Tuesday, 20 January 2009

Isis of plenty

West Australian
Saturday 17/1/2009 Page: 16

Top of a wind turbineIn the past 10 years, one Danish island has cut its carbon footprint by a staggering 140%. Now, with a simple grid of windfarms, solar panels and sheep, it's selling power to the mainland and taking calls from oil multinationals.

JORGEN TRANBERG looks a farmer to his roots: grubby blue overalls, crumpled T-shirt and crinkled, weather beaten features. His laconic manner, blond hair and black clogs also reveal his Scandinavian origins. Tranberg farms at Norreskifte on Samso, a Danish island famed for its rich, sweet strawberries and delicately flavoured early potatoes. This place is steeped in history - the Vikings built ships and constructed canals here - while modern residents of Copenhagen own dozens of the island's finer houses.

But Samso has recently had a remarkable transformation, one that has given it an unexpected global importance and international technological standing. Although members of a tightly knit, deeply conservative community, Samsingers - with Tranberg in the vanguard - have launched a renewable-energy revolution on this windswept scrap of Scandinavia. Solar, biomass, wind and wood-chip power generators have sprouted up across the island, while traditional fossil fuel plants have been closed and dismantled. Nor was it hard to bring about these changes. "For me, it has been a piece of cake," Tranberg says. Nevertheless, the consequences have been dramatic.

Ten years ago, islanders drew nearly all their energy from oil and petrol brought in by tankers and from coal powered electricity transmitted to the island through a mainland cable link. Today, that traffic in energy has been reversed. Samsingers now export millions of kW hours of electricity from renewable energy sources to the rest of Denmark. In doing so, islanders have cut their carbon footprint by a staggering 140%. And what Samso can do today, the rest of the world can achieve in the near future. it is claimed.

In 2007, carbon dioxide reached a record figure of 384 parts per million - a rise of about 35% on levels that existed before the Industrial Revolution. The Intergovernmental Panel on Climate Change has warned that such changes could soon have a dramatic impact on the world's weather patterns. Already, Arctic sea ice is dwindling alarmingly and scientists say the world has only a few years left to make serious carbon-output cuts before irreversible, devastating climate change ensues.

Samso suggests one route for avoiding such a fate. Everywhere you travel on the island you see signs of change. There are dozens of wind turbines of various sizes dotted across the landscape, houses have solarpanelled roofs, while a long line of giant turbines off the island's southern tip swirl in the wind. Towns are linked to district heating systems that pump hot water to homes. These are either powered by rows of solar panels covering entire fields, or by generators which burn straw from local farms or timber chips cut from the island's woods. None of these enterprises has been imposed by outsiders or been funded by major energy companies.

Each plant is owned either by a collective of local people or by an individual islander. The Samso revolution has been an exercise in self-determination - a process in which islanders have decided to demonstrate what can be done to alleviate climate damage while maintaining a comfortable lifestyle. Consider Tranberg. As he wanders round his cowsheds, he scarcely looks like an energy entrepreneur. Yet the 47-year-old farmer is a true power broker. Apart from his fields of pumpkins and potatoes, as well as his 150 cows, he has erected a giant one MW wind turbine that looms over his 120ha dairy farm.

Four other great machines stand beside it, swirling in Samso's relentless winds. Each device is owned either by a neighbouring farmer or by a collective of locals. In addition, Tranberg has bought a half share in an even bigger, 2.3Mw generator, one of the 10 devices that guard the south coast of Samso and now help to supply a sizeable chunk of Denmark's electricity.

The people of Samso were once the producers of more than 45,000 tonnes of carbon dioxide every year - about 11 tonnes a head. Through projects like these, they have cut that figure to minus 15,000. (The minus figure comes from the fact that Samsingers export their excess wind energy to mainland Denmark, where it replaces electricity that would otherwise be generated using coal or gas.) It is a remarkable transformation, wrought mainly by Samsingers themselves, albeit with the aid of some national and European Union funds and some generous guaranteed fixed prices that Denmark provides for windderived electricity.

The latter ensures turbines pay for themselves over a six or seven-year period. After that, owners can expect to rake in some tidy profits. "It has been a very good investment," Tranberg admits. "It has made my bank manager very happy.

But none of us is in it just for the money. We are doing it because it is fun and it makes us feel good." Nor do his efforts stop with his turbines. Tranberg recently redesigned his cowshed so it requires little straw for bedding for his cattle. Each animal now has its own natty mattress. Instead, most of the straw from his fields is sold to his local district heating plant, further increasing his revenue and limiting carbon dioxide production. (Carbon dioxide is absorbed as crops grow in fields.

When their stalks - straw - are burned, that carbon dioxide is released, but only as a gas that has been recycled within a single growing season. By contrast, oil, coal and gas are the remains of plants that are millions of years old and so, when burned, release carbon dioxide that had been sequestered eons ago.) Samso's transformation owes its origin to a 1997 experiment by the Danish government.

Four islands, Laeso, Samso, Aero and Mon, as well as the region of Thyholm in Jutland, were each asked to compete in putting up the most convincing plan to cut their carbon outputs and boost their renewable-energy generation. Samso won. Although it lies at the heart of Denmark, the nation's fractured geography also ensures the island is one of its most awkward places to reach, surrounded as it is by the Kattegat, an inlet of the North Sea.

To get to Samso from Copenhagen, you have to travel by train for a couple of hours to Kalundborg and then take one of the twice daily ferries to Samso. A total of 4100 people live here, working on farms or in hotels and restaurants. The place is isolated and compact and ideal for an experiment in community politics and energy engineering - particularly because it is low-lying and windswept. Flags never droop on Samso.

The job of setting up the Samso experiment fell to Soren Harmensen, a former environmental studies teacher, with thinning greyish hair and an infectious enthusiasm for all things renewable. Outside his project's headquarters, at the Samso Energiakademi - a stylish, barn-like building designed to cut energy consumption to an absolute minimum - there is an old, rusting petrol pump parked on the front steps. A label on it says, simply: "No fuel. So what now, my love?" Step inside and you will find no shortage of answers to that question. Harmensen is a proselytiser and proud of his island's success. However, achieving it was not an easy matter.

It took endless meetings to get things started. Every time there was a community issue at stake, he would arrive and preach his sermon about renewable energy and its value to the island. Slowly, the idea took hold and eventually public meetings were held purely to discuss his energy schemes. Even then, the process was erratic, with individual islanders' self-interest triggering conflicts. One Samsinger, the owner of a cement factory, proposed a nuclear plant be built on the island instead of wind turbines. He would then secure the concrete contract for the reactor, he reasoned. The plan was quietly vetoed.

"We are not hippies," Harmensen says. "We just want to change how we use our energy without harming the planet or without giving up the good life." Eventually the first projects were launched, a couple of turbines on the west coast and a district heating plant. "Nothing was achieved without talk and a great deal of community involvement," Harmensen says, a message he has since carried round the planet.

"I visited Shropshire recently," he says of the English county. "A wind-farm project there was causing a huge fuss, in particular among the three villages nearest the proposed site. The planners would soothe the objections of one village, only for the other two to get angry - so local officials would turn to them. Then the first village started to object all over again. The solution was simple, of course. Give each village a turbine, I told them.

The prospect of cheap electricity would have changed everyone's minds." Needless to say, this did not happen. On another visit - this time to Islay, off the west coast of Scotland - Harmensen found similar problems. "I was asked to attend a public meeting to debate the idea of turning the island into a renewable energy centre like Samso. But nearly all the speakers droned on about ideals and about climate change in general. But what people really want is to be involved themselves and to do something that can make a difference to the world. That point was entirely lost.

"Later I found that a local Islay distillery was installing a new set of boilers. Why not use the excess water to heat local homes, I suggested. That would be far too much bother, I was told. Yet that was just the kind of scheme that could kick-start a renewable-energy revolution." Of course, there is something irritating about this Scandinavian certainty. Not every community is as cohesive as Samso's, for one thing.

