Thursday 20 March 2008

New energy methods a chance to grow

Weekend Australian
Saturday 15/3/2008 Page: 17

RENOVATING buildings to make them more energy efficient means billions of euros in savings as well as less stress on the environment, says Wolfgang Tiefensee, Germany's minister for construction and transportation. Creating demand for solar, wind and biofuel products also gives underdeveloped regions such as eastern Germany a chance for economic growth, Tiefensee says. Europe's biggest economy is home to solar energy companies including Q-Cells AG and Solarworld AG.

Energy policy around the world is being challenged by record prices for oil, global warming and political tensions in traditional energy-producing regions such as the Middle East, according to Merck Finck analyst Timo Graucob. Governments are negotiating a new agreement to replace the Kyoto Protocol, which expires in 2012, to reduce carbon dioxide emissions, the by- product of burning fossil fuels.

"We have to see not only the gloomy aspect of the current situation, but also the unbelievable chances that are offered," said Tiefensee, who with experts from the solar and building industry are meeting in Berlin to discuss ways to reduce energy use and increase the installation of solar systems in buildings.

Solar and other renewable power sources will offer countries greater energy autonomy and force a change in the way that cities and buildings are designed and constructed, says Hermann Scheer, president of Eurosolar, a European solar energy association. Buildings use almost half of all energy produced in developed countries, Scheer says. New technology such as solar panels offers owners the chance to produce energy on their own, creating a decentralised, more secure system.

"We are now at the stage when we can see this happening," said Scheer in Berlin. "This is a debate that began a century ago with Thomas Edison and now has the potential to be reality. This is the unique opportunity, but we're running out of time." Edison, the US inventor of the light bulb, proposed in the early 20th century that households produce their own electricity, mainly by burning coal, says Eurosolar's Hermann, adding that the plan at the time would have been "very polluting."

Westinghouse Electric successfully countered Edison's idea with a system of centralised electricity that would be generated at power plants and transported to houses. solar energy offers the best opportunities for investors seeking returns from renewable energy companies because the technology is becoming affordable and there is the potential for a large volume of equipment to be installed, according to Merck Finck's Graucob.

Global investment in sustainable energy reached about $85 billion last year, more than tripling from $27.5 billion in 2004, according to the United Nations Environment Program. That figure will have to increase to between $650 billion to $700 billion worldwide by 2012 to minimise climate change, according to Michael Liebreich, chairman of the consulting firm New Energy Finance.

Incentive for homes to go solar

Western Times Bathurst
Thursday 13/3/2008 Page: 40

QUEENSLAND homes using solar power will be paid more for the excess energy they generate for the electricity grid. Under the state government's Solar Bonus Scheme, the "feed-in tariff" for solar powered homes will be boosted to 44 cents per kilowatt hour. Premier Anna Bligh told state parliament the scheme would begin on July 1, and was guaranteed for 20 years. "We want Queenslanders to cash in on our reputation as the Sunshine State," she said.

"By providing this financial incentive, we hope to encourage greater use of solar energy systems, and boost our renewable energy market." Energy retailers now pay between 14 and 20 cents per kilowatt hour for excess solar energy fed into the grid. Ms Bligh said householders could save more than 25 per cent on their annual power bill, depending on the energy efficiency of their homes. This could see the cost of the solar power system recovered in about 10 years, she said. "It will put money back in family pockets.

"It will also provide an opportunity for households to play a direct role in tackling climate change." The announcement came after the government received an overwhelming response to its Queensland Solar Homes Scheme. Announced last week, that scheme will see the government bulk buy 1,000 solar power systems in an effort to drive down their price.

One risk too hot for insurance

Summaries - Australian Financial Review
Friday 14/3/2008 Page: 12

Rio Tinto says geosequestration, the process of burying carbon dioxide underground, is the one area where government should intervene to ensure industry is covered against compensation claims or other insurance risks. In a submission to Ross Garnaut's climate change review, Rio says the insurance sector should indemnify all other risks arising from climate change. Rio also says the Federal Government's 20 percent renewable energy target should embrace all clean technologies to reduce the cost of tackling climate change.

