Saturday 20 December 2008

Perth office powered by wind turbines

West Australian
Thursday 11/12/2008 Page: 16

wind turbinesA plan to install three egg beater-style wind turbines on the roof of a new Perth office block has been given the green light after the State Administrative Tribunal yesterday overturned the Perth City Council's decision to reject the proposal. The five-storey Durack 2 office block was approved at the residential end of Terrace Road near Victoria Avenue in April and in August the council was asked to consider a separate application for three 9m-high turbines, which would be painted red and sit on the south-west corner of the roof.

Council officers had recommended a 12-month trial but councillors canned the idea, claiming once they were installed they would not be removed. The council had received 65 objections and faced a packed public gallery of angry residents before making the decision. The tribunal's decision means the turbines can be permanent, as long as monitoring ensures they do not breach noise limits, making Durack 2 Perth's first six green star building. Construction should be completed within a few months and the turbines should be generating electricity for the building by early next year.

$397b EU rescue Recession, global warming deal sealed

Sunday Times
Sunday 14/12/2008 Page: 43

BRUSSELS: EU leaders sealed an agreement for a $397 billion plan to dig Europe out of recession and a package to combat global warming on the final day of a summit. After persuading Ireland to submit a stalled EU reform treaty to a second referendum next year, the 27 leaders agreed to club together to fund an economic stimulus package and make major cuts in greenhouse gas emissions.

"We are starting to change the way we do things in Europe - talking less and doing more," French President Nicolas Sarkozy, who chaired the gathering, said after the conference. Though the climate-change deal was nailed down only after protracted negotiations, leaders said there had been overwhelming consensus on the need for a joint assault on the economic slowdown.

"Everybody was on the same line about the need for a recovery plan," Mr Sarkozy said. "Exceptional situations need exceptional measures." An eve-of-summit interview by German Finance Minister Peer Steinbrueck, who ridiculed the idea of "tossing around billions" to fend off recession, had indicated the rescue package would prove a major bone of contention.

But British Prime Minister Gordon Brown, whose "breathtaking" $45 billion stimulus package was singled out by Mr Steinbrueck, said the agreement was a riposte to those "who say you (should) do nothing". "What Europe has proved unanimously today is that it is ready to act in a united way to deal with the global downturn," Mr Brown said.

"We will continue to reject the do-nothing approach and we will not stand by and let the recession take its course." Under the stimulus plan, member countries would pump on average the equivalent of 1.5 per cent of gross domestic product into their economies to temper the impact of a global recession.

Before the summit, Germany expressed reservations about ploughing so much public money into the economy and resisted pressure to contribute more than what it judged necessary to get the German economy going again. Mr Sarkozy also said there had been unanimous agreement on the need for a "historic" climate package that he said should inspire the rest of the world. "No continent has given itself such binding rules that we have adopted with unanimity," he said.

The EU's climate-energy package, the "20-20-20" deal, seeks to decrease greenhouse gas emissions by 20 per cent by 2020, make 20 per cent energy savings and bring renewable energy sources up to 20 per cent of total energy use. Environmental groups, including Greenpeace and WWF, slammed the deal, saying it made too many concessions to industry and poorer eastern European nations with their highly polluting coal-fired power generators. "European heads of state and government have reneged on their promises and turned their backs on global efforts to fight climate change," they said in a joint statement.

Obama holds up deal on climate

Sunday Telegraph
Sunday 14/12/2008 Page: 48

DEVELOPING countries offered more emission cuts than anticipated and richer nations mainly offered less, but global climate negotiators have wrapped up lacklustre talks that UN officials said were still on track for a new treaty by December 2009. In a final day of talks, negotiators agreed on principles of financing a fund to help the world's poorest and most vulnerable nations cope with the effects of climate change.

Earlier, they approved a mechanism to incorporate forest protection into efforts to curb greenhouse gas emissions. But basic questions over an equitable balance of emissions cuts, between richer and poorer nations, for the most part remained unresolved, particularly because many richer nations baulked at making firm or ambitious promises to cut emissions in the coining decade.

"We got the bare minimum of what we needed from the talks," said Jennifer Haverkamp, international climate policy director for the Environmental Defence Fund. "There's a lot to do and less than a year to do it." Negotiations have been hampered by growing concerns in Europe, long the world leader in pushing a climate deal, about the costs of cutting emissions as its industries come under pressure from a global recession.

Despite those worries, however, Europe managed to sign its own climate agreement, committing the region to a 20 per cent cut in emissions by 2020, as well as a doubling of use of renewable energy and a 20 per cent boost in energy efficiency. President-elect Barack Obama's promise to make climate change a priority has produced as much frustration as enthusiasm, simply because his negotiators are not yet at the table, which has led others to delay decisions on cuts until a new US proposal arrives.

Negotiators "want to be sure they're not committing their economies and populations to some kind of quixotic emissions reductions regime, which costs them much more than their neighbours and export competitors", said Henry Derwent, International Emissions Trading Association president and a former UK climate negotiator. One of the brightest spots was a series of vows by major developing countries to cut their own greenhouse gases, in recognition of the global scope of the problem and in line with promises made at talks last December in Bali.

Brazil announced a new commitment to cut deforestation by 70 percent by 2017, a move that would effectively cut the country's greenhouse gas emissions by more than a third. South Africa has promised to cut emissions growth by 2020 and begin reductions by 2030, while Mexico has said it will cut emissions, measured at 2002 levels, by half by 2050. Many nations expressed frustration that richer countries, responsible for most of the emissions that have brought climate change, have offered ambitious cuts mostly for 2050, with little firm promise of action in the crucial intervening decades.

NW towns to get solar power stations

West Australian
Friday 12/12/2008 Page: 11

The Pilbara will be the site of Australia's biggest solar energy project after Horizon Power announced yesterday it would install solar energy stations in Marble Bar and Nullagine. Horizon Power general manager Mike Laughton-Smith said that 2000 solar panels, which will be spread between the towns, would generate up to 65 per cent of their electricity needs. The set-up will combine the panels with a flywheel to allow excess energy to be stored. Diesel motors will generate the rest of the towns' power needs. Pending planning approvals, the $25 million project will begin in March.

China blast over target statement - Australia, wealthy nations come under attack

Friday 12/12/2008 Page: 7

AUSTRALIA and other wealthy nations have come under fire from China at UN climate talks for signing off on a greenhouse target statement that merely repeats what they agreed in Bali a year ago. And the Opposition is intensifying political pressure before the release of the Federal Government's much anticipated white paper next week, signalling emissions trading may need to be delayed because of the global financial meltdown.

Shadow emissions trading spokesman Andrew Robb said the proposed 2010 start date was "ridiculous in the current circumstances" - and the Government should listen to concerns from the business community about job losses. Opposition Leader Malcolm Turnbull said the priority must be "jobs, jobs, jobs". "That is why we are concerned that the Government not rush into an emissions trading scheme which will put jobs at risk without environmental gain," he said.

A key Senate cross-bencher, South Australian independent Nick Xenophon, also signalled he had concerns about the Government's proposed carbon trading model, which he said could inflict harm on the economy. He told the ABC that while he had no issue with a start date of 2010, the Government should look to Canada for inspiration. Its system rewarded energy efficiency, he said. Business remains split - with some big companies urging decisive early action and some lobby groups representing manufacturers and resources companies urging a delay until the economic crisis unwinds.

