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By Philip Hopkins - posted Thursday, 5 July 2018

It was able to incorporate the expansion of power supply using new energy sources such as gas. Nuclear was very much on the agenda and renewables were on its horizon. (We're talking about the SEC's outstanding technical and engineering capabilities – not its management, which resulted in dreadful industrial relations, where the unions often treated the SEC like a punching bag. Its social charter, and covert government insistence, also led to overmanning of the power stations, which private operators now operate more efficiently and with fewer staff than the plants under the SEC).

With the Thatcher privatisation revolution unfolding in the 1980s, the SEC was split into individual businesses under the Labor Government. These businesses were subsequently sold for billions by the Kennett Government, which was facing huge government debt and the need to revitalise the 'rust-bucket' state.

As privatisation gathered pace in the 1990s, five retired senior SEC chief executives and engineers wrote to MPs about their fears regarding the disaggregation of electricity supply.


These fears included: the lack of overall planning for expansion of the generating system; short-termism, where bids were not related to sellers' costs; the difficulty in maintaining satisfactory supply because the power system operation is critically dependent on central co-ordination; not one of the separate entities, generation or distribution, had "obligation to supply", critical to a properly managed electricity system; and the long lead time required to build new brown coal generation plants in the Latrobe Valley, thus turning investors towards more expensive and shorter lead time plants such as gas. This would mean the virtual abandonment of the Latrobe Valley coal resources.

"We believe many of the reform proposals are operationally and economically unsound and will inevitably lead to a significant lowering of operational reliability, increased cost to small domestic, commercial and industrial consumers, and a total absence of a properly co-ordinated expansion of the generating system to the disadvantage of the development of the state," the executives said.

Given his emphasis on cheap, reliable electricity, there is no reason to think Monash would have disagreed with them. The SEC executives predicted many of the problems the energy system now has.

Each Latrobe Valley power station was built to match the peculiarities of the brown coal in its locality, but all operated in a co-ordinated way. After privatisation, each became a competitor, a co-ordinated approach to electricity supply was destroyed, research suffered, and consumer costs increased exponentially.

The various companies now controlling power retailing, each with their own chief executives and well-paid staff, and the private distribution network, hark back to the inefficient, pre-SEC days.

We don't know how Monash would have approached the issue of global warming and greenhouse emissions. However, given his belief in innovation and new technology, Monash would likely have backed modern technological use of brown coal allied with gas and a prudent introduction of renewables.


The SEC always had close links with Germany, where the latest brown coal station has emissions 55 per cent below those of the closed Hazelwood power station and 40 per cent below Loy Yang A. The 2200 megawatt plant at Neurath west of Cologne, while operating, can respond to fluctuations in renewables' output within 15 minutes. It was built in 2012 for about $A4 billion.

Given the political furore and dysfunction of much of the current energy scene, Monash's thoughts in January 1929, just a few years before his early death, resonate today:"We have governments and Parliaments composed of men of low intellectual calibre, and timorous and narrow vision. So – there is always a fight on, at almost every stage of the business."

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About the Author

Philip Hopkins is a retired journalist. He has degrees in languages and politics.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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