Sydney Morning Herald
11 July 2011, Page: 9
THE owners of two highly emitting coal fired power plants say they are prepared to talk to the government about being paid to close their generators under the carbon price deal. International Power which owns the Hazelwood plant in the Latrobe Valley confirmed last night it was open to discussions with Labor about its tender scheme to shut down 2000 MWs of coal fired generation capacity by the end of the decade.
That would be enough to shut down one large power plant, such as Hazelwood, and one smaller plant, such as Playford in Port Augusta, South Australia. In a speech last month the Energy Minister, Martin Ferguson, flagged the two plants as likely targets for any buyout. The government refused yesterday to say how much it would commit to closing plants.
The chief executive of International Power, Tony Concannon, said it was clear the government was targeting a Latrobe Valley brown coal generator for closure and he wanted to work with the government to remove the uncertainty as soon as possible" around Hazelwood's future.
Alinta Energy, the owner of Playford, went further. The chief executive, Jeff Dimery, confirmed the company would put up its 50 year old plant for closure under the tender. A spokesman for TRUEnergy which has previously indicated it may also be interested in a buyout of its Yallourn W power station in the Latrobe Valley said it needed to consider details of the compensation package. Along with buyouts, $5.5 billion in permits and handouts until 2016 17 will be given to coal electricity generators.
Compensation for generators will be overseen by a new Energy Security Council. Under a concession to the Greens, the Australian Energy Market Operator will also expand its planning for the electricity market in the next 20 years to consider greater use of renewable energy, including implications of moving to 100% renewable energy.
The chief executive of the Energy Supply Association of Australia, Brad Page, said while there were positives for the industry in the deal for coal fired electricity generators, risks remained, including loss of asset value of generators. The government used the carbon deal to responded to a longstanding report into energy efficiency options for Australia. The government rejected the report's recommendation to establish a national energy efficiency target but it will consider developing a scheme to make retailers force their customers to use less energy.
Friday, 15 July 2011
$40m energy boost for bush communities
Australian
11 July 2011, Page: 6
INDIGENOUS communities will receive $40 million to construct wind turbines and install solar panels to help shift to renewable energy. The Gillard government yesterday announced the money on top of household assistance and tax cuts would be provided to help 50 remote communities obtain clean and reliable power supplies.
"Many of these remote communities currently rely on diesel generators for their power supplies", said a statement released by the Prime Minister, Indigenous Affairs Minister Jenny Macklin and Climate Change Minister Greg Combet. "It will also include training in system maintenance and the provision of energy efficiency information to encourage ongoing emergency management".
A further $22 million will help indigenous Australians participate in the government's carbon farming initiative, with specialists hired to work with communities on getting projects started. This will also include funding for research for carbon farming methodologies which the government claims will create "real and lasting" opportunities for communities.
"Indigenous Australians manage around 20% of Australia's land mass, drawing on traditional knowledge of the land and its responses to fire, flooding and drought", Ms Macklin said. Kimberley Land Council deputy director Nolan Hunter said last week that indigenous people should be urged to take advantage of the opportunities that would come from carbon trading.
11 July 2011, Page: 6
INDIGENOUS communities will receive $40 million to construct wind turbines and install solar panels to help shift to renewable energy. The Gillard government yesterday announced the money on top of household assistance and tax cuts would be provided to help 50 remote communities obtain clean and reliable power supplies.
"Many of these remote communities currently rely on diesel generators for their power supplies", said a statement released by the Prime Minister, Indigenous Affairs Minister Jenny Macklin and Climate Change Minister Greg Combet. "It will also include training in system maintenance and the provision of energy efficiency information to encourage ongoing emergency management".
A further $22 million will help indigenous Australians participate in the government's carbon farming initiative, with specialists hired to work with communities on getting projects started. This will also include funding for research for carbon farming methodologies which the government claims will create "real and lasting" opportunities for communities.
"Indigenous Australians manage around 20% of Australia's land mass, drawing on traditional knowledge of the land and its responses to fire, flooding and drought", Ms Macklin said. Kimberley Land Council deputy director Nolan Hunter said last week that indigenous people should be urged to take advantage of the opportunities that would come from carbon trading.
$10bn reasons for a clean, happy response
Age
11 July 2011, Page: 3
CLEAN energy groups have heralded a $10 billion boost to renewables under the carbon price deal as a "once in a generation" opportunity to transform Australia's electricity sector. The significant investment in renewables was a major goal of the Greens and rural independents during negotiations on a carbon price, but the government has also ensured at least part of the new money will go to "clean energy" projects as well, such as hybrids between renewables and fossil fuels and energy efficiency.
Under the deal, $10 billion over five years will be given to a new clean energy finance corporation, which the government will set up, but which an independent board of directors will run. The clean energy corporation will make loans or take equity shares in projects that cannot find money from private lenders such as banks. Any returns the corporation makes through supporting a clean energy project will be reinvested. In a compromise between Labor and the Greens, the corporation's revenue will be split into two streams.
The first will fund only renewable energy projects, such as wind, solar and geothermal, while the second will make money available for hybrids. The corporation will also invest in energy efficiency projects and manufacturing businesses that make components of clean energy technologies, such as wind turbine blades or solar cells. But the corporation will not invest in carbon capture and storage projects, including "clean coal".
The clean energy corporation will be joined by a new independent agency to direct and manage $3.2 billion in existing government grants for renewables and biofuels, including the large scale solar flagships program. Known as ARENA, the agency will also get future funds through dividends paid by the clean energy corporation and a potential share of revenue from the carbon price via any reduction in compensation for trade exposed industries after 2014 15.
Clean Energy Council director of strategy Kane Thornton said the renewable measures were once in a generation, and "the new initiatives announced today will give us what we need to deliver action on carbon pollution and transition Australia to a clean energy future". The extra money for renewables came as environmentalists were buoyed by a surprise $946 million over six years for measures to protect Australia's biodiversity such as replanting trees and plants, and tackling feral animals.
The biodiversity fund is also expected to get some future carbon price revenue from any reduction in industry compensation. Australian Conservation Foundation head Don Henry commended the renewable energy and biodiversity spending, adding that the overall carbon price deal was not perfect but essential. Under the carbon deal, a further $429 million will be spent over six years to fund measures to help farmers reduce emissions on their land, store more carbon in soil, and other rural research and development.
Farmers will be excluded from directly paying the carbon price, but will be able to sell carbon offset permits to major companies created through measures such as reforestation that can be counted towards Australia's emissions reduction target under international rules. National Farmers Federation chief executive Matt Linnegar welcomed the $400 million program for farming carbon programs and research, but said the carbon tax would still hit his members hard and the federation remained opposed to it.
11 July 2011, Page: 3
CLEAN energy groups have heralded a $10 billion boost to renewables under the carbon price deal as a "once in a generation" opportunity to transform Australia's electricity sector. The significant investment in renewables was a major goal of the Greens and rural independents during negotiations on a carbon price, but the government has also ensured at least part of the new money will go to "clean energy" projects as well, such as hybrids between renewables and fossil fuels and energy efficiency.
Under the deal, $10 billion over five years will be given to a new clean energy finance corporation, which the government will set up, but which an independent board of directors will run. The clean energy corporation will make loans or take equity shares in projects that cannot find money from private lenders such as banks. Any returns the corporation makes through supporting a clean energy project will be reinvested. In a compromise between Labor and the Greens, the corporation's revenue will be split into two streams.
The first will fund only renewable energy projects, such as wind, solar and geothermal, while the second will make money available for hybrids. The corporation will also invest in energy efficiency projects and manufacturing businesses that make components of clean energy technologies, such as wind turbine blades or solar cells. But the corporation will not invest in carbon capture and storage projects, including "clean coal".
The clean energy corporation will be joined by a new independent agency to direct and manage $3.2 billion in existing government grants for renewables and biofuels, including the large scale solar flagships program. Known as ARENA, the agency will also get future funds through dividends paid by the clean energy corporation and a potential share of revenue from the carbon price via any reduction in compensation for trade exposed industries after 2014 15.
Clean Energy Council director of strategy Kane Thornton said the renewable measures were once in a generation, and "the new initiatives announced today will give us what we need to deliver action on carbon pollution and transition Australia to a clean energy future". The extra money for renewables came as environmentalists were buoyed by a surprise $946 million over six years for measures to protect Australia's biodiversity such as replanting trees and plants, and tackling feral animals.
The biodiversity fund is also expected to get some future carbon price revenue from any reduction in industry compensation. Australian Conservation Foundation head Don Henry commended the renewable energy and biodiversity spending, adding that the overall carbon price deal was not perfect but essential. Under the carbon deal, a further $429 million will be spent over six years to fund measures to help farmers reduce emissions on their land, store more carbon in soil, and other rural research and development.
Farmers will be excluded from directly paying the carbon price, but will be able to sell carbon offset permits to major companies created through measures such as reforestation that can be counted towards Australia's emissions reduction target under international rules. National Farmers Federation chief executive Matt Linnegar welcomed the $400 million program for farming carbon programs and research, but said the carbon tax would still hit his members hard and the federation remained opposed to it.
Tuesday, 12 July 2011
Developing nations take energy lead
Weekend West
9 July 2011, Page: 70
Investment in renewable energy last year amounted to a record $US211 billion ($198 billion), a rise of 32% over 2009 and 540% over 2004, according to a United Nations backed report. China, investing $US48.9 billion, up 28%, accounted for more than a fifth of the total, in a year when developing countries for the first time outstripped rich economies in renewables investment, the report said.
Factors behind the surge include stimulus money earmarked after the 2008 financial crash now finding its way into the market, sustained prices for fossil fuels and government perks such as feed in tariffs for cleaner power. The report, Global Trends in Renewable Energy Investment 2011, is a collaboration of the UN Environment Program, the Frankfurt School of Finance and Management in Germany and Bloomberg New Energy Finance.
If big hydropower dams are excluded, renewable power made up 8.1% of total world power generation capacity last year, compared with 7.1% in 2009. The report says the most mature technology, wind, continued to dominate the renewables sector, accounting for $US94.7 billion of investment projects last year. Solar investment was $US26.1 billion and biomass and waste-to-energy projects amounted to $US11 billion.
A almost catches up with wind if small scale installations, such as rooftop photovoltaic panels, are included. The small scale solar sector doubled in value last year, helped by subsidies, especially in Germany, France, Italy and the Czech Republic. These subsidies were being pared back by governments, but even so the market "is likely to stay strong" in 2011, the report said.
The cost effectiveness of wind and solar has risen enormously. The price of PV panels per MW has fallen by 60% since mid 2008, and that of wind turbines by 18%. "The tipping point, where renewables becomes the predominant energy option, now appears closer than it did just a few years back", it said.
9 July 2011, Page: 70
Investment in renewable energy last year amounted to a record $US211 billion ($198 billion), a rise of 32% over 2009 and 540% over 2004, according to a United Nations backed report. China, investing $US48.9 billion, up 28%, accounted for more than a fifth of the total, in a year when developing countries for the first time outstripped rich economies in renewables investment, the report said.Factors behind the surge include stimulus money earmarked after the 2008 financial crash now finding its way into the market, sustained prices for fossil fuels and government perks such as feed in tariffs for cleaner power. The report, Global Trends in Renewable Energy Investment 2011, is a collaboration of the UN Environment Program, the Frankfurt School of Finance and Management in Germany and Bloomberg New Energy Finance.
If big hydropower dams are excluded, renewable power made up 8.1% of total world power generation capacity last year, compared with 7.1% in 2009. The report says the most mature technology, wind, continued to dominate the renewables sector, accounting for $US94.7 billion of investment projects last year. Solar investment was $US26.1 billion and biomass and waste-to-energy projects amounted to $US11 billion.
A almost catches up with wind if small scale installations, such as rooftop photovoltaic panels, are included. The small scale solar sector doubled in value last year, helped by subsidies, especially in Germany, France, Italy and the Czech Republic. These subsidies were being pared back by governments, but even so the market "is likely to stay strong" in 2011, the report said.
The cost effectiveness of wind and solar has risen enormously. The price of PV panels per MW has fallen by 60% since mid 2008, and that of wind turbines by 18%. "The tipping point, where renewables becomes the predominant energy option, now appears closer than it did just a few years back", it said.
Siemens, Lynas in high-tech joint venture
Age
8 July 2011, Page: 3
Lynas Corporation will team with Siemens in a joint venture that will help the German technology company secure a long term source of supply constrained rare earth elements, coveted for their use in hybrid car engines, smart phones, iPads and other technologies. The two companies have signed a letter of intent to form a joint venture, of which Siemens will own 55%, that will specialise in the production of high powered rare earth magnets used in energy efficient engines and wind turbines.
"This planned joint venture would be an important strategic pillar for us to pursue a long term and stable supply with high performance magnets", said Ralf Michael Franke, chief executive of Siemens' drive technologies division. Lynas Corporation chief executive Nicholas Curtis said the deal was part of its strategic objective to become integrated into the supply chains of its customers. "It's strategically, in my opinion, very significant", Mr Curtis said. "We see our sustainable competitive advantage not as the mine [in Mount Weld], but as the integration in the supply chain and the intimacy with our end customer this is an example of that".