The Government's white paper is expected to confirm a range of concessions to energy-intensive industries, but nonetheless press ahead with a scheme and targets to reduce emissions by between 5 and 25 per cent, depending on whether the world achieves a new, comprehensive post- Kyoto agreement.

Meanwhile, rich countries bound by the Kyoto Protocol postponed controversy over aspirational greenhouse targets after eight days of haggling by again acknowledging scientists want them to cut emissions by 25 to 40 per cent, but not saying whether they would be adopted. It followed resistance to a more strongly worded draft from the "umbrella group" of countries, including Australia, Japan, Canada and Russia. Australia will reveal its 2020 greenhouse target on Monday.

Speaking on the conference floor, a Chinese Government spokesman said he was deeply disappointed the developed world had not shown greater commitment to setting a framework for a post-Kyoto climate deal, due to be signed late next year. "It appears that preparations are already under way for the great escape from Copenhagen - we must prove to ourselves and to the world that we remain committed to Copenhagen," he said.

The European Union called on other rich nations to set targets quickly in the 25-40 per cent range. Climate Institute Australia policy director Erwin Jackson said the result was better than negotiations had looked earlier in the week, but little had moved forward. "We're revving the engine but we still have the handbrake on," he said.

The conflict came as diplomats signed off on the bureaucratic phase of the talks, in some cases giving UN officials power to develop documents it is hoped will form the basis of the new climate deal. The second stage, a two-day conference, was to start overnight Australian tinge. Climate Change Minister Penny Wong told The Age it was important to get targets on the table, but they were not an issue that should be considered in isolation.

UN climate chief No de Boer said two major points remained unresolved - how to pay for helping poor countries adapt to climate change, and whether to include an Australian-led pilot scheme that would allow rich countries to offset their emissions by paying for carbon capture and storage projects in poor nations.

Senator Wong said including carbon capture in the clean development mechanism, a scheme under which rich countries get credit for investing in clean energy projects in the developed world, would drive investment in lowering emissions from the energy sector. "We know that developing nations will continue to use coal, so we are much better off for the planet if we can find technology that reduces emissions from that," she said.

NT firm in power struggle

NT Business Review
December, 2008 Page: 3

A TERRITORY company wants to solve South Africa's power problems. Darwin-based Powercorp has invented a device that acts as an electrical shock absorber. It temporarily stores power to smooth out spikes and dips in the flow of the electricity down the wires. The device ensures power grid stability and a continuity of supply to remote sites. It was originally invented to overcome electricity supply problems to remote Aboriginal communities in the NT.

South Africans face the prospect of more electricity cuts during the coming months. Economists warn blackouts will badly damage the country's economy at a time when business is facing a downturn. Powercorp general manager Chris Langworthy said his company was considering providing the electricity shock absorber to the South African mining sector and was in preliminary talks with a South African consultant.

"It's very early days," he said. "We can strengthen the line at the end and help to keep the grid rigid. "Where we really fit in is in the areas where there are long thin lines to important places like mines, wind farms, desalination plants and industrial plants." But South Africa Chamber of Mines assistant adviser Dick Kruger was less optimistic about the device's ability to help South African mines. "Our mines are pretty much in well-populated areas," he said.

Good news power find

Herald Sun
Thursday 11/12/2008 Page: 43

WARSAW - Pilot drilling using new technology has revealed awesome potential for geothermal power in East Africa's Great Rift Valley, UN talks on climate change heard in Poland yesterday. Engineers using new seismic tools to locate hot spots hit powerful veins of steam, warmed by heat from Earth's core, near the Kenyan capital of Nairobi.

Several wells have been identified, most of them generating four to five megawatts of electricity, while one has a "bumper" capacity of eight megawatts, they said. The geothermal potential from the Rift Valley is "at least 7000 megawatts," providing a mighty contribution to the energy needs of 12 countries in East Africa, environment official Monique Barbut said.

Indonesia calls for leadership

Canberra Times
Thursday 11/12/2008 Page: 12

The Indonesian President has used a joint press conference with Prime Minister Kevin Rudd to call on developed nations to show leadership on climate change. One year on from the UN climate change talks at Bali, at which Australia was applauded for signing the Kyoto Protocol, Indonesia's President, Susilo Bambang Yudhoyono, has returned to the island calling for more action. "The developed countries must take the lead, and in fact developing countries are also willing to do their part but they are unable to do so because of their lack of resources," he said yesterday.

Developing countries at UN climate talks in Poland are demanding rich nations cut greenhouse gas emissions by between 25 and 40 per cent below 1990 levels by 2020. But some developed nations want to see more action from the developing world first. Australia was to reveal its 2020 greenhouse target before the talks, but has played the announcement until Monday. Mr Grant said it was important all economies "developed and developing" embraced the climate change challenge. "There is a long way to go in terms of the overall negotiation."

Back home, the debate about Australia's 2020 target range continues to rage. It is expected the range will fall somewhere between five and 25% cut in emissions. Environmentalists are holding out hope the government will leave open the option of a deep cut. The chief executive of the climate Institute, John Connor, believes the government will allow for a 25% cut. "No one has told me to shut up when I've been raising this as important," Mr O'Connor said.

But minerals Council spokesman Brendan Pearson said the cats to emissions would be very difficult for his industry. "People who talk about 25 and 40% are just off the map," he said. Responding to the latest rumour, that the government will push for a 10% cut, he said that would not be easy. "Pursuing a 10% cut will impose of the highest carbon costs in the world on Australia's mineral industry," he said.

National's senator Barnaby Joyce says he can't support emissions trading, due to start in 2010, because of the financial crisis. "The emissions trading scheme is a tax in its current form in the current climate which will put people out of work and it's our job to keep them in work," Senator Joyce said. His comments foreshadow another battle within the coalition over its policy on emissions trading. The coalition policy is to largely support emissions trading while pushing for a delay until after 2011.

UN chief downbeat about deal

Canberra Times
Thursday 11/12/2008 Page: 12

The UN's climate chief sounded caution yesterday over hopes that a new treaty to tackle global warming would be fully wrapped up by the end of 2009. The executive secretary of the UN Framework Convention on Climate Change, Yvo de Boer, said it was possible only "the key political issues" would be nailed down by this deadline and further talks needed to complete the details of the accord. "We won't see a fully elaborated, long-term agreement in Copenhagen in 2009. It won't be feasible," Mr de Boer said.

More than 10,000 delegates have gathered in Poznan, Poland, for the UN meeting, which aims to advance towards a treaty taking effect from the end of 2012, when provisions expire under Kyoto Protocol. Australia's Climate Change Minister Penny Wong arrived in Poznan this week to take part in the talks.

According to the "Bali road map", endorsed by the 192-member UN framework conference in Indonesia last year, the new accord should be completed in Copenhagen in December 2009. "We should be careful not to reach too far and achieve nothing," Mr de Boer said ahead of a ministerial-level phase of the talks, scheduled to take place today and tomorrow.

Rudd faces Gore's heat

Thursday 11/12/2008 Page: 1

BRITISH Prime Minister Gordon Brown and former US vice president Al Gore are urging Kevin Rudd to publicly back a tough global climate change agreement as the Government faces growing domestic pressure not to lead the world on cutting greenhouse gas emissions.

