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Five things we learned this week ..

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There is a saying going around that the world did not leave the Stone Age because it ran out of stones. But what is the chance of it returning there if it runs out of brains? Australia’s three recently elected conservative premiers appear to have set themselves on a three way race to find out, given their policies on climate change and clean energy. Victoria dropped its Climate Change Act, and its emissions limits on new power generation, NSW has done all it could to slow the deployment of wind and rooftop solar, while Campbell Newman’s first act as Premier of Queensland was to tear up his party’s Can-Do energy policy and instruct his predecessor’s husband to unravel the entirety of the state’s climate change and renewable energy schemes.

The LNP’s Can-Do energy policy, unveiled at the start of the campaign, promised to do it all it could to support deployment and research in solar and geothermal, and break the bottlenecks created by inaction from the Labor Government. But the policy details announced a day before the poll include cutting the very schemes that could achieve this, and it threatens to kill the only large-scale renewable project in the country and the university research programs. So, what is it with conservative governments, climate and renewables? Is the the only difference between Australian conservatives and the Tea-Party inspired antics of the US Republicans, is that if this was the US, then Clive Palmer probably would be Premier of Queensland. What? Oh.

Old King Coal is alive and well Down Under (Part 1)

The Premiers justified their actions to do nothing by claiming that if they did do something, like reduce emissions or build a wind or solar farm, then that would mean somebody else (i.e the other Premiers) probably wouldn’t. But while they were wrestling with the devilish concept of additionality, which really has a quite simple solution, the coal mining industry was busily arguing that if they didn’t do something, like dig up half of Queensland and export the coal, then someone else probably would. The legal system bought the argument, hook, line and sinker, and this week the courts gave the go-ahead for the giant Wandoan coal mine in Queensland. The developer, Xstrata Plc, didn’t even bother contesting the environmental and climate impacts of burning coal.

To gain some appreciation of the size of this mine, it is 320sq kms, bigger than Stradbroke Island, the same size of Sydney’s North Shore (from North Sydney to Hornsby, Manly and Palm Beach), and half the size of Canberra. If you stuck eight of these together – and about another 60 are planned, some of them much, much bigger – you would take up as much room as would be needed to power the whole country with solar PV. Still, the “if-I-didn’t-someone-else-would’ve” argument may open up other avenues of legal argument. “If my client didn’t steal it, m’lord, then you can be certain that somebody else would have.” “Ah, yes, yes. Quite so, Case dismissed.”

Old King Coal is alive and well Down Under (Part 2)

Another judicial ruling, this time by the Victorian Civil and Administrative Tribunal, overturned a decision by the state’s Environmental Protection Authority on a contentious new power plant proposed for the Latrobe Valley using brown coal and a new “gassifying” technology that can reduce emissions. The EPA had cut the proposed size of the project by half to 300MW, but the VCAT allowed the full 600MW-  but only on the condition that it is not built until another brown coal generator closes, and that it not emit more than 0.8t of C02-e/MWH. This was an interesting decision as it came in the same week that the Victorian government had officially dropped its emission standard.

“Best practice,” the tribunal noted,” does not require a comparison with all other type of electricity generation, such that the outcome would only ever favour the lowest greenhouse gas emitting form of generation.” Hmmm. It certainly doesn’t match new rules proposed for the US, where the EPA has flagged limits of 0.45t/MWh for any new coal-fired generation, effectively ruling out any new coal-fired generation there unless they can produce carbon capture and storage. The US crackdown on emissions is expected to force the closure of more than 100GW of coal-fired generation by 2020, twice the size of Australia’s grid, while Australian government will pay for the closure of the 2GW of coal fired generation by the same time.

AGL sees the future and … OMG!

It is rapidly dawning on energy companies around the world that wind farms and solar arrays may look pretty on the cover of the annual report, but if too many are actually deployed, then their low marginal cost could have a nasty impact on established generators earnings. Apparently, the damn things actually work! The story we ran earlier this week about the impact of the “merit order” on European utilities, and how their earnings were being eroded and forcing the closures – temporary or otherwise – of gas and coal fired generation – attracted a huge amount of interest.

That concern has spread to Australia, where utility AGL betrayed its own anxiety about the merit order in a submission to the Queensland government that was disguised as an academic paper. AGL complained about a “transfer of wealth” from utilities to consumers, and warned that if left unchecked, feed-in-tariffs and the merit order effect could “raise tangential doubts about the entire sustainability of the industry” and “could make a robust energy market model collapse” – language not heard since another owner of a brown coal fired power station, TRUenergy, warned in 2009 that the lights would go out in 2015 if compensation for the proposed CPRS was not extended.

There is no doubt that the increased deployment of energy sources with low fuel costs such as wind and solar poses challenges for the economics of fossil fuel generators, but this will likely occur with or without feed-in-tariffs as technology costs fall, which FiTs are designed to promote. They merely speed up the process. But AGL’s attack on the merit order effect puts in curious opposition with the organization it chairs, the Clean Energy Council, and other wind energy promoters, who use the MOE as justification for the deployment of more clean energy. (An argument AGL has also used for its wind farms).Also not appreciated by many in the solar industry was AGL’s boast of the role it played in decapitating the solar feed in tariffs in NSW, Victoria, South Australia and WA, and its vow to achieve the same outcome in Queensland.

Consumers can fight back

So what are consumers to make of all this? The hardline attitude of some utilities towards distributed generation such as solar PV risks disaffecting their major source of revenue – retail customers. There was huge interest in the comments by Jeff Bye, the head of CBD Solar, about how increasing numbers of people were inquiring if it was possible to leave the grid and what they could do about it. We asked Jeff to expand on his thoughts and he has contributed this tremendous piece about the options for households and commercial customers on reducing their reliance on the energy networks and energy retailers. I recommend you read it. It’s the most practical item on site.

 

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  • Dermot Duncan

    The States certainly have reversed their action on climate change – I wrote a masters paper back in 2009 comparing the US and Australian Federal/State positions and noted that both (at the time) had no Federal Carbon Price but that the States had lead the way in both countries with strong action – clearly a reversal in Australia with “conservative” governments acting contrary to leading scientific/accepted science.

  • Adam

    pretty horrid week. What’s worse is this is just a taste of things to come.

    Once we get a full house of libs in states and federal the momentum will really pick up.

  • John P Morgan

    Many of us have already gone “off grid”.
    I, for one, have increased levels of comfort and very low levels of cost – and no blackouts.