“The world was created in six days, and nothing has ever been on schedule since.” – Young Irish forester, Dermot Mangan, sent to buy timber poles in Finland for the Irish Rural Electrification Scheme.
This is Part II in a series dealing with the political economy of electricity in South-East Queensland and beyond.
Electricity – from local to national, from public to private ownership and from fossil fuels to renewables
State takes control of local government supply of electricity
Where we left off in Part I (The Trundle Electric Light Company), electric light and power was run by a private company in Trundle, a small country town in western NSW. Trundle Electric Light Company had the support of the local Shire that was also a customer. However, by 1957, the supply of power to Trundle and its surrounds was too much for a small company to keep up and so local government took it over with the support of the NSW state government. By the account of Ted Curr, other similar operations were afoot in rural New South Wales and elsewhere in the post war years.
The Irish Rural Electrification Scheme
Take Ireland climbing out of poverty after the Second World War. A young Irish forester, Dermot Mangan, was sent to Finland by the Irish Rural Electrification Scheme in 1946 to find trees sufficient in size and number to be used as electricity poles in Ireland. Dermot obtained the poles from Finland in 1947. Here is Dermot Mangan’s description of the epic nature of this quest:
“On Friday, we went by bus to Otava and then in horse-drawn sleigh over the frozen roads and across several lakes along the margins of which our poles were piled. All the time, a lot of work was involved in scraping off snow and breaking up the ice with axes … The day was rounded off by a wild rush in the same sleigh with the snow falling and the horse’s hooves sending big chunks of the ice off the road back on top of one – in order to catch a train, which was just pulling into Otava as we got there.” — Dermot Mangan from the REO News, 1947.
Apparently there was a world-wide shortage of timber poles. Despite this, the RES had secured supplies of over 100,000 from Finland. They were to be delivered to Ireland during the summer of 1947, before the ports in Finland froze up. These poles were transported in loads of over 10,000 at a time, on huge barge-like steamers, to harbours in Dublin, Limerick and Cork. Upon arrival, they were unloaded, skinned, creosoted, marked and disseminated to the twelve RES districts where they were thrust into the ground to hold the electric cables of the scheme aloft.
Dermot had navigated north from the Finnish capital, Helsinki, over and back across the frozen lakes and impassable roads on treacherous sled and train rides, locating forests and logging companies to fulfill the RES’s requirements. In Mangan’s dispatches, readers would be struck by his gumption, his sense of adventure, and the strangeness of the landscape he witnessed.
Pine Forests in Finland
The electrification of South East Queensland
Turn now to the capital city of Queensland Brisbane/Meanjin which in the 1950s had a population of about a quarter of a million people. To understand electricity supply in Southeast QLD we need to look at the broader energy requirements for a growing metropolis.
Energy systems needed –
- electricity to power the city mines farms and agriculture, industry and manufacture;
- heating and cooling of buildings;
- mass transport including trams, trolleybuses, trains, buses and planes;
- Grids and transmission – poles carried lines aloft creating safety issues, both for electricity workers and for people caught in floods and storms that brought down live wires.
Two major questions arose that influenced the development of these energy systems in South East Queensland.
- Ownership – transition from private ownership to public ownership in the 1960s and 70s and back to private ownership from 1980s till 2000s.
- Technology – Electricity was being produced by fossil fuels in the 20th century which in the 21st century is gradually being replaced by renewable energy.
These factors influence the cost of supply of electricity. In a capitalist society, cost can be broken down into capital required, price of fuels, profit (surplus value), labour cost, and transmission maintenance costs.
Looking first at ownership, electricity generation and transmission was owned and controlled in the 1950s by local government in the form of the Brisbane City Council. There were two power stations in the city limits one at New Farm and the other at Bulimba (Gibson island). By 1961 the state government set up the South-East Queensland electricity authority so a state government entity was beginning to take over some of the responsibility for electricity supply in Brisbane, the Gold Coast and Toowoomba.
Residential customers and taxpayers have always subsidised the cost of electricity to mines in Queensland. Over time the price of electricity has multiplied so that it increased dramatically from 2007 to 2018. Various attempts have been made to rationalise the increased cost of electricity to ordinary consumers … here is just one such attempt:
“During this period (1955-80), real electricity prices fell significantly as economies of scale were utilised from the construction of large thermal power stations”. No mention is made of the lowering effect on price by the move from private ownership by regional operators like the Trundle Electric Light Company to public ownership under large local and state authorities.
Nor is there mention of the sharp rise of prices despite the reduction in cost of renewable fuels like sun, wind and hydro. Solar energy doesn’t cost anything; even though renewables fuel 30% of the total electricity supply, the cost has increased as shown in the graph, Electricity Prices in NSW & Qld (1955-2018).
It is very hard to reconcile the following statement with all known facts of lack of maintenance, inefficiency, brown outs, system failures and power shedding and price subsidy for mines and industry than this paragraph that appeared under the heading “1998 to 2008 – a decade of success“:
“The NEM formed part of a world-wide electricity industry microeconomic reform experiment, which commenced in Chile in 1982 (Pollitt, 2004; Simshauser, 2019). The overall aim of the NEM was, and is, to provide a reliable, secure energy supply at the best possible price for consumers. This was to be obtained by designing and enabling competitive markets where competition was feasible, coupled with robust and resilient regulatory frameworks to complement competition (and substitute for it where competition was not efficient).” – Australia’s National Electricity Market after twenty years by Alan Rai and Tim Nelson.
The City Electric Company owned and operated power supply to Brisbane until 1952 when it was acquired by the state government. Brisbane City Council used the new farm power station to supply electricity for its mass transportation system comprising of trams and trolleybuses. This was the largest tram system in the southern hemisphere. Bulimba power station situated on Gibson island in the Brisbane river provided electricity to the suburbs.