The weekend phone calls from Mr Brown and Mr Gore, the self proclaimed climate guru, came as a leading unionist and the head of the nation's peak mining industry body attacked big banks, such as NAB and Westpac, for suggesting Australia should promise deep and unilateral greenhouse emission reductions, insisting the Government should tie any commitment to international agreements. Australian Workers Union leader Paul Howes accused the banks of being hypocritical and dishonest on the issue, because they stood to reap all the benefits of a new carbon market but suffer none of the pain.

And the Australian Industry Group, which represents the manufacturing sector, is urging the Rudd Government to rethink even modest plans because of the global financial crisis either starting its scheme as a "dry run" until the economic situation improves, or delaying the proposed 2010 start date.

The conflicting pressures centre on the size of the emission cuts to be announced when the Government unveils its scheme on Monday, and the extent to which they are contingent on the success of an international deal at next year's crucial UN summit meeting in Copenhagen.

The Government is understood to have decided to leave open the possibility of cutting domestic emissions by 25 per cent by 2020, but only as part of an ambitious and comprehensive international agreement including commitments from India and China, with domestic cuts of between 5 and 15 per cent by 2020 in the event of less successful international deals.

Mr Brown, Mr Gore, conservationists and sections of the business community have been lobbying the Government to leave the 25 per cent target on the table, and to announce it at the preparatory UN talks now under way in Poznan, Poland, to help give the negotiations momentum. The Government has so far declined to make a public announcement at Poznan.

Adding to the pressure, European NGOs last night ranked Australia below almost all developed countries and even below Russia in terms of its climate protection performance. On a table of the 57 largest CO2 emitting nations, Australia was ranked sixth worst, ahead of only Kazakhstan, Luxembourg, the US, Canada and Saudi Arabia.

The Climate Action Network said on Tuesday that Australia was "trying to wriggle their way out of putting their number on the table", and that it was "Groundhog Day in Australia" because the Rudd Government was behaving like the Howard government.

NAB and Westpac were among 140 international companies, including The Australian's parent company, News Corporation, that signed a "Poznan communique" released on Monday urging developed countries such as Australia to go even further and "take on immediate and deep economy-wide emissions reduction commitments" ahead of the international deal.

The communique prompted the extraordinary attack from Mr Howes, who writes in The Australian today: "The hypocrisy of big banks like Westpac and NAB, who signed up to a corporate communique on climate change, calling for aggressive unilateral targets, needs to be exposed. "Having participated in what can only be described as a global stuff-up of our financial system, they are now trying to tell Australian corporations who operate in the real economy, and generate real wealth and real jobs, how to behave on climate change.

"It's time their dishonest motivation was exposed the banks are looking to create a new source of revenue from carbon trading markets." The comments from Mr Howes whose members work in heavily affected industries including oil and gas, cement, steel and aluminium were backed by the chief executive of the Minerals Council of Australia, Mitch Hooke.

"These guys seem to be saying we should set a target ahead of a global agreement, but this cheer squad has all care and no responsibility we are the ones who have to make this scheme work. It's a bit hard to get excited right now about the financial sector's enthusiasm for new forms of financial derivatives." And Heather Ridout, chief executive of Al Group, has urged the Government to be even more cautious with its plans. She said the Government's commitments on climate change were shaped by "the politics of prosperity", and that the global financial crisis presented a "strong case" for the Government to rethink how it managed the scheme's early years.

One option is to adopt a start that is akin to a pilot scheme or a dry run. This could involve, for example, minimum cost burdens and placing emphasis on education about how to comply with reporting obligations rather than imposing heavy penalties on errors and misunderstandings. "Another option is to reconsider whether 2010 is an appropriate time to implement the scheme in Australia," she writes in The Australian today.

In Poznan last night, Climate Change Minister Penny Wong was adamant the Government would stick to the 2010 start-up date for carbon trading. It would be wrong to introduce any uncertainty about the Government's intentions," she said. One of the key considerations is to give business the certainty they need. We are talking, particularly in the energy sector, about long-run decisions that are going to be critical in Australia reducing its emissions over the next 10 or 20 years."

Friday 19 December 2008

AGL's $14 million windfarm tilt

Sydney Morning Herald
Wednesday 10/12/2008 Page: 30

The country's second-largest electricity and gas retailer, AGL energy has bought development rights for two wind energy projects that are estimated to cost about $1.4 billion to develop. The purchase, for $14 million, will help AGL meet its commitments under the Federal government's renewable energy target regulations, the company said in a statement to the Australian Securities Exchange. The projects are the 63 MW Oaklands Hill venture in Victoria and the two-stage, 500 MW Coopers Gap plant in Queensland.

Investec, a South African investment bank, estimated in September that Oaklands Hill would cost $210 million to develop, and that Coopers Gap would cost at least $1.2 billion. The government has pledged to introduce a target to increase use of renewable energy to 20% of electricity supplies by 2030 to tackle global warming.

"There is going to be there is going to be high demand for projects to meet the Federal government's expanded renewable energy target," said the managing director of AGL, Michael Fraser. "This transaction is consistent with our strategy of acquiring a pipeline of projects that will be at the bottom end of the cost curve." A spokesman for AGL, Nathan Vass, could not immediately comment on Investec's estimates of the development costs.

The Victorian project has secured planning approval, and the consent application for Coopers Gap is yet to be lodged. Renewable energy generating plants now comprise about 27% of AGL's total generation portfolio in terms of installed capacity, the company said in a sustainability report. Investec will proceed with the development of other wind energy projects in Australia, including the Collgar venture in Western Australia, which is estimated to cost about $700 million to develop.

Climate group says Kakadu `doomed'

Northern Territory News
Wednesday 10/12/2008 Page: 7

THE Federal Government has condemned tourism icons the Great Barrier Reef, the Murray-Darling Basin and Kakadu National Park to destruction by agreeing to a low emissions reduction target, advocacy group GetUp says. GetUp says it understands the government has settled on an emissions reduction target range of 5 to 15 per cent on 2000 levels by 2020. GetUp's national director Simon Sheikh said the government went to last year's election promising strong action on climate change.

"Their expected announcement doesn't constitute a genuine response," he said. "Professor Ross Garnaut found that to get a global deal that saves the Great Barrier Reef, the Murray-Darling Basin and Kakadu National Park, we need to set emission reduction targets of at least 25 per cent on 2000 levels by 2020.

"By not making a decision to tackle climate change, this government is rejecting the mandate given to there by the Australian public." Mr Sheikh said GetUp would launch a campaign to pressure the government into making a significant investment in renewable energy in its next budget.

Plan calls for farmers to be paid to restore habitat

Monday 8/12/2008 Page: 6

agroforestryAN EXTRA 650,000 square kilometres of farmland and other privately owned land could be set aside for nature conservation by 2020 if a program that paid landowners to restore and protect native habitat was introduced. A CSIRO report concludes that this result could be achieved under a national scheme costing between $739 million and $1.6 billion a year. The finding comes out of a study on ways to promote biodiversity conservation. The study was carried out by the CSIRO for the Australian Conservation Foundation and released last week.

It found that "stewardship payments" -regular payments to landowners to reward conservation management - could play an essential role "in promoting environmental conservation and sustainable resource use". In response to the research, the ACF called on the Federal Government to allocate about 5 per cent of the money raised by auctioning pollution permits under the emissions trading scheme to fund a large conservation stewardship scheme. It also urged the Government to modify drought assistance payments to encourage farmers to plant trees or do other conservation works on land that was marginal but ecologically valuable.