Despite negative publicity over its plans to build the world's largest rare earth refinery in Malaysia, Mr Curtis said Siemens and major Japanese investor Sojitz were satisfied with the environmental credentials of Lynas Corporation. Shares in Lynas Corporation suffered their biggest one day fall in two years last week after the Malaysian government imposed environmental and safety conditions on the refinery, where all of its rare earths ore will be processed.
"[Siemens have] reviewed it fully, they understand and are comfortable with the reality of our operations, as are the Japanese", Mr Curtis said. Siemens employs 36,000 staff in its drive technologies division. The companies will work on confirming the financial details of the joint venture, but it is believed the effect on the expected production of Lynas Corporation will be modest to begin with.
8 July 2011, Page: 3
Lynas Corporation will team with Siemens in a joint venture that will help the German technology company secure a long term source of supply constrained rare earth elements, coveted for their use in hybrid car engines, smart phones, iPads and other technologies. The two companies have signed a letter of intent to form a joint venture, of which Siemens will own 55%, that will specialise in the production of high powered rare earth magnets used in energy efficient engines and wind turbines.
"This planned joint venture would be an important strategic pillar for us to pursue a long term and stable supply with high performance magnets", said Ralf Michael Franke, chief executive of Siemens' drive technologies division. Lynas Corporation chief executive Nicholas Curtis said the deal was part of its strategic objective to become integrated into the supply chains of its customers. "It's strategically, in my opinion, very significant", Mr Curtis said. "We see our sustainable competitive advantage not as the mine [in Mount Weld], but as the integration in the supply chain and the intimacy with our end customer this is an example of that".
Despite negative publicity over its plans to build the world's largest rare earth refinery in Malaysia, Mr Curtis said Siemens and major Japanese investor Sojitz were satisfied with the environmental credentials of Lynas Corporation. Shares in Lynas Corporation suffered their biggest one day fall in two years last week after the Malaysian government imposed environmental and safety conditions on the refinery, where all of its rare earths ore will be processed.
"[Siemens have] reviewed it fully, they understand and are comfortable with the reality of our operations, as are the Japanese", Mr Curtis said. Siemens employs 36,000 staff in its drive technologies division. The companies will work on confirming the financial details of the joint venture, but it is believed the effect on the expected production of Lynas Corporation will be modest to begin with.
More businesses rally behind a price on carbon
www.cleanenergycouncil.org.au
06 Jul 2011
Almost 85 companies including Infigen Energy, Grocon, and The Body Shop have signed on to a joint statement backing a price on carbon. The companies join previous signatories including GE, AGL Energy, Fujitsu, IKEA, Alstom and Pacific Hydro to make a total of 54 companies pledging their support for a carbon price.
The combined businesses represent a wide variety of sectors from across the economy including infrastructure, energy, capital, technology and retail. They have united behind the statement to encourage all members of Parliament to take positive action and assist Australia's transition to a low-carbon economy.
The businesses agree that a carbon price with cost effective complementary measures is critical to reducing Australia's emissions and ensuring Australia remains globally competitive as the rest of the world reduces their emissions. The new wave of businesses signing the statement coincides with the launch of a website called Business for a Clean Economy. This has been developed out of concern that many businesses are not being represented in the current carbon price debate.
The site will allow other businesses, no matter what their size or industry, to show their support for a price on carbon. Current signatories are urging more businesses to sign the statement through the Business for a Clean Economy website: www.b4ce.com.au The next four months will now see carbon price legislation drafted and debated in Parliament and business support will continue to provide an important voice in the debate.
Daniel Grollo, CEO of Grocon, said:
"Personally I'm in favour of a cost on carbon. As I look forward in Australia, I see us at the threshold of some fantastic times and I get disillusioned when I see some critical decisions that need to be made for our future getting bogged down in politics."
Mark Kindness, CEO of The Body Shop Australia, said:
"Practicing responsible environmental stewardship and advocating for strong climate change legislation is a key priority for us as a business. We hope the price on carbon will act as an incentive for corporate Australia to think twice before choosing carbon intensive business practices."
The Business Statement
"As major Australian and international corporations and representative associations operating across the Australian economy we strongly support the introduction of a well-designed carbon price to support the transition to a low-carbon economy.
Australia must aim to be globally competitive in clean energy, energy efficiency and low-carbon technology. Pricing carbon is critical to providing business certainty and unlocking the jobs and investment that will accompany the transition to a prosperous, cleaner and internationally competitive economy.
As the costs of action are outweighed by the costs of delay the carbon price should be implemented as soon as possible. A price should be accompanied by appropriate transitional assistance for households and business, as well as complementary measures that reduce emissions at least economic cost.
We look forward to working with the Multi-Party Climate Change Committee and all members of Parliament as they implement a carbon price."
Click here for the full list of signatories.
06 Jul 2011
Almost 85 companies including Infigen Energy, Grocon, and The Body Shop have signed on to a joint statement backing a price on carbon. The companies join previous signatories including GE, AGL Energy, Fujitsu, IKEA, Alstom and Pacific Hydro to make a total of 54 companies pledging their support for a carbon price.The combined businesses represent a wide variety of sectors from across the economy including infrastructure, energy, capital, technology and retail. They have united behind the statement to encourage all members of Parliament to take positive action and assist Australia's transition to a low-carbon economy.
The businesses agree that a carbon price with cost effective complementary measures is critical to reducing Australia's emissions and ensuring Australia remains globally competitive as the rest of the world reduces their emissions. The new wave of businesses signing the statement coincides with the launch of a website called Business for a Clean Economy. This has been developed out of concern that many businesses are not being represented in the current carbon price debate.
The site will allow other businesses, no matter what their size or industry, to show their support for a price on carbon. Current signatories are urging more businesses to sign the statement through the Business for a Clean Economy website: www.b4ce.com.au The next four months will now see carbon price legislation drafted and debated in Parliament and business support will continue to provide an important voice in the debate.
Daniel Grollo, CEO of Grocon, said:
"Personally I'm in favour of a cost on carbon. As I look forward in Australia, I see us at the threshold of some fantastic times and I get disillusioned when I see some critical decisions that need to be made for our future getting bogged down in politics."
Mark Kindness, CEO of The Body Shop Australia, said:
"Practicing responsible environmental stewardship and advocating for strong climate change legislation is a key priority for us as a business. We hope the price on carbon will act as an incentive for corporate Australia to think twice before choosing carbon intensive business practices."
The Business Statement
"As major Australian and international corporations and representative associations operating across the Australian economy we strongly support the introduction of a well-designed carbon price to support the transition to a low-carbon economy.
Australia must aim to be globally competitive in clean energy, energy efficiency and low-carbon technology. Pricing carbon is critical to providing business certainty and unlocking the jobs and investment that will accompany the transition to a prosperous, cleaner and internationally competitive economy.
As the costs of action are outweighed by the costs of delay the carbon price should be implemented as soon as possible. A price should be accompanied by appropriate transitional assistance for households and business, as well as complementary measures that reduce emissions at least economic cost.
We look forward to working with the Multi-Party Climate Change Committee and all members of Parliament as they implement a carbon price."
Click here for the full list of signatories.
Monday, 11 July 2011
Top firms call for tax on carbon
Courier Mail
7 July 2011, Page: 31
MORE than 50 Australian and international companies, including AGL Energy, General Electric, IKEA and Alstom, yesterday joined together to back the carbon tax. They said a carbon price should be implemented "as soon as possible" to prevent Australia being left behind by other economies, such as the European Union which has had a carbon price since 2005. "Australia must aim to be globally competitive in clean energy, energy efficiency and low carbon technology", they said in a joint statement.
Daniel Grollo, of construction firm Grocon, said: "I'm in favour of a cost on carbon. I see us at the threshold of some fantastic times and I get disillusioned when I see some critical decisions that need to be made for our future getting bogged down in politics".
Separately, Westpac owned fund manager Ascalon Capital Managers yesterday said it has launched Australia's only fund open to ordinary investors who want to invest in listed clean energy companies, such as solar, wind and geothermal energy firms, in global markets.
It said the Global Clean Energy Fund would also invest in companies involved in energy efficiency, energy storage, electric vehicles and clean building technologies. A similar fund running since 2008 has outperformed global market benchmarks, such as the MSCI World Index.
7 July 2011, Page: 31
MORE than 50 Australian and international companies, including AGL Energy, General Electric, IKEA and Alstom, yesterday joined together to back the carbon tax. They said a carbon price should be implemented "as soon as possible" to prevent Australia being left behind by other economies, such as the European Union which has had a carbon price since 2005. "Australia must aim to be globally competitive in clean energy, energy efficiency and low carbon technology", they said in a joint statement.
Daniel Grollo, of construction firm Grocon, said: "I'm in favour of a cost on carbon. I see us at the threshold of some fantastic times and I get disillusioned when I see some critical decisions that need to be made for our future getting bogged down in politics".
Separately, Westpac owned fund manager Ascalon Capital Managers yesterday said it has launched Australia's only fund open to ordinary investors who want to invest in listed clean energy companies, such as solar, wind and geothermal energy firms, in global markets.
It said the Global Clean Energy Fund would also invest in companies involved in energy efficiency, energy storage, electric vehicles and clean building technologies. A similar fund running since 2008 has outperformed global market benchmarks, such as the MSCI World Index.
The politics of clean energy
Summaries - Australian Financial ReviewI
6 July 2011, Page: 53
Although Australia is respected for its scientific research, the country's ability to successfully commercialise inventions is seen as weak. Solar voltaic technology that was developed at the University of New South Wales has been commercialised three times by BP, CSG Solar and Suntech Power, all overseas. While there are companies such as Silex Systems, which is building a solar power station locally and has developed laser technologies being used overseas in partnership with GE, that have Federal Government support, there is a consensus that Australia's support for commercialisation is poor.
GeoDynamics says the 'massive structural changes' needed for the successful implementation of technologies such as its geothermal power require changed policy frameworks, while the Australian Coal Association's Ralph Hillman says a carbon price will not be sufficient to drive the commercialisation of new technologies. Companies such as the Australian Securities Exchange listed AlgaeTec avoid government assistance due to intrusive bureaucracy, while Canberra's Dyesol has had to go to overseas companies Tata Power Steel and Pilkington Glass to help produce its technologies.
The Government's climate adviser, Ross Garnaut, says Australia's alternative energy R&D and commercialisation policies are poor, with the Australian National Audit Office finding that the 13 low emissions funding schemes often have spent little of their funding. Garnaut has proposed the creation of a Low Emissions Innovation Council to co ordinate efforts. Resource Minister Martin Ferguson, in recent comments to a Committee for the Economic Development of Australia, said the government was supporting renewable energy technologies.
Elsewhere, the CSIRO is spending funds on its 'energy transformed' project that includes building management systems that help to cut power usage, while GE has a partnership with electric vehicle group Better Place, as well as a partnership with EV Engineering that is helping develop an all electric GM GM Holden Commodore, which GE's Custom Fleet business could help.
6 July 2011, Page: 53
Although Australia is respected for its scientific research, the country's ability to successfully commercialise inventions is seen as weak. Solar voltaic technology that was developed at the University of New South Wales has been commercialised three times by BP, CSG Solar and Suntech Power, all overseas. While there are companies such as Silex Systems, which is building a solar power station locally and has developed laser technologies being used overseas in partnership with GE, that have Federal Government support, there is a consensus that Australia's support for commercialisation is poor.
GeoDynamics says the 'massive structural changes' needed for the successful implementation of technologies such as its geothermal power require changed policy frameworks, while the Australian Coal Association's Ralph Hillman says a carbon price will not be sufficient to drive the commercialisation of new technologies. Companies such as the Australian Securities Exchange listed AlgaeTec avoid government assistance due to intrusive bureaucracy, while Canberra's Dyesol has had to go to overseas companies Tata Power Steel and Pilkington Glass to help produce its technologies.
The Government's climate adviser, Ross Garnaut, says Australia's alternative energy R&D and commercialisation policies are poor, with the Australian National Audit Office finding that the 13 low emissions funding schemes often have spent little of their funding. Garnaut has proposed the creation of a Low Emissions Innovation Council to co ordinate efforts. Resource Minister Martin Ferguson, in recent comments to a Committee for the Economic Development of Australia, said the government was supporting renewable energy technologies.
Elsewhere, the CSIRO is spending funds on its 'energy transformed' project that includes building management systems that help to cut power usage, while GE has a partnership with electric vehicle group Better Place, as well as a partnership with EV Engineering that is helping develop an all electric GM GM Holden Commodore, which GE's Custom Fleet business could help.
Electric dream is a reality
Adelaide Advertiser
6 July 2011, Page: 23
WHO did kill the electric car? Or is it simply a case that its development was wounded by General Motors in the 1990s? While General Motors was held accountable for the demise of the electric powered vehicle almost two decades ago, a flurry of new release battery powered and hybrid vehicles on to the world market in recent times suggests the concept of fuel free motoring was only set back when GM scrapped the EV1 development.
