally ruin relationships. I've almost given up advising people against their own stupidity. You don't get any brownie points for saying, 'I told you so, either, only more resentment. Often, the only thing to do is let them crash and burn.

Alas, the situation is far worse than that, because redraw is being used not only for cars and holidays but essential day-to-day expenses. But even for families who have reached that point, all is not lost just yet. They still have time to sell, perhaps take a big fat capital gain (depending how long ago they bought) to wipe out all debt and still have a deposit for a future home purchase, and if they are living in the house they can start renting while they regroup and completely restructure their family finances. Surely that would be better than desperately clinging onto the house as its value starts to fall.

The sensible thing to do would have been to wait a bit longer and save the few grand required for the holiday. Of course, you can't tell people that, and so they have to be allowed to pay the extra money. It is unfortunate that the truth, or an honest opinion, can totally ruin relationships. I've almost given up advising people against their own stupidity. You don't get any brownie points for saying, 'I told you so, either, only more resentment. Often, the only thing to do is let them crash and burn.

I think there's too much of a cultural 'instant gratification' thing in our culture that says you shouldn't have to wait - it's how people like Gerry Harvey have built their fortunes. It's so much better to wait till you can afford it and then drive a hard bargain with your cash. The last time I bought a major appliance (my desktop computer) I took $800 cash with me to go shopping... it's amazing how much better the deals get when you wave that cash in the shop assistant's face. Even in 2017 most big retailers will knock a good amount off for cash - I ended up getting nearly $100 off the ticket price.

Alas, the situation is far worse than that, because redraw is being used not only for cars and holidays but essential day-to-day expenses. But even for families who have reached that point, all is not lost just yet. They still have time to sell, perhaps take a big fat capital gain (depending how long ago they bought) to wipe out all debt and still have a deposit for a future home purchase, and if they are living in the house they can start renting while they regroup and completely restructure their family finances. Surely that would be better than desperately clinging onto the house as its value starts to fall.

At this point it appears that most small-time landlords etc. are still okay unless they went deep in WA or the NT. As Carnot said (above) it's hard to know what the quality of many owner-occupier or investor mortgages are actually like until things get sticky... maybe we're about to find out.

these are not indications of a strong economy

Having been to Regional VIC recently I'd say that there's a lot of prosperity as you get closer to Melbourne but as soon as you move beyond the commuter belt things start to look parlous.

At this point it appears that most small-time landlords etc. are still okay unless they went deep in WA or the NT. As Carnot said (above) it's hard to know what the quality of many owner-occupier or investor mortgages are actually like until things get sticky... maybe we're about to find out.

They have all been OK simply because they had the option of selling to take capital gains if things got too tight. A sole breadwinner colleague of mine recently went to refinance because things were getting a little tight, and was told by the bank that under the new lending restrictions he never would have been given his current mortgage because his assessed capacity to repay is now lower, so he walked away unsuccessful. Luckily he had the option of reducing spending (or so he thinks for the time being), or his house would now be on the market. I'm going to assume this is happening to quite a number of people. In the cheap debt and high capital growth environment of the last 15 odd years it has been so easy to set oneself on an unsustainable financial trajectory.

According to Digital Finance Analytics, household finance confidence fell in the last month, with most of those of the 52,000 surveyed who said their wealth had increased in the last year attributing the lion's share of that rise to unrealized capital growth in their properties rather than real gains in income from employment or rental receipts. It seems assumptions of capital growth in residential property are underpinning everything.


The amount of home loans that have been extended based on “factually inaccurate” information is estimated to have reached $500 billion, according to an updated study by investment bank UBS. According to UBS, a survey of 907 Australians who took a mortgage in the past 12 months found that just 67 per cent said their application was completely factual and accurate versus 72 per cent a year ago. By channel, the level fell to 61 vs 68 per cent for brokers and to 75 vs 78 per cent for bank branches. For NAB, the level fell to 62 per cent and for ANZ it fell to 55 per cent. https://www.macrobusiness.com.au/2017/09/move-sleaze-bank-dodgy-home-loans-rise/http://
Only 55% for ANZ? That's pretty shocking. And remember, the real figure is probably lower, since it's likely that some people lied just as much in the survey as their loan applications.