The ACF's rural landscapes campaigner, Corey Watts, said that without more action on private land Australia faced a wave of extinctions. Some state and federal stewardship programs already existed and were very welcome, but were "hamstrung by woefully small budgets", he said. A bigger and better funded scheme of conservation payments would appeal to farmers and other landowners and deliver them an extra source of guaranteed annual income.

"The farm of the 21st century will be deriving its income from a range of sources," he said. "Not just the production of food and fibre, but it could include sustainable energy production and demonstrating that you are looking after soil, water, wetlands and wildlife." The idea of financial rewards for landowners to conserve native habitat won the approval of Benalla beef farmer Robert Richardson.

"I think it's a great idea and definitely a lot more farmers would plant trees and actively manage habitat restoration," he said. "Economies on the land are very marginal at the moment, so any incentive to do more and do a better job is going to be most welcome. "And if we can siphon some money off from carbon trading into native vegetation and habitat restoration, then it's got to be a win-win for everybody." Mr Richardson has planted about 50,000 trees on his property since 1982, including 40,000 for agroforestry and 10,000 to restore native habitat.

Concerned freight giant backs big emission cuts for industry

West Australian
Tuesday 9/12/2008 Page: 12

A big transport company has supported aggressive emissions cuts out of concern the Rudd Government may be getting a one-sided view from industry on carbon trading. Freight giant Linfox joined two Australian banks and developer Lend Lease among 140 businesses globally calling for deep and rapid cuts in a communique delivered to climate change talks in Poznan, Poland. Linfox environment and climate change group manager David McInnes said the public debate in Australia on climate change policy had favoured business groups urging more modest cuts on emissions.

"Those industry leaders in companies who feel that more aggressive targets are necessary were concerned that we put our point of view on the public record," Mr McInnes said. "Governments could be misled into thinking that there wasn't a measure of industry support for a change in the way that we do business." The effects of climate change were likely to be far more serious than bearing a short-term economic cost. "We're for taking action sooner rather than later," Mr McInnes said.

Lobby groups for big polluting industries have urged a relatively soft start to emissions trading and protection from the full carbon price when it can't be passed on to customers. The Poznan statement backed a 2050 global target of 50-85 per cent. Developing countries and environmental groups want rich nations to cut by 25-40 per cent by 2020. Mr McInnes said the Government could do better than a 2020 target range of 5-15 per cent it is reported to be considering. Linfox has its own target of cutting the company's emissions by 15 per cent by 2010 on 2006-07 levels.

Climate Change Minister Penny Wong will announce the Government's target range next Monday, along with its blueprint for the emissions trading scheme. The Greens said setting a weak target would not make scientific, economic or diplomatic sense. Senator Wong left for the Poznan conference yesterday saying Australia would play its part in tackling climate change through the ETS. While she has called it a working conference at the mid-point of talks where no binding commitments would be made, the Minister said Australia would call on other developed nations to announce mid-term targets as soon as possible next year.

Federal Opposition Leader Malcolm Turnbull yesterday said it appeared the Government's ETS design would impose heavy costs on trade-exposed industries. "It is clear that if the countries with which these industries compete do not have a comparable cost of carbon, we run the risk of exporting both emissions and jobs," Mr Turnbull said.

Solar passes means test

Summaries - Australian Financial Review
Tuesday 9/12/2008 Page: 53

The solar energy industry continues to expand, despite gloomy predictions that followed the government's surprise announcement in the May budget of means-tested rebates. Demand has 'exploded,' according to Eric Zimmerman, chief executive of Victoria-based solar installation firm Beyond Building. Coenergy chief executive Rodger Meads, who led a protest against means-testing to Environment Minister Peter Garrett, says the surprise boom is likely the result of publicity generated by the government's decision.

He said the solar panel market had grown at the bottom end but 'probably declined at the upper end.' The Department of Environment says it's receiving 30 times as many rebate applications as it had budgeted for. Phil May of Queanbeyan-based Solartec says his business has remained the same as before the means test was introduced. The industry continues to have concerns about means testing and favours a gross feed-in tariff, which pays homes with solar energy a premium for the electricity they produce. But the Council of Australian Governments two weeks ago backed net schemes, which pay only for electricity fed into the grid.

How the scum of the earth could help save the planet

Tuesday 9/12/2008 Page: 10

The use of algae in producing fuels has the potential to transform energy the way aeroplanes transformed transport, so why aren't governments paying more attention, asks Mark Tester

HERE are many reasons for wanting to reduce our dependence on oil: the increasing cost, reliability of supply, finite resources, the contribution of fossil fuels to global warming. Yet when people talk about alternative sources of fuel they mostly discuss the conversion of food, such as corn, into ethanol, which puts enormous pressure on food supplies. During the past year, demands for food and fuel have combined to drive up food prices sharply, which has particularly important ramifications in developing countries.

When one adds to the mix growing populations and global environmental change, with the pressures these impose on our ability to maintain high crop yields, the prospects for providing sufficient food for all are not good. So, the idea of converting a significant proportion of our food into fuel for vehicles or diverting agricultural land to grow biomass seems misguided. Although the growth of biomass on marginal lands has some prospect, the impact on nature conservation must be considered. Furthermore, the contribution that such areas can make to global liquid fuel needs will always be modest.

Marginal lands provide only low density cropping potential and biomass from plants or crop residues generally has a low energy density, while a significant proportion of the energy gained from the biomass will be consumed in the process of moving the biomass to the processing centres. Yet one group of plants could make a sustainable, significant contribution to world energy supply. They do not require agricultural land and need only minimal processing.

Single-celled algae can grow very rapidly in low quality water, producing biomass at 10 to 30 times the rate of terrestrial plants. They can do this mainly because the cells are immersed in a medium providing all their needs, including physical support, and so the cells have no need to build infrastructure to move materials and to support themselves.

A pond 60km by 60km (less than 500,000ha) well stocked with a vigorous microalga would go close to producing sufficient biomass to meet most of Australia's liquid fuel needs. Furthermore, algae have remarkable biochemical abilities: some strains produce oils that could be used unmodified in diesel engines. Indeed, there is good evidence that many of the world's vast reserves of fossil liquid fuels are the products of ancient algal activity.

The demands of algae are simple: sunlight, warmth, water, nutrients and, most significantly, carbon dioxide, the much maligned gas that is a major contributor to global warming. Australia has more sunshine and warmth than any other developed country, and seawater is common, thanks to our extended coastline. Augmentation of seawater with waste water from sewage treatment plants could completely satisfy algal nutrient demands and would have the side benefit of treating the waste water.

Significantly, carbon dioxide can be delivered to the algal cells either direct from the atmosphere or in a concentrated form from cement factories and electricity stations. The algae can also be engineered to convert waste carbon dioxide to produce valuable products, such as liquid fuels. Consequently, this process has much greater economic potential to be an economic option than, for example, carbon capture and storage, which, other than the carbon credits produces no useful product.

In addition to the production of liquid fuels, the algae can be used in other ways: there is potential for the cells to be pyrolysed to char for burial, which effectively removes carbon dioxide from the atmosphere, or they could be used as animal food. Across the world, including in Australia, pilot programs are pioneering this new biotechnology. The main engineering challenge is efficiently harvesting the algae. The biological challenges would not surprise anyone who has attempted to keep an aquarium clean.

The algae must be resistant to pests and pathogens and must be able to outcompete other algae that are likely to contaminate the ponds. Reliable containment methods, such as those used for bacteria and fungi in research laboratories for decades, are also necessary to prevent the escape of the microalgae into our waterways. The use of algae that have evolved in natural ecosystems will not be adequate. To optimise productivity, alteration of the algae will be necessary, including their genetic modification. Globally, most of the research on algal biofuels is in private hands.