UN climate chief warns Bangkok meeting must deliver
12 March, 2008

UN climate chief Yvo de Boer has warned that upcoming UN talks in Bangkok must reach agreement on a detailed work plan, if the world is to meet the Bali roadmap deadline of endorsing a new global pact at Copenhagen in 2009. "What worries me a bit personally is that, although we have two years until Copenhagen, actually our first meeting in Bangkok, which has to agree the work programme, is happening in early April," de Boer told Carbon Finance.

"So that means the first three months of those two years are gone. And secondly, to be able to sign off on something in Copenhagen, it presumably needs to be available on paper some time before. So the actual amount of time that we have available is considerably less than a full two years," he said. "That in turn implies that the Bangkok meeting is really going to have to do what it is supposed to do, which is map out the programme of work that is going to make a Copenhagen agreement possible," de Boer said.

The Ad-hoc Working Group on Long-term Cooperative Action under the Convention and the Ad-hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol are set to meet in Bangkok from March 31 to 4 April. As well as "identifying which items will be discussed [and] when", the Bangkok meeting will need to identify the issues that need further clarification, he said.

"For example, the Bali language talks about real, measurable and verifiable action by rich and poor countries alike. One question is, who is going to be doing the measuring and who is going to be doing the verifying? The Bali language talks about comparable effort on the part of rich countries. How do you determine what is comparable effort?"

De Boer said government representatives at the Bangkok meeting would also need to decide what input they want from intergovernmental organisations, the private sector and civil society.

Biofuel projects struggle to find favour with EIB
12 March, 2008

The European Investment Bank (EIB) lent money to just one biofuel production project in 2007, despite examining more than 50 proposals. However, it sees brighter prospects for "second generation" biofuels made from a wider variety of feedstocks. The EIB has a mandate to support the policy goals of the European Union, which includes a requirement for biofuels to make up 5.75% of transport fuels by 2010, with a proposed target of 10% by 2020. Currently, less than 2% of EU transport fuel is biofuel and the European Commission is doubtful the 2010 target will be reached.

Last year, the EIB lent €168m ($258m) to Associated British Foods to build ethanol plants in the UK, at Wissington and Kingston upon Hull. This represents 0.4% of the EIB's total global lending of €47.8 billion in 2007. The bank has noted that biofuel plants produce fuel that is expensive compared with petroleum fuels and is only considering projects where production costs are lower than average. It also takes other factors, such as the emissions savings over petroleum fuels, into account.

Christopher Knowles, the EIB's head of energy and environment, structured finance and advisory, said: "From the outset we have been very conscious that a lot of biofuels projects were bankable in financial terms, but not in terms of their economic impact, sustainability, vulnerability to commodity prices and social sensitivity. "Looking back at how the sector has performed in the last year, our conviction has been vindicated."

Knowles, who is based at the bank's Luxembourg headquarters, said "a couple" of other proposals for biofuel plants are under consideration, and did not dismiss the idea of funding further plants in future. However, the bank's lending is being directed towards research and development of second generation biofuels, which can be made from a wider variety of food and non-food crops. "We think second generation is going to be the breakthrough in costs and bringing diversity in feedstocks," he said.

Revised proposal in the wind

Moorabool News
Tuesday 11/3/2008 Page: 4

A revised Yaloak Wind Farm proposal by Pacific Hydro Pty Ltd will not require assessment under the Environment Effects Act, Minister for Planning Justin Madden MLC has confirmed. Moorabool Shire Council was notified of the decision, originally made at the time of the previous proposal in 2003 and upheld on the basis that there are no significant new or additional impacts within the project area that would arise from the revised proposal.

The move comes as Pacific Hydro seek to revive the $150 million Yaloak project and submit a revised proposal for a 70 generator wind farm, addressing the issues that saw the original proposal refused by the previous planning Minister. Minister Madden has also asked Pacific Hydro to consult with Moorabool Shire Council and other relevant government agencies in scoping the program of studies and finalising the documentation prior to lodging a planning permit application.

Moorabool Shire Council CEO, Robert Dobrzynski, said it is important the community remains informed of the proposed wind farm's progress. "Council is committed to keeping the community up-to-date on significant issues that concern them. The Yaloak Wind Farm was an important issue for the community when the first proposal was considered by the Minister in 2005. Whilst Council is not the responsible authority for making a decision on this matter, it wants to ensure the community remains informed of progress.

