Thursday 4 December 2008

Our energy supply is safe, but it will cost us more

Friday 21/11/2008 Page: 2

transmission towerAUSTRALIANS should brace for higher energy prices as ageing infrastructure is replaced and an emissions trading scheme is phased in, but the good news is that energy supply is reliable for now.

That is the message from the Australian Energy Regulator's 2008 State of the Energy Market report, to be released today, which states that while the global financial crisis continues to cripple some corners of the economy, investment in network transmission and distribution will continue to grow.

AER chairman Steve Edwell told BusinessDay that the 323-page report highlighted that Victoria had a mature energy market capable of dealing with policy shocks, such as the Federal Government's carbon pollution reduction scheme. He said Australia could not afford to be frugal on spending in the energy sector.

"We have seen a high level of investment on the network side of things: $1.2 billion a year in transmission and in distribution it is about $3 billion a year. In gas it is about $400 million a year. That is pretty significant and it is increasing," he said. "In Victories transmission we had about $600 million spent from 2003 to 2008 whereas going forward we have endorsed $950 million over the same period.

That will keep things moving." Mr Edwell said consumers would have to pay for that higher level of investment. "Consumers need to be aware that energy prices are clearly going to increase and that there is cost pressure right across the supply chain. That is most evident in the generation space because we have to replace lower-cost, high-emission intensity plants with higher cost, low-emission plants. That is going to increase the cost of generation possibly by about 15% or 20%," he said.


Developing nations urged to slash carbon emissions

Monday 24/11/2008 Page: 5

THE world will fail to halt global warming in time unless key developing countries join the West in slashing carbon emissions "substantially below business as usual", the world's chief energy watchdog has warned. The executive director of the International Energy Agency, Nobuo Tanaka, told The Age that, on current policies, developing countries will generate 97 per cent of the growth in greenhouse emissions between now and 2030.

"After 2020, the BRICs (Brazil, Russia, India and China) must participate", Mr Tanaka said. "Without some of them, it's simply impossible to achieve the goal of limiting global warming to 2 degrees. "Our modelling shows that even if all the OECD economies reduce their emissions to zero. it still wouldn't be enough. They (the BRICs) simply have to join." In Australia to address the Clean Energy Council conference today, Mr Tanaka strongly rejected calls for Australia and other Western countries to put off tackling climate change because of the financial crisis.

He said issues of climate change and depleting oil supplies were far too important to be shelved because of the economic slump. To do nothing now would raise costs in future, making it harder to recover from the slump. "Many international oil companies have postponed investments because of the credit crunch," Mr Tanaka said. "This will create a possible supply crunch when demand is coming back after the crisis is over.

"We want to see the investment happening now, and it's the same with climate change. If we don't have the investment now, the cost of mitigation will be higher in future. We should not slow down." The agency is the West's think tank on energy issues, and is funded by 22 governments, including Australia. It has long criticised Australia, the United States and others for delaying action on climate change.

But Mr Tanaka gave the Rudd Government high marks on everything except its refusal to consider nuclear energy - which the IEA argues will be needed to halve global emissions at least cost. He praised the Prime Minister's plan to set up a global research fund for carbon capture and storage.

Australia turns its coal shoulder - Alternatives are cooking with gas

Thursday 20/11/2008 Page: 6

AlternativesTHE approach to emissions trading has virtually wiped coal off the table of options for new power stations in Australia, an official survey reveals. The Australian Bureau of Agricultural Resource Economics reports that of 29 power stations under construction or committed, only one will burn coal: a small, 416-megawatt station in Western Australia.

Australia generates three quarters of its electricity from coal, a dependence that has made it one of the world's biggest greenhouse gas emitters per head. But its power in future will be cooked on gas. The ABARE survey found 58% of the new capacity will be generated from burning gas, which emits only half as much greenhouse gas as black coal and a third as much as the brown coal used in Victoria.

Methane generated from coal seams is the second-biggest source of new power, accounting for 19% of new capacity, followed by wind with 11%. In Victoria, five power stations are under construction or committed, adding 1156 megawatts to the state's grid. Almost half that will come from the first stage of Origin Energy's 1000-megawatt gas plant at Mortlake, in the Western District.

Wind stations under construction in western Victoria at Waubra (near Ballarat), Crowlands (near Ararat) and Portland will add up to 466 megawatts to the grid, while AGL's Bogong hydro station will generate up to 140 megawatts. ABARE lists 16 other wind energy projects in Victoria at less advanced stages of planning. If all were built, they would generate more than 2000 megawatts on a windy day - more than the power stations in the Latrobe Valley.

Victoria has another 2000 megawatts of gas-fired stations in the pipeline but just one coal-fired plant - the 400-megawatt station in the Latrobe Valley to use HRL's new technology of drying and gasifying the coal before burning it, which promises to reduce emissions by 30%. It also includes Solar Systems' plan for a 154-megawatt solar thermal plant at Bridgewater, near Bendigo - now not expected to start until 2013 - and a 34-megawatt tidal power station planned by Tenax Energy for Port Phillip Heads.

Even in the rest of Australia, ABARE lists only five plans to generate electricity from coal. They include the path-breaking ZeroGen plan in central Queensland to build Australia's first power station using carbon capture and storage by 2012.

Global prospects for clean coal are becalmed. The Bush Administration pulled out of the FutureGen consortium in the US after project costs almost doubled, while Bloomberg reports that European Union plans to subsidise a dozen demonstration plants have stalled over funding.


Clean energy lacks appeal

Adelaide Advertiser
Monday 24/11/2008 Page: 34

ONLY 1 per cent of consumers are exploring green energy options when looking for a new electricity provider, research has found. Energy price comparison website says paying extra to help the environment is not a high priority for most consumers. "The vast majority will only choose a more environmentally friendly option if it means they are still saving money off their regular bill," GoSwitch chief executive Ben Freund said.

He said many people did not realise that in some cases, green energy options cost less than their existing plans. GoSwitch believes the introduction of an emissions trading scheme in 2010 could result in the average annual household electricity bill jumping 55 per cent, from $1800 at present to $2800.