This one is an AFR subscription article, but the message is that banks are again diving head-first back into interest-only investor loans.
“ANZ Banking Group and other property lenders are easing back into lucrative interest-only loans because a dip in the number of investors is lowering pressure on strict regulatory caps and creating new opportunities to build market share during peak spring buying season.”
I'm assuming that since the restrictions related to the proportion of investor mortgages on the books, recent cooling of the investor market has opened up space for a revival of specufestor activity. In order to maximize profits, the banks want to run right up to their limits, and to hell with the long term implications of more house price inflation, let alone the use of unrealized capital gains as collateral.

Billionaire property developer Harry Triguboff says the downturn in Australia's apartment market will have a "big impact on the economy", and has called for government intervention to help stem price falls.

Triguboff, owner of the Meriton apartment empire with 8000 units in Australia's major cities, says prices are down 10% over the past six months and sales have dropped, according to a report in The Australian.

“The big question is whether the government will allow prices and volumes to go down before they start helping,” Triguboff said, adding, "Australians could lose an enormous amount of wealth."
http://www.msn.com/en-au/news/australia/billionaire-developer-harry-triguboff-warns-apartment-downturn-could-destroy-an-enormous-amount-of-wealth/ar-AArEZy5?ocid=ientphttp://

Well, well, well, a rich property developer wants the government - meaning taxpayers - to stop house prices from falling.

Australians could lose an enormous amount of wealth? Well, yes, they are going to lose some or all of their deposits and more, but since much of that so-called wealth is also comprised largely of unrealized capital gains, in part it's wealth they never had to begin with.

A nice piece of self-interested rhetoric from a property developer. I think there's something deeply shameful about rich people holding out their hands to the big daddy welfare state when it suits them, then effectively shaming poor people for doing the same and claiming that they got rich by their own merits.

Sorry, Harry, but it's not our job to bail out your failed ponzi scheme. Sadly for us, we're probably going to do it anyway.

Part of the problem is that people have got familiar with low interest rates and forget the lessons of the late 1980's.

Back then I had a 'low interest home loan' via my employer of 9% when the going rate was 18% for a home loan.

As a result I have not relied on the bank's information but used one of the mortgage calculators around to work out the repayments if the loan was 10% and take out a loan with a redraw option.  The money soon mounts up and when the car needed replacement I took the money out of the 'payments in advance' to purchase it but put the money back in the account at the repayment rate of a personal loan on top of the mortgage payments.

It also lets you build a buffer in case your personal circumstances change as the reason for the change may not be under your control

Well, well, well, a rich property developer wants the government - meaning taxpayers - to stop house prices from falling.

It isn't surprising that a billionaire is calling for government action - most of these people (especially in mining) have made their money due to favourable government decisions and changes in the law that have allowed them to accumulate their billions. Yet they probably deride "dole bludgers" for living off the government...

Harry is in quite a bit of trouble because he began hoarding his own apartments a few years ago in anticipation of the prices going up - particularly Brisbane where the market for his completed apartments has been quite soft. Now he's at a situation where he has thousands upon thousands and there's still no sign of the market appreciating. Interesting that he makes this plea on behalf of the people who have bought property in the last several years... not because he's losing money himself.

Part of the problem is that people have got familiar with low interest rates and forget the lessons of the late 1980's.

ANYONE under 40 won't even remember those times, they'd stare at you in disbelief if you told them that mortgage rates were once 18%. The sad thing is that we are so heavily leveraged that any move towards historical norms of 7-8% will probably destroy the banking system.

I'm assuming that since the restrictions related to the proportion of investor mortgages on the books, recent cooling of the investor market has opened up space for a revival of specufestor activity. In order to maximize profits, the banks want to run right up to their limits, and to hell with the long term implications of more house price inflation, let alone the use of unrealized capital gains as collateral.

Well they've made unprecedented profits in the last 20 years on the back of the explosion in house prices, it's only reasonable to expect that they'd want to double down because of the yet-to-be-realised fantastic profits ahead. And in fairness to the banks, why should they worry about risk - any problems that they encounter in the future will be ultimately borne by the taxpayer, not by them. It's a win/win for them, what other business is there in Australia where the government must legally bail out your international creditors and domestic depositors when you lose money?

there's a thing about risk ownership - if you owe the bank $1 million you have a problem. If you owe the bank $100 million then they have a problem.

I'm assuming that since the restrictions related to the proportion of investor mortgages on the books, recent cooling of the investor market has opened up space for a revival of specufestor activity. In order to maximize profits, the banks want to run right up to their limits, and to hell with the long term implications of more house price inflation, let alone the use of unrealized capital gains as collateral.