"Although the Minister has indicated that a revised proposal will not require assessment under the Environment Effects Act 1978, he has requested that the fresh planning permit application for the wind energy facility include an assessment of risks to flora and fauna listed under the Flora and Fauna Guarantee Act 1988. In particular, he has required attention be given to assessment of the risks to the Wedge-Tailed Eagle," he said. Mr Dobrzynski added that Council is unaware of timings surrounding any future planning application to the Minister.

The original proposal was refused because it did not appropriately consider the protection and conservation of biodiversity, particularly the impact upon Wedge-Tailed Eagles; had an adverse landscape impact in the Parwan Creek valley from views to the wind generators on the escarpment and the Bluff; and had an adverse amenity impact on residents in the Parwan Creek valley from wind generators located on the Bluff and Horseshoe.

Diversity to shore up power supply

Business News
Thursday 13/3/2008 Page: 22

MORE than $6 billion is likely to be invested in Western Australia's energy infrastructure over the next four years to meet growing demand for electricity and improve reliability. The biggest investment will be the progressive upgrade of Western Power's electricity distribution and transmission network. Western Power is currently spending $686 million on electricity upgrades across the South West Interconnected System, and has committed to spending a further $2.63 billion over the next four years.

Dampier Bunbury Pipeline (DBP), which owns the Dampier to Bunbury natural gas pipeline, has been another big investor in energy infrastructure. During the past three years, it has committed to spending $1.35 billion expanding the pipeline's capacity, and is planning to proceed with further staged expansions. In the power generation sector, Griffin Group, NewGen Power and aspiring new players such as Aviva Corporation and Eneabba Gas are aiming to expand their operations in WA.

Government-owned power generator Verve Energy will also be making substantial investments in its existing infrastructure, but is constrained at the moment from pursuing any expansion opportunities. The state government requires Verve to cap its generating capacity at 3,000 megawatts to allow private sector competitors to get established in the WA market.

The power generation sector has witnessed profound change since the year 2000, and more change is expected. A total of 12 new power stations have been committed to be built since 2000, with 11 of these privately owned. Seven of the 12 are powered by gas or gas-and-oil, two by wind, two by coal, and one by biomass (forest waste products). The 12 new power stations will add 2,390 megawatts to WA's electricity grid, partly offset by last year's retirement of old units at Muja and the planned retirement of units at kWinana.

NewGen Power, a joint venture between Queensland company ERM Power and investment group Babcock and Brown, is planning to build a 330MW gas-fired plant at Neerabup. This follows its construction, currently under way, of a 320MW gas-fired plant at Kwinana. Gas has been the preferred fuel for new power stations but that is likely to change, in light of the tripling in gas prices over the past three years and the difficulty in obtaining firm, long-term supply contracts.

That has favoured Griffin Group, which is close to completing its first 200MW coal-fired power station at Collie, is proceeding with a second 200MW unit after signing a longterm supply contract with electricity retailer Synergy in December, and has plans for a third unit. Another group hoping to take advantage of high gas prices is Aviva Corporation, which is aiming to build a 400MW coal-fired power station in the Mid West.

Aviva is designing its coal-fired power station so that it can utilise `clean coal' technology that is still in development. Also in the Mid West is Eneabba Gas, which has plans for a 168MW gas-fired power station. Aviva and Eneabba Gas are aiming to supply some of the large iron ore projects planned for the Mid West region. The first of these, Gindalbie Metals' Karara iron ore project, selected Verve Energy as its electricity supplier after a competitive tender last year.

Several renewable energy projects, including biomass plants and wind farms, are also planned. WA Biomass is hoping to develop its 40MW biomass unit at Manjimup, after community opposition drove it away from its preferred site at Bridgetown, while SpiritWest BioEnergy is planning a 46MW biomass plant at Neerabup.

Wednesday 19 March 2008

Winds of change blowing at Nichols Poultry

Burnie Advocate
Thursday 13/3/2008 Page: 11

A Sassafras poultry farm aims to become Australia's leading environmentally sustainable poultry producer with the erection of a new wind turbine. Nichols Poultry managing director Robert Nichols said the turbine will help reduce the farm's carbon footprint and preserve natural resources by harnessing wind to produce its energy requirements.