SA climate shift 'proof' - Fifty years of figures show temperatures up, rainfall down

Sunday Mail Adelaide
Sunday 23/11/2008 Page: 18

SOUTH Australia has been in the grip of climate change for the past 50 years, an analysis of Bureau of Meteorology figures has revealed. And the state's climate will continue to get hotter and drier with potentially devastating consequences, the bureau warns. A climate expert says the data, recorded at seven weather stations across the state since 1956, provides "unequivocal" proof that climate change is impacting on the state.

All seven stations, from Ceduna in the Far West to Mt Gambier in the South-East, recorded an annual increase in temperatures, while five also show a decline in rainfall. The data was revealed after a midweek poll on the Sunday Mail website, AdelaideNow, showed almost half of 728 respondents said climate change was a "myth". The figures show the worst-affected area is the famed wine-growing region of Clare in the state's Mid-North.

The area now gets 150mm less rain a year on average than five decades ago, and has experienced a 1.7C increase in the average temperature. The Bureau of Meteorology's SA regional director Andrew Watson said South Australians must get used to living in a changed environment. "Records over the past 50 years across the state show that climate change is happening," he said. "Overall, rainfall will continue below the average and the water in the River Murray will continue at these levels or get worse."

He said climate change had "contributed to the severity of this present dry spell". "This spell is drier than it would have been 50 years ago, and any householder hoping to hang on to their garden with the expectation rainfalls will return to the long-term average is hanging on to a pretty vain hope," Mr Watson said.

Federal Minister for Climate Change and Water, Penny Wong, said: "Anyone who says we shouldn't act should look at these figures." She pointed to other data to emphasise the need to introduce the Government's carbon trading scheme in 2010, to reduce greenhouse gas emissions which contribute to climate change.

"Five of the eight catchments in the southern Murray-Darling Basin over the past 10 years have already seen inflows around, or worse than, the CSIRO's worst-case projections for 2030," Ms Wong said. Australian National University Professor Ross Garnaut, who was employed by the Rudd Government to produce a green paper into the cost of a national carbon trading scheme, said SA was especially at threat from climate change.

"Irrigation farming, the growing of high quality wines and other agriculture are particularly vulnerable ... but the best news on climate change is that a concerted effort by all countries could substantially improve the odds of avoiding the worst damages," Professor Garnaut said. Author, scientist and former SA Museum director Tim Flannery said the SA figures were "consistent with what we are seeing worldwide". "But I think people may be surprised that the impact of climate change has been recorded for the past 50 years in South Australia," Professor Flannery, Australian of the Year in 2007, said.

In the Clare Valley, a well sunk by Jesuit Brothers at the world-famous Sevenhill Winery has run dry for the first time in 150 years. Sevenhill winemaker Brother John May said the well had been dry for the past three years. "I remember big winter rainfalls in the 1960s when no one ever thought of having irrigation," he said.

No special carbon deal for LNG: Rudd

West Australian
Saturday 22/11/2008 Page: 1

WA's lucrative liquefied natural gas industry appears destined to face the full force of the emissions trading scheme after Kevin Rudd said he was yet to be convinced by arguments for special treatment presented by Woodside Petroleum's outspoken chief executive Don Voelte. Woodside Petroleum, the lead partner in the North West Shelf Venture, claims the ETS threatens up to $100 billion of new projects because the scheme's proposed design would force LNG producers to buy permits for all of its greenhouse gas emissions from 2010.

By comparison, bigger polluters, including the coal and aluminium sector, would get between 60 and 90 per cent of their pollution permits free. But in an interview to mark his first 12 months as Prime Minister, Mr Rudd said LNG companies, while entitled to argue for changes to the ETS design, would have to provide hard data to substantiate their case.

And in a direct dig at Mr Voelte's harsh criticism of the proposed ETS design and his claims about the implications of the failure to give the LNG industry free emission permits, he said the Government was not going to listen to one or two players but "the industry in all of its dimensions". "LNG companies like Woodside Petroleum could assert a range of things in relation to what might happen and attribute multiple causalities to it, that's a matter for them," Mr Rudd told The West Australian.

"LNG firms can reach their own conclusions and they're entirely entitled to argue their case. As to whether the data substantiates the propositions being advanced, that's a separate matter. And we are very much data driven and evidence-based." Mr Voelte was unavailable yesterday but last month he said the ETS was "dead on arrival" because of the global financial crisis.

He has also suggested Woodside Petroleum may shift its proposed floating Sunrise LNG plant into East Timorese waters to avoid the carbon trading regime. Chevron Australia's managing director Roy Krzywosinski has also previously warned that the ETS would threaten the viability of the US giant's proposed Gorgon and Wheatstone operations in the North-West with a combined value of $40 billion.

In a wide-ranging interview with The Australian, Mr Rudd said his Government's ambitious reforms on climate change, hospitals, education, infrastructure and defence had been made more difficult by the "indiscriminate" turmoil on world markets but he vowed to pursue them "meticulously" while also tackling what he has rebadged as the "global financial and economic crisis". "We are working our guts out to deal with these challenges," he said.

"It's tough and it's hard and next year's going to be tough and hard but we have framed an economic strategy to get us through it, but it's going to be a bumpy road." He singled out climate change as the most urgent generational challenge, saying that Australians not only recognised the need to act early but also understood the cost of adjusting to a low-carbon economy was manageable if "handled properly".

Mr Rudd challenged opponents of Australia reducing its emissions to explain to their children and grandchildren their preference for inaction. "Let me have their answer on behalf of their kids," he said. He said the financial crisis was the hardest issue to deal with because of its "intensity, complexity and international connectedness", and the death of Australian soldiers in Afghanistan. He said the deployment of 1000 Australian troops in Afghanistan was "about right" but that the commitment to the war would be reviewed. On deploying more troops, he said: "The truth is we are stretched."

Alice residents see the light on solar energy

Northern Territory News
Friday 21/11/2008 Page: 7

THE 500th household has signed up for the sun powered revolution in Alice Springs. Kathy and John Boyle said they thought they were "green conscious" until they went into the Smart Living Centre. "We have a front loading washing machine and low pressure shower heads," Ms Boyle said. "But we were amazed to hear about many other ways to save energy." The couple own AJ Services and signed up for two energy surveys - residential and commercial Alice Solar City aims to sign up 1500 homes and businesses for surveys by 2013.