And it should also be noted that the island's transformation has come at a price: roughly 420 million kroner - about $115 million - that includes money from the Danish government, the EU, local businessmen and individual members of collectives. Thus the Samso revolution cost around $23,000 per islander, although a good chunk has come from each person's own pockets. Nevertheless, if you multiply that sum by 60 million-the population of Britain-you get a figure of around £600 billion ($1370 billion) as the cost of bringing a similar revolution to Britain. It is utterly impractical, of course-a point happily acknowledged by Harmensen.

"This is a pilot project to show the world what can be done," he says. "We are not suggesting everyone makes the sweeping changes that we have. People should cherry pick from what we have done in order to make modest, but still meaningful, carbon emission cuts. "The crucial point is that we have shown that if you want to change how we generate energy, you have to start at the community level and not impose technology on people. For example, Shell heard about what we were doing and asked to be involved - but only on condition they ended up owning the turbines.

We told them to go away. We are a nation of farmers, of course. We believe in self-sufficiency." Jesper Kjems was a freelance journalist based in Copenhagen when he and his wife went to Samso for a holiday four years ago. They fell in love with the island and moved in a few months later, although neither had jobs. Kjems started playing in a local band and met Harmensen, its bassist, who sold him the Samso energy dream. Today Kjems is official spokesman for the Samso project.

Outside the town of Nordby, he showed me round its district heating project. A field has been covered with solar panels mounted to face the sun. Cold water is pumped in at one end to emerge, even on a gloomy day, as seriously hot water - about 70C - which is then piped to local houses for heating and washing. On particularly dark, sunless days, the plant switches mode: wood chips are scooped by robot crane into a furnace which heats the plant's water instead. The entire system is completely automated. "There are some living creatures involved, however," Kjems says. "

A flock of sheep is sent into the field every few days to nibble the grass before it grows long enough to prevent the sun's rays hitting the panels." Everywhere you go, you find renewable-energy enthusiasts like Kjems. Crucially, most of them are recent recruits to the cause. Nor do planning rows concerning the sight of "eyesore" wind turbines affect Samsingers as they do Britons. "No one minds wind turbines on Samso for the simple reason that we all own a share of one," says electrician Brian Kjar.

And that is the real lesson from Samso. What has happened there is a social, not a technological, revolution. Indeed, it was a specific requirement of the scheme, when established, that only existing, off-the-shelf renewable technology be used. The real changes have been those in attitude. Kjar's house near the southern town of Orby reveals the consequences. He has his own wind turbine, which he bought second-hand for $36,000 - about a fifth of its original price.

This produces more electricity than his household needs, so he uses the excess to heat water that he keeps in a huge insulated tank that he also built himself. On Samso's occasional windless days, this provides heating for his home when the 21m turbine outside his house is not moving. "Everyone knows someone who is interested in renewable energy today," he says. "Something like this starts with a few people. It just needs time to spread. That is the real lesson of Samso."

Clearing the Air

Sydney Morning Herald 

Saturday 17/1/2009 Page: 1

Clearing the Air Our addiction to cheap coal is under pressure as the climate debate rages and business tries to profit from alternatives. Clancy Yeates reports.

WHEN Sydneysiders flick on the power, there's every chance some of the electricity has come from a couple of coal-guzzling power plants in the Hunter Valley. Eraring power station's 200-metre-high chimneys tower over Lake Macquarie, while further west, the Bayswater station is set against beef and dairy country near Muswellbrook.

Drawing on the region's vast coal fields, these state-government owned giants share the title of biggest stations in the country, and supply about half the power in NSW. They also have the dubious distinction of being among the country's biggest polluters, and are a hot spot for environmental protesters. After entering service in the 1980s, their drab grey chimneys spew out more than 20 million tonnes of carbon dioxide a year. That's equal to the emissions of 4.6 million cars.

A US study last year said they were among the world's 100 biggest polluters, in a survey of some 50,000 stations. Amid the growing concerns over climate change, one might assume these plants were fast becoming industrial relics from a bygone era. But just last year the State Government approved an expansion of the Eraring plant to shore up its dwindling power supply, further inflaming environmental tensions.

The Nationals' Senate leader, Barnaby Joyce, this week showed the political stoush over cutting emissions has a long way to go, when he reignited fears of the economic impact. But as thousands of bureaucrats descend on Copenhagen this year to discuss greenhouse gas reductions, decisions such as the Eraring extension should become increasingly rare. It's much less clear, however, where our future electricity will come from.

Power generators - responsible for about half the country's emissions - are at the centre of this change. They have just decades to develop cleaner ways of providing electricity and are already placing bets on methods with potential. In just one illustration of the scale of the challenge, the consultancy Energetics calculates that meeting Sydney's needs alone would require some 77 square kilometres of solar panels. That's three times the area of the CBD, and it would still pose problems after dark.

The consultancy's managing director, Tony Cooper, says the Prime Minister, Kevin Rudd's decision to cut emissions by just 5% by 2020 is "disappointing" but at least it's a start. "Given all the economic doom and gloom, he could have said we'll push it back to 2020," he says. "lt's the thin edge of the wedge but money will start to flow through and change will start to occur a little faster than it has to date." But where this money will flow, and what type of changes it will stimulate, are unclear.

Every energy company boasts a commitment to "sustainability" but what are they doing to balance their books and still cut emissions? How they manage this monumental change has widespread effects across corporate Australia, and this has caught the eye of the financial sector. The number of carbon departments and consultancies is exploding as businesses cotton on to the potential cash to be made from this new industry. But the big end of town is also watching closely because of the business impacts of cutting carbon emissions from energy. Not only will it raise power prices, the energy sector is also the first and largest test case in the unprecedented push towards a low carbon economy.

Power companies haven't always grabbed so much market interest. The plodding utilities were traditionally sought out by conservative funds looking for safe rather than spectacular returns, such as superannuation managers. Power stations have an investment life of about 30 wars and produce fairly predictable earnings. The stunning rise and fall of Enron in the US went a fair way to changing this perception. And although the circumstances are different, the Babcock and Brown satellite Babcock and Brown Power has exposed local investors to utilities that appear to have put deal-making before running power plants.

Nevertheless, going green won't be easy for the electricity industry. It sources 84% of its power from coal, and emission-free, or renewable energy, makes up just 7% - the vast majority of it from hydro-electricity. But after months of corporate disaster scenarios about potential incentive not only because it will start low, but impacts of a carbon emissions trading scheme, having to cut emissions won't stop the companies in their tracks or leave them stranded with worthless assets. "It's not the absolute amount of carbon that you produce when you generate, it's the relative amount compared to everyone else," says an analyst at UBS, David Leitch. "When the price of carbon comes up, are you hurt more than some other guy, or less than some other guy?"

This leaves room for different approaches among the local rivals. 'The biggest listed power companies, Origin Energy and AGL, are competing to convince the markets they can cut their emissions most profitably. B&B Power may have more pressing concerns, after putting its assets up for sale after a review found it needed to slash debt. The other main generators are the British-listed International Power and TRUEnergy, which is owned by the Hong Kong-listed CLP Group.

TRU, based in Victoria, has committed to cutting its 1990 emissions by 60% by 2050 and ruled out building any more coal plants. International Power is backing a "clean coal" project at the Victoria station, Hazelwood, which was built in the 1960s using '50s technology. Many of the country's remaining power stations are in public hands but tend to be run as profit-seeking corporations.

From July next year, these generators will have to factor a price for their future carbon emissions in to their plans. Although they will initially receive many emissions permits free of charge, the Federal Government's carbon pollution reduction scheme should provide a long-term incentive to cut emissions. All of the generators except Origin Energy have coal assets, so they will receive a share of the $3.8 billion set aside to compensate the coal sector.

