Across the United States right now, a pitched battle is being fought over the future of renewable energy targets in the 29 states that have them. Already, 16 of these states are considering legislation – templated by a fossil fuel-sponsored lobby group, the American Legislative Exchange Council – to repeal or dilute the ambition of renewable standards.
So far, the campaign – boosted by Tea Party radicals in the Republican movement – has not been successful. In the past week, North Carolina rejected the idea after leading utilities such as Duke Energy, and big data centre operators such as Apple and Google expressed their support for wind and solar projects.
In Colorado, the ALEC bill met a similar fate, with the state deciding instead to lift its clean energy standard for rural electric cooperatives to 25 per cent by 2020 — a 15 percentage point jump from the current 10 per cent.
Still, the fate of other state-based RPS schemes remains in the balance. ALEC task force director Todd Wynn recently told Bloomberg that 2013 will be the most active year yet in efforts to repeal renewable energy standards. “Natural gas is a clean fuel, and regulators and policy makers are seeing how it’s much more affordable than renewable energy.”
In Australia, a similar battle is about to be waged. The difference here is that renewable energy targets are a federal policy mechanism, but the four mainland conservative state governments (Queensland, NSW, Victoria and Western Australia) are lined up firmly against them, and the new energy minister in WA, Mike Nahan, has upped the ante – possibly in anticipation of the Coalition winning the federal poll in September.
The Coalition has already indicated that it will seek yet another review of the RET, and will be sympathetic to claims by utilities that lower than expected electricity demand should cause less wind and solar farms to be built. Some utilities want the numbers cut in half – and they have the support of broader industry groups such as the Business Council of Australia and other industry groups, and of the conservative state governments.
Nahan is an interesting choice as energy minister. For supporters of renewable energy, he’s actually quite a frightening one.
The American-born Nahan is a former executive director of the conservative, pro-market, anti-renewable think tank, the Institute of Public Affairs, which is so intertwined with conservative policy making that many Coalition politicians refer journalists to the IPA for comment on issues such as energy and climate.
A collection of Nahan’s thoughts on climate and energy can be found on the IPA website as, like his contemporaries and successors, he was a prolific contributor to (mostly Murdoch-owned) newspapers. They give an interesting insight into his views on all things climate, energy and environment.
In 2005, he questioned the science of climate change. “Not only is the fact of global warming unclear, but a fully honoured Kyoto Agreement would have had only a trivial effect on temperatures,” he wrote in the Herald Sun.
In 2006, in the same paper, he hallelujahed the creation of the pro-nuclear and pro-business Australian Environmental Foundation, which has strong links to anti-wind farm groups. He also praised the expansion of the massive Hazelwood brown coal-fired power station, describing one of the country’s most polluting power plants as “efficient, profitable and clean.”
And, of course, he doesn’t like the Greens, accusing them of being “Watermelons” – former socialists who were red on the inside and green on the outer. He even decried the focus of Environment Day, saying such events should be a celebration of achievements – such as the fact that there were, he wrote in 2004 – enough whales to support large whaling fleets.
Elsewhere, Nahan mocks the idea that the planet is depleting its resources, praises Conservative pin-up boy Bjorn Lomborg, and suggests that the global environment is actually improving rather than degrading. He also scoffed at suggestions that the Murray Darling Basin had water or salinity issues – both here and here.
Elsewhere, he dismissed the concept of “negawatts” – the idea promoted by the likes of the International Energy Agency that energy efficiency can play a critical role in decarbonising the world’s energy system, and to save money – as “activist jargon for subsidised energy conservation.” His preferred term was ‘megawatts’ – code for building more coal, gas and nuclear plants and burn as much fuel as possible.
Just in case you thought he might have evolved since being elected to state parliament in 2008, his views of wind and solar remain staunchly conservative, old school and just plain wrong. In a recent parliamentary debate, Nahan insisted wind energy required “one-for-one” backup by fossil fuel generators and did not reduce greenhouse gases, said solar cells were “hugely more costly” than polluting alternatives, and the only “low-cost, baseload, greenhouse-low energy” that existed was nuclear power.
He said Western Australia should consider nuclear power, but conceded they “do not fit the grid, because they are too big; they are too lumpy … our system is too peaky and nuclear would not fit. And then he goes on to suggest that the government should “consider nuclear power for the Pilbara,” which is an even smaller grid.
Last week, the West Australian reported that Nahan had promised a “root and branch” review of the RET scheme, labelling renewables as “unsustainable”, and even promised a review of the much-lauded demand management system, which rewards large customers for reducing demand at times of peak load. This from a state which subsidises the construction of diesel-fired peaking plants that are never switched on.
The Australian renewables industry will recognise the dangers of such talk. WA, ironically, is probably the best placed state for added renewable energy investments because of its high electricity prices, and excellent solar and wind resources. The Collgar wind farm in the wheat belt operates at near 50 per cent capacity, and numerous solar plants – without subsidies beyond the RET – are being considered by developers.
The problem, in WA and elsewhere around the country, is that new projects are at a virtual standstill. Financiers have basically shut up shop pending the result of an election, and the likelihood of yet another RET review. This is despite the conclusion by the Australian Energy Market Operator that even going 100% renewables may not entail much greater cost than the air-con inspired super-sizing of the grid this past five or six years.
The appointment of Nahan – along with Queensland’s Mark McArdle, NSW’s Chris Hartcher, and Victoria’s Michael O’Brien – and the impending return of the federal Coalition’s Ian Macfarlane, has doomed the industry to another period of uncertainty and inaction. All, it would seem, in the name of ideology.
Look-alike energy ministers in Canberra
On the subject of federal energy ministers, it was fascinating to hear the newly appointed Federal Minister for Resources and Energy Gary Gray speak about the issue at a conference in South Australia this week.
As RenewEconomy pointed out after the resignation of former minister Martin Ferguson last month, he and his ultimate successor, the Liberal energy spokesman and former minister Ian Macfarlane, were like two peas in a pod – sharing like-minded, highly conservative views on Australia’s energy policies and how its energy system should evolve.
Gray – who says he is no longer a climate skeptic – is probably only keeping the seat warm for a return of Macfarlane come the September election, but he wants it known that he is of the same ilk as Ferguson, whom he labelled as a sometimes grumpy but “hardworking visionary,” and his Coalition counterpart.
“In many ways it really doesn’t matter from a Federal perspective if you look back at any (Federal Energy Minister), Ian Macfarlane or you look at Martin Ferguson, hopefully myself, you effectively see the same person,” Gray told a resources conference in Whyalla. “You see a Canberra political system that places the resource industry and the resource sector above politics, that cares deeply for the success of this sector and enjoys its success in the most obvious way.”
In the case of all three, it’s a matter of stepping on the gas. Gray is convinced the shale gas boom will deliver lower gas prices to Australia, notwithstanding that everyone else, including the gas operators themselves and market analysts, point out that gas prices will match export prices – and that means they are going up.
Note: This story was corrected to remove reference of the Australian Industry Group opposing the LRET, which is no longer the case.
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