General manager Brian Elmer said the biggest interest had been in solar hot water systems. The campaign has supported the installation of nearly 60 systems on rooftops in eight months. More than $1 million in incentive vouchers has been given to Alice residents to use power saving measures, such as solar photovoltaic systems, energy efficient lighting, insulation and window tinting.

Payback plan to boost interest in solar energy

Friday 21/11/2008 Page: 2

A NATIONAL scheme to pay people for generating solar energy would drive a $17.9 billion investment in the industry, generate thousands of jobs and reduce Australia's carbon emissions by 4.6 million tonnes a year, a report to be released today reveals. The report by Access Economics for the Clean Energy Council comes after Australia's biggest solar panel factory, BP Solar, announced it would close its doors early next year, saying it could make panels more cheaply overseas.

The research shows that a gross feed-in tariff, under which people would be paid for all of the electricity they generated, including the energy they used themselves, would invigorate the solar industry, leading to strong take-up of solar panels and bringing forward investment in the technology. The scheme would cost the federal Government $16.2 billion over the next 20 years if it were available to businesses and residents.

It would cost less than half of that $6.5 billion if only householders were included. The feed-in tariff would allow people to recoup the costs of their investment in solar panels within 10 years. The report says an emissions trading scheme and mandatory renewable energy target were expected to be insufficient on their own to drive significant growth in the industry.

Feed-in tariffs have sparked rapid growth in solar industries overseas. In Germany, which implemented a gross feed-in tariff in 2000, solar installations have grown on average by 72 per cent over the past five years, and the industry has generated about 42,600 jobs. The report predicts that some of the costs would be offset by a saving of $610 million by deferring new investments in electricity generation capacity.

The take-up of solar energy would help to reduce electricity demanded from the grid during peak periods. Access Economics director Steve Brown said the research revealed there was potential for a strong solar photovoltaic industry in Australia, especially given Australia had the highest solar radiation levels in the world. "We've seen overseas that the uptake of solar does respond to policy settings," Mr Brown said.

He said it was up to policymakers and the industry to balance the costs and benefits of the scheme. The solar industry and environmental groups have pushed strongly for a national feed-in tariff scheme, saying it would encourage the take-up of renewable energy and reduce greenhouse emissions. Earlier this month, a federal parliamentary committee recommended that a national scheme be developed in consultation with the states. It followed an agreement between Kevin Rudd and the states to consider options for a harmonised approach. Many jurisdictions have already pushed ahead with their own schemes.

The ACT recently became the first Australian jurisdiction to announce the introduction of a gross feed-in tariff scheme. Householders and businesses that installed renewable energy systems, including solar panels or micro-wind turbines, would be paid for all the energy they produced at nearly four times the current cost of electricity. Victoria, Queensland and South Australia have also introduced feed-in tariff schemes, but people are paid only for the excess energy they feed back into the system. In South Australia and Queensland, the scheme is open to residents and small businesses, while Victoria's scheme is open only to householders.

LNG industry says 37pc of output threatened by carbon trade

West Australian
Thursday 20/11/2008 Page: 12

The LNG industry says up to 37 per cent of its potential output would be under threat if it does not qualify for exemptions under the emissions trading scheme. The Australian Petroleum Production and Exploration Association told a Senate inquiry yesterday that the Federal Government's ETS model would unfairly penalise a clean energy source which cuts emissions in customer nations.

Modelling commissioned by the association has shown that 28 to 37 per cent of LNG output in planned projects would not be produced under a 2020 greenhouse target of 10 to 20 per cent. There are three LNG projects operating or under construction off WA and another 13 in the planning stages nationwide.

"We're not saying they won't proceed (under an ETS)," chief executive Belinda Robinson told the inquiry. "We're not saying how it will play out on a project-by-project basis but it will play out in some way. " She said that for every tonne of carbon the industry produced in Australia, 5.5 to 9.5 tonnes of emissions were reduced in China and four tonnes in Japan by using LNG instead of coal.

The industry would not be allocated any free polluting permits like other exporters under the Government's proposed ETS. Ms Robinson doubted that LNG producing nations such as Nigeria, Algeria, Indonesia and Malaysia would face carbon pricing. The Government has been under fire from industry groups for assuming in its Treasury modelling that big emitters China and India would eventually commit to curbing emissions.

A Federal Treasury official told the inquiry the modelling reflected the Government's desire to engage the international community. "That multi-staged (action) was judged to be more realistic in the context of the international negotiations," Meghan Quinn, manager of Treasury's climate change modelling unit, said. "Assumptions need to be made to do modelling and there is a limit on how many you can do." Ms Robinson questioned the Government's modelling scenario of China taking action from 2015 and India from 2020.

Wednesday 3 December 2008

New modelling shows sun can shine on Australian solar power

Clean Energy Council
21 November 2008

NATIONAL: Australia is in a strong position to develop a thriving national solar industry over the next 20 years, according to a report into the renewable energy sector released today by the Clean Energy Council (CEC). The report, undertaken by Access Economics, provides a compelling economic case for the implementation of a gross national feed-in tariff in Australia.

"What this shows is that with the right policy and investment, there's a strong future for sustainable and profitable growth in Australia's renewable energy sector," said CEO of the Clean Energy Council, Matthew Warren. "Australia's share of the global solar market has fallen from seven per cent in 1992 to one per cent in 2007 - despite having the highest average solar radiation of any country in the world, Australia significantly lags behind other countries in its investment in the solar industry."

The report shows a gross national FIT would drive investment in solar PV systems by the commercial and residential sectors, assuming 3,000 MW of capacity is deployed, of up to $17.9 billion over the next 20 years (NPV at 5.7 per cent). Solar industries in other countries that have adopted a national gross feed-in tariff have developed strong industries that encourage take-up of solar through consumer earnings and cost savings.

"The report shows a gross feed-in tariff will be the trigger for strong investment - and growth - in the solar sector," Mr Warren said. "This kind of policy in Australia could help reduce residential and commercial demand for energy and help deliver electricity on hot sunny days when it is the most valuable. "As a result, the modelling suggests solar energy can defer investment in gas-peaking plans".

