Wednesday, 2 November 2011

Opposition plan adds to uncertainty: Origin

Sydney Morning Herald
21 Oct 2011, Page: 5

AUSTRALIA must prepare for five more years of uncertainty over the foreshadowed carbon tax as a result of the federal opposition's claim that it will repeal it if elected. Grant King, the managing director of the largest privately owned power company, Origin Energy, called for more rigour in the debate about renewable energy, saying that no form of energy "is truly benign".

"There's been uncertainty for probably 10 years and right now you'd say there will probably be another five years of uncertainty", Mr King said, in light of the opposition's stated plans to repeal the tax. "There is quite a period of uncertainty ahead of us, no matter what", he said. "It will result in different [energy] choices than might otherwise have been made. "What will be built is the cheapest way that might meet that requirement, and that might not cause the right long-term mix of generation in the system to be built,.. We will generally expose the least amount of capital we can to that decision. "That might mean there's much more open cycle plant in the system-that's gas peaking plant-than base load plant, and that is less efficient, so you therefore get more carbon emissions".

Most people wanted steps taken to reduce carbon emissions, Mr King said, but there was concern about the rate of change. Furthermore, there was a "level of misinformation and misrepresentation on [coal seam gas] issues which I think are ideologically motivated around the notion of 'good' versus 'bad' fuels", he said, with no form of energy "truly benign".

Solar cells, for example, needed chemicals such as hydrofluoric and phosphoric acid and sodium hydroxide, all of which were highly toxic, he said. wind turbines were visually offensive to some, while others claimed they cause low frequency audible noise. Similarly, geothermal energy produced "up to 200 times more water" than coal seam gas wells and required hydraulic fracturing, similar to that seen with some coal seam gas wells, with the potential to affect the Great Artesian Basin.

"The point of these examples is not to say renewables are 'bad', rather that all forms of energy bring environmental issues", Mr King said. A $23 a tonne carbon price would likely result in "something near a 50% increase in current wholesale electricity prices, and natural gas wholesale costs may double over the next three to five years". Even so, given the rise in household incomes, "we think it unlikely that the cost of household energy will become significantly more burdensome on consumers", he said.