Well they've made unprecedented profits in the last 20 years on the back of the explosion in house prices, it's only reasonable to expect that they'd want to double down because of the yet-to-be-realised fantastic profits ahead. And in fairness to the banks, why should they worry about risk - any problems that they encounter in the future will be ultimately borne by the taxpayer, not by them. It's a win/win for them, what other business is there in Australia where the government must legally bail out your international creditors and domestic depositors when you lose money?

The banks are making rational, short-term profit-oriented decisions, but I think the key takeaways here are:

• contrary to the official narrative that things have become more sensible in the lending game thanks to APRA's adjustments, they really haven't become much more sensible at all - while there are limits on certain types of lending, they are expressed as a percentage, so if the market grows, so does the nominal figure linked to that percentage; even with a small percentage ceiling on riskier lending, the contagion effect of those risks coming home to roost could still be severe
• the banks will continue inflating the property bubble as much as they think they can get away with, meaning the market will have further to fall when (not if) it does go down, and the burden on the taxpayer will be maximized

I got my power bill today and I'm pretty angry; my Kw/h basic charge has gone up 25%. A quarter more for the same amount of winter electricity as I used last year; it's almost $600. I'm running a Fujitsu reverse cycle to keep warm, I have all LED lighting, my house is very well insulated and occasionally I have to use the tumble dryer. The hot water and cooking are on gas so that's about it - it's purely the increase in the basic Kw/h. I just don't understand what happened to our country, your power bill used to be less than $100 a quarter even in winter - now I'm paying six times the amount for the same product and everyone from Turnbull down thinks that's okay somehow... I'm blind with rage. Haven't got my winter gas bill yet but I bet that's well over $300.

Is anyone else in the same situation?

I got my power bill today and I'm pretty angry; my Kw/h basic charge has gone up 25%. A quarter more for the same amount of winter electricity as I used last year; it's almost $600. I'm running a Fujitsu reverse cycle to keep warm, I have all LED lighting, my house is very well insulated and occasionally I have to use the tumble dryer. The hot water and cooking are on gas so that's about it - it's purely the increase in the basic Kw/h. I just don't understand what happened to our country, your power bill used to be less than $100 a quarter even in winter - now I'm paying six times the amount for the same product and everyone from Turnbull down thinks that's okay somehow... I'm blind with rage. Haven't got my winter gas bill yet but I bet that's well over $300.

Is anyone else in the same situation?

Our electricity bill has gone up just 10% this winter - total bill about $225 for qtr.  Our use is slightly more than last year so not really complaining.  We have highly efficient gas central heating (and solar/gas HW) and that costs about $300 each winter - the tariff hasn't changed.

Shop for plans that offer discounts for direct debit etc.  That can make a difference.

Also look for sources of parasitic electrical use - i.e TVs, chargers, electronic devices on sleep mode that suck up power etc.

My ex years back got incensed at our power bill and went around turning any thing off that was not needed, like sound systems left on, lights left on and so on. She seemed to think it would lower the electricity bill, what a shock it was to get the next power bill though, someone in accounts at our electricity provider had move the goal posts so all my ex got for her trouble was a bit of exercise. They just keep moving the basic charge upwards for no real apparent reason other than pure greed. This country was once great but is now way down the gurgler and I doubt we can ever swim our way out of the whirlpool it is in now!

I thought blackouts here were a thing of the past having been born in the 1950's and experienced some beauts in my younger days but now it is happening all over again here, because some imbecile poliie or party wants to use only green electricity, not coal or gas. Like most I don't give a fig whether the electricity is green, blue, black or purple just as long as I turn the switch on and something works! It has got beyond the part that was a joke and how many will simply die now because they cannot afford to pay electricity and like bills.  It is not only used to power heaters and air conditioners though but some home life saving equipment, and not all of the poor can afford to get a back up system in case the power goes out or they cannot pay the bill. So what happens to them, no one really gives a fig any more, to be honest by the sounds of it.

Our electricity bill has gone up just 10% this winter - total bill about $225 for qtr.  Our use is slightly more than last year so not really complaining.  We have highly efficient gas central heating (and solar/gas HW) and that costs about $300 each winter - the tariff hasn't changed.

Shop for plans that offer discounts for direct debit etc.  That can make a difference.

Also look for sources of parasitic electrical use - i.e TVs, chargers, electronic devices on sleep mode that suck up power etc.