The Access Economics report records the sharp increase in deployment of solar panels in Australia since 2007 when the increased federal government rebate triggered increased awareness and affordability of the technology. The report also states Australia's carbon pollution reduction scheme (CPRS) and mandatory renewable energy target (MRET) may be insufficient to drive significant investment in the solar sector.

"A gross feed-in tariff is entirely complimentary to a CPRS and a 20% MRET, but it's important to note that currently, less than one per cent of the MRET comes from solar sources," said Mr Warren.

Lights out for solar panel plant 200 jobs to go as manufacturer quits

Wednesday 19/11/2008 Page: 10

AUSTRALIA'S only commercial scale solar panel plant will shut in March, axing about 200 jobs and sparking fears that skilled "green-collar" workers will be lost overseas. Announcing that it will close its Sydney solar photovoltaic plant, British-owned BP Solar said yesterday the cost of importing raw materials was too high.

BP Solar regional director Mark Twidell said shifting manufacturing to larger plants in China, India, Spain and the US would make household rooftop panels cheaper. The Opposition and the Australian Greens called on the Federal Government to save the factory, saying its closure was evidence that Labor was not doing enough to support the solar industry.

Opposition climate change spokesman Greg Hunt said: "If the Government was willing to spend $6 billion propping up our automotive industry, why is it not doing more to save, let alone expand, our solar industry?" Mr Twidell said extra support for the renewable energy industry would not have changed its decision. "We need to be located at places closer to our suppliers where we can operate at scale, 20 times the scale we're currently operating at, to deliver lower costs on the products to consumers," he said.

BP Solar global chief executive Reyad Fezzani said the Olympic Park location, lack of expansion potential and lease agreements combined to make the Sydney plant uncompetitive. But Greens climate change spokeswoman Christine Milne said the Government should do all it could to retain skilled workers in green industries. "The Rudd Government has consistently demonstrated its complete lack of interest in renewable energy, with its single-minded focus on coal," she said.

A spokesman for acting Innovation Minister Craig Emerson said the decision was disappointing, but based on costs. BP Solar had not asked for taxpayer-funded support, he said. Mr Hunt said the decision showed the Government's solar industry policy was in chaos, pointing to its decision to limit access to an $8000 rebate for rooftop solar panels to households earning less than $100,000 a year.

But the Government said Mr Hunt had no credibility on solar energy. Despite his campaign against the means test, applications for the rebate grew markedly since the means test was introduced in May - from about 350 a week to 750 a week. The solar industry is campaigning for the Government to replace the rebate with an incentive scheme that would pay a premium for power generated at home, eventually making solar panels profitable at a household level. Called a feed-in tariff, the subsidy was backed last week by a Senate committee, which recommended a model be developed with the states.

Obama promises ‘new chapter’ for US action on climate change
19 November, 2008

US President-elect Barack Obama has reaffirmed his election pledge to take serious action on climate change, saying that the country will re-engage with international negotiations, promote clean energy development and implement a cap-and-trade programme for greenhouse gas emissions.

In a video address to the Global Climate Summit, an event arranged by California Governor Arnold Schwarzenegger ahead of next month's UN climate conference in Poznan, Poland, Obama said: "Delay is no longer an option. Denial is no longer an acceptable response. The stakes are too high. The consequences are too serious." While he will not personally attend the UN conference, Obama said he had asked observers to report back to him.

"Once I take office, you can be sure that the US will once again engage vigorously in these negotiations and help lead the world towards a new era of global co-operation on climate change," he said. Obama's pledges included implementing a federal cap-and-trade system, with strong annual targets that set the US on a course to reduce emissions to 1990 levels by 2020 and 80% below 1990 levels by 2050.

"My presidency will mark a new chapter in America's leadership on climate change that will strengthen our security and create millions of new jobs in the process," he said. He promised $15 billion of support each year for the private sector to develop clean energy - including solar, wind, next-generation biofuels, nuclear and clean coal - which he estimated would create 5 million 'green' jobs. "When I am President, any governor who is willing to promote clean energy will have a partner in the White House. Any company that's willing to invest in clean energy will have an ally in Washington," he said.

In a press briefing on Monday, UN climate chief Yvo de Boer said he expected the US delegation to Poznan to "participate fully and give us an indication of where things might go in future". De Boer outlined three main outcomes he hopes to see from the conference: the first version of the negotiating text that will lead to a new climate change agreement; for ministers to give a vision of future co-operative action; and the formal launch of the climate change adaptation fund.

Congress must revisit key tax break – green power lobby
New York, 20 November:

No sooner has the US Congress approved tax credits for renewable energy, it should immediately adjust them because the financial crisis has limited new project development, renewable energy advocates have said. In October, after numerous failed efforts, the legislature extended the key production tax credit (PTC) to the end of 2009 for wind and biodiesel and through 2010 for other renewable energy sources, and the investment tax credit for solar energy projects to the end of 2016.

The PTC, in particular, had been a crucial underpinning to a booming wind energy market in the US and the industry had been calling loudly for its extension. But, despite the recent victory, new projects are still failing to get off the ground because of a diminishing appetite for the tax benefits related to the projects among investors.

To exploit the credits, renewable energy developers must either have a US tax liability, or be able to attract backers who do - so-called tax equity investors. However, major players in this market - such as Lehman Brothers, Wachovia and American International Group - have either disappeared or scaled back their activity due to the financial crisis.

To spur investment, Congress should make the tax credits refundable, transferable and available to investment vehicles known as master limited partnerships, to allow their use by a wider range of investors. "If Congress does not take that step, we're going to see a significant downturn in what has been a booming industry," said Randall Swisher, executive director, American Wind Energy Association.

Ideally, Congress would adjust the tax credits during its lame-duck session, but troubles in the auto industry could overshadow the renewable energy sector. Any adjustment would solicit an "instant response" because projects on the bubble will quickly secure financing from organisations such as pension funds that have not traditionally been involved in renewable energy investment, said Rhone Resch, president, Solar Energy Industries Association.

