Saturday 8 December 2007

Clarity call on carbon policies

Herald Sun
Wednesday 5/12/2007 Page: 43

EARLY movers on climate change have warned governments of developed countries at the UN conference in Bali to avoid policies that will lead to "stranded" investments. A working group that will help to frame binding emissions targets for the renegotiated Kyoto Protocol was also told that developed nations should aim for a short-term 2020 target of cuts between 25 and 40 per cent of 1990 levels. The final figure would be an aggregate target for all first world economies, possibly allowing some, such as Australia, more leeway than those which had already exceeded their protocol commitment, Global Wind Energy Council secretary general Steve Sawyer told BusinessDaily from Bali yesterday.

Mr Sawyer, whose Brussels based association addressed the Bali group on behalf of an alliance of international energy giants, power plant builders, various business councils for sustainable energy and carbon trading investors, said "private capital should do the lion's share of the work" towards achieving nations' reduced carbon emissions. GWEC believes free markets should have the key role in driving greenhouse gas reductions through carbon trading.

But TRUEnergy managing director Richard Mclndoe, who is also in Bali, said credible longterm incentives from government were needed for business to commit capital at the scale necessary to address the climate challenge. Technology deployment can only be accelerated if business has confidence that policy risk will be kept to a minimum," he said. Dr Wulf Bernotat, CEO of Europe's largest privately owned energy company, said he was ready to invest 18 billion ($A30 billion) in new carbon-abating technologies by 2010 as long as there was certainty about future carbon regimes.

Mr Sawyer's powerful international alliance, which is financed largely by multinationals such as General Electric, Siemens, BP and Shell, and the major wind industry companies, addressed delegates who will influence their countries' post-2012 binding commitments. The Bali meeting is the first step before two year-long negotiations on post-2012 targets begin in earnest. Mr Sawyer said the companies he represented, including oil producers and power plant builders, believed industrialised countries needed to radically cut greenhouse gas emissions by between 25 per cent and 40 per cent of 1990 levels by 2020.

"Our position is that reductions need to tighten over time," Mr Sawyer said. "We support a halving of emissions by 2050 on 1990 levels." The Intergovernmental Panel on Climate Change said last month this was a minimum level of cuts to atmospheric carbon dioxide required to stop the climate change that would cause serious environmental damage and in turn harm global economies. "While not all countries will be in a position to make cuts at the top of that range, some like Germany will go further and are already on track to achieve 20 per cent reductions even sooner, by 2012," Mr Sawyer said.

He said this could help nations such as Australia to negotiate lower reductions of 20 per cent from 2000 levels by 2020 as proposed by Australia's Clean Energy Council (CEC ). CEC chief executive Dominique La Fontaine had been due to deliver the GWEC position, but was precluded because of her role on Prime Minister Kevin Rudd's Bali team. Other advisers to Mr Rudd in Bali include an association representing the fossil fuel sector, the Australian Industry Greenhouse Network, plus the National Farmers' Federation, National Association of Forest Industries, Climate Action Network Australia and World Vision.

"The early movers in the business community require governments to send a clear signal from Bali that they are committed to establish the framework for post-2012 Kyoto Protocol will by the end of 2009," Mr Sawyer said. "We want a long term stable framework for investment and that means binding targets to reduce emissions." We don't want chopping and changing every couple of years. "That is bad for business that will lead to stranded investments in the energy and carbon trading sectors." Under the former Howard government's carbon emissions policies, a refusal to extend the Mandatory Renewable Energy Target (MRET) led to investments in wind energy being stranded.

It included the closure of the Portland wind turbine factory owned by Danish giant Vestas earlier this year and the forcing of Victorian companies, such as Pacific Hydro, to go overseas to grow their business. Mr Sawyer said the GWEC alliance represented companies with billions of dollars in financial capital and investments, and a strong commercial interest in the expansion of sustainable energy and energy efficiency markets. "The decisions made here in Bali will have the potential to significantly catalyse business investment in climate solutions." he said.

Climate Friendly gives Macquarie Capital a footprint in carbon market

Thursday 6/12/2007 Page: 3

Macquarie Capital Group has joined those becoming more active in the carbon market, buying 50% of climate change company Climate Friendly for an undisclosed sum. The deal comes a day after Prime Minister Kevin Rudd ratified the Kyoto Protocol, which sets a legally binding emissions reduction target for Australia. But Macquarie said it had been looking for some time to break into what it predicted "is about to become a very big market."

Climate Friendly, established in 2003, helps businesses and individuals adopt energy-efficiency targets and gain renewable energy carbon credits. Oliver Yates, Macquarie's global head of climate change practice, said the partnership would link Climate Friendly with Macquarie's international contacts and help Macquarie get into the growing market.

The timing looks opportunistic, but when you are getting into an acquisition of a business, it doesn't happen overnight," he said. "We think this market is going to be significant and we think enabling ourselves to get a better understanding of it, and enabling our clients to participate in it, is in the best interests of ourselves, our clients, Climate Friendly and the environment." Mr Yates said Mr Rudd's decision to ratify Kyoto would only strengthen Macquarie's position. From an Australian side, that process will benefit the business." he said.

"Corporates now need to directly focus on this issue. It can't be something that people ignore any longer." Climate Friendly, which this year has traded about 70,000 tonnes of carbon, the equivalent of taking 15,000 cars off the road, said it expected growth to explode following the Kyoto ratification and through the synergies of the Macquarie deal.