Origin Energy's executive general manager of corporate affairs and public policy, Carl McCamish, says every player is busily researching likely drivers of the future carbon price. The 5% target set out in the Government's white paper for the carbon pollution reduction scheme - which is likely to result in a carbon price of $25 a tonne - will encourage investment in gas generators but it won't spark a rush of investment into emissions-free, renewable energy.

"In the short term, the 5% target, in and of itself, will make very little difference to whether people build wind or geothermal or solar," McCamish says. Companies say the carbon price is a weak incentive not only because it will start low, but because of high uncertainty thereafter. A big influence on the domestic carbon price is the price of carbon in overseas markets, because the white paper allows carbon credits to be imported. This means even movements in the exchange rate could change the carbon price. Instead, the main incentive for green investment is the mandatory renewable energy target.

A draft of the policy last month said it would require 20% of electricity to come from renewable sources by 2020. "In dollar terms, that creates a much clearer and more immediate signal for people like us than the carbon price," McCamish says. Failure to comply incurs a fine, so market analysts are carefully assessing where the energy rivals place their bets. "The key factor for us is to look at the impact of the emissions trading scheme on these companies, when combined with an expanded mandatory renewable energy target," a Citi analyst, Marie Miyashiro, says.

The legislation would require the construction of 45,000 gigawatt hours of renewable capacity, worth up to $27 billion. Wind turbines provide the cheapest new green energy and are likely to make up most of the new investment. Despite these incentives, specialist green energy companies are seen as speculative ventures. The Economist reported that amid the looming recession, money spent on clean energy projects around the world was down 25% in the third quarter of last year.

Instead, established energy companies draw cash from their main businesses to take smaller stakes in renewables that look promising. McCamish calls it a "portfolio of options". "You get involved, you build skills and you learn more about the technology and if it looks like one in particular is becoming cheaper, you invest more in that as you go along," he says.

Of the local players, AGL has placed the largest bet on clean energy, with 27% of its company's capacity in renewables. TRUEnergy has a joint venture with the Hydro Tasmania known as Roaring 40s, which operates 226 MWs of wind energy and says it wants to become the country's biggest green developer by 2010. Origin Energy's main domestic game is gas but its 51.4% stake in New Zealand's Contact Energy has a large proportion of green energy. It is developing some wind and solar assets and has a 30% joint venture interest in the main project of the geothermal developer, GeoDynamics.

The chief economist and head of corporate affairs at AGL, Paul Simshauser, describes a completely renewable system as an "eventual utopia" but the incentive to back green energy is growing considerably. "Wind remains, certainly for the foreseeable future, likely to be the most scale- efficient renewable technology available today," says the ex-chief of B&B Power.

AGL also has coal assets, which he says still have a role in meeting power demand: "I think it will be a long time before we wind down the thermal [coal] fleet in Australia, because if we turned them off tomorrow, it would take the better part of 20 years just to replace them all." However, building more coal plants is highly unlikely, and some of the country's highest-emitting plants could be switched off in next five years, he says. "To actually 'put money -into a coal power station as a stand-alone investment decision would certainly test the minds of the executive team and the board."

The growing role for green energy is a small but encouraging start in addressing our carbon dependence but there's no shortage of challenges ahead. The chief executive of the Clean Energy Council, Matthew Warren, warns against focusing purely on wind. He says the group's members, which include fossil fuel generators, are concerned that design of the renewable energy target could discourage investment into more adventurous options in the longer term.

Mature wind projects appear safe but "if you come into the market in say 2016 or beyond, you've got a much narrower time to get a return on your investment", he says. "We want it to create a pathway for those new and emerging technologies, we want to be surprised by what they can end up doing, and we want to be given the time to be able to do that." Rushing into one technology can be risky for companies, too. Some analysts say AGL's bet on wind could be a long-term concern if a new, cheaper technology emerged.

But AGL's Simshauser points to the company's other renewable investments and says electricity prices should continue to rise, protecting the value of wind farms. "Provided you spread your investments out, you usually do OK in the long run," he says. Despite companies' warm and fuzzy clean energy slogans, their more immediate bet is on gas - a fossil fuel. Last year's bonanza in Queensland coal seam gas projects - worth more than $15 billion - was partly to meet surging gas demand from growing Asian markets.

More deals are likely in the coming years but even gas has its risks. The director of NabCapital's Carbon Solutions Group, Sean Lucy, says the likely wave of gas investments are bets that in 25 years a more efficient, cleaner generation method won't have arrived. "The challenge is that you are making in- vestments in an area of evolving policy and scientific understanding and you are also taking a view about how fast the world is going to feel it needs to move with emissions," he says.

A final business gripe is the effect of cutting carbon on retail margins. The executive director of the Energy Retailers Association of Australia, Cameron O'Reilly, says state-run price regulation of electricity prices could prevent them passing on higher prices. State energy ministers have acknowledged the issue, and it looks likely to be resolved. JPMorgan says Origin Energy and AGL's retail business will also benefit in the early years of emissions trading because the compensation to generators will limit the volatility in wholesale markets. As with any extra cost, business lobby groups are frantically pointing out possible risks.

However, an exodus from polluting fuels remains a long way off, reflecting the Government's slow start to cutting emissions. True to the industry's safe reputation, the big players are unlikely to gamble any more on clean fuels than they see as profitable. Even the managing director of renewable-heavy AGL, Michael Fraser, did not rule out buying NSW coal power assets when they were possibly up for sale last year, though he said it was "not a preference for the company".

Amid the burgeoning interest in carbon there's a rare positive story, of sorts. While the rest of the economy falters, a thriving industry of consultants has sprung up within the big financial and advisory firms. Banks have been expanding their carbon trading desks and are eyeing the potential windfall from advising the thousand businesses that must record and, eventually, pay for their emissions. But this attention is more than the banks spotting commissions. Large companies are tracking how the energy sector adjusts, because electricity is a cost that few businesses can avoid, though it has often been taken for granted.

The white paper released last month said electricity prices would rise by about a third, with generous compensation for households, which use about a quarter of all power. Businesses use nearly all the rest and are preparing for the rise. "The one thing that seems very certain about it all is that the electricity price is going to go up, and somewhere along the line that is going to put a lid on consumption growth," says UBS's Leitch. To deal with the rise, energy efficiency - using less energy to get the job done - is becoming a much bigger focus.

As unlikely as it may sound in any other industry, the retailers are trying to convince their customers to use less of the product they sell. This might mean switching to a different type of light bulb, or co-generation: using a heat engine to produce electricity and heat to drive down power costs. AGL did this with the brewer Coopers, building a plant that supplies electricity and steam to the brewery, with surplus electricity sold to the grid.

NabCapital's Lucy says it could be relevant to businesses with banks of computers that need large stable power supply. "We're seeing more and more people coming and talking to us about how can they improve their carbon efficiency or productivity by investing in their own generation assets." Listed companies' greenhouse and energy performance is also under greater shareholder scrutiny. The executive director of the Investor Group on Climate Change, Joanne Saleeba, says fund managers increasingly cross-examine companies about reducing their emissions or their energy use.

The group's members, fund managers responsible for $550 billion, are putting pressure on corporate chiefs to provide "long-term scenario planning" over what they think carbon or energy prices will be and how they will react. Saleeba is unaware of investors ditching a stock or sector purely because of poor carbon performance but the pressure is on companies to become carbon literate. "If the investor knows more about the risks and opportunities to the business than the business itself, then that's a risk," she says.

And it seems many of the country's businesses still have a lot to learn about carbon. In November 2007, a PricewaterhouseCoopers survey of more than 300 Australian businesses with an annual turnover of more than $150 million found only 20% were factoring a carbon price into their capital expenditure decisions. Energy companies were better prepared than most, it said, but even in the last year carbon has become a burning issue too large for businesses of all shapes to avoid. If they haven't already hired a carbon consultant to do it for them: financial chiefs across town will be closely watching as the energy sector takes the first steps in changing.