The associations outlined six priorities for President-elect Barack Obama and the new Congress, with a minimum five-year extension of the PTC and additional funding for the currently $400 million/year Clean Renewable Energy Bonds programme at the top of the list. Obama should issue an executive order expanding federal procurement of renewable energy generation because the federal government is the largest US electricity customer, spending $5.8 billion per year, they suggested. The new administration should also support investment in electricity infrastructure and smart-grid technology to deliver renewable energy to population centres.

Obama has already spoken out in favour of several of the groups' stated objectives, including a national renewable portfolio standard to ensure that at least 10% of electricity consumed in the US comes from renewable sources by 2012 and 25% by 2025 and a federal greenhouse gas cap-and-trade programme. He has also pledged to invest $150 billion over the next 10 years on renewable energy projects, but $30 billion should be invested in 2009 to finance new projects and technology installations, they said. "If we don't have government participating in the renewable energy sector, we will go from being one of the bright spots to one of the industries struggling in this economy," Resch said.

Big US brands call for climate regulations
London, 20 November:

Five of the biggest brands in the US called on Wednesday for the incoming US government to introduce strong climate legislation early in 2009.

Uniting under the banner Business for Innovative Climate and Energy Policy (BICEP), Levi Strauss, Nike, Starbucks, Sun Microsystems and Timberland said legislation was needed to boost the clean energy economy and mitigate the risks that global warming could have on their businesses.

A phasing-out of coal-fired power plants except those equipped with carbon capture and storage technology, the introduction of a greenhouse gas (GHG) cap-and-trade system in which all carbon allowances were auctioned, and a national plan to stimulate renewable energy were the key demands from the group.

BICEP said it would lobby Congress to set GHG reduction targets of at least 25% below 1990 levels by 2020 and 80% below 1990 levels by 2050, establish aggressive policies to double historic energy efficiency rates and adopt a national renewable portfolio requiring 20% of electricity to be generated from renewable energy sources by 2020 and 30% by 2030.

Sarah Severn, head of Nike's corporate responsibility team, said the five corporations had decided to launch the initiative as they had "felt the consumer brand voice was missing" from the climate change debate. The companies said it was important the US acted immediately to mitigate the costs of climate change and "jump-start a new economy".

Ben Packard, Starbucks vice president, said he believed "economic viability and environmental stewardship" went hand-in-hand and that stricter climate legislation would stimulate business rather than stymie the economy. "The cost of inaction is higher [economically and environmentally]," said Packard. Severn said: "Nike...believes legislative action on climate change and clean energy is not only urgent but imperative to creating positive, long-term change".

Hilary Krane, senior vice president of corporate affairs at Levi Strauss, said: "Large-scale climate change would have economic, social and environmental consequences for our business and the communities in which we operate. We can voluntarily change our own behaviour ... but we also believe that US government leadership is essential if we are to create an environment in which every US company recognises the role it must play in addressing climate change."

Tuesday 2 December 2008

California greening

Canberra Times
Monday 17/11/2008 Page: 4

California greeningWith Barack Obama headed for the White House, the race is on to bring the United States back into the international community fighting climate change. Much will hang on negotiations between governments to find a successor to the Kyoto Protocol. But the real business in the next few months will be to find a blueprint for domestic action. And legislators say they need look no further than what is going on right now in California.

California, the most populous state in the US, has always been the pioneer of American action on air pollution. At the offices of the California Air Resources Board in the state capital Sacramento they talk proudly of their long efforts, begun in 1968, to curb Los Angeles smogs. This is where they dreamed up emissions standards for lawn mowers and solvents, as well as pioneering cleaner car exhaust pipes. And now they believe they are set to pioneer what will become national standards aimed at cutting carbon-dioxide emissions.

We are doing what we want the federal government to do," deputy secretary of the California Environmental Protection Agency Eileen Tutt said before the presidential election. We want the new administration to have a working model in front of them when they arrive at the White House. We are creating the biggest plan to fight climate change in North America. We are the biggest game in town." The California blueprint is already set to be adopted - in outline at least - by much of the rest of the American west, the seven US states and four Canadian provinces that make up the Western Climate Initiative.

The state's Republican Governor Arnold Schwarzenegger may be an unexpected convert to the cause of environmentalism, but he is said to be partly inspired to pollution-busting by his son's asthma. And many other Californians realise that, living in a desert and dependent on snowpacks for water, they are in the front line on climate change.

Schwarzenegger set out his strategy in the California Global Warming Solutions Act of 2006, known internally as the AB32. A full "scoping plan" on how the state plans to implement the Act was published in June, and it is expected to go before the Air Resources Board for a final vote early next month.

Till now, battling for state law on carbon-dioxide emissions has been an uphill task. Even before the passage of AB32, California has been fighting a legal battle with the Bush Environmental Protection Agency to establish the principal that states can introduce laws on exhaust-pipe emissions of carbon dioxide, under the California Clean Car Law passed in 2002. Sacramento wants to impose a 30 per cent cut in emissions per kilometre travelled by 2016. But the Bush EPA has insisted that there are no special effects of carbon-dioxide particular to California, so it has no jurisdiction. That veto should fall with the Bush Administration.

But the new plan goes beyond exhaust-pipe-emissions standards, laying out a broad range of measures aimed at cutting overall state CO2 emissions by 15 per cent by 2020. That is the equivalent of a 30 per cent cut from business as usual, or a return to 1990 levels. It is a task made more daunting by the fact that the state's population in 2020, swelled by migrants, is expected to rise from 27 million in 1990 to 45 million by 2020. The steps to be taken are far ranging.

The centrepiece is a state system for trading in permits to pollute - a so-called cap-and-trade system - that should be operational by 2012. It is aimed first at power generators and heavy industry, but will later be extended to include transport emissions, which comprise 40 per cent of California's total. If all goes to plan California could cover 85 per cent of total state emissions with a cap-and-trade system, which would take it ahead of the European system, which is now the world leader. In addition there are the exhaust-pipe emissions standards, plus new fuel standards aimed at cutting the carbon emissions for every gallon (4.55lt) of petrol burned by 10 per cent. This last measure will be achieved mostly through biofuel additives.

But attacks on vehicle emissions alone will not be enough, California has concluded. They have to act directly against the state's car culture as well. In the past decade, the number of vehicle miles travelled in California has risen by 3 per cent a year, more even than the 2 per cent annual rise in population. "People are driving more and that has to be stopped," state climate-change PR man Stanley Young says.