Recently, Bill Gates invested in a US company developing algae as a fuel. But if industry is to bridge the gap between theory and reality, large companies will need to dig deep in order to develop long-term research programs. Perhaps some government-sponsored research is also necessary. Support for the integration of algal production systems with existing infrastructure power stations and waste treatment works will also require government intervention.

But, on the whole, this new and exciting area of research and development is likely to be driven by the private sector. Meanwhile, the Government is grappling with solutions to climate change without factoring in new technology. The international community is meeting this week in Poznan, Poland, to try to negotiate a global agreement on reductions in greenhouse gas emissions. These negotiations are bound to be diabolically difficult, to use Ross Garnaut's phrase. There will be heated discussions about what the level of greenhouse gas emissions should be in 25 years and in 50 years.

It is as if a conference were being held in 1908 on global transport for the 20th century without taking into account the work of Wilbur and Orville Wright. Nobody imagined that their rickety plane would transform the world. But it did. In the 21st century we need to build on this understanding of the power of technology to transform the way we live. As Rupert Murdoch observed when he delivered his first Boyer Lecture last month, there will be great rewards for Australians who discover new ways of reducing emissions or cleaning the environment.

With some hard economic analyses, some cutting-edge plant biotechnology and engineering that balances economic and biological demands, algal liquid fuel production could provide us with the most sustainable and economically viable biofuels option and a contribution to greenhouse gas reductions.

Mark Tester is director and research professor at the Australian Plant Phenomics Facility at the University of Adelaide.

Australia warned on climate stance

Sydney Morning Herald
Monday 8/12/2008 Page: 4

A CHINESE Government climate adviser has issued a stark warning that Australia would derail global climate talks if its maximum 2020 greenhouse target was less than a 25 per cut in emissions. Dr Jiahua Pan, a member of the Chinese Experts Committee for Climate Change, said Australia would be acting as though it considered itself a poor nation if it set a maximum target of a 15 per cent cut at the end of United Nations climate talks in Poland.

The public call is a sign of disenchantment among developing nations, including China - the world's biggest greenhouse emitter - that Australia, Japan and Canada have not joined Europe in promising deep emission cuts to take a lead in stalling negotiations. It comes as the newly formed Global Climate Network - a collaboration between seven international research institutes - will today publish analysis showing that even if all rich nations adopted the relatively ambitious greenhouse targets proposed by Europe and the US president elect, Barack Obama, it would not be enough to avert the worst climate change predictions without further action.

Dr Pan said the Rudd Government must follow the lead of the European Union, which has committed to an unconditional 20 per cent cut, increasing to 30 per cent if a new global climate deal can be reached in Copenhagen next year. "If we did not have these targets I think we would go away from Copenhagen empty handed," Dr Pan told the Herald.

"Outsiders would say: it is acting like a developing country - it is very strange ... If you cannot do it, how can you ask us to do it?" Federal cabinet is weighing up its 2020 reduction target, which is due to be announced next Monday as part of its white paper on a new emissions trading system. But there are expectations that the 2020 target will not fall within the 25 to 40 per cent range advised by climate scientists and backed by most rich nations in Bali a year ago.

The Minister for Climate Change, Penny Wong, who will attend this week's talks in Poznan, appeared to be lowering expectations yesterday on the potential for a breakthrough in the negotiations and the size of Australia's target. "We in this Government understand Australia has to play its full and fair part in terms of reducing the world's carbon pollution," Senator Wong told ABC TV.

"But when it comes to targets what we are very conscious of as a Government is striking the right balance, striking the right balance between the different interests. All is us in this government are focused on securing employment." Senator Wong said tackling climate change was a marathon rather than a sprint involving policy measures that would affect the economy for many years to come.

Dr Pan, the head of China's Research Centre for Sustainable Development, said Australia's wealth and natural resources gave it the capacity to set a strong target. Sergio Serra, the climate change ambassador for another developing economy, Brazil, said his country was also worried about the lack of commitment from industrialised nations. "Basically the EU is the only one that is acting," he said.

Developing nations are not bound by the Kyoto Protocol but the leading emerging economies, especially China, face rising pressure from the rich to accept a binding target to limit emissions growth in a new deal. About 97 per cent of emissions growth between 2006 and 2030 is projected to come from developing countries, but China says it wants the developed world to act first as promised. Last week South Africa called on Australia, Japan, Canada and Russia to put their targets on the table.

Flaming waste of clean coal gas

Courier Mail
Monday 8/12/2008 Page: 15

QUEENSLAND coal mines will "flame" millions of dollars in clean, energy producing gas unless a developing niche industry is recognised in Australia's new energy regime, it was claimed yesterday. Capturing waste coal mine gas to use for power generation is already successfully undertaken across NSW and Queensland. But the fledgling industry fears a Federal Government white paper due out on December 15 and finalising emissions targets for 2020 will sideline the process.

David Hamill, chairman of Envirogen, which operates waste coal mine gas operations, said while the Kyoto Protocols recognised the critical role of waste coal mine gas, Canberra was in danger of allowing the industry slip through the policy cracks. "I cannot believe that the Rudd Government would intentionally ignore the fantastic opportunity presented by generation from waste coal mine gas when it is hungry for new sources of green energy, jobs and export dollars," the former Queensland treasurer said.

Mr Hamill said without Government support the industry could wither as coal companies opted to "flame" the valuable gas to meet safety requirements. Climate Change Minister Penny Wong yesterday denied claims the Government had gone soft on its ambitious, long-range target to cut carbon output by 60 per cent by 2050, saying the emissions targets would reflect the Government's commitments.

Tariff plan generates new energy

Monday 8/12/2008 Page: 28

GERMANS may not be famous for their sense of humour but members of a German solar energy trade mission seemed to have a good chuckle in Sydney last month as they explained how Germany was the world leader in solar energy despite having a northern European level of sunshine. The prospect of doing business in high-sunshine Australia also seemed to give them good cheer.

The reason for their success is the German Government's feed-in tariff system, so the meeting with the delegation was the right place for NSW Climate Change Minister Carmel Tebbutt to announce that NSW would join the other states in introducing a feed-in tariff system for solar energy, and that the NSW system would be along the lines of the anticipated federal system.

The design of a national feed-in tariff (FIT) system, and renewable energy sources to include, is the subject of a Senate committee report. FIT schemes are generally based on solar energy and, while it may not be appropriate for all renewable energies to be part of a national FIT scheme, wind energy is an obvious candidate for inclusion.

Two developments point to the inclusion of wind energy. The first is the imminent arrival of small wind turbines for houses and small properties, and the almost as imminent arrival of industrial windfarms for industrial properties in urban areas. Small wind is likely to prove popular with householders, and industrial wind is expected to interest businesses and commercial property investors. The technologies will allow both groups to make an important contribution to our energy supply and help their family or business budgets at the same time.

The second development is the much-anticipated arrival in a few years of the plug-in electric car. If it is as popular as expected, it could transform the national economy. It will substitute home-made electricity for massive oil exports and provide additional energy security. On the other hand, it will create an increase in electricity demand that needs to be met in a responsible way.

The electric car could also transform household and business budgets. Where a household may spend, say, $500 on electricity and, say, $3000 on petrol each year, it could change to spending the equivalent of $3500 on electricity. This would provide an opportunity to transform household and to some extent business budgets in a very positive way.