Woodside calls temporary halt to California offshore gas plans

Weekend Australian 

Saturday 17/1/2009 Page: 25

Woodside Petroleum has delayed its innovative attempt to deliver Australian LNG to the US, citing "changed energy market conditions". The project involved mooring an LNG tanker off the coast of Los Angeles and connecting to an undersea pipeline to deliver the gas to California's domestic gas network.

Woodside Petroleum Natural Gas president Steve Larson said yesterday that conditions were not right for the proposed development. "We must acknowledge the impact of the current market, and have notified the regulatory agencies we are withdrawing our application for the time being," Mr Larson said. "While the permit process in California and Los Angeles is challenging, we were confident that, with the overall environmental and safety attributes of our design, our application would ultimately succeed"

Woodside Petroleum's move to suspend OceanWay marks one of the first blows the global financial crisis has laid on a major Australia petroleum player, in contrast to the resources sector, which has been in a spin since last year under the pressure of sinking commodities prices and shrinking credit markets. Woodside Petroleum, which declined to reveal the impact of the deferral on its accounts, has been pursuing OceanWay since 2005 and was slowly moving the plan through regulatory approvals under intense scrutiny from Californian environmental activists.

Domestic gas production in the US has increased, in contrast with conditions when Woodside Petroleum initiated the OceanWay project. Mr Larson said Woodside Petroleum saw a future for OceanWay despite the suspension, particularly as Californian Governor Arnold Schwarzenegger continued his campaign to reduce carbon emissions. "As the state's climate change policies continue to evolve, they will only strengthen the role for natural gas as part of California's clean air solution," he said. "We still believe in the long- term value of liquefied natural gas as a source of clean, reliable and secure energy for Los Angeles"

UBS senior energy analyst Gordon Ramsay said the suspension of OceanWay was unsurprising. "It is a project that has gone quiet lately and has been deferred, not cancelled indefinitely," Mr Ramsay said. "The US gas price is particularly weak," he said. The deferral was based on the conclusion that the market was not there at the moment. The postponement came as the Australian arm of Japanese gas firm Inpex - in partnership with French major Total- announced it had awarded the contract for front end engineering and design (FEED) to a joint venture of engineering and design firms .JGC Corp, KBR and Chiyoda Corp.

The FEED milestone puts an end to hopes - particularly from the West Australian Government - that Inpex would review its decision to abandon WA as the processing site for gas from its Ichthys field in favour of Darwin's Blaydin Point. lnpex president Naoki Kuroda reaffirmed that the project was moving ahead despite volatile market conditions. " Despite the current global financial environment, Inpex remains firmly committed to advancing the Ichthys project," Mr Kuroda said.

Inpex expects the $US20 billion project, scheduled to begin loading LNG in late 2014 or early 2015, to produce 8 million tonnes of LNG a year and 1.6 million tonnes of LPG a year as well as 100,000 barrels of condensate a day. Darwin's Blaydin Point site can support two initial LNG trains, with the capacity for additional trains to accommodate future expansion. Woodside Petroleum shares fell 52c to close at $33.53 yesterday.

Australia needs to go nuclear: engineers

Canberra Times
Saturday 17/1/2009 Page: 5

Australia will probably have to go nuclear to tackle climate change, engineers and scientists say. They say nuclear energy is the only reliable, proven source of electricity with a minimal carbon footprint. They're tipping 15% of the country's electricity will come from nuclear reactors by 2050. And the first plant could swing into action just 10 years after approval is given. The Australian Academy of Technological Sciences and Engineering, which represents more than 700 experts, has issued a report calling for nuclear energy to be on the table.

The report's lead author, John Burgess, said the problem with coal and gas-fired power was that it emitted carbon pollution, which caused climate change. But renewable energy, often touted as the solution, was either not baseload power or not proven. "We need power that runs for 24 hours a day, as opposed to just when the sun shines or the wind blows," Dr Burgess said. "[Nuclear power] is an existing technology which is operating quite safely." He said public hostility to nuclear energy could fade as concerns about climate change grew.

The report said Australia was well-placed to go nuclear because of an abundance both of uranium reserves and remote sites for dumping waste. There are more than 440 nuclear energy reactors in the world, in 31 countries. The report said Australia would probably have a "generation 3 plus" style of nuclear reactor, which was safer and more fuel-efficient than current plants. A plant would produce between 2 and 10 cubic metres of waste a year, a small amount compared with some other technologies, the report said.

But the Australian Conservation Foundation was not having a bar of the engineers' nuclear push. The foundation's nuclear-free campaigner, David Noonan, said, "It's completely unrealistic of them, they're on a hiding to nothing." He said Australians did not want nuclear energy or nuclear waste. Renewable energy was the way to tackle climate change, and it could be a cheap, baseload source of power, Mr Noonan said. And if Australia opted for nuclear energy, it could send a message to other countries that nuclear weapons would also be developed.

The Federal Government opposes domestic nuclear energy. Energy minister Martin Ferguson reiterated the message when questioned on the academy's report yesterday. "It is the Government's view that nuclear energy is not needed as part of Australia's energy mix given our country's abundance and diversity of low-cost renewable energy sources," he said. "The Government has a clear policy of prohibiting the development of an Australian nuclear energy industry." The report, which looked at the best ways for Australia to generate electricity in a climate-friendly way, said a technological revolution was needed. Emissions trading was a good start but would not do enough to encourage low-emission technologies.

It said $6 billion should be spent by 2020 on researching greener electricity generation. New technologies must be deployed on a massive scale, and there should be ''relentless'' work on energy efficiency programs.

Monday, 19 January 2009

Solar funds a ray of light for research

Canberra Times
Friday 16/1/2009 Page: 3

worldclass solar laboratory in CanberraA $5 million Federal Government grant will help establish a worldclass solar laboratory in Canberra, which researchers hope will put Australia back on the cutting edge of solar development. The grant is part of the Government's $100 million election commitment to expedite solar research in Australia. The facility, planned to start operations in one year, will be built at the Australian National University to adjoin the university's existing solar laboratories. Associate Professor Maus Weber, from the college of engineering and computer science, will be one of the key researchers working within the new facility.

Professor Weber said he hoped the project would be the beginning of a far more productive era for Australia's solar industry. "We've been in a position in Australia where, in the last few years, there was comparatively little funding compared with overseas research institutions," he said. "Basically the standard of our laboratories has declined relative to what is available overseas, which makes it more difficult to remain internationally competitive. "What we want to do with this project is to get back to that level and have something that's right up there with the best facilities."

Researchers will carry out Australian Solar Institute research programs within the facility as well as existing programs. Resources and Energy Minister Martin Ferguson launched the Australian Solar Institute in Newcastle yesterday. Mr Ferguson said the new institute would provide support for researchers in the field of solar photovoltaics and concentrating solar thermal energy to help solar energy become cost competitive. "The Government believes cost competitiveness is achievable and that solar energy is a commercially viable energy option for the Australian community," he said.

Researchers at the ANU will continue to work on combined photovoltaic thermal systems, which are systems that generate electricity and heat, within the new facility. Normally when using a photovoltaic solar panel, at least 80% of incoming sunlight is converted to heat. The researchers are trying to capture and make use of this heat for applications such as heating water.

Professor Weber said the new facility would mean these kinds of projects could go "a lot further, a lot quicker. In other cases, it will allow its to come up with much more streamlined processes for getting towards the end product." The ANU will contribute $1.4 million to extend the Link Engineering Building to make space for the new facility. The extension will include a 360sqm concrete slab roof with solar access for outdoor testing and 400sqm of extra solar laboratory space.

Business development manager Igor Skryabin, from the ANU Centre for Sustainable Energy Systems, said training new researchers at their new laboratory would beat the top of their agenda. "Now it's very difficult to find a good solar researcher," Dr Skryabin said. "They're in very high demand in Australia and overseas. We are looking worldwide for the best brains to be attracted to Australia and now we will be in a much better position to do so."