There is no shortage of inventive names for the fully electric and hybrid cars to match the scientific and engineering feats taken to create them. The Nissan LEAF and Mitsubishi i-MiEV the only two fully electric vehicles available on the Australian market are joined by close cousins, hybrids, which include the Chevrolet Volt (which GM Holden will have in its stable next year) and the well known Toyota Prius and Honda Civic hybrid.
The electric cars of today are much more stylish and appealing than the goofy spaceship-like EV1. But history, and the relatively slow take up of electric and hybrid vehicles in Australia, shows that there remain speed bumps too large for appealing bodywork, in vogue green credentials and fancy names to overcome with ease.
Price is the biggest factor for individual buyers, with electric vehicles for the general public still considerably greater in cost than the equivalent petrol powered models.
There also is a slow introduction of "refuelling stations" powering hubs and limitations to the driving range of these vehicles, their compact size and their capabilities that have stalled this market's growth. But car companies worldwide believe in the electric dream. Dozens of concept electric and hybrid vehicles have been exhibited at motor shows around the world over the years. And car companies in Australia have made moves to show authorities that, despite our long range driving requirements in this vast country, electric powered vehicles do have a home here.
Adelaide Lord Mayor Stephen Yarwood has access to a Mitsubishi i-MiEV supplied by the car maker, as do other organisations in Adelaide. A charging point is located at Mitsubishi's Tonsley offices. Nissan Australia last week presented the car keys for 16 of its new zero emission LEAF hatchbacks to the Victorian Government to kick off the company's participation in the state's five year EV Trial.
The cars, which were built at Nissan's plant in Oppama, Japan, join the Government's realtime evaluation of electric vehicles and their application in Victorian cities. Mitsubishi already has provided a fleet of its i MiEV electric cars to the EV program. Its groundbreaking all electric vehicle will take pride of place on the Mitsubishi Motors stand at this year's Melbourne International Motor Show, ahead of its public sale debut in August.
While the vehicles on the test program and on display at the show will be the current model, Mitsubishi Australia has just announced that the new 2012 model, which features a host of safety and comfort specification upgrades, will arrive in Australia in a matter of weeks.
Mitsubishi claims it will be the first all electric vehicle available on the Australian market for both private and corporate owners to purchase outright at a retail price of $48,800, a 23% reduction in price on the previous model. The price of being seen to be green is coming down as manufacturers clamber to be the first to offer all electric vehicles to the general motoring public.
The Renault Fluence Z.E, will be the first family sized all electric powered sedan to enter the Australian market when it arrives here later this year, says Justin Hocevar, managing director of Renault Australia "We see the Fluence Z.E, as being the first vehicle which ticks all the boxes for a wide variety of car users", he says. "Our aim is to take away as many of the remaining excuses as to why you can't switch to renewable energy zero emissions for your mobility needs".
Bringing further hope that the electric dream will finally come of age on our shores is partnerships like that struck between Nissan and ChargePoint. The Japanese manufacturer's business partner has installed a series of level two Electric Vehicle charging stations at Nissan's Victorian headquarters ahead of the LEAF's arrival in numbers in Australia next year. The two CT2000 stations and the CT500 fleet station have full communication capabilities, in that they can "talk" to the car under charge, take in diagnostic information and help scientists and manufacturers better understand the requirements of these vehicles.
Nissan Australia CEO Dan Thompson says the CT2000 stations are available for use by Nissan staff and LEAF visitors. "It will simply be a case of swiping your ChargePass card and plugging in your Nissan LEAF", he says. ChargePoint says the three recharging stations at Nissan are the first level two charge points to be installed in Australasia, but others will follow as business and consumers embrace electric transportation. ChargePoint already has more than 30 other public and private charging stations in Australia and New Zealand.
6 July 2011, Page: 23
WHO did kill the electric car? Or is it simply a case that its development was wounded by General Motors in the 1990s? While General Motors was held accountable for the demise of the electric powered vehicle almost two decades ago, a flurry of new release battery powered and hybrid vehicles on to the world market in recent times suggests the concept of fuel free motoring was only set back when GM scrapped the EV1 development.There is no shortage of inventive names for the fully electric and hybrid cars to match the scientific and engineering feats taken to create them. The Nissan LEAF and Mitsubishi i-MiEV the only two fully electric vehicles available on the Australian market are joined by close cousins, hybrids, which include the Chevrolet Volt (which GM Holden will have in its stable next year) and the well known Toyota Prius and Honda Civic hybrid.
The electric cars of today are much more stylish and appealing than the goofy spaceship-like EV1. But history, and the relatively slow take up of electric and hybrid vehicles in Australia, shows that there remain speed bumps too large for appealing bodywork, in vogue green credentials and fancy names to overcome with ease.
Price is the biggest factor for individual buyers, with electric vehicles for the general public still considerably greater in cost than the equivalent petrol powered models.
There also is a slow introduction of "refuelling stations" powering hubs and limitations to the driving range of these vehicles, their compact size and their capabilities that have stalled this market's growth. But car companies worldwide believe in the electric dream. Dozens of concept electric and hybrid vehicles have been exhibited at motor shows around the world over the years. And car companies in Australia have made moves to show authorities that, despite our long range driving requirements in this vast country, electric powered vehicles do have a home here.
Adelaide Lord Mayor Stephen Yarwood has access to a Mitsubishi i-MiEV supplied by the car maker, as do other organisations in Adelaide. A charging point is located at Mitsubishi's Tonsley offices. Nissan Australia last week presented the car keys for 16 of its new zero emission LEAF hatchbacks to the Victorian Government to kick off the company's participation in the state's five year EV Trial.
The cars, which were built at Nissan's plant in Oppama, Japan, join the Government's realtime evaluation of electric vehicles and their application in Victorian cities. Mitsubishi already has provided a fleet of its i MiEV electric cars to the EV program. Its groundbreaking all electric vehicle will take pride of place on the Mitsubishi Motors stand at this year's Melbourne International Motor Show, ahead of its public sale debut in August.
While the vehicles on the test program and on display at the show will be the current model, Mitsubishi Australia has just announced that the new 2012 model, which features a host of safety and comfort specification upgrades, will arrive in Australia in a matter of weeks.
Mitsubishi claims it will be the first all electric vehicle available on the Australian market for both private and corporate owners to purchase outright at a retail price of $48,800, a 23% reduction in price on the previous model. The price of being seen to be green is coming down as manufacturers clamber to be the first to offer all electric vehicles to the general motoring public.
The Renault Fluence Z.E, will be the first family sized all electric powered sedan to enter the Australian market when it arrives here later this year, says Justin Hocevar, managing director of Renault Australia "We see the Fluence Z.E, as being the first vehicle which ticks all the boxes for a wide variety of car users", he says. "Our aim is to take away as many of the remaining excuses as to why you can't switch to renewable energy zero emissions for your mobility needs".
Bringing further hope that the electric dream will finally come of age on our shores is partnerships like that struck between Nissan and ChargePoint. The Japanese manufacturer's business partner has installed a series of level two Electric Vehicle charging stations at Nissan's Victorian headquarters ahead of the LEAF's arrival in numbers in Australia next year. The two CT2000 stations and the CT500 fleet station have full communication capabilities, in that they can "talk" to the car under charge, take in diagnostic information and help scientists and manufacturers better understand the requirements of these vehicles.
Nissan Australia CEO Dan Thompson says the CT2000 stations are available for use by Nissan staff and LEAF visitors. "It will simply be a case of swiping your ChargePass card and plugging in your Nissan LEAF", he says. ChargePoint says the three recharging stations at Nissan are the first level two charge points to be installed in Australasia, but others will follow as business and consumers embrace electric transportation. ChargePoint already has more than 30 other public and private charging stations in Australia and New Zealand.
Friday, 8 July 2011
Truth that's still inconvenient
Hobart Mercury
5 July 2011, Page: 18
NEITHER Al Gore nor yours truly seems to have much to say these days, lamented a recent Mercury correspondent. "Is it a sign that climate is as always was? Perhaps Mr Boyer should start a travel column".
I should be so lucky. The promise of having a good time in exotic places at others' expense might even persuade me that I shouldn't have sounded of about air travel's carbon footprint. Or maybe a TV travel show, which pays better. But it's not going to happen.
Which leaves me with the reader's other thought, that Al Gore and I are banging on about nothing. A growing number of people would seem to agree, if the Lowy Institute's annual survey of about 1000 Australians, released last week, is anything to go by. The Lowy poll finds that a decreasing number of people only 41% think climate change is a serious and pressing problem. The figure has dropped by 27% since a similar survey in 2006, the year Al Gore's movie An Inconvenient Truth broke box office records.
In the same five years, support for the sceptical position that we should do nothing if there's a cost involved has nearly tripled from 7 to 19%. There's a strong age difference here: 28% of people aged 60 or more take this view, but only 11% of young adults (up to age 29). If only they were right. I'd cope with the egg on my face if it became clear that Earth's atmosphere or oceans haven't been affected by our release of 30 billion tonnes of fossilised carbon a year, and that its surface temperatures, ice sheets and sea levels remained they as always were. If only.
If you think that the evidence for human induced climate change is weakening, think again. Here's what top level overviews of current peer reviewed science compiled last year and this year by the Australian Academy of Science and the Climate Commission are saying:
All this and much more is telling us loudly, repeatedly and with increasing urgency that Spaceship Earth has a problem. Something new is happening to the climate and the cause of it is clear. It's us. Getting our heads around the idea of a changing climate is hard, especially when we need to think globally and across decades, centuries and millennia. When winter chills seems to give the lie to global warming it's an even bigger challenge. Perhaps Lowy should do a midsummer poll.
The lagging public support for action in the face of increasingly strong scientific evidence has led Australia's Chief Scientist, Ian Chubb, to describe the current level of public debate as "appalling". A failure to contain human emissions of greenhouse gases, he said, will bring us to a "tipping point" after which climate change will be unstoppable.
The spectrum of scientific opinion about the potential impact of our fossil fuel emissions ranges from benign (a tiny minority of specialist scientists) to dangerous (a large majority). We'd be fools to put all our eggs in the benign basket.
Peter Boyer: pb@climatetasmania.com.au
5 July 2011, Page: 18
NEITHER Al Gore nor yours truly seems to have much to say these days, lamented a recent Mercury correspondent. "Is it a sign that climate is as always was? Perhaps Mr Boyer should start a travel column".I should be so lucky. The promise of having a good time in exotic places at others' expense might even persuade me that I shouldn't have sounded of about air travel's carbon footprint. Or maybe a TV travel show, which pays better. But it's not going to happen.
Which leaves me with the reader's other thought, that Al Gore and I are banging on about nothing. A growing number of people would seem to agree, if the Lowy Institute's annual survey of about 1000 Australians, released last week, is anything to go by. The Lowy poll finds that a decreasing number of people only 41% think climate change is a serious and pressing problem. The figure has dropped by 27% since a similar survey in 2006, the year Al Gore's movie An Inconvenient Truth broke box office records.
In the same five years, support for the sceptical position that we should do nothing if there's a cost involved has nearly tripled from 7 to 19%. There's a strong age difference here: 28% of people aged 60 or more take this view, but only 11% of young adults (up to age 29). If only they were right. I'd cope with the egg on my face if it became clear that Earth's atmosphere or oceans haven't been affected by our release of 30 billion tonnes of fossilised carbon a year, and that its surface temperatures, ice sheets and sea levels remained they as always were. If only.
If you think that the evidence for human induced climate change is weakening, think again. Here's what top level overviews of current peer reviewed science compiled last year and this year by the Australian Academy of Science and the Climate Commission are saying:
- The decade from 2001 to 2010 was the warmest in 130 years of global records, more than 0.46C above the average for the three decades to 1990. Australia's average surface temperature has risen by about 0.7C since 1960, and its 10 year average has risen every decade since the 1940s.
- The number of heat waves in Australia in the decade to 2010 was double the decadal average of the past 50 years, while the number of low temperature extremes was the lowest on record.
- Sea surface temperatures have warmed nearly everywhere over the past century. Around Australia they are now on average the highest on record.
- Satellite observations show that both the Greenland and West Antarctic ice sheets continue to lose ice at an increasing rate, and that Antarctica as a whole is losing ice. Mountain glaciers everywhere are getting smaller.
- The world's sea level has risen on average by about 20¢m since the first global estimates in the 1880s. Sea level around Australia has risen about 1.2mm a year since 1920, but over the past 20 years, relative to land, it has risen by 2mm year in the south east and more than 8mm a year in the north west.
- Studies of changing responses of biological species and ecosystems in Australia and globally, such as animals and plants becoming extinct or moving to new habitats, have yielded clear evidence of a warming climate.
- The concentration of carbon dioxide in the air has just passed 390 parts per million about 40% higher than the highest natural concentration over the 800,000 year ice core record. This has changed the acidity of oceans since 1880 at a rate unprecedented in 25 million years, putting exceptional evolutionary pressure on marine ecosystems.
- A long term increase in the atmosphere's average water vapour content, at a rate of about 1.5% each decade, has brought more intense heavy rains in many regions.