Instead of paying out, say, $3500 a year, families could dramatically reduce this cost or even generate cash if they could apply the full range of suitable renewables to the task. With potential 24-hour operation, wind is a logical inclusion in the feed-in tariff mix. The same applies to businesses and property owners.

A US hospital has turned its cat-park into a solar energy generator and a new source of cash flow. In Britain, industrial wind turbines have turned supermarkets and petrol stations into energy and cash generators. An Australian-owned company and its US partner are working to turn architectural shade cloth roofing into solar generators and revenue sources.

The trend seems global and unstoppable so let's go with it, and let the Government join in too. The Solar Schools Program is a good start, making it easy to envision solar panels on every school roof. Another step would be to put solar panels on every hospital, police station, prison, council and other government-owned roof. Many of these properties are also suitable for wind turbines.

With housing, investment, commercial and government properties generating renewable energy, we would have a national project that would reduce greenhouse gas emissions and oil imports and provide energy security while generating income for families, small businesses and investors. How much is that worth? Victor Bivell is editor of Eco Investor magazine.

A line in the sand

Sun Herald
Sunday 7/12/2008 Page: 19

Clean Energy for EternityHUNDREDS of people declared their commitment to saving the planet on Mollymook Beach on the South Coast yesterday. Five hundred protesters formed the words "People Power", and the event was filmed from the air by a local helicopter pilot. David Herring, a spokesman for Clean Energy for Eternity, said the highly visible message was intended to spur ordinary people into action over global warming.

The event coincided with the third annual Global Day of Action on climate as well as UN climate talks taking place in Poland. The Mollymook event was also being co-ordinated with the Lifesaving Energy initiative under way at the Mollymook Surf Lifesaving Club, which is installing solar and wind energy to generate most of its energy.

Climate change demands cool heads and compromise insists Ross Garnaut

Monday 8/12/2008 Page: 8

THE UN Climate Change Conference in Poznan, Poland, focuses attention on the importance and difficulty of achieving international agreement to reduce greenhouse gas emissions. No country acting alone not even the biggest emitters of greenhouse gases, the US and China can cause the risks of dangerous climate change to fall substantially by its actions alone. A co-operative effort involving all substantial economies is required.

Each country acting alone in its narrow national interest will calculate that it will be better off if it does as little as possible to reduce emissions, whatever other countries are doing, so long as it does not believe that its inaction will influence materially the actions of others. In this, climate change is more difficult than other international policy issues.

It is more difficult than trade liberalisation, in which, despite the charades of trade negotiators, each country would be better off liberalising its trade whether or not other countries were doing so. It is more difficult than arms control negotiations, in which there is at least a fiscal gain from doing more, whatever others are doing. With climate change mitigation, one country acting alone accepts costs without substantial benefits.

So an international agreement on allocating the burden of the global mitigation effort is necessary. Each country could draw confidence from an effective international agreement that its commitments would be accompanied by commensurate efforts by others, and so would generate benefits in the form of reduced risks of dangerous climate change.

Without such an international agreement, the outcomes eventually will be judged by people in all countries as being inadequate, reducing emissions too little to achieve an optimal balance between the costs and benefits of emissions reductions. An international agreement will have to be widely seen as being fair or at least as generating more benefits than costs from participation by the governments of all the leading economies.

What would the contents of an international agreement cover? A successful global effort to reduce greenhouse gases would establish a common price on emissions in all countries, at a level that induces the required reduction in the emissions intensity of economic activity. It could do this through agreement on applying a common rate of tax on emissions in all countries. Alternatively, and more directly, it could allocate entitlements to emit greenhouse gases across countries through an emissions trading scheme: international trade in emissions entitlements would tend to equalise the carbon price across countries.

The international community in Poznan, and subsequently in Copenhagen in December next year, is seeking agreement of the latter variety. The agreement should embody commitments by all leading economies that add up to global emissions reductions and eventually to greenhouse gas concentrations in the atmosphere, striking a good balance between the costs and benefits of reducing greenhouse gas emissions.

Unless there is a coalescing of international support around clear principles through the first half of 2009, there is no prospect that a good agreement will be reached in December at Copenhagen. This analysis and discussion must be undertaken long before meetings at which political agreements are sought, as the issues are complex and not amenable to resolution in tit-for-tat exchanges under the international political spotlight.

Too little analysis and discussion have been devoted to the principles on which a global agreement can be based. In the absence of clear and widely supported principles, each country will develop reasons it should carry less than its proportionate share of the burden of mitigation. The canvas on which the negotiations proceed will become cluttered and unifying themes will be lost in complexity.

If you hear negotiators from the respective countries arguing that Australia needs high per capita entitlements because it is big and lightly populated, or Canada because it is cold, or Japan because it has few opportunities for geo-sequestration of emissions from fossil fuel combustion, or China because it is the workshop of the world, you will know that the world has lost the battle to avoid dangerous climate change.

The approach to allocating emissions entitlements at Kyoto, which is by default being taken into the discussions at Poznan, will not serve. Variable percentage reductions in emissions against a base line for developed countries, and no emissions reductions yet for developing countries, will neither allow agreement nor solve the problem since most of the growth in emissions during the next two decades and beyond will be in the developing countries.

In the absence of early constraints that hold developing country emissions well below business as usual, no degree of constraint from developed countries will avoid high risks of dangerous climate change. It cannot be the basis of agreement because its allocation of the burden is not based on principles that have any prospect of being widely seen as being fair.

My work on The Garnaut Climate Change Review (Cambridge University Press, 2008) has led me to the view that any allocation of emissions entitlements with a prospect of being accepted by most developing countries must be based on convergence towards low levels of per capita entitlements at some time in the future. There will need to be headroom for rapidly growing developing countries.

Through a transition period, the commitments of lower-income developing countries would be one-sided, with compliance encouraged through incentives rather than penalties. The agreement over emissions entitlements would need to include developed country commitments to public support for research, development and commercialisation of low-emissions technologies.

The agreement could embody firm commitments by developed countries to cover additional development assistance for complying developing countries to adapt to the climate change that will inevitably be faced in the period ahead. It could be supported by a proposal for World Trade Organisation rules to constrain individual countries' measures to restrict trade with countries that are not reasonably complying with the requirements of an international mitigation effort. At the centre of the agreement would be an understanding on the allocation across countries of a diminishing total of annual emissions entitlements. These would be allocated on the basis that emissions would converge towards equal per capita entitlements at some time in the future.

The difference between the basis of allocation of emissions entitlements proposed here, and the Kyoto approach of fixed but differentiated reductions, is large. Within principles designed to reduce global emissions through convergence over time towards equal per capita entitlements, a reduction of 10 per cent from 2000 levels by 2020 in Australia would represent a full proportion contribution of a global to hold concentrations of carbon dioxide equivalents to 550 parts per million. It would represent a larger per capita reduction than was required of the US or the European Union. It would represent a larger per capita reduction for Australia than the EU's implementation of its proposed unconditional commitment to reduce emissions by 20 per cent from 1990 levels.

By contrast, the same Australian reduction in emissions could compare and be compared unfavorably with commitments that the EU made, if seen within the old and ultimately unproductive framework of comparing percentage reductions in total national emissions from some baseline. Of course, Australia cannot accept aspects of a principled approach to emissions entitlements on matters that suit it, and abandon the principles where the implications are less favourable from a narrow national perspective.

