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“Farcical” start to Tony Abbott’s renewable energy review

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Tony Abbott’s controversial review of Australia’s renewable energy target (RET) made a “farcical” start to its public deliberations on Wednesday, attracting new accusations of bias and of having a pre-determined outcome.

Clean energy representatives were shocked by the panel’s appointment as chief advisor and modeller of ACIL Allen, a consultancy seen as close to the fossil fuel industry, and whose highly contested research formed the basis of the coal industry’s attempts to dismantle the RET in 2012.

Not only will ACIL Allen do the modelling for the RET Review panel, some of the assumptions that will form the basis of that modelling have also stunned the clean energy industry, and been branded as a farce.

This includes an apparent refusal to measure the benefits of renewable energy – including the health benefits, job benefits, and the network benefits – which the panel has dismissed as “too hard to model” and little more than a “transfer of wealth”, presumably away from the coal generators and network providers. There is concern about how it will model the reduction in wholesale prices – the main complaint from the existing fossil fuel industry.

Around 50 people who attended the RET Review panel’s modelling forum at the Mercure hotel near Sydney’s international airport were also told that the modelling will assume that there will be no carbon price out to 2030, and will not factor in any abatement targets. In other words, it is assuming there will be no carbon restrictions on the sector for another two decades.

John Grimes, the CEO of the Australian Solar Council, echoed the thoughts of many who attended the meeting and were interviewed by RenewEconomy when he said it appeared clear that the RET Review will serve only to protect the vested interests in the current electricity market.

“I’ve got to say – this is much worse than we had anticipated,” Grimes said. “This entire review process needs to be revealed for the sham that it is … we can only conclude that the RET Review process is heading to a biased and predetermined outcome.

“Instead of making customer benefits the key measure of a successful energy market, this review is set to side with big business, giving little or no weight to the benefits of solar for householders, business and the community.

“Clearly any model that fails to consider a carbon price (in any form) up to 2030, in the face of international action on climate change, is negligent and lacks any credibility. “

dick warburtonThe RET review was already controversial because of the Abbott government’s decision to by-pass the Climate Change Authority (which dismissed the ACIL Allen modelling and the coal industry’s protestations in its 2012 review), and appoint a panel led by climate change denier and pro-nuclear advocate Dick Warburton.

He will be supported by fossil fuel lobbyist and former ABARE chief Brian Fisher, and Shirley In’t Veld, the former head of WA’s biggest coal generator, Verve Energy. The secretariat will be housed in Abbott’s own department.

Clean energy attendees said they were shocked by some of the statements – including Warburton’s apparent ignorance that the Abbott government went to the election with a “million solar rooftops” commitment, as well as assumptions by the panel that the current 41,000GWh could not physically be met.

The panel reportedly claimed that no large renewable energy projects would be able to be built for another 18 months, and no more than 1,000MW to 1,200MW of wind capacity would be possible in a single year, making it impossible to reach the current target. Both these claims were reportedly vigorously contested by the representative of the Clean Energy Council.

However, it was ACIL Allen’s appointment that confirmed the worst fears of the renewable energy industry.

In 2012, the energy consultancy produced a report for EnergyAustralia, one of the fiercest opponents of the renewable energy target, that suggested the cost of the RET amounted to a subsidy of $53 billion – a number it said could be halved if the RET was adjusted from its fixed target of 41,000GWh to a “real 20 per cent”. This is the very argument that the fossil fuel industry continues today, and one that ACIL Allen, farcically, has been asked to adjudicate and model.

The figures produced by ACIL Allen in 2012 were ridiculed by the industry, and rejected by the CCA, which said that diluting the RET would save little for consumers, although industry analysts noted that doing so would destroy the price of renewable energy certificates currently held by clean energy developers and banks.

ACIL Tasman – as it was then known – was labeled by academic Guy Pearse in his book “High and Dry” as the coal industry’s favourite consultant.  Read this New Matilda report on the links between Fisher’s ABARE, ACIL Tasman and the fossil fuel industry.