Climate Friendly chief executive Joel Fleming said the business would operate in the voluntary carbon market as well as through mechanisms available through Kyoto. "We could be doing a million tonnes in a very short space of time and that is what is needed for us to solve this problem of climate change," he said. "The benefit of Macquarie being involved is that they own a lot of assets and infrastructure and have a large global reach. This is the type of thing we needed to do to scale the business up globally."


Weaven's foresight pays off big time

Wednesday 5/12/2007 Page: 40

JUST over two years ago, when Gary Weaven's Industry Funds Management wrapped up control of Pacific Hydro in a deal that valued the company at $780 million, the talk in the market was that he overpaid big time. Put aside for a moment the fact that his average entry price into the stock was much lower, given IFM was an early investor and owned 34 per cent at about $1 a share compared to the $5 a share acquisition price. Then consider that a third of the company's Australian assets are wind farms of a similar size to the Queensland Stanwell wind project acquired last week by Transfield Services for $450 million.

Throw in this week's decision by the Rudd Government to sign the Kyoto Protocol, which significantly broadens Pacific Hydro's ability to generate carbon credits from its offshore developments, and it's not much of a stretch to say the company is worth more than double its value in 2005. Weaven won a bidding war with Spain's Accione to buy 100 per cent of the company and his foresight has paid off in spades.

Pacific Hydro already sells carbon credits into the European trading system from its small Fiji hydro projects, generating a few million dollars worth of credits, and will now be able to generate significantly more from its Philippine and Chilean ventures. The company is one of the first direct beneficiaries of the Government's move, but others can now quickly use the protocol to access offshore carbon abatement investments to lower costs. This is precisely why former environment minister Malcolm Turnbull urged John Howard to sign the agreement once he had agreed to implement a carbon trading scheme, because it had the immediate benefit of helping Australian companies to lower costs.

This said, Pacific Hydro sees a more immediate upside from another Rudd initiative to increase the renewable energy targets from the highest existing state scheme around 15 per cent to 20 per cent. Signing the agreement does at least give business more certainty that Rudd will move quickly to develop a carbon trading scheme, backed hopefully by significant reduction targets by 2010 even the likes of Alcoa, which is engaged in its standard game of brinkmanship with the Victorian Government, trying to get taxpayers to subsidise its electricity costs.

The reality is that while Alcoa's smelter is likely to be grandfathered in a trading scheme, electricity costs will rise and the burden should be shared with other companies. In rough terms, coal-fired power costs $39 per megawatt hour, gas around $42, nuclear anywhere between $45 and $75, wind $85 and solar $150. If you assume a tonne of coal attracts maximum carbon costs of, say, $20 a tonne, then the maths don't look so good for coal because its costs would jump to $59 an hour. Gas is about 40 per cent carbon-intensive, so its costs would rise by $8 an hour to $50 and so forth.

The sooner companies can work around these figures, the better for all concerned. It is also far better to work from a market-based system than myriad different subsidies to alternative energy forms, and worse still to offset the costs of the big electricity users like Alcoa which would be a subsidy on top of a subsidy to everyone's detriment but Alcoa's. Carbon-based pricing will increase costs, as by definition will Australia's signing the Kyoto Protocol, but it will also significantly expand business options to offset these costs in a way which may actually be beneficial to the global environment.

Thursday 6 December 2007

Driest year on record lowers dam capacity to just 17pc: Hydro drained by drought

Burnie Advocate
Wednesday 5/12/2007 Page: 6

Hydro Tasmania buckled under the weight of Tasmania's driest year on record in 2006-07, it admitted to a parliamentary committee yesterday. The drought lowered Hydro's dams to only 17 per cent capacity, meaning the company had to spend an extra $100 million on power from Basslink and Bell Bay's gas station to keep up with Tasmania's electricity demands. The company is also more than $1 billion in debt.

Hydro chairman David Crean said the company only produced 6600 gigawatt hours - significantly below the State's 10,000 gigawatt demand. Hydro would not return dividends to the Government in the 2007-08 year, but Mr Crean said Tasmanians could still be optimistic about the company's future. He said with a new Labor Federal Government promising an increase in Mandatory Renewable Energy Targets, the Roaring 40s wind farm developments could soon prove to be lucrative with assets potentially worth $400 million.

Hydro owns nine wind farms in Australia, India and China, with Woolnorth host to the biggest in the southern hemisphere. Mr Crean said based on rainfall predictions, Hydro's operating cash would increase from $37.4 million last year to $150 million in 2012. He said scientific advice suggested Tasmania would receive the same amount of rainfall in the next 30 years, but it could be erratic in its distribution, which wouldn't be ideal for Hydro.

Primary Industries and Water Minister David Llewellyn said with the predicted impacts of climate change, Hydro needed to be aware of other renewable energy producing ventures. Hydro assured the committee that despite its financial difficulties, machinery had been maintained to standard.

Harnessing the weather

Sunday Examiner
Sunday 2/12/2007 Page: 6

One of Tasmania's most innovative projects can be found in the Circular Head area, with Roaring 40s Woolnorth Wind Farm, at Studland Bay. This environmentally-friendly farm has been in existence since March this year, following the completion of the nearby 65MW Bluff Point in 2004. At full capacity, the Studland Bay wind farm will be able to generate 75MW of energy, or enough to power 30,000 households, with an average annual electricity production of 295GWh. This output will be sold directly into the National Electricity Market, and the Renewable Energy Credits will be sold to Aurora Energy.

The Studland Bay site is positioned perfectly to take advantage of the roaring 40s winds that strike Tasmania's West Coast, with the wind speed for the site averaging about 9.5m per second. It will be a world class wind resource and Roaring 40s, the company behind the wind farm, is confident of its capabilities. "It will be a world class wind farm and we are confident that it will work in a similar class to the nearby Bluff Point Wind Farm, which is one of the top three operating wind farms in the world," Roaring 40s spokesman Josh Bradshaw said. "The site was also attractive because it provided relatively ease of access to both major transport and transmission corridors and provided few issues with regard to construction logistics.