BG power plant halt a setback for NSW

Summaries - Australian Financial Review
Friday 16/1/2009 Page: 13

British energy company BG Group has cancelled plans to build a $750 million gas-fired power plant in NSW's Hunter Valley region. The project would have created around 3 percent of the states current electricity capacity, and the National Electricity Market Management Company projects a power reserve shortfall in NSW by 2014-15. The NSW Business Chamber said the decision posed a risk to the state's medium-term electricity supply as it would take at least six years to gain approval and build another plant. NSW Energy Minister Ian McDonald blamed the global financial crisis for BG Group's decision to shelve the project.

US renewables sector can meet Obama challenge – analysts

www.environmental-finance.com/
New York, 15 January:

The US renewable energy sector is capable of meeting President-elect Barack Obama's pledge to double US production within three years, but the ongoing financial crisis will challenge the industry in 2009, analysts and industry experts said.

Currently, renewable energy sources comprise 7% of the US energy supply, according to the US Energy Information Administration. In a speech last week, Obama reiterated his pledge to make development of the sector a major part of his economic stimulus package. "I think it's a very admirable goal and I do believe the industry can step up to the plate and achieve that goal," said Charles Dewhurst, a Houston-based partner and leader of the national energy industry practice at consulting firm BDO Seidman.

However, meeting Obama's goal will require the industry to overcome several challenges, primarily the economic crisis that slowed the sector's growth in the second half of 2008. Financing of new renewable energy capacity at the global level declined from $23.9 billion in the first quarter of 2008 to $19.3 billion in the third quarter, according to New Energy Finance.

"The economic crisis will cause a decline in renewable energy project activity through 2009," said Milo Sjardin, at New Energy Finance in New York. "The stimulus package may boost it a little bit, but there's certainly going to be difficulty getting project financing." It is also uncertain how much of Obama's proposed $825 billion stimulus package will be devoted to the renewable energy sector. Estimates of the energy portion range from $30 billion to $50 billion, not all of which will be directed to renewable energy, according to Citi Investment Research.

Revamping the production and investment tax credits that have underpinned recent strong growth in US renewables has also been widely discussed, with renewable energy lobbyists advocating making the credits refundable. This would make the incentives more attractive, as most companies expect to pay lower taxes, undermining the value of tax credits. The number of active tax equity investors has dropped from 20 to five, but making the credits refundable would spur more tax equity investment, they argued.

In the absence of any changes to the tax structure, it will be difficult for companies to take advantage of the credits because of financing challenges, said Seth Tennant, a New York-based associate of the alternative energy group of Citi Investment Research. The wind, solar and geothermal sectors are all expected to benefit from Obama's commitment. US solar photovoltaic demand, for example, could increase by about 1,750MW to 2,000MW, increasing the US installed base by 150-200%, according to Citi.

"It's really going to be low-cost, low-carbon producers" who will benefit most, said Jack Robinson, president of Winslow Management Company in Boston, which has been involved in green investing for more than 25 years. All three sectors can triple production "with no difficulty", he said. The impact of the stimulus package on other low-carbon energy sources is less clear. Despite safety concerns, nuclear energy has to be part of the conversation because of its limited greenhouse gas emissions, although there is no timeframe for new capacity coming online, Tennant said.

Green companies expected to benefit from Obama's commitment include First Solar and Energy Conversion Devices, both of which are well positioned to quickly ramp up solar production, Robinson said. Wind turbine maker and technology companies Vestas and American Superconductor and geothermal company Water Furnace Industries can also quickly utilise any advantages provided by the stimulus package, he said.

Dewhurst at BDO Seidman also expects to see a continuation of major oil companies establishing and expanding separate business units specifically focused on wind and solar development.

Clean energy investment limps over $150bn in ‘08

www.environmental-finance.com/
London, 15 January:

Investment in clean energy companies and projects grew by 4.4% in 2008, to breach $150 billion for the first time, according to figures from New Energy Finance (NEF). But strong growth - of 40% year-on-year - in the first half of 2008 gave way to a drop of 23% in the second half of the year, compared with the same period in 2007. Preliminary 2008 figures from NEF released in December anticipated a fall of 4%.

Nonetheless, the slightly improved final numbers compare dismally with 60% growth in investment between 2006 and 2007. However, the London-based analysis company suggests that, after a "subdued start" to 2009, policy developments in the US particularly could restore the sector's momentum later in the year.

A total of $155 billion was invested last year, with investments directly in renewable energy assets reaching $97 billion (up from $84.5 billion in 2007) and by venture capital (VC) and private equity (PE) players in clean energy companies hitting $13.0 billion (up from $9.8 billion). However, investments via the public markets shrank, to $10.3 billion, from $23.4 billion in 2007. NEF said that the rise in VC and PE investment took up some of the slack from the public markets, where sharp falls in share prices in 2008 made it difficult for clean energy firms to raise fresh capital.

"It is encouraging to see that clean energy investment was so strong in 2008, despite everything that was going on in the world economy," said Michael Liebreich, chairman and chief executive of NEF. "Having said that, the big change late in the year was that debt and tax credit finance for renewable energy projects became much harder to find because of the problems of the banks.

This meant that investment in wind farms, solar plants and the like slowed fairly dramatically in the second half." He added: "The dearth of debt finance will continue into 2009. In addition, public stock markets remain fragile, and this will deter clean energy firms wanting to launch IPOs or secondary issues." NEF is predicting that the first half of 2009 will see lower investment than last year.

"What happens after mid-year will depend on two things: whether the banks start to translate historically low central bank rates into lending to companies and projects, and whether administrations around the world deliver on their promises to make a push for clean energy part of any fiscal stimulus packages," said Liebreich.

The company sees clean energy "moving from supply-constrained markets in 2007-08 to demand- and finance-constrained markets in 2009". It adds that renewable energy is continuing to become cheaper, but the trend has been obscured by high commodity prices and supply chain bottlenecks, that new industrial capacity is set to unblock.

China blasts through wind energy target

www.environmental-finance.com/
Kunming, 15 January:

China more than doubled its wind energy capacity in 2008, installing 4.66GW of additional capacity and passing the government's 10GW target two years ahead of schedule. China's wind energy industry, dominated by the 'big five' state-owned electric power companies, increased the country's total installed wind energy capacity to approximately 12.8GW by the end of 2008, according to a 5 January report from industry group China Electricity Council (CEC), a 127% increase over 2007.

The explosive growth, widely projected by observers, was driven by an 88.10% year-on-year increase in capital investment, said the report. The increase reflects the success of China's policies to promote renewable energy, which include the mandated target of 10GW by 2010 and a renewable portfolio standard that requires "non-hydro renewables" to account for 3% of the installed capacity of large power companies by 2010, and 8% by 2020.

China's central economic planning body, the National Development and Reform Commission (NDRC), has also set a target for 30GW of wind energy capacity by 2020. But last year's growth has observers projecting the industry outstripping the 2020 mark a decade sooner. Ma Lingjun, deputy general manager of the Chinese Renewable Energy Industries Association, said the group unofficially projects that 25-30GW of wind energy capacity will be installed by the end of 2010.

However, Ma said, it was unlikely that the government would increase the 2020 target, as it did the 2010 target last year, because, "there is some concern by NDRC that wind energy is growing too fast, so maybe they will use the [low target] as a way to emphasise the sustainable development [of the sector] and quality control." Rapid growth has led to high incidence of wind turbine unreliability and underperforming installations, a problem the industry is addressing, she said, "by doing more and more innovation and testing before installation".

"But since this industry is still in the early stage it is not a surprise we are having problems," she added. Last year also saw increased investment in China's electrical power grid, according to the CEC report, with 50.5% of capital invested in the power sector devoted to grid improvements, expansion and repair. Despite this investment, Ma estimated that 20% of installed wind energy capacity is not currently connected to the grid.