- Science has found no natural basis for Earth's warming. Solar cycles are the main short term influence, but we're now in the middle of a deep "solar minimum" which by itself would have a cooling effect The only plausible evidence for warming and it's very strong evidence is the rapid rise in greenhouse gases caused by fossil fuel burning.
All this and much more is telling us loudly, repeatedly and with increasing urgency that Spaceship Earth has a problem. Something new is happening to the climate and the cause of it is clear. It's us. Getting our heads around the idea of a changing climate is hard, especially when we need to think globally and across decades, centuries and millennia. When winter chills seems to give the lie to global warming it's an even bigger challenge. Perhaps Lowy should do a midsummer poll.
The lagging public support for action in the face of increasingly strong scientific evidence has led Australia's Chief Scientist, Ian Chubb, to describe the current level of public debate as "appalling". A failure to contain human emissions of greenhouse gases, he said, will bring us to a "tipping point" after which climate change will be unstoppable.
The spectrum of scientific opinion about the potential impact of our fossil fuel emissions ranges from benign (a tiny minority of specialist scientists) to dangerous (a large majority). We'd be fools to put all our eggs in the benign basket.
Peter Boyer: pb@climatetasmania.com.au
New body to control clean energy grants: Details of compromise deal emerge
Age
5 July 2011, Page: 6
RESPONSIBILITY for handing out about $1 billion in clean energy grants will be taken out of government hands under a compromise with the Greens as part of a carbon price deal to be announced on Sunday. The Age has learned that clean energy programs such as the $1.5 billion solar flagships program designed to help build Australia's first large solar plants will be removed from Energy Minister Martin Ferguson's control and run by an independent statutory body.
As previously reported, a separate "clean energy finance corporation" will also be created to oversee up to $2 billion a year in seed funding loans for projects trialling large scale renewable energy technology. The steps are part of a compromise deal between Labor, the Greens and independent MPs Tony Windsor and Rob Oakeshott.
It is understood it will include a multimillion dollar tender round to buy out and shut down about 2000 MWs in brown coal power generation an offer that is expected to interest the owners of the Hazelwood power station and Yallourn W power station in the Latrobe Valley. There will be compensation packages for households, surviving coal plants, export industries, coal miners and manufacturers.
The new statutory body running clean energy grants is expected to take over responsibility for some of the $5 billion clean energy initiative announced in 2009, including the remaining $730 million in solar flagship funding. Prime Minister Julia Gillard last night released a statement saying cabinet had agreed that enough progress had been made for the carbon price scheme to be announced on Sunday, though it was yet to sign off on the details.
The multi party climate committee will meet again before cabinet gives final approval. Earlier, Ms Gillard refused to say which industries would face increased transport costs due to a carbon price, but repeated her promise that ordinary motorists and small business would not face higher petrol costs. Ms Gillard said Opposition Leader Tony Abbott had been "caught out misleading the Australian community" by repeatedly claiming that a carbon price would increase the cost of petrol by six cents a litre.
Mr Abbott responded that the government was "dribbling out" what it thought was good news, but warned the carbon tax would be a "quagmire of complexity" for business. The Public Transport Users Association warned that a carbon price could penalise public transport users if electricity and fuel for trains, buses and trams became more expensive while petrol was excluded.
It is understood the deal between Labor and the Greens includes an agreement to start work on a national scheme that would force energy retailers to help customers cut energy use. If successful, it would require retailers to offer household audits and hand out energy efficient products to help consumers cut power use by up to 3% a year.
5 July 2011, Page: 6
RESPONSIBILITY for handing out about $1 billion in clean energy grants will be taken out of government hands under a compromise with the Greens as part of a carbon price deal to be announced on Sunday. The Age has learned that clean energy programs such as the $1.5 billion solar flagships program designed to help build Australia's first large solar plants will be removed from Energy Minister Martin Ferguson's control and run by an independent statutory body.
As previously reported, a separate "clean energy finance corporation" will also be created to oversee up to $2 billion a year in seed funding loans for projects trialling large scale renewable energy technology. The steps are part of a compromise deal between Labor, the Greens and independent MPs Tony Windsor and Rob Oakeshott.
It is understood it will include a multimillion dollar tender round to buy out and shut down about 2000 MWs in brown coal power generation an offer that is expected to interest the owners of the Hazelwood power station and Yallourn W power station in the Latrobe Valley. There will be compensation packages for households, surviving coal plants, export industries, coal miners and manufacturers.
The new statutory body running clean energy grants is expected to take over responsibility for some of the $5 billion clean energy initiative announced in 2009, including the remaining $730 million in solar flagship funding. Prime Minister Julia Gillard last night released a statement saying cabinet had agreed that enough progress had been made for the carbon price scheme to be announced on Sunday, though it was yet to sign off on the details.
The multi party climate committee will meet again before cabinet gives final approval. Earlier, Ms Gillard refused to say which industries would face increased transport costs due to a carbon price, but repeated her promise that ordinary motorists and small business would not face higher petrol costs. Ms Gillard said Opposition Leader Tony Abbott had been "caught out misleading the Australian community" by repeatedly claiming that a carbon price would increase the cost of petrol by six cents a litre.
Mr Abbott responded that the government was "dribbling out" what it thought was good news, but warned the carbon tax would be a "quagmire of complexity" for business. The Public Transport Users Association warned that a carbon price could penalise public transport users if electricity and fuel for trains, buses and trams became more expensive while petrol was excluded.
It is understood the deal between Labor and the Greens includes an agreement to start work on a national scheme that would force energy retailers to help customers cut energy use. If successful, it would require retailers to offer household audits and hand out energy efficient products to help consumers cut power use by up to 3% a year.
Sweating on solar panels: Schools still await promised funding
Sunday Tasmanian
3 July 2011, Page: 15
GOVERNMENT schools being asked to make significant budget savings are frustrated by the wait for promised funding for solar panels. Through the Department of Climate Change and Energy Efficiency's National Solar Schools Program, schools can apply for up to $50,000 for solar panels. Thirty-three Tasmanian Government schools received funding under 2010-11 grants. Schools told late last year about their grants success are still waiting for their money.
Twelve non government schools that won grants have already received money through individual funding agreements with the climate change department. Payments to government schools must go through state and territory governments via a national partnership agreement that is yet to be signed. A spokesman for the DCCEE said the department and the state and territory governments were still working to agree on the national partnership agreement for the program. He said the process was close to being finalised.
One of the schools waiting for funding is the brand new Kingston High School. School association member Lisa Estreich said the long delay was disappointing given schools had been asked to find significant savings due to the state's dire financial situation. Ms Estreich said solar panels would allow schools to make savings by cutting power bills.
Education Minister Nick McKim said the national partnership agreement on the NSSP was taking a "considerable period of time", but the State Government had done nothing to delay the process. Mr McKim said the Department of Premier and Cabinet received the final version of the Australian Government's proposed agreement on June 27. Sixty-seven Tasmanian schools were granted funding in the 2009-10 grant round, with most schools receiving close to the maximum amount.
3 July 2011, Page: 15
GOVERNMENT schools being asked to make significant budget savings are frustrated by the wait for promised funding for solar panels. Through the Department of Climate Change and Energy Efficiency's National Solar Schools Program, schools can apply for up to $50,000 for solar panels. Thirty-three Tasmanian Government schools received funding under 2010-11 grants. Schools told late last year about their grants success are still waiting for their money.
Twelve non government schools that won grants have already received money through individual funding agreements with the climate change department. Payments to government schools must go through state and territory governments via a national partnership agreement that is yet to be signed. A spokesman for the DCCEE said the department and the state and territory governments were still working to agree on the national partnership agreement for the program. He said the process was close to being finalised.
One of the schools waiting for funding is the brand new Kingston High School. School association member Lisa Estreich said the long delay was disappointing given schools had been asked to find significant savings due to the state's dire financial situation. Ms Estreich said solar panels would allow schools to make savings by cutting power bills.
Education Minister Nick McKim said the national partnership agreement on the NSSP was taking a "considerable period of time", but the State Government had done nothing to delay the process. Mr McKim said the Department of Premier and Cabinet received the final version of the Australian Government's proposed agreement on June 27. Sixty-seven Tasmanian schools were granted funding in the 2009-10 grant round, with most schools receiving close to the maximum amount.
Thursday, 7 July 2011
$2b from tax for clean energy
West Australian
1 July 2011, Page: 6
Carbon tax totalling $2 billion a year will be put into a renewable energy fund to drive a 17 fold increase in Australia's use of clean power, in a key Gillard Government concession to the Greens. The West Australian understands the fund will be managed by an independent commission and provide seed funding for solar, wind and other clean energy projects. But proponents of clean energy generation projects part funded by the scheme would be expected to repay the investment over time, once the project becomes commercially viable.
The renewable energy fund has been one of the Greens' key demands in climate change negotiations which are nearing conclusion ahead of an announcement within a week. In tandem with greater emphasis on renewable energy, the multi party climate change committee is believed to have agreed on offering financial incentives for the nation's dirtiest coal fired power stations to close or switch to gas. Three brown coal power stations in Victoria Hazelwood, Yallourn and Loy Yang and South Australia's Playford B power station will be the top targets for early closure or retrofitting to gas fired.
It is also understood the committee has agreed to a starting carbon price that is much closer to $20 than $30 in an acknowledgment that a "soft start" is crucial for the Government. Treasurer Wayne Swan yesterday revealed that renewable energy sources, excluding hydropower electricity, would comprise 40% of Australia's energy mix by 2050, up 1700%. This would translate to a 60% cut in emissions from the electricity sector, on current levels.
The renewable energy investment fund would operate independently of government, along the same lines as the Future Fund. Industry estimates suggest that for every $1 of government money, $2 to $4 could be leveraged from the private sector, with the cash vital to help underwrite investor risk before projects make a profit.
The Government's top climate adviser Ross Garnaut recommended between $2 billion and $3 billion revenue to be spent on renewables, while the Australian Conservation Foundation has been pushing for a stand alone $2 billion a year financing corporation that would help companies get new projects off the ground and boost energy efficiency measures.
ACF climate change campaigner Claire Manes said at least $100 billion was needed over the next decade for clean energy projects but any funding must be limited to real renewable energy sources, such as solar, wave and geothermal. The Greens have resisted allowing carbon capture and storage projects being eligible for funding under the scheme. The Clean Energy Council's Kane Thornton said use of carbon price revenue would "kick start a range of emerging early stage renewable technologies".
1 July 2011, Page: 6
Carbon tax totalling $2 billion a year will be put into a renewable energy fund to drive a 17 fold increase in Australia's use of clean power, in a key Gillard Government concession to the Greens. The West Australian understands the fund will be managed by an independent commission and provide seed funding for solar, wind and other clean energy projects. But proponents of clean energy generation projects part funded by the scheme would be expected to repay the investment over time, once the project becomes commercially viable.
The renewable energy fund has been one of the Greens' key demands in climate change negotiations which are nearing conclusion ahead of an announcement within a week. In tandem with greater emphasis on renewable energy, the multi party climate change committee is believed to have agreed on offering financial incentives for the nation's dirtiest coal fired power stations to close or switch to gas. Three brown coal power stations in Victoria Hazelwood, Yallourn and Loy Yang and South Australia's Playford B power station will be the top targets for early closure or retrofitting to gas fired.
It is also understood the committee has agreed to a starting carbon price that is much closer to $20 than $30 in an acknowledgment that a "soft start" is crucial for the Government. Treasurer Wayne Swan yesterday revealed that renewable energy sources, excluding hydropower electricity, would comprise 40% of Australia's energy mix by 2050, up 1700%. This would translate to a 60% cut in emissions from the electricity sector, on current levels.
The renewable energy investment fund would operate independently of government, along the same lines as the Future Fund. Industry estimates suggest that for every $1 of government money, $2 to $4 could be leveraged from the private sector, with the cash vital to help underwrite investor risk before projects make a profit.
The Government's top climate adviser Ross Garnaut recommended between $2 billion and $3 billion revenue to be spent on renewables, while the Australian Conservation Foundation has been pushing for a stand alone $2 billion a year financing corporation that would help companies get new projects off the ground and boost energy efficiency measures.
ACF climate change campaigner Claire Manes said at least $100 billion was needed over the next decade for clean energy projects but any funding must be limited to real renewable energy sources, such as solar, wave and geothermal. The Greens have resisted allowing carbon capture and storage projects being eligible for funding under the scheme. The Clean Energy Council's Kane Thornton said use of carbon price revenue would "kick start a range of emerging early stage renewable technologies".
Garnaut lambasts media reporting
Sydney Morning Herald
1 July 2011, Page: 2
Ross Garnaut has lashed out at "crude" and "distorted" reporting of the government's plans for a carbon tax, calling News Ltd the worst offender.
Speaking at a conference sponsored by The Australian, a News Ltd title, on his last day as the government's climate change adviser, Professor Garnaut said much of the reporting had been "about the crudest and most distorted discussion of a major public policy issue in my long experience of Australian public policy". "I know from my close friends among the senior journalists at The Australian that there is disquiet about that. And I don't think my feelings are unusual".