A Vestas 225kW wind turbine will be erected today and officially commissioned next week. Mr Nichols said it allowed the company to supply excess power back into the grid. "It will be the equivalent of reducing 640 tonne of CO2 into the atmosphere per annum or removing 148 cars off the roads, or supplying 68 households with their energy requirements annually," Mr Nichols said.

Nichols Poultry began operating 20 years ago as a farm cottage industry originally supplying fresh turkeys to Wrest Point Casino. Latrobe Deputy Mayor Rick Rockliff asked the council if it had a policy on wind turbines in case more applications were presented.

Meters may not be so smart for environment

Thursday 13/3/2008 Page: 6

VICTORIA'S plan to roll out "smart" electricity meters to 2.4 million homes and small businesses across the state could inadvertently trigger an increase in greenhouse gas emissions, a report has found. A major study commissioned by state and federal energy ministers also raises doubts about the claimed economic benefits of the scheme, with the roll-out expected to cost as much as $5.5 billion nationally by the time it is completed in 2016, for very little gain.

The meters will provide consumers with regular updates on how much power they are using, how much it is costing and greenhouse gas emissions generated. They will allow retailers to boost prices during periods of high demand, encouraging people to run energy-hungry appliances such as dishwashers and washing machines offpeak. The scheme will help smooth consumption across the day, making it easy to manage energy demand, but there could be some unwanted side-effects.

Energy Minister Peter Bachelor conceded that the meters could theoretically trigger an increase in emissions by encouraging consumers to shift their energy use from peak periods to offpeak periods - when power tends to be generated using greenhouse gas intensive brown coal, rather than hydro, gas and wind power, typically used to produce peak power. But he said this was unlikely, predicting the new meters' sophisticated in-house display units would also encourage consumers to cut their overall consumption, thereby lowering emissions.

The report, by NERA Economic Consulting, found that Victoria's greenhouse gas emissions would be about 95,000 tonnes higher if the meters succeeded only in convincing consumers to change the timing of their energy use, rather than cutting it. But the report estimates that emissions would be about 3.8 million tonnes lower if the meters successfully triggered a large drop in total power use.

The amount of energy saved as a result of the smart meters has also raised questions about whether the costs outweigh the benefits. The Brumby Government has refused to say publicly how much it expects the Victorian component to be, but The Age believes it has factored in a price as high as $1.4 billion.

The NERA report estimates that Victoria will shave off only 0.03% of its energy consumption once that money is spent. The other states will also experience only marginal reductions in consumption following the roll-out, it forecasts. A spokesman for Mr Batchelor, Dan Ward, defended the cost, saying the consultants had been conservative and had "taken the high-end costs against the low-end benefits." In Victoria smart meters will deliver net benefits," he said. In terms of replacing analog meters, this absolutely stacks up for us."

Residents updated on wind farm proposal

Pyrenees Advocate
Friday 7/3/2008 Page: 7

AROUND 70 members of the Stockyard Hill community gathered last Friday for a progress report on plans for a wind farm in the district. A community BBQ was arranged by Wind Power Pty Ltd to update residents on a study into the local Brolga population and what effect the proposed Stockyard Hill Wind Farm will have on the birds. Consultant Brett Lane has been engaged to study the local Brolga population, their movements and habits.

Mr Lane reported that his team had been studying the Brolgas in a 20 kilometre radius from the wind farm site. He has identified 18 breeding pairs of the endangered bird, which is about 5% of the entire population living within south-west Victoria. The study of the birds took place over several weeks. Mr Lane said field work is still being conducted in the district to further study the bird's movements and a final report will be submitted to Wind Power by mid April.

The Brolga is a native crane, predominantly grey in colour with a small red head patch and standing about 1.2 m tall. The species is listed as threatened on the state Flora and Fauna Act. Under the state wind energy planning guidelines, Wind Power is therefore obliged to investigate the potential impacts of the wind farm on the Brolga.

The proposed Stockyard Hill Wind Farm will encompass an area approximately five kilometers south of Beaufort down to approximately four kilometres north of Skipton, centred around Stockyard Hill and Lake Goldsmith. The proposal is in the very early stages of development and the number and location of turbines is unknown at this stage. However, Wind Power envisages that it will be a project of significance, consisting of approximately 150-200 turbines. The size and layout of the wind farm is subject to further environmental and wind resource investigations.