Friday, 16 January 2009

Carbon capture put to the test in NSW

Sydney Morning Herald
Thursday 15/1/2009 Page: 9

NSW is about to find out whether it will be able to capture greenhouse gas emissions from its coal-fired power stations and store their underground. Drilling began on Monday to see if the rock 800 metres under the Central Coast can handle having thousands of tonnes of liquefied carbon dioxide pumped into it each week. It is yet to be proved that carbon capture and storage, in which carbon dioxide fumes from power stations are compressed and cooled on-site before being buried, will work on a large scale in Australia. Most environmental groups and some in the coal industry think it will not become effective in time to help slow climate change.

But the Government is optimistic that exploratory drilling close to Delta Energy's Munmorah coal-fired power station near Lake Macquarie, and at three other points in the state's north, will show results. By April we'll have an idea whether things are going well," the Minister for Energy, Ian Macdonald, said. We believe that it will work." Last July, a trial carbon capture project at the Munmorah power station was launched by Delta Energy using CSIRO technology. The next step is to bury the captured carbon.

The amount captured and stored at Munmorah is initially to be small - 3000 tonnes of carbon dioxide per year, a tiny fraction of the power station's emissions. It aims to capture 100,000 tonnes a year by 2013. If the chosen test site at Munmorah proves unsuitable for storing carbon, other sites - such as Mount Piper power station near Lithgow- would be immediately investigated, Mr Macdonald told the Herald.

If no geological sites can be found near existing power stations, the Government would consider contributing funds to build a vast network of pipelines Environmentalists say the expense of carbon capture and storage would take money away from the development of renewable energy. The coal industry is trying to create the appearance that it is doing something about climate change, but all they are really doing is fighting tooth and nail to keep themselves in business," a Greenpeace spokesman said.

Take time to get the climate right

Summaries - Australian Financial Review
Thursday 15/1/2009 Page: 46

While the financial crisis will be the most important policy platform for the Rudd government this year, climate change will be the most important for the next 50 years. The government suggested in a white paper released before Christmas a 5 percent emissions target for 2020 and additional compensation for heavy emitters than recommend by Ross Garnaut. Reserve Bank of Australia board member Warwick McKibbin has argued that emissions trading scheme architecture can only work with significant changes, including a longer term policy. Access Economics co-founder and former Treasury officer Geoff Carmody has argued the focus on emissions permits for production is flawed.

Fridges store beer, milk ...and energy

Canberra Times
Wednesday 14/1/2009 Page: 3

For most people, talk of "green" fridges might conjure tip images of hygiene disasters in scungy student flats. But Australian researchers have come tip with a green fridge which is not on the nose. They have invented a device which allows household fridges to run more easily off solar or wind energy. This could slash their greenhouse gas emissions - and could make renewable energy more usable as well.

Fridges switch themselves on and off regularly as they keep their temperature between 2 and 4 degrees. The CSIRO invention hooks up all the fridges in an area electronically. They then "talk" to each other, and to renewable energy suppliers, about when is the best time to crank up the compressor and cool themselves down. So when there is plenty of solar energy available, the fridges switch themselves on. And when the clouds roll in, they switch themselves off.

Engineer Sara West, who helped develop the device at CSIRO's research centre in Newcastle, said using the humble fridge to store renewable energy was exciting. "A lot of people are surprised to hear that they can use [their fridge] for this kind of storage, usually they're pretty interested," Mr West said. One of the biggest obstacles to the widespread use of renewable energy is its reliability - it does not provide a baseload supply like coal-fired power stations. Finding ways to store renewable energy would help address the issue, Mr West said.

The "green fridge" was one way of doing it, in the form of thermal energy - or cold. The system was foolproof and would not lead to the milk going off. The CSIRO invention is a small box which can be attached to existing fridges. The organisation hopes to roll out a trial version of the system, and said it was possible that one day all fridges would come equipped with the device.

Thursday, 15 January 2009

Time out as banks mull sell-off

Summaries - Australian Financial Review
Tuesday 13/1/2009 Page: 38

A two week trading halt will be placed on Babcock and Brown (B&B) stocks as the company's bankers think about selling the company's assets, such as thermal, wind and solar developments, and winding up the business. If approved, the decision to sell assets will end chief executive officer Michael Larkin's plan to turn the finance house into a specialist infrastructure investment business and sell 'non-core assets' like rail and leases. Current management rather than a receiver appointed by the banks will supervise the asset sales.

B&B told the Australian Securities Exchange that it expects the trade suspension will be lifted once the company's lenders including Australia's four major banks - the Commonwealth Bank of Australia, Australia and New Zealand Banking Group, the National Australia Bank and Westpac - make their final responses. The majority of last week's trade was done via CommSec and ETrade indicating retail investors were confident in taking a chance that the company would survive until the February decision on a debt-for-equity swap.

Power demand steady despite global turmoil

Hobart Mercury
Tuesday 13/1/2009 Page: 8

THE factory lights are on and Tasmanian industry is still at home as the global economic crisis drives many overseas manufacturers to the wall. So far, there has been no mass shutdown of industry in Tasmania. But the company that supplies electricity to our big manufacturers is keeping tabs on the situation as it enters what analysts predict will be a tough year.

Hydro Tasmania acting chief executive Lance Balcombe said the electricity generator had not seen a reduction in demand for power. "We are, however, mindful of the situation of some energy users and the impact the downturn may have on those businesses - particularly those with exposure to global markets." Mr Balcombe said. "We'll continue to monitor the situation and keep in contact with our customers."

Mr Balcombe said there were upsides in the current business climate. "The reduction in interest rates is benefiting our business." he said. But there were also negatives. "The falling Australian dollar may have an impact on our capital works program," he said. The cost of imported components rises in line with a devaluation of Australia's currency and this could result in projects being deferred. "However, we consider this to be an unlikely situation." Mr Balcombe said.

State drops its power limits for desal plant - Madden vague on energy demand

Age
Tuesday 13/1/2009 Page: 3

VICTORIA'S desalination plant has been given scope to consume more electricity, after the Brumby Government rewrote the energy efficiency limits on the controversial project. desalination requires significant energy to separate drinking water from salts and other wastes, and the composition of Bass Strait water will make Victoria's plant less energy efficient than plants in other Australian cities such as Perth.

Strict "performance requirements" for energy efficiency at the Wonthaggi plant were set in September's environmental effects statement. It said that annual power consumption at the plant should remain below an average 4.6 kWs for each kilolitre of drinking water produced. However, when approving the EES process on Friday, Planning Minister Justin Madden appeared to water down that requirement, saying the energy efficiency standard should be merely "as low as reasonably practicable and to the satisfaction of the Environment Protection Authority".

Mr Madden rejected suggestions he was relaxing the energy efficiency standards. "It's not a weakening of the standards at all. It's probably indicating a strong advocacy for reducing emissions as much as possible in any possible form," he said. But Environment Victoria director Mark Wakeham said it was concerning that Mr Madden had opted for the generic statement when a numerical limit would suffice. "It's a bit like writing a blank cheque on behalf of Victorian consumers by not requiring a minimum energy performance standard," he said.

The waters off Wonthaggi are colder and more saline than those off Perth, meaning more electricity will be needed to produce each litre of drinking water at the Victorian plant. In his report, Mr Madden conceded the plant would "entail significant greenhouse gas emissions". The Government has promised that plant operators will have to purchase renewable energy credits to offset the electricity used in operating the plant and pumping water 80 kilometres to Cardinia Reservoir.

But the 1.4 million tonnes of emissions produced during construction of the plant will not be offset, nor will the 70,000 tonnes of emissions produced each year by decomposing wastes and deliveries. Department of Sustainability and Environment spokesman Greg Meyer said the offsets for the desalination project would be in addition to Victoria's existing renewable energy targets. But it remains unclear whether the offsets will be in addition to all renewable energy targets across Australia.