Common practice among wind energy developers now is to lease land holdings of local landowners, but in relation to the Woolnorth site, Roaring 40s has bought 3000ha of land from the Van Diemen's Land Company and divided it into separate lots. "Lot one is the site of Bluff Point Wind Farm and lot two is the site of the Studland Bay Wind Farm. To ensure continued use of the site for farming and agricultural purposes, Roaring 40s leases the land back to VDL," Mr Bradshaw said.

As with all wind farm developments in this country, the Studland Bay Wind Farm required environmental approval from local, State and federal authorities. Certain conditions to ensure that environmental biodiversity of the site were protected had to be met before approval was given. Also, any cultural or heritage values were taken into account and had to be managed accordingly. "At its height, the Woolnorth Studland Bay Wind Farm was one of the largest infrastructure projects undertaken in Tasmania, the benefits of which will be realised by the people of the North-West and the State of Tasmania well into the future," Mr Bradshaw said.

Bali will be a test of leaders' resolve

Wednesday 5/12/2007 Page: 13

WE HAVE read the science. Global warming is real, and we are a prime cause. We have heard the warnings. Unless we act, now, we face serious consequences. Polar ice will melt. Sea levels will rise. A third of our plant and animal species could vanish. There will be famine in Africa and central Asia. Largely lost in the debate is the good news: we can do something - more easily, and at far less cost, than most of us imagine.

These are the conclusions of the latest report from the Intergovernmental Panel on Climate Change, the scientific body that recently shared the Nobel peace prize. It is sobering reading. But let's remember its optimistic bottom line as world leaders gather in Bali this week, seeking an agreement on climate change that all nations can embrace.

We do not yet know what such an accord might look like. Should it urge governments to tax greenhouse gas emissions or endorse a global carbon-trading system? Should it provide mechanisms for preventing deforestation, accounting for 20% of carbon dioxide emissions, or help less-developed nations adapt to the inevitable effects of global warming? The answer, of course, is some variation on all these things - and much, much more. But at Bali, the goal is simpler and more immediate.

We must set an agenda - create a road map to a better future, coupled with a timeline that produces a deal by 2009. In this, it helps to have a vision of how the future might look if we succeed. That is not merely a cleaner, healthier, more secure world for all. Handled correctly, our fight against global warming could set the stage for an eco-friendly transformation of the global economy - one that spurs growth and development rather than crimps it, as many nations fear.

We have witnessed great economic transformations in the past century. Following on from growing industrialisation came the technology revolution, then our modern era of globalisation. We stand at the threshold of another great change: the age of green economics. The evidence is all about us, often in unexpected places. Visiting South America recently, I saw how Brazil has become one of the biggest players in green economics, drawing some 44% of its energy needs from renewable fuels. The world average is 13%. In Europe: 6.1%.

Much is made of the fact that China is poised to surpass the US as the world's largest emitter of greenhouse gases. Less well known, however, are its more recent efforts to confront grave environmental problems. China is on track to invest $10 billion in renewable energy this year, second only to Germany. It has become a world leader in solar and wind energy. At a recent summit of east Asian leaders, China's Premier, Wen Jiabao, pledged to reduce energy consumption (per unit of gross domestic product) by 20% over five years - not far removed, in spirit, from Europe's commitment to a 20% reduction in greenhouse gas emissions by 2020. This is the way of the future.

Some estimates show that growth in global energy demand could be cut in half over the next 15 years simply by deploying existing technologies yielding a return on investment of 10% or more. The IPCC report lays out the very practical ways, from tougher standards for air-conditioners and refrigerators to improved efficiency in industry, building and transport. It estimates that overcoming serious climate change may cost as little as 0.1% of global GDP a year over the next three decades.

Growth need not suffer and, in fact, may accelerate. Research by the University of California at Berkeley indicates that the US could create 300,000 jobs if 20% of electricity needs were met by renewable s. The United Nations Environment Program estimates that global investment in zero-greenhouse energy will reach $1.9 trillion by 2020. Already, businesses in many parts of the world are demanding public policies on climate change, regardless of what form they might take - regulation, emissions caps, efficiency guidelines. The reason is obvious. Business needs ground rules. Helping to create them is very much the role of the UN.

Our job, in Bali and beyond, is to shape this nascent global transformation - to open the door to the age of green economics and green development. What's missing is a global framework within which we, the world's peoples, can co-ordinate our efforts to fight climate change. The scientists have done their job. Now it's up to the politicians. Bali is a test of their leadership.

Fossil fuels here to stay: UN's de Boer

Australian Financial Review
Tuesday 4/12/2007 Page: 6

Scientists must find ways to use fossil fuels such as oil and coal without further harming the environment, executive secretary of the United Nations Framework Convention on Climate Change Yvo de Boer told delegates during the opening session of climate change treaty negotiations yesterday. Suggesting that fossil fuels would continue to be the drivers of growth, Mr de Boer recommended all major greenhouse-emitting nations urgently agree in a new, stronger climate pact based on recognition that it was not realistic to assume alternative sources of energy alone could address the threat of global climate change.

Of course energy efficiency, renewable energy and alternative fuels such as ethanol are a critical part of the answer to climate change, but we also have to recognise that countries will continue to use fossil fuels, so therefore we have to find a cleaner way to use them,' Mr de Boer said. He said most of the demand for coal over the next 20 years would come from the developing economies of China and India.