Singling out a front page story which he said implied electricity prices would rise by 11% as a result of renewable energy schemes, he said the true figure was close to 3%, with the schemes actually responsible for 11% of a 30% increase. "I could give you dozens of examples", he said. "Facts are ignored, the rules of logic violated, and it is rare for people professing strong opinions to go back and look at the documents on which they have commented".
Surveying an audience of 200 economists and academics at the Melbourne Institute Australian conference, he said he knew of only two who had read his climate change report in full. One was the opposition frontbencher Malcolm Turnbull. The misrepresentation of the US position on climate change had the potential to harm Australian foreign policy, Professor Garnaut said.
"When I and others have written about the Australian reform era, we have given a large place to the positive role played by a highly professional, committed Australian media", said the former Hawke government economic adviser. "Great figures such as Peter Robinson, Max Walsh [and] Max Suich transmitted the analysis that was going on in the universities and the Tariff Board and built a platform that made reform possible".
The Australian's economics editor, Michael Stutchbury, said it was wrong to compare the battles over tariff reform with those over a carbon tax.
1 July 2011, Page: 2
Ross Garnaut has lashed out at "crude" and "distorted" reporting of the government's plans for a carbon tax, calling News Ltd the worst offender.
Speaking at a conference sponsored by The Australian, a News Ltd title, on his last day as the government's climate change adviser, Professor Garnaut said much of the reporting had been "about the crudest and most distorted discussion of a major public policy issue in my long experience of Australian public policy". "I know from my close friends among the senior journalists at The Australian that there is disquiet about that. And I don't think my feelings are unusual".
Singling out a front page story which he said implied electricity prices would rise by 11% as a result of renewable energy schemes, he said the true figure was close to 3%, with the schemes actually responsible for 11% of a 30% increase. "I could give you dozens of examples", he said. "Facts are ignored, the rules of logic violated, and it is rare for people professing strong opinions to go back and look at the documents on which they have commented".
Surveying an audience of 200 economists and academics at the Melbourne Institute Australian conference, he said he knew of only two who had read his climate change report in full. One was the opposition frontbencher Malcolm Turnbull. The misrepresentation of the US position on climate change had the potential to harm Australian foreign policy, Professor Garnaut said.
"When I and others have written about the Australian reform era, we have given a large place to the positive role played by a highly professional, committed Australian media", said the former Hawke government economic adviser. "Great figures such as Peter Robinson, Max Walsh [and] Max Suich transmitted the analysis that was going on in the universities and the Tariff Board and built a platform that made reform possible".
The Australian's economics editor, Michael Stutchbury, said it was wrong to compare the battles over tariff reform with those over a carbon tax.
Energy firms lock in capital's rural land ahead of solar bonanza
Canberra Times
1 July 2011, Page: 1
Solar farm companies have secured large parcels of land in rural ACT in preparation for a large scale solar power auction. Environment and Sustainable Development Minister Simon Corbell, re announced details of an auction process yesterday for solar power businesses to bid for the rights to establish large facilities in the ACT that can produce 40 MWs of power for the national capital. Renewable energy company Elementus Energy has already secured 300ha of pastoral land in the ACT in anticipation of the auction.
Elementus Energy managing director Ashleigh Antflick said the company had signed "bankable" contracts with an undisclosed number of farmers willing to lease their land and have solar farms installed on their properties. He would not confirm the location of the sites. "We have looked towards areas in the ACT, where there is a large enough piece of land and no topographical shading", he said. "You don't want Mount Stromlo casting a long shadow on your solar panels for a few hours a day".
Mr Antflick said it would take three to five hectares of land to produce 1 MW of power and the company would lodge a large bid. Elementus Energy has already been in discussion with ActewAGL Energy about grid connection options. Mr Corbel' said he was aware of a number of renewable energy companies securing land in the ACT to deploy solar farm installations. The ACT Government has released an industry briefing paper on the auction process and plans to develop supporting legislation and an auction framework by the end of the year. Mr Corbell said he expected the sealed bid auction to take place early next year, 18 months later than the mid 2010 auction date previously set.
"This has proven to be a very complex process to work through and industry have said they need sufficient time to plan for auction", he said. "We expect strong interest and we will have up to 20 bids. There is strong industry interest in this already, this is the first time it has been done in Australia". The company offering the most affordable power will win the contract and receive a feed in tariff to support the facility. Meanwhile, a Greens bill to roll the household solar feed in tariff scheme into a medium scheme was passed in the Legislative Assembly yesterday after garnering support from the Liberals.
ACT Greens energy spokesperson Shane Rattenbury said the bill would provide a "lifeline" to the local solar industry, which was devastated by the sudden closure of the micro tariff scheme for households earlier this month. "Overnight the scheme stopped, industry had no preparation, no warning and it created a situation where within weeks we would have seen solar powers in Canberra lay staff off. This provides a smoother transition than the existing scheme would", he said.
Opposition leader Zed Seselja decided to support the Green's bill because it would make "a bad scheme work a little better". Amendments made to the bill by Mr Seselja will require Mr Corbell to report monthly on the number of applications for renewable energy generator connections and will lower the tariff rate for households which entered into a generator contract on or after June 1, 2011.
1 July 2011, Page: 1
Solar farm companies have secured large parcels of land in rural ACT in preparation for a large scale solar power auction. Environment and Sustainable Development Minister Simon Corbell, re announced details of an auction process yesterday for solar power businesses to bid for the rights to establish large facilities in the ACT that can produce 40 MWs of power for the national capital. Renewable energy company Elementus Energy has already secured 300ha of pastoral land in the ACT in anticipation of the auction.
Elementus Energy managing director Ashleigh Antflick said the company had signed "bankable" contracts with an undisclosed number of farmers willing to lease their land and have solar farms installed on their properties. He would not confirm the location of the sites. "We have looked towards areas in the ACT, where there is a large enough piece of land and no topographical shading", he said. "You don't want Mount Stromlo casting a long shadow on your solar panels for a few hours a day".
Mr Antflick said it would take three to five hectares of land to produce 1 MW of power and the company would lodge a large bid. Elementus Energy has already been in discussion with ActewAGL Energy about grid connection options. Mr Corbel' said he was aware of a number of renewable energy companies securing land in the ACT to deploy solar farm installations. The ACT Government has released an industry briefing paper on the auction process and plans to develop supporting legislation and an auction framework by the end of the year. Mr Corbell said he expected the sealed bid auction to take place early next year, 18 months later than the mid 2010 auction date previously set.
"This has proven to be a very complex process to work through and industry have said they need sufficient time to plan for auction", he said. "We expect strong interest and we will have up to 20 bids. There is strong industry interest in this already, this is the first time it has been done in Australia". The company offering the most affordable power will win the contract and receive a feed in tariff to support the facility. Meanwhile, a Greens bill to roll the household solar feed in tariff scheme into a medium scheme was passed in the Legislative Assembly yesterday after garnering support from the Liberals.
ACT Greens energy spokesperson Shane Rattenbury said the bill would provide a "lifeline" to the local solar industry, which was devastated by the sudden closure of the micro tariff scheme for households earlier this month. "Overnight the scheme stopped, industry had no preparation, no warning and it created a situation where within weeks we would have seen solar powers in Canberra lay staff off. This provides a smoother transition than the existing scheme would", he said.
Opposition leader Zed Seselja decided to support the Green's bill because it would make "a bad scheme work a little better". Amendments made to the bill by Mr Seselja will require Mr Corbell to report monthly on the number of applications for renewable energy generator connections and will lower the tariff rate for households which entered into a generator contract on or after June 1, 2011.
Wednesday, 6 July 2011
Home audits reveal a tonne of energy
Adelaide Advertiser
1 July 2011, Page: 26
ENERGY retailers in South Australia conducted 6500 residential energy audits last financial year, delivering more than 248,000 tonnes of greenhouse gas reduction. The number of audits was 30% above the target set under the State Government's Residential Energy Efficiency Scheme (REES). Energy Minister Michael O'Brien said the Essential Services Commission of South Australia REES 2010 report, released today, showed the scheme was highly successful.
"More than 74,000 households benefited in 2010 and, importantly, 77,000 tonnes of the reduction was delivered to low income households", Mr O'Brien said. "Under the scheme, licensed electricity and gas retailers with more than 5000 residential customers are required to achieve targets for the reduction of greenhouse gas emissions". Mr O'Brien said retailers must also conduct a specified number of residential energy audits in low income households to identify ways those residents could reduce their electricity and gas costs.
GM Holden Hill homeowner Roger Gilbert said he was able to save money and energy after learning he could turn off the back up power to his solar water heating during summer. Mr Gilbert said his home was already energy efficient with 10 solar panels on the roof and LED light bulbs fitted instead of incandescent bulbs. "I was on the right track all the way", he said. "You have to do everything you can like closing the curtains when the sun goes down.".. An AGL Energy spokeswoman said the provider had contacted customers after audits to check on whether they had adopted any of the energy saving recommendations.
1 July 2011, Page: 26
ENERGY retailers in South Australia conducted 6500 residential energy audits last financial year, delivering more than 248,000 tonnes of greenhouse gas reduction. The number of audits was 30% above the target set under the State Government's Residential Energy Efficiency Scheme (REES). Energy Minister Michael O'Brien said the Essential Services Commission of South Australia REES 2010 report, released today, showed the scheme was highly successful.
"More than 74,000 households benefited in 2010 and, importantly, 77,000 tonnes of the reduction was delivered to low income households", Mr O'Brien said. "Under the scheme, licensed electricity and gas retailers with more than 5000 residential customers are required to achieve targets for the reduction of greenhouse gas emissions". Mr O'Brien said retailers must also conduct a specified number of residential energy audits in low income households to identify ways those residents could reduce their electricity and gas costs.
GM Holden Hill homeowner Roger Gilbert said he was able to save money and energy after learning he could turn off the back up power to his solar water heating during summer. Mr Gilbert said his home was already energy efficient with 10 solar panels on the roof and LED light bulbs fitted instead of incandescent bulbs. "I was on the right track all the way", he said. "You have to do everything you can like closing the curtains when the sun goes down.".. An AGL Energy spokeswoman said the provider had contacted customers after audits to check on whether they had adopted any of the energy saving recommendations.
Detail soon on clean energy bid
Courier Mail
29 June 2011, Page: 46
GeoDynamics says detail about a major push in the year ahead on its flagship, zero emissions power project should be finalised next month. It also said the work program would be funded by existing cash resources, grant funding and its balance sheet, noting its current cash balance was $29.1 million. The Australian Stock Exchange had queried the Brisbane based company about any undisclosed information that could explain a drop in its stock price. After the company's statement, the stock surged to close up 7% at 15¢.
GeoDynamics said it was unaware of any such undisclosed information but that a review of its Innamincka Deeps joint venture forward work program with partner Origin Energy was advanced. The project aims to use GeoDynamics' world first technology to produce zero emissions, 24 hour electricity using underground heat sources. A 2009 well blowout delayed a final investment decision on a 25 MW commercial scale plant until 2013. The total market value of Australia's 81 listed clean energy and technology stocks has tumbled to $9.5 billion as of last month, from $10.3 billion a year earlier.
29 June 2011, Page: 46
GeoDynamics says detail about a major push in the year ahead on its flagship, zero emissions power project should be finalised next month. It also said the work program would be funded by existing cash resources, grant funding and its balance sheet, noting its current cash balance was $29.1 million. The Australian Stock Exchange had queried the Brisbane based company about any undisclosed information that could explain a drop in its stock price. After the company's statement, the stock surged to close up 7% at 15¢.
GeoDynamics said it was unaware of any such undisclosed information but that a review of its Innamincka Deeps joint venture forward work program with partner Origin Energy was advanced. The project aims to use GeoDynamics' world first technology to produce zero emissions, 24 hour electricity using underground heat sources. A 2009 well blowout delayed a final investment decision on a 25 MW commercial scale plant until 2013. The total market value of Australia's 81 listed clean energy and technology stocks has tumbled to $9.5 billion as of last month, from $10.3 billion a year earlier.
Renewable boom is leaving us stumbling
Canberra Times
29 June 2011, Page: 19
Australians are great innovators. Think Hills Hoist, the wine cask and bionic ears. But we are also renowned for stumbling at the finishing line where it matters most. Today, there is a global race to take advantage of the boom in renewable energy and countries like China, South Korea, Germany and the US are leaving us for dead. Often using technologies that were developed here.
We're pretending not to notice as another clean energy technology manufacturer shuts up shop and heads offshore because Australia doesn't have the right support to attract the investment needed.
Early this month, an Adelaide solar cell manufacturer closed its doors and relocated to the US after deciding an Australian based operation wasn't viable. After receiving $8 million in state and federal research and development grants to develop super slim solar panels pioneered at the Australian National University in Canberra, Origin Energy Solar is heading to Idaho, taking with it the knowledge, the investment and the potential for a stack of new jobs.