A Government panel hired to review the EES process recently urged the Government to better clarify its offsets program for the project, and to ensure there was no double accounting. Environment Minister Gavin Jennings yesterday defended revelations that Victoria produced 2.2 tonnes more of greenhouse emissions in 2008 than in 2007. NSW reduced its emissions over the same period, according to a report by the climate group.

Despite the report being released annually, Mr Jennings urged Victorians to focus on a period stretching back to 2000, during which emissions growth in Victoria was slower than in NSW and Queensland. He said investment in renewable energy schemes in Victoria had slowed because investors were waiting for the introduction of federal schemes, such as emissions trading in 2010.

Opposition environment spokesman David Davis said the Government had failed to live up to its rhetoric on reducing greenhouse gas emissions.

Tuesday, 13 January 2009

NSW bucks national trend for gas emissions

Sydney Morning Herald
Monday 12/1/2009 Page: 5

THE amount of greenhouse gases pumped out by energy generation and transport fell in NSW last year, bucking the national trend. High petrol prices and a move towards diesel helped the state lower its carbon dioxide emissions by about half a million tonnes in 2008 compared with 2007, although NSW became even more dependent on burning coal to generate electricity. Emissions from energy and transport in Queensland and Victoria, the two other states that make up the east coast electricity grid, still rose.

Last year the east coast released 19% more carbon dioxide - which traps heat in the atmosphere and contributes to climate change - than in 2000. NSW released just over 98 million tonnes of greenhouse gases. Compared with 1990, the year usually used to calculate emissions under the Kyoto Protocol, emissions from NSW have risen 30%. Since 1990 Queensland is up 116% and Victoria 32%, according to The Climate Group, which collated weekly figures from its national greenhouse indicator, based on electricity market data and fuel sales.

The figures mean households, industry and governments have a huge job ahead of them just to stabilise greenhouse gas emissions over the next few years, before meeting even the modest 5% cuts now proposed for 2020. The reason there was a drop in NSW is that there were lower petroleum sales, so in that regard higher petrol prices may have played a small but useful role," said Rupert Posner, the nonprofit group's Australian director. "At the same time there was actually an increase in emissions from coal-fired power stations." In NSW, emissions from coalfired power stations - the backbone of the electricity grid - increased by 1.5 million tonnes on the previous year, a rise of 0.7%.

Electricity production went up by 1.3% in response to public demand and a rising population. Production rose more quickly in Queensland and Victoria, reflecting the higher population growth rates in those states. "We haven't started to see the turnaround we need yet," Mr Posner said. "What's clear from these figures is that Australia's dependence on coal is just not sustainable." Petrol sales fell 9% around the state last year, and sales of the less-polluting diesel fuel rose 2%.

On average, the energy and transport sectors in NSW put 1.9 million tonnes of carbon dioxide or its equivalent into the atmosphere each week last year. More energy was used during winter, as people turned on heating in their homes, and less power was used during the Christmas lull. The Federal Government plans to introduce an emissions trading scheme in 2010 to wind back emissions by making the nation's 1000 heaviest-polluting industries buy permits equivalent to the amount of greenhouse gas they release, and therefore paying for their emissions.

The Government is committed to reducing national emissions by at least 5% on 2000 levels over the next 12 years. It has said it will aim for deeper cuts if a binding global deal on carbon reduction is agreed to next year, although its proposed cuts for 2020 still fall short of the 25 to 40% recommended by most climate scientists.

Pollution skyrockets - Coal and gas for electricity blamed

Courier Mail
Monday 12/1/2009 Page: 11

GREENHOUSE gas emissions from fossil fuels for transport and electricity in Queensland rose by two million tonnes last year, a report has claimed. But last year's sharp spike in oil prices helped cut petroleum emissions across Queensland, New South Wales and Victoria. Rupert Posner, Australian director of charity The Climate Group, which compiled the report, said the paper "clearly demonstrates that our reliance on coal for electricity is our biggest problem when it comes to cutting our greenhouse gas emissions".

On page 2 of The Courier- Mail every Monday readers can track emissions created by Queensland's coal and gas-fired electricity generators and from petroleum use. Published today, The Climate Group's annual report reveals that across Victoria, NSW and Queensland, annual emissions were 3.6 million tonnes higher last year than in 2007 a rise of 1.3% for the year. Compared with 2000 levels, the report said emissions from energy-use were significantly higher across all states, collectively up 19%.

But the increase above equivalent 1990 levels was even higher, with Queensland's emissions more than doubling compared with rises of 30% in NSW and 32% in Victoria. "Most of the increase in emissions in 2008 was from coal-fired generators in Queensland and Victoria, which both produced an extra 1.5 million tonnes each," Mr Posner said. He said Australia needed to reduce its reliance on fossil fuels if emissions were to be cut.

"The Greenhouse Indicator's 2008 results clearly show we all need to start taking action now if we want to reduce our greenhouse pollution," he said. "The window of opportunity open to us to prevent dangerous climate change is becoming smaller but there are lots of things that people can do immediately to start making a difference." Emissions from petroleum, calculated from sales figures in the three eastern states, actually fell by 0.6%. The Climate Group describes itself as an independent not-for- profit coalition of government and business leaders aiming to move to a low emission future.

Monday, 12 January 2009

The clean, green potential sizzling far below

Age
Saturday 10/1/2009 Page: 15

transmission towersWHEN explorer Major Thomas Mitchell meandered across western Victoria in 1836, so enraptured by the vast grasslands that he called the place Australia Felix, meaning lucky or blessed land, he could not have imagined that even greater fortune lay thousands of metres below his feet. Now, as the world grapples with the perplexity of how to produce energy without pouring greater amounts of pollutants into the atmosphere, new explorers are about to try to tap that invisible power, as green as the pastures above.

It is in the form of vast aquifers of ancient brackish water heated up to 145 degrees lying beneath a blanket of sedimentary rock at depths between 2.4 kilometres and more than four kilometres. And as these new explorers have found, it is not limited to western Victoria. Two companies - Greenearth Energy and Hot Rock - are in a race to exploit this previously ignored resource, which is superheated by sitting atop deep beds of granite warmed by the Earth's mantle.

It is a race, however, given little impetus by the Rudd Government's recent decision to reduce carbon emissions by 5% to 15% by 2020. The policy continues to favour coal-fired power stations, which means the old polluting technology retains a significant price advantage - about half the MW price - over geothermal technology, which requires large amounts of start-up money, particularly for drilling.

Between them, Hot Rock and Greenearth Energy have been granted by the Victorian Government geothermal exploration permits covering more than 46,000 square kilometres stretching from the Latrobe Valley in Gippsland, across Geelong and along the entire stretch of the west Victorian coast and its hinterland. Deep beneath those great tracts of land, the companies have ascertained, lies the potential to make Victoria one of the world's greenest baseload energy suppliers - a goal neither wind nor solar energy can achieve.

Greenearth Energy's 18,795-square kilometre tenements are in the Latrobe Valley and the Bellarine Peninsula, Geelong and Daylesford areas. Early last month, it published Victoria's first "inferred geothermal resource", showing that beneath a large area between Geelong and Anglesea lies enough stored heat energy to provide 150 tunes Victoria's energy requirements.

This week it published another such report on discoveries beneath Gippsland, including the Latrobe Valley. The potential, according to Greenearth Energy managing director Mark Miller, is for these areas to produce many hundreds of MWs of "clean, safe, renewable energy at the doorstep of our two great Victorian cities, Melbourne and Geelong". Hot Rock's 27,000-square kilometre exploration area extends from Lorne for 270 kilometres to the South Australian border. Major centres covered by the company's permits include Colac, Terang, Warrnambool, Hamilton and Portland.

While Victoria as a whole has long overlooked its ability to fire up its industries and cities using the free heat sizzling deep in the earth, the potential was hardly unknown. For more than 20 years, Portland was the only city in Australia that used geothermal power to heat many of its larger public buildings and its public swimming pool. Its ageing bore, sunk a relatively shallow 1400 metres beneath the city, produced water at 58 degrees but was dismantled two years ago. Gas is now used as an alternative heating source while the city fathers ponder whether to reopen the geothermal plant.