Wind farm backed

Warrnambool Standard
Monday 3/12/2007 Page: 8

SUPPORT for a wind farm near Mortlake is as high as 80 per cent according to a company planning to build 100 turbines near the town. Mortlake, The Sisters, Kolora, Noorat, Terang and Darlington residents went to a community day to learn about the project before returning 140 survey forms to to Acciona Energy, the company said.

New activists' battleground: their own Dinosaur digs

Geelong Advertiser
Monday 3/12/2007 Page: 15

HOW is it that environmentally sound endeavours, as we understand them, are becoming increasingly difficult propositions to justify or execute? It might be wind farms and the hostility they prompt from wildlife preservationists. It might be tidal power opponents anxious about marine life impacts. biofuel opponents worried about palm-oil or corn-led incursions on environments faunal, floral or human. Or it might be, as we've seen this past week, a new breed - palaeontological heritage agitators anxious about desalination plans along the Gippsland coast.

Gippsland, if we venture back to its early encounters with Europeans, was a wild and mysterious place. Trees, trees and more giant trees. Dense, impenetrable bush - a wild place to be feared. It's no accident the antipathies of white to black in the 19th century led to the gloriously ludicrous myth of the Captive White Woman - an Eliza Fraser-style piece of theatrical scaremongering to keep the natives in their place - being situated in Gippsland. It was the perfect site for a mystery.

Now we have a new mystery. Sort of. The previously, supposedly, unknown dinosaurs of Wonthaggi have surfaced as a major impediment to the multi-billion dollar desalination plant the State Government wants to build, instead of dams, to safeguard Victoria against future droughts. Sure, it's a political sop to the greens. And, sure, we should be able to better utilise water without ripping up more trees for reservoir sites, or exposing ourselves to water from dams serviced by logging catchment areas. But where's all this activism coming from?

You've got to face it. Activism has come a long way. It's become such an art form, it's outdoing itself. It's an entire new world of marketing in which numerous single-dimension vested interests stand to threaten the broader champions of the good cause. What it means is environmentalist pitted against conservationist, preservationist against indigenous, heritage activist versus naturalist - all of them high profile, all of them vocal and influential. All manner of permutations and combinations of idealism, realism and personal agendas.

In short, the environmental turf war is turning loudly local and self interested. And very NIMBY - not in my back yard. And sophisticated, media-savvy and wide awake to due process. The dinosaurs of Wonthaggi area classic example. Why? Well, for one, because the folk protesting the desal plant's earthworks and their effect on dinosaur precincts have been gazumped by boffins suggesting the works offer one of the best chances of discovering more dinosaur samples and information. The chances, the finances, would be scarce otherwise.

Myself, if someone needs to stop the desal works, I'd prefer they invoke the Francis Drake defence. The Elizabethan buccaneer/explorer made it to Wonthaggi too, you know. Well, maybe, the story's been about for awhile among some of the heritage world's more imagination prone figures. It can perhaps be sourced to the 1776 novel Voyage de Robertson aux Terres Australes in which the author claims to have sailed from Chile with Drake aboard the Elizabeth in 1585 to discover a new continent, Australia, away in the west. Australia was popular also with writers like Jonathon Swift, whose Lilliput was somewhere around the Great Australian Bight. (That's why yahoos come from South Australia.)

However you care to look at it - dinosaurs, Drake or damsels in distress - protests are often a tad too conveniently staged. And more than a little self-righteous. Which, over the longer term, isn't really going to help anyone.

Wednesday 5 December 2007

That sinking feeling still mires Pacific

Monday 3/12/2007 Page: 36

This week at the UN climate change negotiations at Bali, the tiny nations oft he Pacific will once again be paraded as the global poster boys of climate change campaigners. The emotional appeal is obvious: the first innocent victims of a warming climate as their low-lying islands lace the threat of eventual inundation from rising sea levels. But a far more immediate threat comes not from the burning of fossil fuels, but the cost of them. Oil prices have tripled in four years and if they stay above $US100 a barrel might produce Pacific economic refugees long before they are under water.

A recent UN report confirmed that these Pacific countries were among the world's most vulnerable to high oil prices. As small economies, they have weak negotiating power with suppliers, pay high transport costs, have limited indigenous alternative energy sources and no capital. While Australian motorists might complain each time they stop to refuel, their electricity is currently fuelled by some of the world's cheapest coal and gas. Water shortages caused a temporary price spike and there are more forecast, but most local energy is relatively immune to global oil prices.

While most of the Pacific states augment their electricity supplies with hydro power, around half of their total electricity comes from an ageing fleet of diesel generators. They were cheap to install but with the cost of diesel fuel doubling this year, they have become an increasingly unaffordable burden on economies already struggling with high levels of debt, political unrest, low foreign reserves and marginal balances of payments.

A conference of South Pacific energy companies last week reported that fuel now accounted for 70 per cent of their operating costs. They are under intense pressure. The cost of electricity varies across the region, but can be around three to four times that paid in Australia. Retail prices are still highly regulated. The cost of imports to exports has doubled in the past few years. Fiji's big non-tourism income earners such as sugar, gold and textiles are barely covering the rising national fuel bill.

The next tanker of fuel is scheduled to arrive tomorrow on the island of Saipan, the biggest of the Marianas chain. The local government-owned energy utility, the Commonwealth Utilities Corporation (CUC), is reportedly still scratching around trying to raise the $2.5 million needed to pay for it. In scenes reminiscent of EnergyAustralia's $10 million-a-week losses during, the wholesale electricity spike earlier this year, the local administration had already lowered the retail price of electricity below what it costs to generate it.