That means changes to land use planning, a function held by individual cities. State attorney general Gerry Brown has introduced a series of cash inducements aimed at bullying local planning authorities into cutting out urban sprawl and siting new housing close to mass transit systems. The moves have the backing of environmentalists and house builders. The model is Portland, which has imposed a green belt to prevent sprawl and encouraged higher-density development in core areas.

The state is also planning new initiatives in public transportation, including spending $US10 billion on a highspeed rail link from Los Angeles to San Francisco, eventually extending south to San Diego and north to Sacramento. There are also plans for a million "solar roofs" across the state and regulations covering emissions from trucks on the states highways and ships docked in state ports.

California does not burn much coal, but it buys in a lot of electricity from out of state that is generated by burning coal. The cap-and-trade system, penalising the big carbon emitters, is aimed primarily to tackle that by providing the right incentives to have a third of the state's electricity generated from renewable sources by 2020.

The state will use its buying power too. The biggest single purchaser of power in California, using more than 3 per cent of electricity, is the state program to pump water to Central Valley irrigators. "Currently that is is coal-fired, mostly from out-of state," Air Resources Board deputy executive officer Mike Scheible says, and, at 23 years, its longest serving staff member. From 2012, when that contract ends, it will be from renewables." But he says such changes won't always be easy. The Los Angeles water and power department has a contract for coal-fired electricity from Utah that runs until 2027.

State legislators believe that the new rules will make California the largest market in the world for renewable sources of electricity such as solar and wind energy. They estimate it will stimulate the purchase of about 17,000 megawatts of renewable generating capacity by 2020 and provide tens of thousands of green-collar jobs. And a new breed of green industrialists is lining up to take advantage. Many of them are funded by billionaires who made their fortune in Silicon Valley.

In Palo Alto, I met solar energy entrepreneur David Mills, chairman of the California-based firm, Ausra, who spent more than a decade at the Sydney University developing ideas on generating electricity by heating water with the power of the sun. Two years ago, frustrated by government indifference in Australia, he went to California. It has a state plan for renewables; it has the technologists to deliver and it has the venture capital," he says. His backers in Silicon Valley have pumped tens of millions of dollars into helping him build a robot-run factory in Las Vegas.

However, with Bush in the White House, Mills and his rivals haven't been able to get power companies to buy the kit. He has a deal with California's largest power company, Pacific Gas and Electric, for a 180MW solar thermal plant to supply peak-load electricity from 2sqkm of desert. Pacific Gas and Electric also has deals with two other solar thermal companies.

But construction is on hold because state utilities regulators haven't been prepared to sanction investment in solar plants without long-term arrangement for tax credits for renewable so far denied by Washington legislators and the Bush Administration. The Barack Obama administration should break that logjam.

California has other plans too. It was one of the pioneers of wind energy 30 years ago. Since then, it has stalled while Europe has taken the lead. But now California wants to grab back the initiative, by going offshore. All the talk in recent months has been about drilling for oil offshore, in California and elsewhere. But in Sacramento they think there is more wind energy than oil to be had off the California coast. A study last year by Stanford civil engineer Michael Dvorak found a number of good windy, shallow water sites for offshore wind farms, along the lines of those being developed in the North Sea. Some sectors of state industry back the AB32 plan with its opportunities for new businesses.

Tutt says, We have a long history of environmental leadership supported by our business community. They know that they profit in the end." In September, when I sat in on a meeting of the California Air Resources Boards Global Warming Economic and Technology Advancement Advisory Committee, which included representatives of leading state industrialists, there was no acrimony, just a determination to make it work effectively. But others are less sanguine. The California Chamber of Commerce is one of the opponents. They are gearing up to raise a ruckus," one state official said, "particularly against the current background of economic turmoil."

However, at the Air Resources Board they remain gung-ho. Last month, the state published a report predicting that the measures would be broadly beneficial to the state economy, increasing economic productivity by $US27 billion by 2020, primarily through improved energy efficiency, while creating 100,000 jobs. Chair of the board Mary Nichols said the financial crisis effected neither the plans nor their profitability.

Not all industrialists agreed. The California Manufacturers Technology Association called it "long on wishful thinking but short on economic reality". At Stanford University, I discussed this with Jim Sweeney, director of the Precourt Institute for Energy Efficiency and an adviser to Schwarzenegger on energy issues. He said he thought the board's predicted benefits were a tad optimistic, but saw no great harm being done. And if there was federal backing for similar measures from the new administration, then the optimistic prognosis could prove correct.

One unresolved issue is how much "offsetting" of emissions to allow. In other words, will polluters be able to meet some of their obligations to reduce emissions by investing in carbon cutting technologies outside the state? For us the bottom line is whether this is beneficial to the state," Scheible says. Since the ARB thinks green technology will be good for the state's economy, the general answer will be no. We want investment in California industry," he says.

But other parts of the state administration seen more in favour of offsets. California has a tradition of joint environmental action with other states and municipalities across the border in northern Mexico, and Tutt says these may be extended to include carbon offsets. The idea of some offsets is generally accepted," she says. Especially because the state wants to see action to cut emissions and increase sinks from agriculture and forestry, and Mexican offsets would be one way of achieving that.

And Tutt says Pacific Gas and Electric already has a program encouraging its customers to offsets their emissions and it would be crazy to outlaw that". The scoping plan suggests a limit on offsets at 10 per cent of the total compliance obligation.

In the end, the detail of how this all plays out will undoubtedly depend on policies framed in Washington, DC, and how they mesh with international negotiations set to conclude late next year. But California remains the place where the US is pioneering its environmental laws, especially on air pollution. Soon it may be leading the world.

Fred Pearce is a contributing editor of New Scientist magazine.

Clean Energy Council disappointed by BP Solar announcement, calls on Government to act

Clean Energy Council
18 November 2008

NATIONAL: The Clean Energy Council says it is disappointed that BP Solar will no longer produce solar photovoltaic (PV) power cells in Australia, but hopes the decision will lead to more affordable solar energy supply for Australians.

