Climate change before privatisation: Professor

Cooma Monaro Express
Thursday 28/2/2008 Page: 3

CLIMATE change should be placed as the number one priority above the debate of whether the electricity market should be privatised, according to an industry professional. Associate Professor in Energy Systems at the University of New South Wales Hugh Outhred told the Cooma Monaro Express that the potential costs of climate change would have a greater cost than any sell-off of the retail arm of the electricity market or the privatisation of Snowy Hydro.

"In my opinion, given the climate change problem we now face the NSW government should not proceed with the lease of the generators or the sale of the retail electricity arm until they get them in a much better shape to deal with the impacts of the climate change problem," said Professor Outhred.

"I argue the state would need to undertake a significant amount of work before any lease or sale is possible." Professor Outhred added that even Snowy Hydro should be less concerned with its ability to compete if the retail arm was sold-off as climate change threatened its viability. "I don't think initially Snowy would be badly affected by the sell-off, but it would depend on who the new owners are and whether they would have other generation assets, but the future is uncertain.

"Operation constrains could however be limited water inflows if climate change leads to the long term reduced rainfall in the catchment, then Snowy Hydro's role would become more limited." "Snowy Hydro can't do much about the lack of rainfall, so it poses a more significant risk than the sale of the electricity retailers." Professor Outhred did suggest that the fact that Snowy Hydro used a completely renewable energy resource worked to its advantage, however its ageing infrastructure could present another problem.

"There's no question that Snowy Hydro's assets would continue to be used and operated if the retail arm was sold off and I don't think there's any likelihood that Snowy Hydro would shut down as it's a very important generation asset." "Snowy Hydro has the fundamental advantage of being a hydro scheme as it doesn't have to pay for the water that ends up in the dams, they don't have to worry about buying fuel, the technology of a hydro power station is simpler than coal and is more reliable, and it's a low carbon emitter. "However the ageing of the dams and power stations means that there needs to be significant refurbishments to keep the assets operational."