Typically the solutions are difficult and uncertain. The host of small public and private utilities think they can improve the efficiency of their networks by about 7 percent if' they can find the capital to invest in upgrading ageing distribution systems. They are also trying, to hand together to establish joint procurement of fuel to give them greater negotiating power with the major oil companies. It sounds easy, but it is complicated by the colossal regional geography and the different types of fuel used on tittering islands.

Suppliers such as Mobil and Exxon are aware of the strategy and have been signing up utilities on longterm contracts to protect their market power. If the joint procurement can get off the ground, here are moves afoot to try and hedge against price volatility. Macquarie Bank is about to start a 12-month simulation to test whether and how a collective hedge might help control costs. Ultimately, the solution lies in finding new sources of energy. Hydro is prevalent, but as in Australia most of the best locations have been exploited, as has energy from bagasse, the sugar by-product.

Fiji's first wind farm opened in October at a cost of around $25 million, saving about $2 million of diesel a year. That's still a long payback. None of the islands is far enough south to exploit the impressive wind assets at or beyond a latitude of 40 degrees, and no, cyclones don't count. The capital costs for renewables are still prohibitively expensive in economies where 70 percent of the population still don't have electricity. Most new investment comes from aid. The European Union has just put €11.3 million ($18.7 million) into solar homes across some remote islands in seven countries.

Two lights and a power point do wonders for the health and education of the occupants, but they don't provide the scale needed to help develop their economies and encourage value-adding that will lift them out of poverty. They have limited options but are under-utilising many of' those that they, to have. The Pacific islands control 60 percent of the world's tuna harvest but most of the licences are sold off to Japanese, Taiwanese and other foreign fishermen because the islands have not been able to develop domestic fish processing industries at scale.

The islands have a long list of failed canneries, resulting from poor management and planning those that survive are under constant pressure to remain competitive, and as the biggest energy users in the market, skyrocketing energy prices don't help matters.

Emissions - Early action key to jobs, investment: Deep cuts won't hurt

Adelaide Advertiser
Monday 3/12/2007 Page: 43

DEEP and prompt cuts to carbon emissions would not damage the economy, an Australian delegation will tell the United Nations climate change talks starting in Bali today. The Climate Institute Australia will present fresh research showing that if emissions are reduced sooner rather than later, the cost of energy will be more affordable in years to come than it was in 2005. Economic momentum, jobs and investments would be safeguarded even with greenhouse gas cuts as high as 20 per cent below 1990 levels by 2020.

Emissions reductions of this magnitude would be necessary to reverse catastrophic climate change by mid-century, the institute said. Erwin Jackson, Climate Institute Australia policy and research director, said if Australia took a leadership position with other nations acting to slow global warming, it would safeguard a robust economy beyond 2020. In a detailed report co-written by Mr Jackson called Leader, Follower or Free Rider?

The economic impacts of different Australian emission targets, it said that if Australia continues to delay action, future climate policy shocks will hurt business. "Taking a leadership position - like early action - buys time and options, akin to buying insurance in an uncertain world," wrote Mr Jackson, who will be delivering the report at a forum in Bali today. Also attending Bali as part of the new Federal Government contingent, will be Clean Energy Council chief executive Dominique La Fontaine, and CEC chairman Richard Mclndoe, whose TRUEnergy group operates wind farms and coalfired power stations.

The institute's report is an update on the findings arrived at by the Business Roundtable on Climate Change last year that urged fast action on emissions policy, said Origin Energy executive Tony Wood. "There are some segments of the economy that will be significantly affected initially, especially high energy intensive industries like aluminium smelters. "But broadly across the economy, that won't be the case." The Climate Institute Australia is an Australian-based independent group working with community, business and governments on innovative climate change solutions.

Emission cut won't hit economy

The Australian
Mon, 3 Dec 07

AUSTRALIA can take an aggressive approach to reducing its greenhouse gas emissions with minimal impact on economic growth, according to new research released to coincide with the start of international negotiations in Bali today. The two-week negotiations under the United Nations Convention on Climate Change are expected to conclude on December 14, aiming for a formal mandate to begin negotiating a new global deal to replace the Kyoto Protocol, which ends in 2012.

The new analysis commissioned by the Climate Institute Australia says Australia can afford to start taking immediate action to halt emissions growth by 2012 and then deliver deep cuts by 2050, as projected economic growth over this time will swamp the higher costs of abatement. The study estimates the cost of three different levels of policy response by Australia over the coming decades. It finds that even the most aggressive leadership option would result in a cut in total income of 3.5 per cent by 2050, while the economy is projected to triple in size over the same period.

Climate Institute Australia chief executive John Connor said Kevin Rudd had repeatedly referred to Intergovernmental Panel on Climate Change estimates of greenhouse levels of about 450 parts per million to avert the most dangerous impacts of climate change. This would require cuts for developed countries of between 25 and 40 per cent by the end of next decade.

"Now we need to remain focused on doing everything we can at Bali and beyond to avoid dangerous climate change beyond a 2C increase," Mr Connor said yesterday. Australia's first federal climate change minister, senator Penny Wong, will be sworn in today along with other Rudd government ministers.

Gas production increases amid drought

December 2, 2007

Gas production on Australia's east coast has increased as water restrictions constrain output from major coal-fired and hydro power plants, according to advisory firm EnergyQuest. The firm's latest quarterly report indicatedthat east coast gas production during the three months to September 30 was a record 185 petajoules, 10.2 per cent higher than the previous quarter.

"This growth in such a short time is a remarkable achievement by the gas industry," EnergyQuest chief executive Graeme Bethune said. "Beating the previous peak by 10 percent is a real feat and one which significantly reduced the pressure on the east coast electricity system during winter."