As Brisbane and Queensland grew these power stations were replaced by Tennyson, Swanbank, Tarong, Millmerran, Gladstone (the largest), Kogan Creek, Callide and Stanwell power stations. These were all driven by fossil fuels. There has been a reluctance by state governments to replace fossil fuels with renewables. On 11 July 2008, four activists from Greenpeace Australia occupied the top of a 140-metre high Swanbank smokestack for 33 hours. They descended over two hours on the next day, leaving a message for Australia’s leaders – “Go Solar“- painted on the side of the smoke stack.
From the 1960s on, electricity supply and generation in SE Qld moved from private hands to local government, then to state (SEA) and finally to a National Electricity Market (NEM). At a national level in recent times, publicly owned coal fired power stations are being replaced by privately owned gas, solar and wind electricity generation. Both the Beattie and Bligh Labor governments tried to privatise electricity system despite both union and environmentalist opposition. However the transmission grid remains in public hands.
Electricity generation has also occurred at sugar mills owned by co-ops. Some electricity comes from hydro and a little from wind. About 70% of Queensland electricity comes from call and gas fired power stations, 30% comes from renewables including hydro, solar, wind and bio mass. One third of that comes from rooftop solar which has a large impact on fossil fuel generation at peak hours in the afternoon, reducing the need for big power stations to supply electricity.
In 1985, the Queensland government sacked 1001 electricity workers to reduce the cost of electricity to businesses. Some of these workers were replaced by contract labour.
I received this message from a person who grew up in the ensuing years, the 1990s and 2000s: “I do remember the lights going off in Queensland a number of times in my childhood due to storms or the system overloading in hot weather when everyone turned their air conditioners on.”
However there was another factor … Joh Bjelke-Petersen had introduced contract labour into the system by sacking the 1001 SEQEB workers … he did so because local businesses insisted on cheaper electricity. So maintenance of the system went out the back door and there were very few back-up systems. The former CEO of SEQEB, Wayne Gilbert, transferred to Auckland in NZ when Labor took government in Qld in the late 1980s. The wrecker of SEQEB repeated his practice of cutting corners and not having back-up systems. There was a massive failure of the electricity system in Auckland when a main cable melted under load. There was no back up so Auckland was without electricity for 5 weeks.
In 1989 when Labor came to power in Qld they did not ensure that maintenance of the system was improved because they accepted the neo-liberal argument that private enterprise should run the system and could keep electricity costs down. Workers lived under the bizaare situation where two linesmen or cable jointers in the same truck doing the same work were paid at different rates and under different conditions. Some were employed under the Bjelke-Petersen contracts which required longer hours of work (38 hours) and others were employed under the old award system with a shorter working week (36 hours). Their pay rates also differed. What a nightmare that must have been for the payroll clerks!
It was not until well into Beattie’s reign as Premier in the early 2000s that the Labor government were forced to improve maintenance of the grid.
So, throughout your childhood, the electricity system was on a knive-edge with brown outs, system failures and power shedding. All this time Labor attempted to privatise both generation and transmission of electricity. It proved to be very unwise because all it produced was higher electricity prices from 2007 onwards when Labor & Liberal governments introduced a National Electricity Market.”
One of the problems faced when live wires are suspended from poles is safety. During extreme weather events such as strong winds, floods, and high temperatures, these wires and poles come down creating a threat to anyone in the vicinity. one of the objections by the Electrical Trades Union and SEQEB workers was the lack of safety for linesmen and cable jointers. During the 1985 SEQEB dispute, untrained contractors brought in to replace skilled workers were electrocuted.
South-east Queensland is subject to extreme weather events caused by climate change. In the 1974 floods, Captain Ian Kerr and Corporal Neville Hourigan were electrocuted in Pullen Pullen Creek near Moggill. This tragedy occurred when their amphibious vehicle hit a high tension transmission wire while they were on a rescue mission.
Despite energy demand being reduced by more efficient technology (e.g. in lighting, and domestic whitegoods) cost of electricity is increasing. One reason is “gold plating” where there is “over investing” in poles and wires based on excessive estimates of demand. The ACCC estimated in 2008 that nearly half (48%) of an electricity bill in Australia was due to the cost of building and maintaining the networks that distribute power from the generator to the customer. Most of these networks are now privately owned. Qld is an exception, perhaps because it is the most decentralised state.
From public ownership to market failure
Despite cover ups by moguls in private enterprise and by state and federal bureaucrats, the Australian electricity market failed in 2022. This is not the first time; the electricity grid failed in the South Australian blackout of 2016.
Despite resistance by state government there is an inexorable move from burning fossil fuels to renewables in energy and electricity production. At the same time this change is being used as a Trojan horse to privatise electricity production and supply in Australia resulting in gold plating, profit taking and therefore higher electricity prices. Worker health and safety are put at risk in an industry that is an essential service and should be retained in public hands.
For those apologists who claim that higher prices are due to government regulation are simply mistaken. Regarding system maintenance in the electricity grid, I think it is a false assumption that capitalists will always look after the things they need to run their businesses; short term thinking is a capitalist imperative. Capitalist enterprise lurches from crisis to crisis. Ironically, this is how some (not all) often make even more money, out of a crisis. Others must fail. The crisis produced by higher electricity prices is but one example. Run under capitalism, the current electricity generation, transmission and distribution systems are inefficient.
Part III – the failure of the market
Trevor Berrill is working on Part III in the series now. It is an in depth look at why the electricity market has failed, both from a technological and economic standpoint.
29 July 2022
“THE QUIET REVOLUTION – THE ELECTRIFICATION OF RURAL IRELAND 1946 – 1976” by Michael J Shiel