"While we are certainly not pleased to see clean energy manufacturing leave Australian shores, we accept that this was a commercial decision by a global company looking to deliver the lowest cost solar panels to a growing world market by operating larger scale plants overseas," said Matthew Warren, CEO of the Clean Energy Council. "Hopefully this will mean more affordable solar energy for Australian households and businesses, making it easier for Australia's fast-growing solar industry to deploy solar energy panels on rooftops across the sunniest continent on earth".

"Now, more than ever, Australia's emerging clean energy industry needs the federal government to provide certainty by delivering on its promise of an expanded Renewable Energy Target (RET) and other complementary measures to ensure we assume our role as a global clean energy superpower as quickly as possible", Mr Warren said. "The future of Australia's clean energy business and the supply of affordable renewable energy must not be impeded in any way because of delays in implementing government policies to make this a reality".

"BP Solar says there was nothing federal or state governments could have done to influence their decision. Today's announcement reminds us that developing manufacturing industries in Australia is challenging in a global market, and the renewable energy sector is no different", he said. "The Clean Energy Council calls upon the federal government to deliver on its promise of providing a more certain future for Australia's renewable energy industry."

Windfall will go to WA and Victoria

Summaries - Australian Financial Review
Monday 17/11/2008 Page: 5

Western Australia and Victoria are expected to grab the biggest shares of an expected $23 billion investment in clean energy as a result of the federal government's 20 percent renewable energy target. A report by Ernst & Young says South Australia will struggle unless transmission lines are built to increase opportunities for wind energy, and expansion in NSW could be hampered by low electricity prices and a problematic planning system. Renewable energy company Pacific Hydro has proposed the government provide funds to build transmission lines in South Australia. Australia's strongest winds are found along the continent's south coast and in Tasmania.

B&B converts energy to cash

Sydney Morning Herald
Tuesday 18/11/2008 Page: 21

THE long-awaited sale of 30 Portuguese wind farms by Babcock and Brown and its ASX listed wind energy offshoot was finally sealed yesterday but with differing financial outcomes for the debt-troubled pair. B&B, which originally acquired the Enersis portfolio of operating turbines and fields under development, will make a profit on the deal - albeit a smaller one than expected when it put its 50 per cent interest on the market in February.

Its net proceeds from the sale of Enersis to a consortium of investors led by a local company, Magnum Capital, will amount to $285.8 million out of a total enterprise value price of $2.2 billion. The sale also includes from B&B's end several wind energy service companies. B&B, which is in the process of selling assets to bring down its corporate borrowings, plans to use its share of the proceeds to pay off another tranche of project debt which is secured against its other European wind assets.

But the deal does nothing to reduce its overall debt burden, a prospect that saw the group's shares shed 7 cents to 41 cents. The move has also been less beneficial in terms of profit for B&B Wind, to which B&B sold the other half share in Enersis just over a year ago. B&B Wind had to book a loss of $11.7 million after taxes, costs and foreign exchange gains.

But its share of $998 million from the total sale price will allow it to cut its own debt pile by $718 million, given that it also had a half share in Enersis's sizeable borrowings. The remaining $274 million of net cash will help the hard pressed wind energy operator to conduct an on-market buy-back of its shares with the aim of boosting the sharemarket price of its securities. That news helped to boost B&B Wind's shares by 2.5 cents to 82 cents yesterday.

The sale of the pair's joint interests had been hampered by a fall in prices and a lack of finance available to potential purchasers as a result of the global credit crisis. Yesterday's announcement underlined their need to get the process out of the way as they signed the deal and settled on it with the buyer simultaneously. It will allow B&B to push on with the disposal of its other wind assets and development projects in France, Germany and Greece. But there was still no indication as to when those deals will come to fruition.

Renewable energy fund fizzles

Monday 17/11/2008 Page: 20

INVESTMENT in Australia's renewable energy sector has failed to take off, totalling just $3 billion in the eight years since the scheme was introduced. Modelling by the Energy Supply Association of Australia estimates that a $23 billion investment in renewable energy will be required to achieve the federal Government's goal of doubling the market share of renewable energy from 10 per cent to 20 per cent by 2020.

Uncertainty over interim mandatory renewable energy targets (MRET) beyond 2010, which is slated to be announced in early 2009, has been the key reason for investment in the sector stalling, according to "2020 Vision", a new report from Ernst & Young on the investment challenges and opportunities of meeting the target.

The MRET was initially set to reach 9500 gigawatts by 2010, but the federal Government has since vowed to increase the target to 45,000GW by 2020. But it has not revealed its interim targets for the increase in energy from wind, biomass, geothermal and solar sources.

Adding to the regulatory challenges confronting the industry, E&Y strategic growth markets leader Jon Dobell said increased finance costs due to the global financial crisis were also likely to impact on the viability of some 'cleantech" projects. The International Energy Agency's 2008 Outlook, which was released last week, found modern renewable technologies would grow "most rapidly, overtaking gas soon after 2010 to become the second largest source of electricity behind coal".

But it noted that shifting the energy mix to reduce carbon emissions required "much more investment in energy-related infrastructure and equipment". Mr Dobell said investment in Australia would need to step up a gear for domestic renewable targets to be met. To achieve the 2020 target of 20 per cent (market share), more than half of all new electricity generation capacity installed in Australia until then will need to be renewable, requiring about $23 billion in investment," Mr Dobell said.

"Only about $3 billion has been invested in the renewable energy sector in Australia since mandatory national targets were first introduced eight years ago so this is a huge increase." As the clock wound down on meeting the MRETs, the attractiveness of renewable energy investment in Australia's states and territories is also set to dramatically change, the 2020 report found.

Despite capturing the lion's share of renewable energy investment over the past seven years, South Australia, the traditional seat of renewable power, was "about to lose its crown" because of grid transmission capacity constraints, while the unexploited wind resource and available transmission capacity made NSW the "'next frontier" for renewable energy investment.

"A relatively lower underlying electricity price in NSW in the past due to excess baseload capacity has impeded the viability of renewable energy projects," the report says. "However, increasing coal prices, the introduction of emissions trading and increasing construction costs for new fossil fuel plants are likely to negate this in the future."