EnergyQuest said demand for gas on the east coast was likely to remain strong amid continuing drought conditions and the landslip at the Yallourn power station in Victoria. Meanwhile, EnergyQuest said oil production fell sharply during the September quarter, down 18.1 per cent on the previous quarter due to natural field decline and various other disruptions.

Tuesday 4 December 2007

Australia to have leading role in carbon mitigation

Canberra Times
30/11/2007 Page: 15

Natural gas, coal and renewables provide plenty of clout, Ross Garnaut writes.

What should Australia aim for as the world discusses a global emissions target? Australia is likely to be damaged more than any other developed country by climate change. Our environment is dry and highly variable already, and this will be exacerbated with climate change, with the effect on agriculture and water supplies being particularly pronounced. Australia is well placed to be part of an effective global mitigation effort. We have exceptionally rich resources for solar, geothermal and wind energy.

Our large livestock industries are less emissions-intensive than our competitors in Europe, north-east Asia and North America. We have large resources of high quality (that is, low emissions per unit of energy) coal, which means our share of the global coal supply would rise under an effective global mitigation regime.

We have large deposits of natural gas and uranium, the exports of which would increase in a world of major and effective mitigation. We have an exceptional endowment of favourable sites for Carbon Capture and Storage, most being favourably located in relation to the coal-using industrial centres of the south-east.

And we have an exceptional human resource base in engineering, management and finance related to the resources sector, which places its well for competitive participation in innovation in the emerging low emission energy industries. All of these Australian strengths facilitate, and render less costly, domestic mitigation. To date, Australians have been encouraged to concentrate on an unhappy part of the reality - that mitigation is a risk for Australia due to the disproportionate importance of our trade-exposed, exceptionally emissions-intensive industries.

Without an adequate international framework, domestic action may lead to movement of these industries overseas, reducing the value of Australia's economic output and in the worst of circumstances perversely affecting global emissions The solution is to ensure the exceptionally emissions-intensive trade-exposed industries -metals smelting, steel, cement and a small number of others - are subject to similar disciplines in major producing economies, comparable in effect to the application of the general mitigation regimes being applied by major economies.

Australia can move to secure its interests in a number of ways. First, ratification of Kyoto will strengthen our voice in global discussion, starting in Bali. Second, leadership could be shown by supporting incentives for reducing emissions from deforestation; on the need for an ambitious global budget; and on principles for allocation of the budget. Third, Australia can ensure its own mitigation regime fits productively into a feasible international regime. Our emissions targets should be consistent with a global budget for allocating rights among the countries of the world.

Fourth, Australia has a vital interest in the development of new clean energy technologies. It has an especially strong interest in Carbon Capture and Storage from coal. It shares this interest with other economies, including in the European Union and China, which provides a strong basis for international cooperation.

Finally, Australia's adoption of an efficient mitigation approach, carefully designed to encourage others to move towards effective contributions to global mitigation, can play a big international role. At the centre of a mitigation strategy is the setting of a price on emissions, paid by anyone who emits greenhouse gases.

If the price is established at the right level, there is no need for other policy treasures to tip the balance of private decisions on supply and use of fossil fuels towards low-emissions technologies. There are two ways of setting an emissions price. One is through a carbon tax. The other is to set a limit on carbon emissions, to allocate permits up to that limit, and to let the market set the carbon price. An emissions trading system (ETS) and a carbon tax are both market based approaches to confining emissions within a specified budget.

There are two important advantages of an efficient ETS. First, allowed to do its job without political adjustment, it can be relied upon to constrain emissions within the specified total budget. Second, it sets the current and future prices directly, without bureaucratic clairvoyance about the continuously changing influences on the supply and demand side for emissions permits. The task is to establish in Australia a well-designed and credible ETS. Finally, it is worth differentiating between the price of carbon and its cost to the economy.

The cost to the economy is not, as some have suggested, the carbon price set for emission permits. The "price" is not the cost - this has been a fallacy of the Australian discussion to date. The cost to the economy is the expenditure on substitutes net of existing higher costs imposed through mandatory schemes.

So if the price of emission permits is not all a cost to the economy, where does it go? Most, especially in the early period, is likely to be passed through to households. If the scarcity value of the permits is collected passed back to households in appropriate ways, there is no negative income effect on them. The redistribution of income may be large - including redistribution away from low-income households. Without appropriate policy responses, the redistribution of income will lead to political resist-, nice to economically and environmentally efficient carbon prices.

Professor Garnaut is Professor of Economics at the Australian National University's research school of economics. He is currently reviewing the economic impact of climate change on Australia for Prime Minister-elect Kevin Rudd, with a view to informing future government policy. This is an edited extract of his S.T. Lee lecture yesterday at the ANU.

Australia most hurt by change in climate

Courier Mail
30/11/2007 Page: 11

AUSTRALIA is likely to be damaged more than any other developed country by climate change, a senior Rudd Government-linked climate change expert said yesterday. Ross Garnaut, tipped to be appointed by Prime Minister-elect Kevin Rudd to a climate change role in the new government, said yesterday the impact of warming on agriculture and water supplies was beyond doubt.

Delivering the inaugural ST Lee Lecture on Asia at the Australian National University, Professor Garnaut said Australia faced a worse and more urgent problem in addressing dangerous climate change than had been thought. If Australia did not get its policy right, it risked becoming a climate change loser on the world stage.

Professor Garnaut, an economist commissioned by the state and territory governments to conduct a review of Australia's approach to change, said the world was enjoying a platinum age which had helped alleviate global poverty, improved Asia-Pacific security and Australian prosperity. "The challenge is to reconcile the longevity of the platinum age with efficient mitigation of climate change and adaptation to the change already occurring," he said.