Origin Energy Solar joins the likes of Stinted' Power, now in China and one of the world's largest solar manufacturers, built on the back of technology developed at the University of New South Wales. Or the solar thermal technology developed by Dr David Mills at Sydney University and now driving the fortunes of Ausra. In America.
How can we put a stop to the brain drain, the demise of our manufacturing industries and the failure to capitalise on job creation? The answer sits on the desk of our most senior government ministers. As they deliberate on the detail of a carbon price, the answer is staring them in the face.
Revenue generated from the price on carbon can be used to finance the transition to a clean energy future and there is a smart way to do it. The Australian Conservation Foundation recently issued a report, Funding the Transition to a Clean Energy Economy, which highlights the myriad ways government can catalyse private investment in clean energy. Globally, countries are using a suite of financial policy measures and instruments to support the commercialisation of clean technologies, build low carbon industries and create tens of thousands of new jobs.
The Federal Government already supports Australian export industries through the Export Finance Insurance Corporation, our film industry through tax credits and other "nationally significant" infrastructure with a variety of co investment, off take agreements, subordinated debt and other methods.
The Federal Government has before it right now a proposal to establish an equivalent independent authority to facilitate the rapid roll out and expansion of private investment in renewable energy technologies. A clean energy finance corporation is needed as part of the carbon pricing package to unlock the clean energy boom in Australia.Support for a_clean_energy finance corporation has come from the largest investors in Australia, such as the peak bodies in the super funds industry. Investors are ready to play their part.
The Government needs to get the settings right. What better way to invest our super funds than in securing a long term clean energy future for our children? The investor community can do the heavy lifting, but it's up to the Government to prepare the ground.
A clean energy finance corporation needs to be well funded, with around $2 billion from carbon permit revenue each year. And it needs to be targeted at real renewable energy deployment solar, wave and geothermal technologies that stand ready to be delivered, using resources Australia has in abundance. We shouldn't waste time on unproven, inefficient and costly technologies like so-called clean coal. Not when our endless sunshine, wind, waves and hot rocks are the envy of the world.
We should be winning this race. We have what it takes to lead the world into a 100% renewable clean energy future. Instead we've allowed other nations, who have less technological innovation and fewer natural resources, to get ahead. At this crucial moment in deciding our economic, environmental and energy future, it's time we caught up.
Simon O'Connor is the Australian Conservation Foundation's economic adviser.
29 June 2011, Page: 19
Australians are great innovators. Think Hills Hoist, the wine cask and bionic ears. But we are also renowned for stumbling at the finishing line where it matters most. Today, there is a global race to take advantage of the boom in renewable energy and countries like China, South Korea, Germany and the US are leaving us for dead. Often using technologies that were developed here.
We're pretending not to notice as another clean energy technology manufacturer shuts up shop and heads offshore because Australia doesn't have the right support to attract the investment needed.
Early this month, an Adelaide solar cell manufacturer closed its doors and relocated to the US after deciding an Australian based operation wasn't viable. After receiving $8 million in state and federal research and development grants to develop super slim solar panels pioneered at the Australian National University in Canberra, Origin Energy Solar is heading to Idaho, taking with it the knowledge, the investment and the potential for a stack of new jobs.
Origin Energy Solar joins the likes of Stinted' Power, now in China and one of the world's largest solar manufacturers, built on the back of technology developed at the University of New South Wales. Or the solar thermal technology developed by Dr David Mills at Sydney University and now driving the fortunes of Ausra. In America.
How can we put a stop to the brain drain, the demise of our manufacturing industries and the failure to capitalise on job creation? The answer sits on the desk of our most senior government ministers. As they deliberate on the detail of a carbon price, the answer is staring them in the face.
Revenue generated from the price on carbon can be used to finance the transition to a clean energy future and there is a smart way to do it. The Australian Conservation Foundation recently issued a report, Funding the Transition to a Clean Energy Economy, which highlights the myriad ways government can catalyse private investment in clean energy. Globally, countries are using a suite of financial policy measures and instruments to support the commercialisation of clean technologies, build low carbon industries and create tens of thousands of new jobs.
The Federal Government already supports Australian export industries through the Export Finance Insurance Corporation, our film industry through tax credits and other "nationally significant" infrastructure with a variety of co investment, off take agreements, subordinated debt and other methods.
The Federal Government has before it right now a proposal to establish an equivalent independent authority to facilitate the rapid roll out and expansion of private investment in renewable energy technologies. A clean energy finance corporation is needed as part of the carbon pricing package to unlock the clean energy boom in Australia.Support for a_clean_energy finance corporation has come from the largest investors in Australia, such as the peak bodies in the super funds industry. Investors are ready to play their part.
The Government needs to get the settings right. What better way to invest our super funds than in securing a long term clean energy future for our children? The investor community can do the heavy lifting, but it's up to the Government to prepare the ground.
A clean energy finance corporation needs to be well funded, with around $2 billion from carbon permit revenue each year. And it needs to be targeted at real renewable energy deployment solar, wave and geothermal technologies that stand ready to be delivered, using resources Australia has in abundance. We shouldn't waste time on unproven, inefficient and costly technologies like so-called clean coal. Not when our endless sunshine, wind, waves and hot rocks are the envy of the world.
We should be winning this race. We have what it takes to lead the world into a 100% renewable clean energy future. Instead we've allowed other nations, who have less technological innovation and fewer natural resources, to get ahead. At this crucial moment in deciding our economic, environmental and energy future, it's time we caught up.
Simon O'Connor is the Australian Conservation Foundation's economic adviser.
Tuesday, 5 July 2011
Lawyers' picnic drives up the cost of electricity
Australian
29 June 2011, Page: 14
ELECTRICITY prices have been rising across the nation; dramatically in some states. With the introduction of a carbon tax there will be more pressure on prices.
In recent years, very little if any of the upward pressure on prices has come from the cost of the energy itself. Most of the pressure on prices has come from increasing network charges: distribution plus transmission. Various renewable schemes, such as the federal renewable energy target and various state solar schemes, have also been adding to costs and hence final electricity bills.
All this is relatively recent. Up until about five years ago, network cost increases had been relatively modest since the microeconomic reforms of the 1990s. Most of the pressure on electricity prices came from the underlying cost of the energy, not the cost of delivering (network charges) or supplying (retail margins) the energy to end customers.
Networks had been effectively regulated in some form for years; in the case of NSW, since the early 1990s. We are witnessing substantial increases in network charges. Andrew Reeves, chairman of the Australian Energy Regulator, has expressed frustration over his (in)ability to effectively regulate energy networks. The AER is foreshadowing a series of rule changes that could significantly change the way electricity networks are regulated.
Several commentators (Ross Garnaut, Rod Sims, Roman Domanski, Mark Duffy and myself) have expressed reservations about not just the regulatory model but the incentives that seem to be driving the network businesses. Businesses are being accused of gold-plating; the regulator is regularly losing appeals against arcane elements of the cost of capital a main driver of network costs. Many are now suggesting that the system is broken.
So what has changed? The basic model is essentially the same as was introduced by the Independent Pricing and Regulatory Tribunal and its predecessor the Government Pricing Tribunal of NSW in the early 1990s. But the way in which the regulator and some of the businesses now engage with the model is very different from the relatively simple model that worked for nearly 15 years.
The model of regulation that was introduced in NSW in 1992-93 was based on that developed in Britain, particularly its water regulator, Ofwat, a few years prior. A few key features underpinned its success. It was designed to be light handed (and light hearted); that is, data was kept to the minimum required to form a view about a business's efficient costs and prices.
It was explicitly based on sound commercial principles, rather than a complex legal framework. Indeed, lawyers were explicitly not a part of the IPART process for many years. In the original NSW model there was no provision for merit appeal; the decision of the regulator was final. The model was highly transparent, relatively simple and low cost, for businesses, customers and the regulator. Most important, the regulatory model was based on incentives.
The regulator formed a view about the efficient costs of the business operating costs; capital costs; depreciation; and financing costs (debt and equity) and provided incentives for the businesses to out perform the regulatory allowance during the period of price control.
The key to the incentive regulation model was that the businesses had an incentive to perform better than the regulator allowed, keeping some of those benefits for a period, with customers capturing a share of those benefits in the next regulatory period. A win-win scenario. And it worked as well for the NSW regulated utilities that were government owned as it did for privatised utilities.
At the risk of over simplification, what does the present (national) regulatory model look like today (and many of these observations apply equally to the British regulation)? It is still based on building blocks, but many of the other key features have changed substantially. Regulation today is far from light handed; the data requirements on the businesses and the burden on the regulator are very much greater, more detailed and much more intrusive than nearly 20 years ago.
The amount of material submitted as part of a regulatory submission is vast. The regulator is now attempting to second guess management in many areas of the business. Has it led to the regulator having a better understanding of the businesses and a better handle on efficient costs? I doubt it.
Lawyers have found another lucrative source of revenue in economic regulation in Australia. The regulator and the regulated now use lawyers extensively at all stages of the process. Appeals (on merit) against the regulator's determinations are standard and the regulator has lost some appeals before the Australian Competition Tribunal.
These appeals are increasingly about arcane elements of the cost of capital (the angels on pinheads of regulation) that are increasingly accounting for large increases in network charges. Regulation is now far from low cost; large regulatory budgets are standard for the businesses as well as for the regulator.
But, most important, the fundamental role of incentives appears to be missing from regulation today. The regulator doesn't appear to accept that a business will drive all of its costs, including efficient financing costs, so that customers can share in those benefits. And some of the businesses, notably the government owned businesses, are not demonstrating the same governance drivers that gives the regulator confidence that the incentive model will work.
For incentive regulation to work, the owners and management of the regulated network need to actively seek out every opportunity to drive efficiency in all the costs of the businesses. Whether all of the government owned businesses in NSW and Queensland (and Western Australia) have the same drivers that we saw in the 1990s and early 2000s is starting to be questioned.
And if governance is not transparently aligned to efficiency incentives, then the Australian regulatory model is very close to broken. How to fix it? That is the billion dollar question. Hopefully, policy makers at state and national levels of government will re engage with this critical area of micro economic reform. They need to; there is substantial economic welfare at stake.
Tom Puny was foundation executive chairman of the Independent Pricing and Regulatory Tribunal and its predecessor, the Government Pricing Tribunal of NSW, from 1992 to 2004. These views are his own.
29 June 2011, Page: 14
ELECTRICITY prices have been rising across the nation; dramatically in some states. With the introduction of a carbon tax there will be more pressure on prices.
In recent years, very little if any of the upward pressure on prices has come from the cost of the energy itself. Most of the pressure on prices has come from increasing network charges: distribution plus transmission. Various renewable schemes, such as the federal renewable energy target and various state solar schemes, have also been adding to costs and hence final electricity bills.
All this is relatively recent. Up until about five years ago, network cost increases had been relatively modest since the microeconomic reforms of the 1990s. Most of the pressure on electricity prices came from the underlying cost of the energy, not the cost of delivering (network charges) or supplying (retail margins) the energy to end customers.
Networks had been effectively regulated in some form for years; in the case of NSW, since the early 1990s. We are witnessing substantial increases in network charges. Andrew Reeves, chairman of the Australian Energy Regulator, has expressed frustration over his (in)ability to effectively regulate energy networks. The AER is foreshadowing a series of rule changes that could significantly change the way electricity networks are regulated.
Several commentators (Ross Garnaut, Rod Sims, Roman Domanski, Mark Duffy and myself) have expressed reservations about not just the regulatory model but the incentives that seem to be driving the network businesses. Businesses are being accused of gold-plating; the regulator is regularly losing appeals against arcane elements of the cost of capital a main driver of network costs. Many are now suggesting that the system is broken.
So what has changed? The basic model is essentially the same as was introduced by the Independent Pricing and Regulatory Tribunal and its predecessor the Government Pricing Tribunal of NSW in the early 1990s. But the way in which the regulator and some of the businesses now engage with the model is very different from the relatively simple model that worked for nearly 15 years.
The model of regulation that was introduced in NSW in 1992-93 was based on that developed in Britain, particularly its water regulator, Ofwat, a few years prior. A few key features underpinned its success. It was designed to be light handed (and light hearted); that is, data was kept to the minimum required to form a view about a business's efficient costs and prices.
It was explicitly based on sound commercial principles, rather than a complex legal framework. Indeed, lawyers were explicitly not a part of the IPART process for many years. In the original NSW model there was no provision for merit appeal; the decision of the regulator was final. The model was highly transparent, relatively simple and low cost, for businesses, customers and the regulator. Most important, the regulatory model was based on incentives.
The regulator formed a view about the efficient costs of the business operating costs; capital costs; depreciation; and financing costs (debt and equity) and provided incentives for the businesses to out perform the regulatory allowance during the period of price control.
The key to the incentive regulation model was that the businesses had an incentive to perform better than the regulator allowed, keeping some of those benefits for a period, with customers capturing a share of those benefits in the next regulatory period. A win-win scenario. And it worked as well for the NSW regulated utilities that were government owned as it did for privatised utilities.