Hot Rock, basing its venture on an independent review and the discovery of great pools of hot water during previous drilling for oil and gas across western Victoria, believes there is enough geothermal power available within its tenements to generate up to 5000 MWs, or almost Victoria's entire electricity requirement. Essentially, the process involves drilling to the aquifers and pumping the water to a plant at the surface where the heat is extracted to drive turbines. The water is then returned to its aquifer through reinjection wells. There are no toxic emissions and there is no loss of water.

And unlike major geothermal schemes unfolding in South Australia's remote Cooper Basin, the Western District and Gippsland permits lie along major power transmission systems. In monetary terns, this is crucial - new electricity transmission lines cost between $1 million and $2 million a kilometre. In short, the power - in baseload form, which produces electricity 24 hours a day like power from coalfired plants - could be transmitted at minimal cost across a relatively small area populated by 5 million people.

"I have never been involved in an environmental project that ticks every conceivable box, but this one does everything - that is, except serious government support," says Hot Rock's managing director, Dr Mark Elliott. Greenearth Energy and Hot Rock plan to start work on their initial projects in the middle of this year. Hot Rock plans to begin proving its strategy by drilling and testing two wells north-west of the town of Koroit, near Warrnambool, and building a 50-MW power plant in about two years.

Eventually, assuming significant investor support, several other power plants producing about 200 MWs - more than all the wind farms now operating in Victoria - are to be built at the Koroit site. In the long term, Greenearth Energys Mark Miller sees his company moving beyond electricity production to helping the Latrobe Valley's coal-fired plants clean up their act. He believes that heat extracted from its Gippsland tenements could dry the wet sludge known as brown coal, reducing toxic emissions from existing power plants. Even the doughty Major Mitchell may have been impressed.

Profits before planet

Adelaide Advertiser
Friday 9/1/2009 Page: 11

Relaxing in a chairGOING green has been overtaken by economic concerns at several South Australian businesses. While a growing number of businesses are still inquiring about measuring their carbon footprint, many are deferring audits until they are free of financial constraints. Carbon Planet chairman and chief executive Jim Johnson says while workplaces have stepped up preparations for going green, the global economic downturn is resulting in a delay in action.

"It's a case of people saying, 'We know we have to do this, it's inevitable, but in the face of economic uncertainty most definitely due to the economic climate," Mr Johnson told The Advertiser. "They haven't exactly cut back, it's more a case of in the last three months there have been some deferrals." However, in the wake of Prime Minister Kevin Rudd signing the Kyoto Protocol, Mr Johnson said regardless of cost-cutting, being green was coming back. "Now Australia's participation in climate is formal and inevitable - I call it the boy scout syndrome - people are getting prepared," he said.

However, full commitment from Australian businesses is still some time away with a recent survey by online career network LinkMe.com.au revealing only 15.6% of companies have moved to measure the levels of greenhouse gases they emit. Mr Johnson said this level of awareness - including offsetting entire emissions and purchasing carbon credits - has only been adopted by a minority. "It's still a very low number. I think given the current economic condition ... there will be a delay in those sorts of decisions," he said.

However, one business not willing to put off such a decision is Adelaide-based Scan Conversion Services which has achieved carbon neutral status through implementing green policies and purchasing registered carbon offsets. SCS managing director Richard Bates says being green is not only a moral or economic concern, but steps like cutting paper use can also increase productivity in the workplace. "There is a strong, proven link between staff productivity and job satisfaction by reducing boring, repetitive chores like filing, photocopying, mailing and hunting for paper documents." Mr Bates said.

Honda stomps on gas

Adelaide Advertiser
Saturday 10/1/2009 Page: 3

Hybrid and fuel-cell cars are not the only thing Honda is doing to reduce CO2 emissions. The Japanese car maker is claiming an Australian media first with billboards, featuring the new Honda Accord Euro, lit by solar energy. Outdoor advertising company APN Outdoor has installed solar panels on several of the billboards around Australia. Honda subsidiary Soltec began production and sales of ultra-thin solar panels throughout Japan in October.

B&B Power organises a show and-tell tour for suitors

Sydney Morning Herald
Saturday 10/1/2009 Page: 31

POTENTIAL purchasers of parts or all of Babcock and Brown Power's business are to be given detailed briefings over the next three weeks of what they may end up buying as the group prepares for break-tip and even a full takeover. Having received a number of what the group described as "non-binding and "indicative" bids just before Christmas, BBP - which is having to consider a complete overhaul of its corporate structure because of a near $3 billion debt burden - will now test its suitors' actual appetite for its assets.

Interested parties - said to include the Australian power providers AGL and Origin Energy and a Bahrain-based energy investment group, Arcapita- are to be taken on site visits of all of BBP's 12 operating power stations and the former Alinta retailing assets. BBP has also opened a data room for purchasers to sift through the confidential management information about the earnings potential of each of its generating interests, which will have to be weighed up against the debt pressures the company is facing.

While BBP is intent on securing an offer for the entire company as opposed to further individual sales of power stations like the disposals it has recently completed, its problem remains the price tag that will be put on its equity if a normal takeover bid is to ensure. With its share price wallowing at just 10c after a dramatic fall in value over the last 12 months, the company is valued in sharemarket terms at just $73 million - well below the net asset value of its mainly gasfired generating plans around Australia and in New Zealand.

However, its hard-pressed security holders know that any offer based on its share price will have to take into account the need for buyers to take on huge chunks of its debt as part of the final transaction. The company was worth $2 billion a year ago but has been crippled by the size of its large borrowings and the cost of refinancing part of the debt. BBP is hoping to be able to make an announcement to its hard-pressed investors on its long-term future by the end of March but that timetable could slip depending on the complexity of the bids involved.

A spokeswoman described as "premature" the prospect of a swift conclusion to the review now being undertaken by BBP's board, saying that the bidding process was still at an early stage. The role of its one-time parent, the equally beleaguered Babcock and Brown, in managing the fund and the fees that it takes as a result would also only be resolved once BBP's directors had made a decision on the offers it had received. Babcock and Brown Wind Partners, which now runs its own operations independently of B&B and is in the process of changing its name, yesterday announced it had completed the $1 billion sale of its Spanish wind farm assets.

Carbon market value up 84% in 2008 – analyst

www.environmental-finance.com/
Clean Energy Council
London, 8 January:

The carbon market was worth $118 billion last year, up 84% year-on-year, according to a report by analysis firm New Carbon Finance (NCF). But the growth rate this year is set to be slower, with the London-based firm predicting that the market's value, based on transactions, will be $150 billion in 2009, up 27% on 2008. The growth in value last year was driven by a mixture of higher carbon prices and increased transactions, with an estimated 4 billion emissions permits changing hands - 42% more than in 2007.

Trade in EU allowances (EUAs) accounted for $94 billion, or about 80% of the overall total. EUA prices have been higher in Phase II of the EU emissions trading scheme, which began last year, compared with Phase I, as the 2005-07 period was plagued by an oversupply of allowances which led to the collapse of prices. By comparison, the 2008 EUA futures contract on the European Climate Exchange - the most liquid contract last year - peaked at nearly €30 ($40.75) in July, before recessionary pressure brought prices down to around €15 when the contract expired in December.

And, while secondary certified emission reduction (CER) deals grabbed an increasing share of trading, accounting for 13% of transactions, up from 8%, the value of primary CER deals - where the credits are bought directly from the Clean Development Mechanism project - dropped by 20%, said NCF, to $5.8 billion from $7.4 billion, with volumes down an estimated 30%.

This is partly due to a slowdown in the number of projects seeking registration, and partly because most of the projects going forward are small-scale ones, mainly focusing on renewable energy and energy efficiency, said the firm. Growth this year will be driven by increased liquidity in the secondary CER market, NCF said, while the EUA market will post moderate growth.