Australia faced major climate change impacts because of its dry and highly variable environment, the predicted reduction in rainfall in southern latitudes and our location surrounded by developing countries which also were disproportionately affected. On the positive side, Australia had exceptionally rich resources for solar, geothermal and wind energy and possibly for biofuels from the savannahs that currently made minor contributions to food production.

"We have large resources of high quality (low emissions per unit of energy) coal, which means that our share of the global coal supply would rise under an effective global mitigation regime," Professor Garnaut said. "We have large deposits of natural gas and uranium, the exports of which would increase in a world of major and effective mitigation." Professor Garnaut said when Australia ratified Kyoto in Bali next month, it would strengthen the nation's voice in global discussions.

Monday 3 December 2007

Planning for change

Border Mail
01/12/2007 Page: 47

From Australia to Africa, scientists are trying to pinpoint exactly how climate change will affect specific regions but a lot depends on what people will or won't do.

MOVING on from the risk of global warming, scientists are now looking for ways to pinpoint the areas set to be affected by climate change, to help countries plan everything from new crops to hydropower dams. Billion-dollar investments, ranging from irrigation and flood defences to the site of wind farms or ski resorts, could hinge on assessments about how much drier, wetter, windier or warmer a particular area will become. But scientists warn precision may never be possible.

Climate is so chaotic and the variables so difficult to compute that even the best model will be far from perfect in estimating what the future holds. "We need to give indications that are at the scale countries can use to make decisions," says Michel Jarraud, head of the World Meteorological Organisation (WMO), which oversees the US's climate panel. "We need to come to a scale that is smaller than countries like Spain or France or the UK. "We are not yet there." The UN climate panel was meeting in Valencia, Spain this month to issue a final report summing up more than 3000 pages of findings this year that blamed humans for climate change and outlined solutions.

It will also look at what a next report, perhaps in 2013 if governments agree on spending, might contain. The Intergovernmental Panel on Climate Change (IPCC) shared the 2007 Nobel Peace Prize with former US Vice President Al Gore. An IPCC report in April gave regional projections for a warmer climate such as a melting of the Himalayan glaciers or better growing conditions for Nordic forests, but the scale is often too vague to be of great use.

Farmers from Australia to Africa would like to know which areas are threatened by desertification. Ski operators from the Alps to the Rocky Mountains wonder how high the snow line will be before investing in new hotels or ski lifts. But forecasts may never be precise enough to estimate which of two neighbouring valleys in the Andes, for instance, might get wetter and be better suited to a hydroelectric dam. "To get down to the site-level would be a huge step," says Martin Parry, a British scientist who co-chairs the IPCC section devoted to regional impacts of climate change.

The impact of global warming depends largely on how many people keep burning fossil fuels, a main source of greenhouse gases, or develop cleaner energies such as wind or solar power. "I don't think that an assessment in 2013 would deliver that much more detail needed for planners on water issues," says Johan Kuylenstierna of the Stockholm International Water Institute. "The uncertainties will still be quite high." Planners already know enough to act in many cases. The smallest grids used for climate projections are 50 kilometres by 50 kilometres.

London is looking into ways to confront projected regional risks such as more floods from North Sea surges up the Thames, more heatwaves and a drier climate. Painting houses white to protect against heatwaves makes sense, according to Mr Parry who also warns homeowners in areas at greater risk of floods could raise electrical goods such as fridges or washing machines off the ground floor. Mr Parry says some farmers in eastern England are considering selling and moving north to Scotland because they reckon they will soon be able to grow the same crops on land that costs less now.

A rise in sea-levels is already factored in as a threat to all coasts. The IPCC projects that sea-levels will rise by 18 to 23 centimetres this century. "It would be pretty unwise to build a nuclear energy station at sea-level," Mr Parry says. Mr Kuylenstierna says there may well be stronger evidence by 2013 that climate change is under way, such as melting Arctic ice or a drier Mediterranean region. That would in turn give pointers to future change. "But to break that down to information to a level relevant to a city or a hydroelectric dam base is a different question. I think nature is much more complex," he says. "Even so, we can start making a lot of investments today."

Glaciers are already melting in mountain ranges from the Andes to the Himalayas, so countries should invest in flood protection along vulnerable rivers and consider new irrigation needs if glaciers, a source of water in dry seasons, vanish. In Florida, the population has soared to about 18 million from below 1 million in 1920, with ever more people living near the coast. New construction codes should aim to help protect against hurricane damage and rising seas.

Wind farms prove gold for green fund

Courier Mail
30/11/2007 Page: 2

THE State Government has sold off its wind farm assets with almost half a billion dollars to be poured back into climate change initiatives. Premier Anna Bligh yesterday said Transfield Services Infrastructure would buy the assets from Stanwell Corporation and Tarong Energy for $460.4 million. The boost to the Queensland Climate Change Fund funding for projects encouraging more sustainable living comes after the Enertrade gas businesses were sold for $268 million this month.

The package includes Stairwell's Windy Hill Wind Farm in Queensland and Toora wind farm in Victoria, and Tarong's Mt Millar and Starfish Hill Wind Farms in South Australia. It also includes a 50 per cent Stanwell interest in the Emu Downs wind farm in Western Australia and other wind farm projects around the country. Ms Bligh yesterday said the sale price was $130 million more than the Government had originally expected.