Even the Murdoch-owned Business Spectator made a spectacular demolition of ACIL Allen’s research, pointing to its previous reports that claimed that carbon pricing would eradicate the LNG industry, would force the closure of all brown coal generators by 2020, its predictions that geothermal would account for 30 per cent of the Renewable Energy Target, and how on two occasions it grossly miscalculated the uptake of rooftop solar.

On its website, another study undertaken for the Electricity Supply Association of Australia – another body that wants the RET diluted – recommended a “pricing or regulatory response” to try to prevent the widespread uptake of rooftop solar and the potential “islanding” of electricity consumers.

In yet another study, for the Department of Resources and Energy, ACIL Allen in 2010 was asked to assess various energy technology cost estimates. ACIL Allen made this extraordinary prediction for solar – saying its capital cost would be around $4,650 a kW by 2015, possibly falling 30 per cent to $3,255/kW by 2030. (See the table here, page 16, table 8).

Even in 2010 this prediction was patently absurd. Solar PV prices were falling 30 per cent a year, not every 15 years. By the end of 2013, capital costs for utility-scale PV are already at 1,500/kW – less than half what ACIL Allen predicted would be the cost two decades hence. Still, the ACIL Allen estimates formed a crucial part of the government’s commitment to fossil fuels.

This largely reflects the problem that the renewable energy industry faces – incumbents and ageing engineers and business people who reject the science, simply do not understand or accept that renewable energy sources can be effective and cost competitive, and cannot imagine an energy system any different to the centralised model that has dominated for the past 100 years, and/or who are merely seeking to protect their vested interests.

The problem is that not only do they now have the ear of the current government, they have their hand on the wheels – and their foot on the brakes.

 

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  • DogzOwn

    No broken promises, and no unpleasant surprises, and no care, and no responsibility, and not even Cardinal Pell to forgive Phoney Tony for this War on Facts and Nature

  • Zvyozdochka

    I wouldn’t be so gloomy. The change to renewable really is unstoppable. This behaviour will accelerate moves away from a central grid. Businesses that have large inputs of known cost solar (like clients of ours) will have advantages over competitors at the sweet mercy of fossil energy utilities. Their reaction will be to charge more for fixed grid supply costs, which will further accelerate storage interest. The death spiral has begun and really is only a question of how many roadblocks BAU can think up for a few years.

  • Chris M

    However, good news in SA with the solar program as announced yesterday. And with storage and the repayment model, it should be a way ahead for the er economically challenged to have solar on their homes.

  • coomadoug

    Mark Twain said this:
    “If you see a man arguing with an idiot, what you actually have are two idiots”

    He went on to say in the same piece:

    “Let them stand tall and boast on their rubbish pile.
    It will make the alternatives shine.”

  • RobS

    Here’s my prediction, in the time it takes for this farcical review to be undertaken the cost of wind and solar will have fallen by more then the remaining RET subsidy they both receive. That subsidy will then be removed and renewable installations will carry on, a few immature technologies will lose out but the big players have made it over the technology and scale humps needed to be viable and will carry on largely unaffected. This will shock and outrage the right and the fossil fuel industry whose world view relies on the “fact” that renewable energy is only installed due to unsustainable government largesse, they may try to go further and tax renewable self generation however by that time we will be approaching 50% of homes having solar and any attempts by a party to penalise 50% of voters for self generation will blow up spectacularly.

  • Ricardo

    It’s a testament to how farcical and shameless this govt is that Solar PV is marching on in spite of its farcical and shameless attempts to defend the mining industry simply because of the economics. However, the economic and social benefits that Australia is missing out on by having a govt that refuses to support renewables is hard to ignore.

