Paradoxically the perfect storm of two years of very wet seasons, continuing water conservation by south east Queensland householders, and rapidly escalating electricity prices (which makes operating an engineered water system very expensive) has compounded the massive impacts of the $8-9 billion spent by the Beattie Government in the panicked move to stop Brisbane running out of water in 2008. Now south east Queensland has plenty of water (at least for the next four to five years) the government has no money and wants people, especially industry, to increase consumption so as to pay more and help offset the costs of the infrastructure.
It gives new meaning to the old notion of the Hydro-Illogical Cycle – you know the cycle that starts with rain proceeds through apathy to drought on to awareness and then concern and ultimately panic – as we realise the implications of taking for granted a critical resource like water. The panicked spend in the Beattie years happened because of inaction on water infrastructure during the Bjelke-Petersen, Goss, Borbidge and early Beattie years. Action came too late and when it came it was at top dollar in an absolute sellers market.
A better planned more prudential approach to water cycle management by successive governments could have seen a better outcome at a fraction of the cost. Had we had effective demand management strategies in place long before the emergency we would not have needed both plants. At top dollar we got two for the price of four and Queenslanders will pay for the panicked response for a long time. Tugun’s desalination plant and Bundamba’s water recycling plant are producing only 24 million litres of water daily for power stations that don’t need it[xxi]. With the dams full industry does not want to be paying a premium for engineered water. That’s the nature of the hydro-illogical cycle – when there is plenty of water no one wants to think about it.
Engineers Australia State President Steven Goh rightly says “The plants provide our community with increased water security, allowing us to better manage the risk of drought [and] population growth”[xxii]. Hopefully, we will never again take for granted the importance of ensuring sustainable management of our water resource – but I wouldn’t bet on it.
I say that because these debacles happen in large part because of short term community memory. In January 2011 we had a flood in Brisbane. In fact it flooded here in Rockhampton too, but at least your community remembers that it still floods here. In Brisbane we lost our community collective memory and some blamed three dam engineers for the disaster that ensued. Putting aside any lingering doubts about the efficacy of dam management at Wivenhoe during the 2010-11 summer, none of us can deny that over the 37 years from the time of the previous Brisbane River flood an entire generation of development in SEQ happened in places which were always destined to go under water again. Regrettably, short term community memory actually matches our approach to planning which is also short term – and both mitigate against attempts to promote sustainable development.
11. Change not possible without consumers, markets and price signals
Indeed, if any evidence was needed that pricing a utility or commodity can make a difference to its consumption, look no further than electricity consumption. Professor Mike Sandiford, Director of the Melbourne Energy Institute at the University of Melbourne has shown that the average rate of demand across the National Electricity Network (NEM) in the September quarter of 2012 was 600MW lower than the year before. Throughout most of the last decade conventional thinking projected Australia electricity consumption on an endless upward spiral of about 2% growth annually, when in fact since 2008 average actual demand has fallen from a peak of just over 23 GW to today’s figure of 21.4 GW – or 3.9 GW lower than where it was projected to be had business as usual happened[xxiii]. That disparity amounts to as much electricity as is generated collectively from Callide C at Biloela, Kogan Creek on the Darling Downs, and the 2.4 GW generators at Bayswater in central NSW. It represents billions of dollars in either redundant or avoided infrastructure expenditure.
The economic impact of the Global Financial Crisis (GFC) does not explain this yawning gap to the extent that might be expected. Yes, there is some subsidence in manufacturing for example, but it owes more to broader consumer sensitivity to the rising cost of electricity. According to the Productivity Commission, electricity prices “have risen by more than 50 per cent in real terms over the past five years” mainly because of spiralling “network costs… inefficiencies in the industry and flaws in the regulatory environment” – which covers a mesh of sins as different as State Government ownership, discordance between national agencies, and distortionary interventions such as the Renewable Energy Target.