The net sale price was about $430 million after accounting costs but would produce another $30 million a year in interest payments, she said. "This is an excellent financial outcome for Queensland taxpayers and paves the way for further investment in one of the most significant global challenges we face," Ms Bligh said. Climate Change and Sustainability Minister Andrew McNamara said the fund would promote energy efficiency and the uptake of renewable and alternate energy sources.

Blowing in the wind

Coffs Coast Advocate
30/11/2007 Page: 19

INTERESTED in alternative energy? A group of concerned locals have come together to form the Yarrahapinni Wind Energy Association (YWEA). The YWEA provides information about wind as an alternative to fossil fuels, the installation and operation of wind turbines, and the costs and incentives to turn to wind energy. The group meets at the Recreation Hut, Scotts Head Caravan Park. For more information, contact Michael Jones on 6569 0117 or email

Google's grass to get greener

Australian Financial Review
30/11/2007 Page: 72

Google said on Thursday it was looking to build solar power plants, invest in more renewable energy companies and sell of licence any energy-related technologies it develops to other companies. The company said the initiative was aimed at stimulating the development of solar and other renewable energy sources in the hope of finding a cheaper, more reliable power source for the company's computer data centres. Google co-founder Larry Page said 'just providing energy for Google is not really enough of a goal, we really want to provide energy that's cheap enough that it can replace significant amounts of the energy that [is] used today'. According to estimates, Google spends in excess of US$2 million ($2.3 million) per month on electricity.

B&B Wind rises after missing out

Australian Financial Review
30/11/2007 Page: 34

Babcock and Brown Wind Partners missed out on the Queensland government's package of five wind farms. Transfield Services Infrastructure Fund bought them for $450 million. However, B&B Wind's reluctance to pay so much for the assets has impressed analysts, pushing its share price up while Transfield stock fell. That could change, depending on how much Transfield can get for the clean power. It is currently in talks with AGL Energy, Origin Energy and TRUEnergy.

No need for coal-fired power stations

Courier Mail
01/12/2007 Page: 57

CLIMATE change has sparked a world wheat production crisis with extreme weather also responsible for increasing damage to cities and towns amounting to hundreds of billions of dollars each year. Such damage and loss of life will get worse as temperatures increase. A change to renewable energy could save much money if we can prevent the weather damage becoming worse.

Even now, solar power stations are likely to produce cheaper electricity over their lifetimes than coal. Although more expensive to build, solar power stations will have zero fuel cost, while the cost of coal is likely to rise. There is much research into "clean coal" technologies, trying to capture carbon dioxide emitted by power stations. This is estimated to double the price of electricity.

There is no need to build more coalfired power stations. Although taking this path in Australia will have only a small impact on the total world emissions of greenhouse gases, leadership by example is important to convince such countries as India and China to switch to clean energy. There will be some loss from future coal exports, but Australia could make money from development and export of solar technologies and equipment.

Australia is at the forefront of developing new technologies for low cost solar power. Professor David Mills heads the Solar Energy Group at Sydney University and is chairman of the company Solar Heat and Power formed to commercialise a new low cost solar system suitable for largescale power generation. The first commercial plant is being constructed at the Liddell power station in NSW to preheat water, with power generated by existing coal plant turbines.

According to Mills, this will be the world's lowest-cost solar electricity plant, producing power at 10 percent below advanced wind energy units. With solar thermal technology it is possible to store heat, as superheated water, to provide power around the clock and not just while the sun is out.

This is the problem with photovoltaic solar panels, which will be used for the solar power station to be built in northwest Victoria. The idea of turning sunlight directly into electricity sounds good, but with photovoltaic solar panels there is no cheap or practical way to store the power. The solar thermal systems being developed could be stand-alone or retrofitted to power stations to improve efficiency. This offers a way to reduce greenhouse gas emissions over the next 20 years, without abandoning existing power stations. It is likely this will be more economical than trying to capture and store carbon dioxide from them.

Another source of solar power is likely to come from roof-top solar panels. According to Professor Andrew Blakers from the Australian National University, the cost of producing electricity from solar panels will decline as a result of cutting the cost of silicon in the receptors by using thin slivers. Reduction in the cost of solar power will provide strong competition for wind energy, but is not likely to replace it. A mix of power sources is likely to be better than one. In southern Australia the short days and cloudy weather in winter make solar power less productive, while wind energy is more reliable than further north.

Nuclear energy is not a solution to reducing greenhouse gases. The extra energy cost in building a nuclear energy plant and processing the fuel still results in considerable greenhouse emissions. On a cost basis, nuclear energy is just not in the race. If electricity from nuclear energy is more than twice as expensive as a solar thermal power station, why are we even considering it?

Dr Peter Wylie is a researcher and consultant, specialising in environmental issues, including water, energy, climate change and sustainable farming.

Business incentive

Electrical Connection
01/01/2008 Page: 68

The Clean Energy Council has welcomed the New South Wales government's announcement of a $30 million green business programme - saying it can contribute to meeting the state's future electricity needs. The council, an amalgam of the Australian Business Council for Sustainable Energy and the Australian Wind Energy Association, says the program "marks a key step towards a clean energy future."

Under the plan businesses can apply for funding for commercial and industrial energy and water saving projects. Clean Energy Council CEO Dominique La Fontaine says that under programs like the one in NSW, renewable energy and natural gas generation all the state's electricity needs for the "foreseeable future" can be provided for "without the need for new coal or nuclear energy stations."

She also welcomed the NSW government move to establish a taskforce to build on the existing greenhouse gas abatement scheme. "While the forthcoming national carbon emission trading scheme will mark a major breakthrough we should continue to build on the foundations of the NSW scheme which started emissions trading." The NSW greenhouse gas abatement scheme is the second biggest greenhouse gas trading scheme in the world.