Acceptance of the principle that emissions should converge over time towards the same low per capita level in all countries requires Australia to accept ambitious commitments to low long-term per capita entitlements. It would be helpful to emergence of a satisfactory international agreement if Australia were to announce that it accepts this outcome in the context of an effective international agreement.

In the end, convergence towards equal per capita entitlements is the basis of allocation that has the best chance of allowing an international agreement that strikes the right balance between the costs of mitigation, and the costs of climate change.

Ross Garnaut is the author of The Garnaut Climate Change Review.

It's easy being green

Sunday Herald Sun
Sunday 7/12/2008 Page: 34

VICTORIANS could be able to access free solar hot water systems under a new scheme to encourage people to go green. Many households may qualify for full rebates on Easy Being Green solar hot water systems. To clarify previous coverage of the initiative, the rebates do not cover installation costs -but a six-month interest free "green loan" is also available to help consumers with this upfront expense. For more information, phone Easy Being Green on 1300 789 324.

German breakthrough helps B&B in restructure

Sydney Morning Herald
Saturday 6/12/2008 Page: 43

THE disputed bank deposit that almost plunged Babcock and Brown into receivership has been replaced by a new lifeline of short term funding that will tide the embattled asset-management group over the next few months, it emerged yesterday. While B&B indicated in the rescue deal announced on Thursday that it had "come to an arrangement" with the German lender that had withheld access to the money, analysts suggested that the frozen sum has now been used to repay outstanding project debt. Access to the 71 million ($139 million) deposit held by Hypo-und Vereinsbank, a longterm backer of B&B, had been withheld after the group unveiled its most recent restructuring plan a fortnight ago that suggested its financial troubles were even worse than investors thought.

The row overshadowed the need to get the full support of B&B's 25-strong syndicate of international and domestic banks for the revamp, which included the loss of a further 850 jobs, cost savings of $150 million and an intention to cut its $3.1 billion of debt in half by 2011. That blueprint has, in effect, been dropped as a result of the new financing arrangement that B&B has agreed with its banks, although it will form the basis of yet another restructuring proposal that it has to be put to its lending syndicate by early January.

In return, the banks will advance another $150 million to allow B&B to complete certain wind farm developments in the US and then sell them to reduce part of its debt burden. B&B had intended to use some of the 71 million deposit for its working capital needs. But the German bank had expressed concern about money owed to it to develop B&B's European wind farms and froze access to the deposit as part of its case for repayment. B&B's initial aim was to repay Hypo-und Vereinsbank with the proceeds from the recent sale of its Enersis portfolio of wind generators in Portugal but the final sum fell short of what was needed.

According to Citigroup analysts, the 71 million has since gone to clear the project debt with Hypo which led to B&B asking for the additional $150 million from the remaining members of its banking syndicate to meet its other developmental cost needs. Meanwhile, B&B has been given some breathing space with a new "pay if you can" deal on debt interest repayments, including the new loan, as it begins work on its new business plan.

The banks will have until February 28 to sign up to the blueprint, which is likely to see them convert some of B&B's debt into shares in the company. B&B's shares yesterday shed almost all of the gains they made in the wake of Thursday's new deal, ending the session 13.5c down at 25.5c, as investors digested the prospect of the banks ending up owning a large slice of the business.

Thursday 18 December 2008

Solar farm powers up at Lyrup

Adelaide Advertiser
Saturday 6/12/2008 Page: 46

Pike River Woolshed Sun FarmALMOST 500 solar panels on top of a cliff next to the Murray River are proof of the Riverland's resilience and ability to adapt in the drought. The Pike River Woolshed Sun Farm, at Lyrup, is Australia's first privately owned solar energy station and is the brainchild of Andrew Caire, a local teacher and owner of the Pike River Woolshed bed and breakfast. Thanks to the region's 300-plus days of sunshine a year, Mr Caire's 500sq m sun farm generates enough electricity to power eight homes.

Mr Caire said the $300,000 project would also earn about $35,000 a year because excess power was sold to the national grid. The State Government's feed-in tariff pays the owners of solar panel systems double the cost of electricity for power fed into the grid. Mr Caire said the main reason the sun farm was installed was to power the eco-tourism accommodation on the property. "We wanted to give people a great view, to have fun and explore the local environment while providing no carbon footprint," he said.

Mr Caire first considered installing solar panels in November last year and the sun farm was constructed in three weeks in October. Solar Shop Australia national sales manager Peter Castle said the sun farm would reduce annual greenhouse gas emissions by 88 tonnes. "The Riverland may have a shortage of water but there's no shortage of sunshine," he said. "In 10 years' time I'd like to see rows and rows of solar panels alongside the rows and rows of vines and trees." Local MP and State Water Security Minister Karlene Maywald said the project was an example of what could be achieved in the Riverland despite the drought. She said 34 per cent of solar panels connected to the electricity grid in Australia were in SA.

Carbon trading costs cast cloud over solar

West Australian
Friday 5/12/2008 Page: 49

WA's Pilbara remains on the radar for a major solar energy project, despite the economic downturn, but it is unlikely any of the companies backing feasibility studies will commit until they have a clearer picture of the Federal Government's proposed emissions trading scheme. Woodside Petroleum, BHP Billiton, Rio Tinto, Fortescue Metals and Wesfarmers were among the nine WorleyParsons customers that contributed to the cost of a study into a proposed $1 billion, 250 megawatt solar project.

WorleyParsons chief executive John Grill said the participants were reviewing the results of the study and initiating individual feasibility studies for specific locations, but the uncertain economic climate would deter some from moving ahead with the plan. "I think everything is being questioned at the moment in light of the financial crisis, undoubtedly," Mr Grill said. However, the bigger issue was the companies' reluctance to make any major investment decisions without a sound indication of the costs of a proposed carbon trading plan.

"It will be very hard to go forward with one of the projects until these emissions trading rules are sorted out," Mr Grill said. "If the rules are clear and there is certainty, that will at least clear the way for the project to go ahead, because people will be able to do the maths to work out if it's viable or not." WorleyParsons' Advanced Solar Thermal technology collects and focuses solar radiation using parabolic mirrors to heat oil to about 400C. The heat then creates steam to drive turbines and generators. The Pilbara was originally flagged as one of several possible locations, alongside Queensland, South Australia and western NSW.

Economists push all-in ETS model

Summaries - Australian Financial Review
Friday 5/12/2008 Page: 10

The Federal Government has been told by senior private sector economists that it should sustain a number of key principles in the design of its planned emissions trading scheme. In an open letter released late yesterday, seven leading economists - nabCapital's Rob Henderson and Peter Jolly, Citigroup's Stephen Halmarick and Paul Brennan, and Financial Sector Services's Geoff Weir - warn that despite the financial crisis the government should not provide too many exemptions, even as regards petrol, under the ETS. The Greens, independent Nick Xenophon and Family First's Steve Fielding all support the 2010 start date for the ETS.

Hawaii car plan a big jolt to petrol engines

Friday 5/12/2008 Page: 9

HAWAII is to become the first US state to create infrastructure that will allow cars to run almost entirely on electricity. The plan involves building up to 100,000 charging stations in car parks and streets by 2012 and importing electric vehicles manufactured by a joint venture between Nissan and Renault. Motorists who buy the cars will be able to purchase mileage plans including recharging services and battery swaps or use the charging stations on a pay-as-you-go basis.

