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Discussion paper

Missing a stitch in time

The consequences of underinvestment in proper upkeep of Australia’s electricity transmission and distribution system
Publisher
Electricity grid Electricity distribution networks Infrastructure funding Electricity Energy industries Infrastructure Australia
Resources
Attachment Size
Missing a stitch in time 1.45 MB
Description

Australia’s electricity industry constitutes a large and critical component of our national economic infrastructure. The industry produces $25 billion per year in value- added. It employs around 50,000 Australians, paying out $6 billion per year in wages and salaries. It makes $45 billion in annual purchases from a diverse and far-reaching supply chain, that provides the sector with inputs ranging from resources to equipment to construction to services.

Most important, of course, the industry literally keeps the lights on: it provides an essential input, electric energy, without which no other industry could function and the safety and comfort of Australians would be immediately jeopardised. In this regard, electricity is clearly an essential service: a utility vital to virtually everything else that occurs in the economy and society.

Australia’s electricity industry is controlled by self-seeking private businesses, and a few state-owned corporations directed to act just like them. They are governed by a regulatory system which places far too much faith in the inherent efficiency of private sector actors. Hence the industry is failing to make that stitch in time. Australians will pay the price for the chronic neglect of proper maintenance and upkeep of our electricity system in many ways: through a system that is inefficient, unreliable, cannot meet the challenges of the coming energy revolution, is unduly expensive to consumers, and which in many cases is unsafe for both workers and the public at large.

This report provides evidence of a pattern of systematic underinvestment in the upkeep and capability of Australia’s electricity grid, drawing on three major sources of data:

  1. A project to gather original qualitative data from dozens of power industry workers employed on the front lines of maintaining Australia’s transmission and distribution network. Their personal and professional experience attests to a widespread and sustained pattern of underinvestment and neglect, and provides worrisome details regarding the consequences of that underinvestment for the well-being of workers, communities, and the environment.
  2. A review of other research and findings in the public domain (including several government commissions and inquiries) regarding the importance of a top-quality, well-maintained electricity grid for our economy and society. These previous studies have also warned that the current system is falling behind in safe and efficient upkeep of its capital assets.
  3. A review of available quantitative data – from the Australian Energy Regulator, from the Australian Bureau of Statistics, and from individual companies. This review confirms the steady decline in allocations of real resources to the capitalisation and good operating condition of the transmission and distribution grid. And it documents the erosion of real maintenance and upkeep according to several indicators, alongside evidence of unprecedented inflation in both electricity prices and industry profits.

 

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