My tariff has gone from 20 cents p/h to 39 cents p/h in the space of two years - it's not my electricity consumption that's the problem it's the supply charge (85 cents a day up from 70 cents) plus the almost doubling in the tariff.

Shopping around will not make any difference, there is not an actual 'market' in operation in the true sense of the word. I had known for months this shock was coming and had already been trying to find a cheaper plan or alternative provider by using internet comparison services (government and private) - in my part of the world there is absolutely no difference going to another retailer, they were all quoted more expensive than my own existing provider.

They just keep moving the basic charge upwards for no real apparent reason other than pure greed. This country was once great but is now way down the gurgler and I doubt we can ever swim our way out of the whirlpool it is in now!

How can they possibly justify a one-off increase of 25% - it's ludicrous. The infrastructure is all already there and paid for by the Playford government (pretty much as it was in the fifties and sixties in most parts of South Australia) - why was there any justification for hiking the basic Kw/h charge 25%? On what basis - huge subsidies to green electricity generation? Gold plating the network? Overseas owners demand more profits from a captive Aussie consumer? Either way I'm extremely disappointed with our leadership for allowing us to be ripped off in this manner but I can at least afford to pay. I can't imagine how hard life would be for someone without a regular income, as you say, nobody cares about the people on the margins in Aussie society any more.

To be honest I strongly doubt the surcharge or connection fee is anywhere near high enough. The connection fee is the actual cost of sustaining and upgrading the network and if you think 1 million customers in SA paying $200-300 a year cover's it you misguided. The actual unit charge should be basically applied to the generation only, not distribution. Also if you think a network built decades ago doesn't need more investment, you are misguided. After  30-40 years much of it will need replacing or major upgrades.

20 years ago in Tas, the govt switched to a system from where you were only charged by the kW/h to a mix of connection fee and kW/h. In return the unit charges were reduced significantly. You could reduce your connection fee, back then basically $1/day/house by 2/3 or 1/3 by getting a device installed that limited the maximum amperage draw by the house via switching off major loads. ie fixed heating and hotwater. The idea being to reduce the variation demand on the grid and reduce grid costs.  

The ALP/Green's stopped the scheme on election as it was deemed unfair to low power users with people complaining about why they need to pay for power when they don't use any Read "I want to be subsidised by others". And the weak excuse it doesn't encourage people to reduce energy and hence needs to be more expensive so make get more money out of wealthy.

What makes the grid expensive and much of the major upgrades needed in recent 15 years year the demand by house holds to use AC at will as AC is almost standard in Australian houses these days. In 1990, the average house would draw around 10amps tops on a non-winter night. A few amps for TV, lighting other items and random minor use of stove, kettle, vacuum cleaner, hair drier etc. Most rooms in the older house would be lucky to have two single outlets per room and usually one vacant. Now while some things have improved in efficiency, AC's are pretty standard and you can see this on SA's daily load variation in summer with houses now pushing 20-25amps. 1200MW to 3300MW in 8hr, far greater swing than any other state. This is a WTF situation. So you need a grid that can take a minimum 3 x increase in demand over nominal plus a buffer so the ever complaining voters don't go black.

Even today SA is going from 1100MW to 1700MW   155%, meanwhile NSW is 140%, other states less.

I'm also sure the connection fee is being used to recoup funds from those cutting their energy demand to offset rising prices.

The good news is for those wanting to go stand alone, the higher the connection fee, the more viable it is to disconnect when the technology catches up.

'I'm also sure the connection fee is being used to recoup funds from those cutting their energy demand to offset rising prices. '
That's the key to it. It's simply a means to screw anyone who is hard up for whatever reason and attempts to cut their electricity bill by freezing, staying in bed or wrapping themselves in blankets etc.

It also gives suppliers and politicians the opportunity to spin the increases in the cost of electricity by ignoring the so called supply charge.

You don't get charged a fixed amount on top of your train fare to paint the station fence (or not which is usually the case).

They don't even replace condemned poles most of the time these days just slide a piece of formed steel beside the pole and say 'she'll be right'.

Capitalism is wonderful if you are a capitalist.

One for the RE rules : Coal must be killed off proponents

China is building 299 new coal power stations right now

India +100

Vietnam + 30

Japan and Sth Africa + 30 combined.