Hawaii Governor Linda Lingle said the program would help the state's six large islands meet the goal of reducing the use of fossil fuels by 70 per cent by 2038. About 1.3 million people live in Hawaii, most of them in Honolulu. The islands import 90 per cent of their oil from countries such as Saudi Arabia, an arrangement that costs an estimated $US7 billion ($10.8 billion) a year. "Today is a part of the execution of our energy independence, and our getting off the addiction to oil," Ms Lingle said.

Most of the infrastructure will be provided and funded by Better Place, a Silicon Valley company. It will build the charging stations and provide charged batteries. The electricity is expected to come from renewable sources, such as wind energy. All of this will require a significant investment, because Hawaii has limited wind energy and there are no transmission lines to carry electricity between the islands.

Shai Agassi, the founder and chief executive of Better Place, said electric cars would cost the same as petrol vehicles but that over time they would become cheaper because they used half as many parts as cars with internal combustion engines. He added that Hawaii was an ideal place to show off the technology because the state hosts more than five million tourists every year. "If we can get them into electric cars when they rent, we do two great things," he said.

"One, we avoid emissions, and two, we use the opportunity to educate them, to teach them in Hawaii how it needs to be done in the rest of the world." Australia, Denmark, Israel and other parts of the US also plan to host the recharging stations.

Big Four et al figure a functioning Babcock is still in their best interests

Friday 5/12/2008 Page: 8

NECESSITY is the mother of invention in Babcock and Brown's deal with a subset of its banking syndicate that includes the Big Four banks. The $150 million bridging loan the banks have provided will keep Babcock ticking over until the end of this month at least, and heads off the quick appointment of administrators.

It renews Babcock's hopes of selling enough assets to get its $3 billion-plus debt load down to a point where a debt-for-equity swap will be possible, perhaps as early as April next year, and reduces the risk of a cascading crisis across the amorphous Babcock family of listed and unlisted investment vehicles. But this is still a liquidation of the head company.

The banks have just reaffirmed for the time being it is one best conducted unofficially, by Babcock, and with a debt-for-equity swap looming, the value of the company's existing shares is moot. Not all Babcock's 25 banks were willing to inject extra money: the Big Four were the key providers, although foreign banks also contributed.

But the ones that did not stump up did make concessions - to allow Babcock to defer interest payments on its existing debt if necessary, to waive covenants requiring minimum levels for net assets, earnings coverage of interest payments and a 25 per cent surplus of current assets over current liabilities, and, crucially, to give priority ranking to the $150 million of new short-term funding.

In each case, they agreed because the alternatives were worse. Granting repayment priority to the new $150 million line was viewed as a cheap concession against the risk of losses on the $2.8 billion main facility. Babcock also has about $600 million of subordinated notes on issue, and has agreed to a demand from the banks that it hold off on interest payments on the notes until the new facility is repaid.

Waiving the covenants also made sense, given that Babcock will be booking asset value write-downs at the end of this month that would have put it in breach, triggering another round of negotiations. One irony is that the funding wound that triggered Babcock's most recent near death experience healed itself. Two weeks ago, Babcock told the 25 banks in its main $2.8 billion syndicate that it intended to ring-fence its infrastructure division as a continuing business, and sell everything else, including its real estate and leasing divisions, which until then it had hoped to save.

The banks went away to consider the deal, but one of them, Germany's HypoVereinsbank, denied Babcock access to more than $100 million it held on deposit as part of a second, smaller debt facility. The dispute created the funding crisis that nearly pushed Babcock over the cliff - but receipts from the sale of European wind-power assets were already in the pipeline and have now arrived, allowing HypoVereinsbank to be paid out of the smaller facility. It remains a member of the larger syndicate.

Babcock is far from out of the woods, and its progress from here will largely depend on a series of decisions by the banks about the pace of asset sales. Its asset portfolio is large and diverse. Its infrastructure assets are valued at about $2 billion, and wholly and jointly owned real estate is in the books at a similar value, covering assets including shopping centres in Europe, residential properties in Germany, and self-storage units in Asia and the US.

Babcock's aircraft leasing business is worth about $250 million, there is a $380 million loan out to one of Babcock's listed satellites, Babcock Power and the value of management rights with satellites, shareholdings in them and co-investments is very much a mark-to-market exercise. The questions now are how much time does Babcock need to extract as much as possible on the assets it wants to sell, and how much time are the banks prepared to allow.

The loose plan is for the group to get asset sales going fairly quickly, but the banks in many cases will need to make case-by-case calls, choosing effectively between requiring Babcock to sell quickly at a larger discount, or allowing the company more time - time for the markets to recover, and time for Babcock to develop the assets further, by attaching customer contracts to power assets, for example.

To cite just one of the decisions ahead, Babcock owns ethanol plants in the US that are not totally servicing their debt load, but would also fetch only a fraction of their book value of about $200 million if sold urgently. The banks will make the call on that asset, and a host of others, as they look to claw back as much of their exposure as possible.

Geothermal energy source unearthed

Friday 5/12/2008 Page: 4

GREENEARTH Energy has announced a potential geothermal resource large enough to produce 150 times Victoria's energy requirements. In a statement to the Australian Securities Exchange, Greenearth Energy said it had an inferred geothermal resource of 260,000 petajoules. While the resource still needs to be proved, it is encouraging for Victoria's geothermal prospects. Geothermal energy is generated by pouring water down a drilled hole and over hot rocks. The process creates steam, which is brought to the surface and put through a generator.

Greenearth Energy's managing director, Mark Miller, said the discovery was "a major step forward" in creating base-load, emissions-free energy. He said it represents a significant, long-term, renewable energy proposition that demands development. Greenearth Energy will now apply for a licence to drill further and seek funding from the Victorian Government. Shares were unchanged at 10¢.

Tips on spending the Xmas bonus: save money, the economy and the environment

Clean Energy Council
10 December 2008

Clean Energy CouncilA new solar hot water system or better insulation would be ideal ways to spend the federal government's Christmas bonus, helping to stimulate the domestic economy while saving money, energy and the environment at the same time.

The Clean Energy Council believes the government's $10.4 billion stimulus package is a great opportunity for households to have a green Christmas this year while being able to enjoy the bonus, which will continue to keep giving through lower power bills. Investment in smart energy solutions like installing insulation, solar water heaters or solar panels can cut electricity bills by at least 15-20%.

"While Kevin Rudd hasn't told Australians how to spend the bonus, we're sure he would rather they spent it prudently to make their homes more energy efficient rather than just spending it on buying bigger and less energy efficient appliances," said Chief Executive Matthew Warren. "Most insulation and solar hot water systems sold in Australia are also made here meaning that the Christmas bonus will help save Australian jobs."

Mr Warren said new and first home owners could also use some of the extra grants provided by the government to add value to their new homes by making them warmer in winter, cooler in summer and cheaper to run all year round. The first home buyers grant for newly constructed homes will receive an extra $14,000 over the next year, while first home buyers of established dwellings will receive an extra $7,000.

But Mr Warren said all households could celebrate a green Christmas this year and give the gifts that keep on giving; such as a year of green energy, a down payment on some solar panels or even some shares in a clean tech or environmentally friendly company.

"Acting on climate change is within everybody's reach - There are practical things that we can all do to save money while reducing our carbon footprint." "This Christmas we encourage Australians to consider the environment and the future as they launch into their government endorsed spending spree. Clean and efficient energy use make great gifts – that don't stop giving."