Plans floated for factory and workers: Thinking about solar

Southern Times Messenger
Wednesday 12/3/2008 Page: 1

THE MITSUBISHI factory should manufacture solar electric cars, the inaugural Adelaide Thinker in Residence Professor Herbert Girardet says. "Ultimately for low density cities such as Adelaide, every second car should be an electric car, that's feasible," said Prof Girardet, an urban ecologist who returned for the recent International Solar Cities Congress.

He said car companies globally were starting to produce electric cars and with 900 Mitsubishi workers now looking for jobs, SA could be poised to move into sustainable manufacturing. Prof Girardet said solar panels on home roofs or wind turbines in backyards would be used to charge an electric car when not in use. "It's a little bit utopian but that type of world can be within our grasp now in a matter of five to 10 years," said Prof Girardet, a prolific documentary maker, writer and director of programs at the World Future Council.

He said cheap solar energy was only five years away as demand had already soared for cheaper, mass-produced silicon needed for solar panels. He said if Adelaide could halve its carbon emissions of 20 tonnes per person, it could still reach his 2003 Thinker's target of becoming a world leader in sustainability in 10 years. He said electric cars would substantially reduce carbon emissions - currently at 20 tonnes per person - but more could be done by retro-fitting all suburban homes and office buildings.

Professor Girardet also is calling on Adelaide children to help save the environment. Prof Girardet is promoting Kids Call, where children from all over the world send letters to political leaders asking them to consider the environment. These letters would be taken to the powerful G8 Summit, in Japan, this July. "We are trying to get kids to write letters to decision-makers... to tell them that they should take seriously their responsibility for future generations," said Prof Girardet, SA's inaugural Thinker in Residence and the World Future Council's director of programs.

"Decision-makers, politicians keep making short-term decisions and their messing up the future of our children and grandchildren," he said. "Hopefully we'll be able to team up with some organisations locally to get a lot of letters sent." The G8 summit is an annual meeting of the eight leading industrialised nations: Germany, France, the UK, Italy, Japan, Canada, Russia and the USA. Other political leaders also attend.

Tourism centres record visitor surge

Border Watch
Wednesday 12/3/2008 Page: 6

Millicent's Visitor Information Centre (VIC) has experienced its busiest February for 10 years. And visitors are expected to continue rolling into Millicent for the Geltwood Festival. Tourism services manager Janice Nitschke said in the lead up to the festival several quilts had been hung in Millicent's centre, along with posters and cards, making an attractive display. She said the posters and cards had also been sent to VICs across the state and Victoria, as well as in the Limestone Coast region.

Mrs Nitschke said increased visitor numbers were being experienced throughout Wattle Range. "At Millicent the 18pc increase was indicative of the continued interest in the Melbourne to Adelaide touring route, increased coastal tourism and caravanners," Mrs Nitschke said. "The WoakWine Range Wind Farms Tourist Drive continues to generate many inquiries and interest. "The windfarm drive, the Pool of Saloam and food and wineries of Penola and Coonawarra have featured in a film shoot undertaken by a group of Singaporeans.

"Postcards filmed at the Pool of Saloam and Getaway visits the area in March. "Getaway is undertaking a coastal filming episode and suggestions have been forwarded to them for consideration. "Significantly hits on the Wattle Range website continues to increase and although these numbers are not counted within this statistical analysis there were 8609 hits related to tourism and information inquiries. "Interestingly 502 web mail postcards were sent using the selection of Wattle Range postcards available.

"Beachport and Southend also had many hits, along with the photographic exhibition at the Millicent Gallery, 4WD maps and information, Local History and the Vigneron's Cup." Mrs Nitschke said an 18pc increase in inquiries and visitor numbers were witnessed at the Millicent Centre with 1937 visitors for 2008 compared with 1640 in 2007 during February. "This was in fact the busiest February for 10 years and follows successive outstanding months in terms of visitor numbers, inquiries and information packs sent out."

Monday 17 March 2008

Wind farm could pay for projects

Barrier Daily Truth
Wednesday 12/3/2008 Page: 3

Wind farm revenue left over after compensation is paid to four Silverton graziers will fund community projects in the district, according to the Minister for Lands, Tony Kelly. Mr Kelly confirmed with BDT yesterday that his preference was that the money be put into a Western Lands Fund that would recommend community projects for consideration. He said the fund would involve two or three stakeholders who would work in an advisory capacity with the Department of Lands (Western Lands Advisory Council).