AGL is going to be subsidised by the taxpayer ~$250m to build a solar farm 4% of the size (8MW) of the Liddel coal power station (2000MW). That's just the subsidy to make it viable. AGL will pay the rest. It costs about $3-4B to replace Liddle with a modern coal fired power station of same output electrically, but increasing efficiency from low 30% to mid 40% range and include SO2 scrubbers for even lower emissions than just using new technology.

To replace Liddel with Solar requires land 7 x the area of city of Melbourne or 1500 wind turbines plus battery or other storage or gas turbine backup.

The Saudi's will be subsided roughly another $250m to build more solar farms.  

Meanwhile the Vic govt is looking at what to do with the old Point Henry Aluminium Smelter site near Geelong which includes its own shipping berth. Considering the same location has both a salt works and cement plant plus existing incoming HV power lines.

How about starting with a 1800MW x 3 unit brand new coal power station with option to expand to 2400MW using NSW or/and Qld thermal coal.

Provide local high tech jobs

brine from power station cooling is used by salt works to make salt more efficiently.

Fly ash by local cement company.

What makes the grid expensive and much of the major upgrades needed in recent 15 years year the demand by house holds to use AC at will as AC is almost standard in Australian houses these days. In 1990, the average house would draw around 10amps tops on a non-winter night. A few amps for TV, lighting other items and random minor use of stove, kettle, vacuum cleaner, hair drier etc. Most rooms in the older house would be lucky to have two single outlets per room and usually one vacant. Now while some things have improved in efficiency, AC's are pretty standard and you can see this on SA's daily load variation in summer with houses now pushing 20-25amps. 1200MW to 3300MW in 8hr, far greater swing than any other state. This is a WTF situation. So you need a grid that can take a minimum 3 x increase in demand over nominal plus a buffer so the ever complaining voters don't go black.

The private sector delivering the services is saying that this kind of redundancy is extremely expensive hence the mega-increases being approved. There was an idea floated immediately after the blackout last year that domestic consumers should pay the (somewhere around) $2.5 billion to build a very long-distance inter-connector to the NSW eastern seaboard network; the cost of domestic consumers and industry (what's left of it) shouldering that burden is unimaginable - power bills would have to skyrocket even further.

There's no guarantee that any gas turbines will be available at peak times anyway, part of the reason for the blackout was the very high price of running older gas plants here in SA which is why they were turned off at the time. All this is patently absurd; we have almost unlimited supplies of gas, coal and uranium - Playford and Bolte would be rolling in their graves if they could see what a farce their once mighty industrial states have become. Who on earth could afford to operate a business if their power consumption was a large fixed cost - it would be impossible.

What makes the grid expensive and much of the major upgrades needed in recent 15 years year the demand by house holds to use AC at will as AC is almost standard in Australian houses these days. In 1990, the average house would draw around 10amps tops on a non-winter night. A few amps for TV, lighting other items and random minor use of stove, kettle, vacuum cleaner, hair drier etc. Most rooms in the older house would be lucky to have two single outlets per room and usually one vacant. Now while some things have improved in efficiency, AC's are pretty standard and you can see this on SA's daily load variation in summer with houses now pushing 20-25amps. 1200MW to 3300MW in 8hr, far greater swing than any other state. This is a WTF situation. So you need a grid that can take a minimum 3 x increase in demand over nominal plus a buffer so the ever complaining voters don't go black.

The private sector delivering the services is saying that this kind of redundancy is extremely expensive hence the mega-increases being approved. There was an idea floated immediately after the blackout last year that domestic consumers should pay the (somewhere around) $2.5 billion to build a very long-distance inter-connector to the NSW eastern seaboard network; the cost of domestic consumers and industry (what's left of it) shouldering that burden is unimaginable - power bills would have to skyrocket even further.

There's no guarantee that any gas turbines will be available at peak times anyway, part of the reason for the blackout was the very high price of running older gas plants here in SA which is why they were turned off at the time. All this is patently absurd; we have almost unlimited supplies of gas, coal and uranium - Playford and Bolte would be rolling in their graves if they could see what a farce their once mighty industrial states have become. Who on earth could afford to operate a business if their power consumption was a large fixed cost - it would be impossible.

The Private sector only does what the govt lets it get away with and govt ownership doesn't remove stupidity and govt policy got SA into this mess to start with.

$2.5B is more than the cost of building large scale diesel/oil fired power station and probably cheaper to maintain.

I don't think there has been alot of gold plating, what has been done is increasing the ability to move power around the country in larger amounts. Look at all the shinny towers crossing the Qld / NSW border.