At the risk of over simplification, what does the present (national) regulatory model look like today (and many of these observations apply equally to the British regulation)? It is still based on building blocks, but many of the other key features have changed substantially. Regulation today is far from light handed; the data requirements on the businesses and the burden on the regulator are very much greater, more detailed and much more intrusive than nearly 20 years ago.
The amount of material submitted as part of a regulatory submission is vast. The regulator is now attempting to second guess management in many areas of the business. Has it led to the regulator having a better understanding of the businesses and a better handle on efficient costs? I doubt it.
Lawyers have found another lucrative source of revenue in economic regulation in Australia. The regulator and the regulated now use lawyers extensively at all stages of the process. Appeals (on merit) against the regulator's determinations are standard and the regulator has lost some appeals before the Australian Competition Tribunal.
These appeals are increasingly about arcane elements of the cost of capital (the angels on pinheads of regulation) that are increasingly accounting for large increases in network charges. Regulation is now far from low cost; large regulatory budgets are standard for the businesses as well as for the regulator.
But, most important, the fundamental role of incentives appears to be missing from regulation today. The regulator doesn't appear to accept that a business will drive all of its costs, including efficient financing costs, so that customers can share in those benefits. And some of the businesses, notably the government owned businesses, are not demonstrating the same governance drivers that gives the regulator confidence that the incentive model will work.
For incentive regulation to work, the owners and management of the regulated network need to actively seek out every opportunity to drive efficiency in all the costs of the businesses. Whether all of the government owned businesses in NSW and Queensland (and Western Australia) have the same drivers that we saw in the 1990s and early 2000s is starting to be questioned.
And if governance is not transparently aligned to efficiency incentives, then the Australian regulatory model is very close to broken. How to fix it? That is the billion dollar question. Hopefully, policy makers at state and national levels of government will re engage with this critical area of micro economic reform. They need to; there is substantial economic welfare at stake.
Tom Puny was foundation executive chairman of the Independent Pricing and Regulatory Tribunal and its predecessor, the Government Pricing Tribunal of NSW, from 1992 to 2004. These views are his own.
Lawmakers seek inquiry of Natural Gas industry
www.nytimes.com
June 28, 2011
WASHINGTON — Federal lawmakers called Tuesday on several agencies, including the federal Securities and Exchange Commission, the Energy Information Administration and the Government Accountability Office, to investigate whether the natural gas industry has provided an accurate picture to investors of the long-term profitability of their wells and the amount of gas these wells can produce.
"Given the rapid growth of the shale gas industry and its growing importance for our country's energy portfolio, I urge the S.E.C. to quickly investigate whether investors have been intentionally misled," wrote Representative Maurice D. Hinchey, Democrat of New York, in one of three letters sent to the commission by four federal lawmakers, all Democrats.
The calls for investigations came amid growing questions about the environmental and financial risks surrounding natural gas drilling and especially a technique known as hydraulic fracturing, or hydropowerfracking, used to release gas trapped underground in shale formations. Members of the House Committee on Natural Resources said they hoped to hold a hearing in the next several weeks to discuss natural gas drilling.
Senator Benjamin L. Cardin, Democrat of Maryland, sent a letter to the Government Accountability Office, the investigative arm of Congress, asking it to look into questions about the environmental impacts of hydropowerfracking, the accuracy of reserves estimates, and industry regulation. State lawmakers also sought more information.
In Maryland, Delegate Heather R. Mizeur, Democrat of Montgomery County, sent a letter to the state comptroller and the attorney general calling for an investigation into disclosures related to the financial and environmental risks of drilling. In New York, Assemblywoman Barbara S. Lifton, a Democrat and longtime critic of drilling, sent a letter to the New York State comptroller, Thomas P. DiNapoli, calling for a similar investigation and citing roughly $1 billion in state pension funds invested in shale gas companies.
Officials in the office of the New York attorney general, Eric T. Schneiderman, said they had sent subpoenas to five oil and gas companies ordering them to provide documents relating to the disclosure the companies made to investors about the risks of hydropowerfracking, according to sources briefed on the investigation. A spokesman from Mr. Schneiderman's office declined to provide copies of the subpoenas.
The five companies subpoenaed — Talisman, Chesapeake Energy, E. O. G. Resources, Baker Hughes and Anadarko — all declined to comment. The calls for investigations follow articles in The New York Times describing doubts reflected in internal e-mails from federal regulators and natural gas industry officials about the costs associated with shale gas and the reliability of company reserves estimates.
Oil and gas companies and energy market analysts strongly rejected the views expressed in the industry and federal e-mails published by The Times. In an open letter to his employees, the chief executive of Chesapeake Energy, Aubrey McClendon, said the company's prospects were bright. "There is no reason to believe that shale gas wells will have shorter lives than our conventional wells — some 8,000 of which are 30 years old or older," Mr. McClendon wrote. Some financial services companies also released research notes saying they believed shale gas was now profitable for many companies.
But four federal lawmakers — Mr. Hinchey; Representative Edward J. Markey, Democrat of Massachusetts; and Representatives Carolyn B. Maloney and Jerrold Nadler, both Democrats of New York — sent letters calling for the S.E.C. to reconsider recent rule changes that allow companies to avoid disclosing details about the proprietary technology used to predict future gas production and to avoid some third-party audits of those predictions. They asked the commission whether third-party reserves audits should be made mandatory.
The lawmakers also called for an investigation into industry representatives' accusations of possible illegality or reserves overbooking. A spokesman for the S.E.C. declined to comment. In a letter to Steven Chu, the secretary of energy, Ms. Maloney and Mr. Nadler asked his department to assess how inaccuracies in production projections could affect energy policy. The federal Energy Information Administration also faced questions from Mr. Markey and Mr. Hinchey about its reports related to natural gas and its use of industry-tied contractors in writing those reports.
Voicing strong support for the natural gas industry, a bipartisan group of eight federal lawmakers from gas-producing states sent a letter to President Obama on Monday asking him to promote continued natural gas development "by any means necessary, but most specifically, by unconventional shale gas recovery." "The need for the United States to move toward energy independence becomes more crucial as the crisis in the Middle East and North Africa worsens," the letter said.
June 28, 2011
WASHINGTON — Federal lawmakers called Tuesday on several agencies, including the federal Securities and Exchange Commission, the Energy Information Administration and the Government Accountability Office, to investigate whether the natural gas industry has provided an accurate picture to investors of the long-term profitability of their wells and the amount of gas these wells can produce.
"Given the rapid growth of the shale gas industry and its growing importance for our country's energy portfolio, I urge the S.E.C. to quickly investigate whether investors have been intentionally misled," wrote Representative Maurice D. Hinchey, Democrat of New York, in one of three letters sent to the commission by four federal lawmakers, all Democrats.
The calls for investigations came amid growing questions about the environmental and financial risks surrounding natural gas drilling and especially a technique known as hydraulic fracturing, or hydropowerfracking, used to release gas trapped underground in shale formations. Members of the House Committee on Natural Resources said they hoped to hold a hearing in the next several weeks to discuss natural gas drilling.
Senator Benjamin L. Cardin, Democrat of Maryland, sent a letter to the Government Accountability Office, the investigative arm of Congress, asking it to look into questions about the environmental impacts of hydropowerfracking, the accuracy of reserves estimates, and industry regulation. State lawmakers also sought more information.
In Maryland, Delegate Heather R. Mizeur, Democrat of Montgomery County, sent a letter to the state comptroller and the attorney general calling for an investigation into disclosures related to the financial and environmental risks of drilling. In New York, Assemblywoman Barbara S. Lifton, a Democrat and longtime critic of drilling, sent a letter to the New York State comptroller, Thomas P. DiNapoli, calling for a similar investigation and citing roughly $1 billion in state pension funds invested in shale gas companies.
Officials in the office of the New York attorney general, Eric T. Schneiderman, said they had sent subpoenas to five oil and gas companies ordering them to provide documents relating to the disclosure the companies made to investors about the risks of hydropowerfracking, according to sources briefed on the investigation. A spokesman from Mr. Schneiderman's office declined to provide copies of the subpoenas.
The five companies subpoenaed — Talisman, Chesapeake Energy, E. O. G. Resources, Baker Hughes and Anadarko — all declined to comment. The calls for investigations follow articles in The New York Times describing doubts reflected in internal e-mails from federal regulators and natural gas industry officials about the costs associated with shale gas and the reliability of company reserves estimates.
Oil and gas companies and energy market analysts strongly rejected the views expressed in the industry and federal e-mails published by The Times. In an open letter to his employees, the chief executive of Chesapeake Energy, Aubrey McClendon, said the company's prospects were bright. "There is no reason to believe that shale gas wells will have shorter lives than our conventional wells — some 8,000 of which are 30 years old or older," Mr. McClendon wrote. Some financial services companies also released research notes saying they believed shale gas was now profitable for many companies.
But four federal lawmakers — Mr. Hinchey; Representative Edward J. Markey, Democrat of Massachusetts; and Representatives Carolyn B. Maloney and Jerrold Nadler, both Democrats of New York — sent letters calling for the S.E.C. to reconsider recent rule changes that allow companies to avoid disclosing details about the proprietary technology used to predict future gas production and to avoid some third-party audits of those predictions. They asked the commission whether third-party reserves audits should be made mandatory.
The lawmakers also called for an investigation into industry representatives' accusations of possible illegality or reserves overbooking. A spokesman for the S.E.C. declined to comment. In a letter to Steven Chu, the secretary of energy, Ms. Maloney and Mr. Nadler asked his department to assess how inaccuracies in production projections could affect energy policy. The federal Energy Information Administration also faced questions from Mr. Markey and Mr. Hinchey about its reports related to natural gas and its use of industry-tied contractors in writing those reports.
Voicing strong support for the natural gas industry, a bipartisan group of eight federal lawmakers from gas-producing states sent a letter to President Obama on Monday asking him to promote continued natural gas development "by any means necessary, but most specifically, by unconventional shale gas recovery." "The need for the United States to move toward energy independence becomes more crucial as the crisis in the Middle East and North Africa worsens," the letter said.
Sunshine Coast lives up to its name with solar farm power boost
Courier Mail
28 June 2011, Page: 8
THE Sunshine Coast's future as a green energy producer will take a huge step forward tomorrow with the expected approval of Queensland's biggest solar farm and an application for a second facility. A 50,000 Janet facility, worth an expected 540 million, is set to be backed by Sunshine Coast Regional Council for a 20ha site on former caneland at Valdora, halfway between Yandina and Coolum.
It will feed enough power into the grid for 2500 homes and provide a cutting edge model that could be rolled out throughout the state. The local firm behind the project, Energy Parks Australia, told The Courier Mail it would also submit plans tomorrow for a 12,000 panel "solar park" on 32ha at Cootharaba, in the Noosa hinterland.
Director Jason Hague said the Sunshine Coast was well on the way to becoming Australia's most sustainable region and his company had plans for several more projects to create localised renewable energy solutions. Mr Hague said he was confident of their success as they were aligned with council's vision to achieve 20% renewable energy by the year 2020. He said new developments such as Caloundra South and Palmview presented considerable opportunities to develop solar parks that could help save residents from soaring power bills.
"We are very excited about incorporating future energy parks into greenfield sites, which will shape the future of the Coast", Mr Hague said. "There's pressure on every level to deploy green energy options and our projects provide the blueprint for the ever increasing energy needs of modern communities". The second solar farm, to be considered for approval later in the year, would be worth $9 million and be funded by a single investor, a Sunshine Coast businessman confident of green energy's future.
Mr Hague said he hoped work would begin on the Valdora property by the end of the year. He said the clean energy produced could be sold to energy providers, or retailed to individual residents or businesses. A handful of large solar farms are being established by other companies in NSW and Western Australia, but the technology is already used in Europe and Asia. Early this month, Prime Minister Julia Gillard and Premier Anna Bligh announced a jointly funded $1.2 billion gas plant at Chinchilla in the state's west.
28 June 2011, Page: 8
THE Sunshine Coast's future as a green energy producer will take a huge step forward tomorrow with the expected approval of Queensland's biggest solar farm and an application for a second facility. A 50,000 Janet facility, worth an expected 540 million, is set to be backed by Sunshine Coast Regional Council for a 20ha site on former caneland at Valdora, halfway between Yandina and Coolum.
It will feed enough power into the grid for 2500 homes and provide a cutting edge model that could be rolled out throughout the state. The local firm behind the project, Energy Parks Australia, told The Courier Mail it would also submit plans tomorrow for a 12,000 panel "solar park" on 32ha at Cootharaba, in the Noosa hinterland.
Director Jason Hague said the Sunshine Coast was well on the way to becoming Australia's most sustainable region and his company had plans for several more projects to create localised renewable energy solutions. Mr Hague said he was confident of their success as they were aligned with council's vision to achieve 20% renewable energy by the year 2020. He said new developments such as Caloundra South and Palmview presented considerable opportunities to develop solar parks that could help save residents from soaring power bills.
"We are very excited about incorporating future energy parks into greenfield sites, which will shape the future of the Coast", Mr Hague said. "There's pressure on every level to deploy green energy options and our projects provide the blueprint for the ever increasing energy needs of modern communities". The second solar farm, to be considered for approval later in the year, would be worth $9 million and be funded by a single investor, a Sunshine Coast businessman confident of green energy's future.