It would exist under the government's proposed lease/licence structure. and within the framework of the Public Reserves Management Fund. The proposal was raised with the Minister by the graziers who are seeking compensation for the wind farm proposed for their properties near Silverton. Their spokesman, Nigel Lawrence, said they did not want the government running the fund. "We've got a problem of the government being involved; it would make it too vulnerable," he said.

He said the graziers want the money to stay in the west in order it benefit local groups and organisations. The Minister responded by saying he had given a commitment that, in the event that development consent is granted and the project proceeds, the Western Division will be the beneficiary. "How this is realised will depend on the project's commencement, negotiations with the graziers and Epuron, and developing an understanding from the Western Division on what are some of the priorities for projects on Crown land that will provide public benefit for the broader community," said Mr Kelly.

He said the amount of money the fund would have available will be determined by the negotiations with Epuron on lease rentals. "It would not come from Western Lands lease fees and so would depend on the final negotiated land tenure structure," he said. Meanwhile, a vote on how residents feel about the wind farm was to be revealed at a meeting of the Silverton Village Committee last night.

The committee held the secret ballot to help it determine whether residents wanted it to support or oppose the wind farm. The Minister said the Government welcomed the views of the Silverton Village Committee and recognised that the wind farm proposal concerned the entire community. "The Government will continue to negotiate with the proponents, affected leaseholders and the community to ensure an equitable outcome for all," he said.

Climate change targets are achievable - and may have economic benefits

Wednesday 12/3/2008 Page: 40

IN the past 12 months climate change has been a major political, economic and some would say moral issue. For all the debate, the central question is relatively clear what can we do in Australia to reduce the output of greenhouse gases without sacrificing our quality of life in the short term? While quality of life comprises many things, for the purpose of this discussion we'll constrain ourselves to maintaining a healthy economy.

To answer this question, a fact base is needed for appropriate choices to be made, myths dispelled and emotions cooled, and to enable all of us government, business and consumers to understand how we can reduce greenhouse gas emissions.

With the release of Professor Ross Garnaut's Climate Change Review interim report to Government, the science around climate change is starting to look more pessimistic. This suggests dramatic change is required. Recently released McKinsey research An Australian Cost Curve for Greenhouse Gas Reduction suggests that the economics, on the other hand, appear more optimistic. This indicates that the dramatic change required may not be as costly as first thought.

McKinsey has developed an overview of the costs to the economy (a cost curve) of reducing greenhouse gases in Australia, which analyses more than 100 opportunities to reduce emissions and their associated costs, and answers three questions: what reductions can be achieved (a lot); how much will it cost (surprisingly little); and what are the most effective levers to achieve it (a small number in the hands of government, business and consumers).

According to our analysis, a 30 per cent reduction in emissions (below 1990 levels) by 2020 and 60 per cent by 2030 can be achieved without major technological breakthroughs or significant changes in lifestyle. Assuming efficient policies are implemented, we estimate the cost of meeting these targets to be approximately $290 per household per year for 2020 and $590 in 2030 for the economy as a whole.

Although the marginal cost of the required reduction would be $65 per tonne of carbon dioxide, 25 per cent of total reductions in 2020 actually have a positive economic gain, not a cost. Wind power, geothermal options or reforestation cost money, but there are options, such as efficient lighting and insulation, where the cost of implementation is less than the value of the energy savings they will achieve. As impressive as these numbers are, it is important to point out that they are net numbers for the economy as a whole. As not all savings will be passed on to consumers and differences may appear between cost and price increases, actual costs to households will differ.

Amid the dire comments about climate change, these forecasts can appear very optimistic. However, there are three aspects that put these numbers into context. First, no single reduction opportunity or technology can be pursued in isolation if targets are to be met. To make it achievable and affordable, a portfolio of opportunities needs to be pursued simultaneously. Second, early action is critical delays will result in increased costs and make meeting targets more difficult. Third, opportunities that will save money, such as in the building sector and energy efficiency, need to be pursued as vigorously as those that cost money, like the move to clean coal or solar power.