Western Australia, where the electricity market is not physically connected to the other states, was deemed the most attractive state for investment in large-scale renewable energy projects in the short term because of its "excellent" wind resources along the southwest coastline near population centres and because planned of upgrades of the electricity transmission line from Perth to Geraldton, which would support renewable energy infrastructure.

Although Queensland, Victoria, NSW and Tasmania are all physically linked through major transmission interconnectors and operate under the National Electricity Market (NEM), the report found that differences in regulation and the range of operators and distribution infrastructure limited trade between regions and created a variety of electricity prices which "can affect a state's attractiveness for renewable energy projects".

Monday 1 December 2008

Renewable energy crown slips to WA

Adelaide Advertiser
Monday 17/11/2008 Page: 48

Renewable energyIT has been the nation's renewable energy sector leader for the past seven years, but South Australia is about to lose its crown, a report says. A slow-growing electricity market and a need to upgrade transmission lines will put the brakes on future growth, according to Ernst & Young's renewable energy sector report, released today.

"SA has captured the lion's share of new renewables investment during the past seven years since mandatory renewable energy targets commenced, moving from near-zero renewables in its electricity supply to 17 per cent," it says. "In many respects, it serves as the MRET success story and beacon of what's possible for the rest of Australia." Ernst & Young SA regional managing partner Mark Butcher said other states were now following the lead set by SA.

"The challenge is to attract and retain our share of renewable energy funding going forward,' he said. Mr Butcher said much of SA's renewable energy resources were remote, such as the massive geothermal energy resource more than 3km underground in the Cooper Basin which was 500km from the nearest transmission infrastructure.

"The challenge is to move the power from where it's generated to the markets," he said. Ernst & Young's Jon Dobell said SA had led the nation in wind-power generation. Western Australia will be next.

Victoria in top spot for green funds

Monday 17/11/2008 Page: 3

VICTORIA is in pole position to attract the most investment in renewable energy over the long term, according to a report to be released today. The report by professional advisory firm Ernst & Young into the Federal Government's mandatory renewable energy target scheme tips investment in the sector to soar to $2.3 billion a year by 2020. Only $3 billion has been invested in renewable energy in Australia since the scheme was introduced eight years ago.

Under the scheme, electricity retailers must supply 20% of required power from renewable resources by 2020. Electricity retailers will be fined about $57 for every megawatt/ hour they are short of the target. The report, entitled 20-20 vision: Investment challenges and opportunities arising front Australia's 20% renewable energy target, lists Victoria as the "all-round quality performer" because of its favourable renewable investment environment.

Victoria was judged to have:
  • The most active state government in supporting renewable energy.
  • An open, liberalised electricity market regulatory regime.
  • Good-quality grid infrastructure near high-quality wind resources.
However, as electricity prices can differ by more than 25% between states and as up to 60% of a renewable energy project's revenue comes from the electricity they produce, Victoria's relatively low cost of electricity has proved the biggest hurdle for investors. Western Australia is the most attractive state for largescale projects in the short term, according to the report, because of excellent renewable resources and planned upgrades to transmission lines.

NSW is tipped to be on the verge of a renewable energy boom, while Tasmania is judged to have "arguably the best large-scale renewable energy resources" despite its small electricity market. Queensland is described as having "unfulfilled potential" and South Australia, despite having attracted more than half the renewable energy investment to date, will become less attractive because it requires major upgrades to transmission lines.

Ernst & Young partner Jon Dobell said uncertainty over interim targets had temporarily stalled investment, but further guidance from the Federal Government and the introduction of its carbon pollution reduction scheme would provide a stimulus. "As underlying electricity prices increase due to emissions trading, it potentially allows the viability threshold for renewable energy projects to also go up," he said.

Link For more information, go to

Community sets clean energy pace

Sunday Canberra Times
Sunday 16/11/2008 Page: 18

Clean Energy for EternityA COMMUNITY group has made its first steps towards achieving an ambitious carbon emissions' target in south-eastern NSW. Clean Energy for Eternity wants "50/50 by 2020" for the region: a 50 per cent cut in energy use and half of the region's energy produced from renewable sources by 2020.

The non-profit group, which initially set the target for the Bega Valley Shire, has secured $100,000 from the Federal Government for a feasibility study into building a solar farm in the region. If it is built quickly, the 2 MW solar farm could be Australia's largest, powering up to 1000 hones. Clean Energy for Eternity founder Matthew Nott said he expected the farm to cost up to $8 million. He said he hoped it would be built in 12 months.

"If we build it quickly, it will be the biggest solar farm of any sort in this country, which is pathetic," Dr Nott said. "It's just ridiculous that here we are, a small, not for profit community group, planning to build the biggest solar farm in Australia. "We're not going to wait for politicians to come along and fix this for us. We want to be on the front foot as a region in tackling climate change. We want to be a region showing leadership and showing others how to do it."

The Government will contribute an extra $1 million in matching funds to support the solar farm's construction if it goes ahead. Clean Energy for Eternity includes members from Eurobodalla, Cooma Monaro and Snowy River Shire areas as well as the Bega Valley where it formed in 2006. The group has secured support from councils in the region, with three councils adopting the "50/50 by 2020" target.

It has also raised funds to install wind turbines and solar panels on four of the seven surf clubs in the region. It hopes to make the campaign national, setting up renewable energy on every surf club in the country. Earlier this month, the group and federal Member for Eden-Monaro Mike Kelly held a community forum, demonstrating the progress towards a 50 per cent production of energy from renewable sources. Dr Kelly said he wanted Eden-Monaro to be the "incubator and test bed" for Australia's renewable energy industry.

"We have many more concepts and projects that we're exploring for the region in the areas of biogas and particularly harnessing the methane emissions from our livestock industry," he said. "We have huge potential here for research and development." The Government funding comes the Green Precincts Fund, which supports local communities to better manage their water and energy use for current and future generations.

Gas from landfill

Sunday Telegraph
Sunday 16/11/2008 Page: 28

Coffs Harbour Council will start capturing landfill gas, which soon may be used to help run a waste management plant. The council has voted to sign a 10-year contract for AGL Energy to build and operate a landfill gas extraction system at Coffs Coast Resource Recovery Park. Negotiations are under way for one plant there, now using bottled gas, to use landfill gas instead.