Mr Hague said he hoped work would begin on the Valdora property by the end of the year. He said the clean energy produced could be sold to energy providers, or retailed to individual residents or businesses. A handful of large solar farms are being established by other companies in NSW and Western Australia, but the technology is already used in Europe and Asia. Early this month, Prime Minister Julia Gillard and Premier Anna Bligh announced a jointly funded $1.2 billion gas plant at Chinchilla in the state's west.
Monday, 4 July 2011
Sensors to cut cost of checking carbon
Australian
Tuesday 28/6/2011 Page: 35
AUSTRALIAN scientists are spearheading the international development of technology to analyse greenhouse gases and climate change. The Greenhouse Gas Monitor joint research project was awarded $2.3 million last week by the Australian Space and Research Program. The project is designed to develop a mobile sensor unit to vastly boost the number of earthbound measurement stations globally that monitor CO₂. The project, which includes a team from the University of Wollongong's GeoQuest group, will use terrestrial and satellite technology to develop a data collection and feedback system.
By increasing the number of measuring sites, scientists could increase their data volume and the diversity of environmental source conditions, yielding more accurate information and improved weather and climate change forecasting. "So you would be able to prove your computer model and say more accurately where CO₂, is coming from or where it is going to, and that has big implications for things like emissions trading schemes", project researcher and Centre for Atmospheric Chemistry senior research fellow Nicholas Jones said.
The project will enhance international efforts by Japan and the US to launch satellites capable of precisely measuring atmospheric CO₂ and methane from space. To make the satellites useful, the data must be tied back to ground measurements. Current sensors capture CO₂ measurements from Total Column Carbon Observing Network stations, which cost about $1m each and weigh 600kg. The instrument follows the sun and allows scientists to measure CO₂, and methane between the ground and the top of the atmosphere.
Wollongong has one of three TCCON instruments in the southern hemisphere. The others are in Darwin and New Zealand. There are 15 worldwide. "The problem is that, to really make use of the satellite measurements, you want to calibrate them not just in 15 places, but several hundred, preferably 1000 or may be more", Dr Jones said. "What GGM is about is whether we can do the same kind of measurement from the ground but at a tenth of the cost".
He said the team had a candidate technology that could take measurements as accurately as the TCCON. The aim was to develop a mobile instrument for less than $100,000. "In the next 24 months, we are going to be looking at a couple of these technologies, developing them and comparing them with our TCCON data and if it works out we will then commercialise this instrument". The team's mobile prototype is a thumb sized crystal in a box inside a miniature heater.
Dr Jones said the mobile system would be autonomous and made up of a solar tracker to direct sunlight into the instrument, a spectrometer and computer control able to analyse data and send it back to a base station. "So there will be some kind of data archiving system, which then has to grab that data and send it off to the end user, such as the Bureau of Meteorology". The GGM partners also include University of Melbourne and Australian National University, the Bureau of Meteorology, Rosebank Engineering and Vipac Engineers and Scientists.
"We are probably one to two years ahead of the rest of the field, so we are hoping that we can get something to market before someone else does", Dr Jones said. He said the technology would also help in the scientific understanding of the carbon cycle and in climate modelling and the effects of El Nino and La Nina. "If we are able to predict those sorts of events more accurately, that has huge implications in terms of economic impact on the country", he said.
Tuesday 28/6/2011 Page: 35
AUSTRALIAN scientists are spearheading the international development of technology to analyse greenhouse gases and climate change. The Greenhouse Gas Monitor joint research project was awarded $2.3 million last week by the Australian Space and Research Program. The project is designed to develop a mobile sensor unit to vastly boost the number of earthbound measurement stations globally that monitor CO₂. The project, which includes a team from the University of Wollongong's GeoQuest group, will use terrestrial and satellite technology to develop a data collection and feedback system.By increasing the number of measuring sites, scientists could increase their data volume and the diversity of environmental source conditions, yielding more accurate information and improved weather and climate change forecasting. "So you would be able to prove your computer model and say more accurately where CO₂, is coming from or where it is going to, and that has big implications for things like emissions trading schemes", project researcher and Centre for Atmospheric Chemistry senior research fellow Nicholas Jones said.
The project will enhance international efforts by Japan and the US to launch satellites capable of precisely measuring atmospheric CO₂ and methane from space. To make the satellites useful, the data must be tied back to ground measurements. Current sensors capture CO₂ measurements from Total Column Carbon Observing Network stations, which cost about $1m each and weigh 600kg. The instrument follows the sun and allows scientists to measure CO₂, and methane between the ground and the top of the atmosphere.
Wollongong has one of three TCCON instruments in the southern hemisphere. The others are in Darwin and New Zealand. There are 15 worldwide. "The problem is that, to really make use of the satellite measurements, you want to calibrate them not just in 15 places, but several hundred, preferably 1000 or may be more", Dr Jones said. "What GGM is about is whether we can do the same kind of measurement from the ground but at a tenth of the cost".
He said the team had a candidate technology that could take measurements as accurately as the TCCON. The aim was to develop a mobile instrument for less than $100,000. "In the next 24 months, we are going to be looking at a couple of these technologies, developing them and comparing them with our TCCON data and if it works out we will then commercialise this instrument". The team's mobile prototype is a thumb sized crystal in a box inside a miniature heater.
Dr Jones said the mobile system would be autonomous and made up of a solar tracker to direct sunlight into the instrument, a spectrometer and computer control able to analyse data and send it back to a base station. "So there will be some kind of data archiving system, which then has to grab that data and send it off to the end user, such as the Bureau of Meteorology". The GGM partners also include University of Melbourne and Australian National University, the Bureau of Meteorology, Rosebank Engineering and Vipac Engineers and Scientists.
"We are probably one to two years ahead of the rest of the field, so we are hoping that we can get something to market before someone else does", Dr Jones said. He said the technology would also help in the scientific understanding of the carbon cycle and in climate modelling and the effects of El Nino and La Nina. "If we are able to predict those sorts of events more accurately, that has huge implications in terms of economic impact on the country", he said.
How wind power can save farms
Age
28 June 2011, Page: 14
WHAT about a Senate inquiry into the health effects of not building wind farms? Rural Danish communities are dying for the same reasons as rural Australian ones are: farmers are abandoning uneconomic farms; without employment, young families and working age adults are relocating to the cities; and without the population to support them, medical infrastructure has collapsed and schools, banks and village businesses are closing.
Danish government policies expedite approval selling excess energy from their community owned wind farm, many social problems are resolved. A recent documentary featured wind power in Denmark, a world leader in this.
Replying to a question about the consequences of locating a wind farm close to his village, a resident put it succinctly: "Compared to bankruptcy, depression, substance abuse, domestic violence, family breakdowns, loss of community and suicide? - negligible"
Tim Hughes, Kensington
28 June 2011, Page: 14
WHAT about a Senate inquiry into the health effects of not building wind farms? Rural Danish communities are dying for the same reasons as rural Australian ones are: farmers are abandoning uneconomic farms; without employment, young families and working age adults are relocating to the cities; and without the population to support them, medical infrastructure has collapsed and schools, banks and village businesses are closing.
Danish government policies expedite approval selling excess energy from their community owned wind farm, many social problems are resolved. A recent documentary featured wind power in Denmark, a world leader in this.
Replying to a question about the consequences of locating a wind farm close to his village, a resident put it succinctly: "Compared to bankruptcy, depression, substance abuse, domestic violence, family breakdowns, loss of community and suicide? - negligible"
Tim Hughes, Kensington
AGL to land $38m
Adelaide Advertiser
28 June 2011, Page: 55
AGL Energy will earn a development fee of $38 million from the sale of its Oaklands Hill wind farm, which is now under construction in western Victoria. The development fee would be implemented on the completion of the project, with $30 million likely to be recognised this financial year and the balance in 2011-12, AGL Energy said in a statement yesterday.
28 June 2011, Page: 55
AGL Energy will earn a development fee of $38 million from the sale of its Oaklands Hill wind farm, which is now under construction in western Victoria. The development fee would be implemented on the completion of the project, with $30 million likely to be recognised this financial year and the balance in 2011-12, AGL Energy said in a statement yesterday.
Independent inquiry reveals why we're paying more for power
Sunday Tasmanian
26 June 2011, Page: 1
HOUSEHOLDS are paying to keep the Tamar Valley power station viable, an independent review of Tasmania's electricity prices has concluded. The Independent Review of the Tasmanian Electricity Sector's Issues Paper shows the gas fired station has been propped up by households and small businesses through recent power price increases. The report indicates these two groups, as non contestable customers, are bearing the burden to keep the Aurora Energy station up and running despite it being only a back up option for all electricity users.
The report said: "Prices for noncontestable customers, through the regulatory framework, have been increased to preserve the viability of the TVPS. Essentially non contestable customers appear to be funding the 'insurance premium' being the difference between the market related value of the TVPS and its full cost yet the facility provides risk mitigation for all electrical users".
Opposition energy spokesman Matt Groom said households were paying because in June 2010 the Labor Green Government had changed the rules for the economic regulator, which meant prices were based on long range marginal costs (LRMC) and not market costs. "The Green Labor government is forcing households and small businesses to subsidise Aurora Energy by artificially jacking up power prices to a higher level than they should be", he said yesterday.
A table in the Issues Paper shows long range marginal costs estimates can be up to 12.4% greater than market cost estimates. Mr Groom said LRMC estimates pushed the costs for households up while protecting companies that could buy bulk power from interstate firms in the contestable market. "The Labor Green government has rigged the role of the economic regulator to artificially jack up power prices in order to stop Aurora Energy from going broke", he said.
Mr Groom said the report confirmed the Liberals' long held belief that small business and households are paying more for power than they should. The paper shows that if the energy market was opened up to competition, households and small businesses could be paying less for power, he said. Energy Minister Bryan Green said the Government would properly consider the review's findings after all deliberations by its panel of experts. He did not comment about the TVPS or the LRMC estimates.
"We will not be distracted by the antics of the Liberals and their political commentary on the review as the panel continues its important work", he said. "As expected, a wide range of issues has been raised with the panel during the public consultation. The Liberals are being opportunist and simplistic in relation to the complex issue of power pricing. "The Liberals have no evidence to support their claim that going to full retail contestability will mean lower electricity prices in Tasmania.
"They are gambling with future power prices because they don't know whether consumers will benefit. The Government is not prepared to take that gamble. "The Government needs to be sure the benefits of full retail contestability outweigh the costs and is taking a responsible approach by referring the matter to the expert panel to consider as part of its review. "Long range marginal cost (LRMC) is no more than recovering the costs of power generation".
26 June 2011, Page: 1
HOUSEHOLDS are paying to keep the Tamar Valley power station viable, an independent review of Tasmania's electricity prices has concluded. The Independent Review of the Tasmanian Electricity Sector's Issues Paper shows the gas fired station has been propped up by households and small businesses through recent power price increases. The report indicates these two groups, as non contestable customers, are bearing the burden to keep the Aurora Energy station up and running despite it being only a back up option for all electricity users.
The report said: "Prices for noncontestable customers, through the regulatory framework, have been increased to preserve the viability of the TVPS. Essentially non contestable customers appear to be funding the 'insurance premium' being the difference between the market related value of the TVPS and its full cost yet the facility provides risk mitigation for all electrical users".
Opposition energy spokesman Matt Groom said households were paying because in June 2010 the Labor Green Government had changed the rules for the economic regulator, which meant prices were based on long range marginal costs (LRMC) and not market costs. "The Green Labor government is forcing households and small businesses to subsidise Aurora Energy by artificially jacking up power prices to a higher level than they should be", he said yesterday.
A table in the Issues Paper shows long range marginal costs estimates can be up to 12.4% greater than market cost estimates. Mr Groom said LRMC estimates pushed the costs for households up while protecting companies that could buy bulk power from interstate firms in the contestable market. "The Labor Green government has rigged the role of the economic regulator to artificially jack up power prices in order to stop Aurora Energy from going broke", he said.
Mr Groom said the report confirmed the Liberals' long held belief that small business and households are paying more for power than they should. The paper shows that if the energy market was opened up to competition, households and small businesses could be paying less for power, he said. Energy Minister Bryan Green said the Government would properly consider the review's findings after all deliberations by its panel of experts. He did not comment about the TVPS or the LRMC estimates.
"We will not be distracted by the antics of the Liberals and their political commentary on the review as the panel continues its important work", he said. "As expected, a wide range of issues has been raised with the panel during the public consultation. The Liberals are being opportunist and simplistic in relation to the complex issue of power pricing. "The Liberals have no evidence to support their claim that going to full retail contestability will mean lower electricity prices in Tasmania.
"They are gambling with future power prices because they don't know whether consumers will benefit. The Government is not prepared to take that gamble. "The Government needs to be sure the benefits of full retail contestability outweigh the costs and is taking a responsible approach by referring the matter to the expert panel to consider as part of its review. "Long range marginal cost (LRMC) is no more than recovering the costs of power generation".
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