Peaking gas is problematic unless basically built ontop of the gas field as you paying for high cost high flow piping that is used infrequently. In Qld they GT's are on the gas reserves, not in the city.

SA has a min load of about 900MW, nominal winter around 1100-1600 MW, a seasonal summer nominal load of 2000-2400MW with extreme peaks above 3000MW.

Wind and solar is fine, but for every 1MW you get from either you need a backup plan. The Vic inter-tie is too small now to do this effectively on its own, so you need peaking gas. The Inter-tie also needs its own back up with is peaking gas.

For me, its
- 800-1000MW base load coal.
- 300-600MW of seasonal coal output
- 500-800MW of base load gas
- 1000MW of peaking gas

RE and solar is fine and can be used to limit the peaking gas and seasonal coal.

The 100MW battery will support the state into the early evening when demand peaks around 6-8pm, but its use is fairly limited.

What makes the grid expensive and much of the major upgrades needed in recent 15 years year the demand by house holds to use AC at will as AC is almost standard in Australian houses these days. In 1990, the average house would draw around 10amps tops on a non-winter night. A few amps for TV, lighting other items and random minor use of stove, kettle, vacuum cleaner, hair drier etc. Most rooms in the older house would be lucky to have two single outlets per room and usually one vacant. Now while some things have improved in efficiency, AC's are pretty standard and you can see this on SA's daily load variation in summer with houses now pushing 20-25amps. 1200MW to 3300MW in 8hr, far greater swing than any other state. This is a WTF situation. So you need a grid that can take a minimum 3 x increase in demand over nominal plus a buffer so the ever complaining voters don't go black.

The private sector delivering the services is saying that this kind of redundancy is extremely expensive hence the mega-increases being approved. There was an idea floated immediately after the blackout last year that domestic consumers should pay the (somewhere around) $2.5 billion to build a very long-distance inter-connector to the NSW eastern seaboard network; the cost of domestic consumers and industry (what's left of it) shouldering that burden is unimaginable - power bills would have to skyrocket even further.

There's no guarantee that any gas turbines will be available at peak times anyway, part of the reason for the blackout was the very high price of running older gas plants here in SA which is why they were turned off at the time. All this is patently absurd; we have almost unlimited supplies of gas, coal and uranium - Playford and Bolte would be rolling in their graves if they could see what a farce their once mighty industrial states have become. Who on earth could afford to operate a business if their power consumption was a large fixed cost - it would be impossible.

The Private sector only does what the govt lets it get away with and govt ownership doesn't remove stupidity and govt policy got SA into this mess to start with.

$2.5B is more than the cost of building large scale diesel/oil fired power station and probably cheaper to maintain.

I don't think there has been alot of gold plating, what has been done is increasing the ability to move power around the country in larger amounts. Look at all the shinny towers crossing the Qld / NSW border. Also you are trying to tap into NSW during the periods when demand is very high and they will have their own problems and likely flick you off anyway and we haven't even talked about the energy losses along the way.

Peaking gas is problematic unless basically built ontop of the gas field as you paying for high cost high flow piping that is used infrequently. In Qld they GT's are on the gas reserves, not in the city.

SA has a min load of about 900MW, nominal winter around 1100-1600 MW, a seasonal summer nominal load of 2000-2400MW with extreme peaks above 3000MW.

Wind and solar is fine, but for every 1MW you get from either you need a backup plan. The Vic inter-tie is too small now to do this effectively on its own, so you need peaking gas. The Inter-tie also needs its own back up with is peaking gas.

For me, its
- 800-1000MW base load coal.
- 300-600MW of seasonal coal output
- 500-800MW of base load gas
- 1000MW of peaking gas

RE and solar is fine and can be used to limit the peaking gas and seasonal coal.

The 100MW battery will support the state into the early evening when demand peaks around 6-8pm, but its use is fairly limited.

Meanwhile the Vic govt is looking at what to do with the old Point Henry Aluminium Smelter site near Geelong which includes its own shipping berth. Considering the same location has both a salt works and cement plant plus existing incoming HV power lines.

How about starting with a 1800MW x 3 unit brand new coal power station with option to expand to 2400MW using NSW or/and Qld thermal coal.

Provide local high tech jobs

brine from power station cooling is used by salt works to make salt more efficiently.

Fly ash by local cement company.

No chance of a new coal fired power station with the current State Govt.  Political suicide and riots on the streets.