Although reducing greenhouse gases without substantially sacrificing economic growth is achievable, no one is saying it will be easy. These challenges and costs will need to be shared across business, government and consumers. For government, setting a greenhouse gas reduction target is an important first step in providing much-needed certainty for business.

While setting a target alone will not result in carbon reductions. it will enable companies to understand the magnitude and timing of change, allowing them to prioritise reduction strategies. Given that timing is critical, the government should clarify the details of a national emissions reduction scheme and implement it as early as possible.

The federal government has signalled its intention to create an emissions trading scheme. To speed up the process we should take a "learn as we go", rather than a "wait and see" approach towards its implementation. The design of the system should aim to give business appropriate certainty about the price of carbon and ensure a significant reduction in greenhouse gas emissions.

Governments also need to provide the regulatory framework to ensure the right incentives are in place for business and individuals to pursue economic gains in energy efficiency areas like insulation and building construction. The public sector can also contribute to fast-tracking promising technologies to be cost-competitive. Business has a big role to play, beyond complying with relevant new regulation. In the past 12 months, many Australian companies have attempted to quantity their contribution to greenhouse gas emissions.

Once this is done, companies need to move beyond just offsets to genuinely improving energy efficiency to significantly reduce overall emissions. Opportunities will come within businesses but also by collaborating across the whole value chain. Actions to reduce emissions can also unlock new, profitable opportunities. Business can also make a valuable contribution to the policy debate. Some companies feel uncomfortable about this form of advocacy, but this debate has real potential to shape Australia's economic landscape. Undoubtedly a mix of short to long-term actions; offsets, efficiency gains and new growth opportunities; response and advocacy will be required.

Although at this stage of the climate change debate, many people are looking to government, under the right frameworks, market solutions could and should emerge. The capital markets have always been critical in driving innovation, job creation and economic prosperity by reallocating resources away from old, less productive forms of activity towards new and better opportunities. Around the world we are seeing innovation and investment in a lowcarbon environment, and the establishment of financial instruments, institutions, principles and capabilities that are playing a larger role in shaping our future.

Undoubtedly new facts both scientific and economic will emerge before this debate is over. The facts we have now suggest that governments need to be bold and swift; business needs to be responsive to community and profit needs; and consumers need to think twice about the quantity and nature of their consumption.

Adam Lewis is managing partner of Mckinsey & Company, Australia and NZ

People power may soon help meet state's energy needs
Friday, March 7, 2008

Farmer Jim Lenz has often thought of harnessing the strong gusts that blow over his 8,500- acre family farm in northeast Colorado, straddling the border with Nebraska. His farm has the money, labor and the will to build a wind-power project. But he didn't know what to do with the excess electricity - whether he would be able to sell the power back to the grid.

Lenz's dilemma was resolved Thursday when the Colorado legislature passed a bill allowing homeowners and businesses to be paid a fair rate for excess electricity produced by their own solar, wind or geothermal systems. House Bill 1160 has been sent to Gov. Bill Ritter, who likely will sign it in the coming days. "This is good news," Lenz said Thursday. "A wind-power project could save us $10,000 in electricity costs each year."

Bill sponsors Sen. Brandon Shaffer, D-Longmont, and Rep. Judy Solano, D-Brighton, said the bill, called the Homegrown Renewable Power Act, will spur renewable-energy investments - especially in solar - by homeowners and businesses. "This rewards Coloradans who are taking a step in the right direction to make our state a cleaner, healthier place to live by ensuring that solar energy is more affordable and accessible," Shaffer said.

The bill also will make it easier and more cost-effective for a utility to meet its peak power demand. Instead of paying the higher cost of energy bought from power plants at peak times, a utility will be able to buy excess energy from homes or businesses. Conservationists hailed the bill as an important step in fighting global warming while decreasing the nation's energy independence. "In the next decade, we could have a half-million solar roofs helping to power Colorado," said Pam Kiely, legislative director for Environment Colorado.

Lenz is trying to figure out what size wind turbine would best fit the needs of his family farm. He'd like to start a project soon but doesn't know whether he can secure a turbine this year. He attended a wind energy meeting in Wray on Monday, expecting to see 30 people, but 120 showed up. "There were people I knew from Akron, Holyoke and Sterling, but many others I didn't know who came from a distance," Lenz said. or 303-954-2976