In Australia this summer, it’s one thing to have electricity, it’s quite another to be able to pay the bill. Over the last week or so, STT has focused on an event when 200,000 Victorian businesses and households were left sweltering during heatwave, as a collapse in wind power output led to widespread load shedding (ie controlled blackouts).
In the lead up, dozens of energy hungry businesses were dumped from the grid under Australia’s Soviet-era system of power rationing, euphemistically called “demand management”, where businesses are paid handsomely to not use power.
Step back and think about the concept a little more broadly, and the economic insanity reveals itself: because Australia cannot supply enough electricity to consumers, Australian power consumers are paying productive businesses to stop using it. Result? Businesses stop producing whatever it was they might be producing, if they had electricity, in the first place. As an economic…
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