  • Russell Yann

    Thanks Giles, at least the truth is getting out even if the crazies over at the Murdoch circus try to stop it. In the near term things are dire no question. Vested interests writ large, a RET review lead by a bunch of deniers and shills for the fossil fuel lobby. A little further out though I feel we are likely to see a change of government at state level in Victoria. This could see decarbonisation on some scale, with Tasmania, South Australia, ACT and Victoria driving the changes. Add to that widespread access to charging stations in the above jurisdictions and the overall outlook starts to look much better.

  • John P

    No Australian government is ever going to do anything about climate change because of the implied threat to our export trade in fossil fuels.
    But the government will need some sort of ‘fig leaf’ to justify the ‘business as usual’ model.
    This review is just such a fig leaf.
    And quite a few of Liberal party buddies get a good well paid job in the process so that is a bonus.
    But as has been pointed out, the move to renewables is unstoppable.
    Basic economics will undermine the Abbott fantasy.
    Tony himself, a few years back, admitted to knowing little about economics.
    And it shows.

    • andrewalcock

      I
      like John’s fig leaf argument and would like to take it a step further. Abbott
      and Hockey and their irresponsible mates mates in the parliament and in the
      boardrooms do not give a fig about protecting the environment or the welfare and
      the human rights of the most vulnerable people at home and abroad, so he gave us a most laughable fig leaf.

      They always appoint those from their friends and those that
      support them financially to give them they advice they want when it comes to
      inquiries into important issues.

      True, Abbott and his friends know little about economics, but know
      less and care little about important issues like the environment, social
      justice, and fairness in international dealings with other nations – especially
      the poorer ones.

      • John P

        And the dishonesty of the whole thing is breathtaking.
        What we are getting now bears no resemblance to the pre-election blather.
        The voters who changed the government may be wondering what happened to their plans for the future.
        But the point now is, have they learned anything and what will they do at the next election.

      • K.D. Afford

        I have come to this table late, but express disgust at the Liberal governments denial of what faces us and the lead time they are pushing for monetary gains to further the coal industry as we help poison the world. The Chinese come to live here to breath fresh air, so I heard today! And as I write we have +2.7 min and +3.2 maximum temperatures for this month and we are looking at a serious 70% chance of a nasty El nino this year, coming on the back of already elevated temperatures.
        It is frightening that men in alligator shoes, lobbyists, run the country and all the government does is feed the lies to a compliant and brainwashed public who are too weak to care – or are they, Mr. Abbott?

  • JohnRD

    I think that all this is good news. The appointments, the modelling the “This includes an apparent refusal to measure the benefits of renewable energy – including the health benefits, job benefits, and the network benefits – which the panel has dismissed as “too hard to model” ” All this provides Abbott’s enemies plenty of scope to attack the obvious bias.

    It all reminds me of the Queensland Competition Authorities report on the setting of “fair” feed in tariffs. (See http://www.climateplus.info/2014/04/13/comments-on-qca-report-on-feed-in-tariffs/ for comments.) That report admitted that it was only concerned with being fair to the retailers, not rooftop solar PV (RTS) owners, power generation companies or consumers. (By implication, the QCA was also committed to defending the payments made to power distributors.)

    When calculating the “fair” FIT the QCA managed to find excuses for not including most of the savings associated with the use of RTS. This made an enormous difference. If these savings are included, the FIT would have to be above 100 cents/kWh before RTS stopped reducing the power bills of Qld householders who don’t have RTS. The QCA exclusions reduced this figure to a measly 8 cents/kWh.

  • Chris Sanderson

    The Abbott ‘shocks’ are intentional. Abbott is
    following his mentor Howard, who fell in thrall with the US neo-cons, when he
    met with Bush and them during the 9/11 event.

    It’s a strategy you can read about in Naomi Klein’s
    ‘Shock Doctrine – The Rise of Disaster Capitalism’ It’s based on Milton
    Friedman’s Chicago school of economic theory. She writes that in conjunction with the IMF and the World Bank the ‘Chicago Boys’ theories destroyed economies in South America, Middle East, Asia and Eastern Europe during the last 30 years of the
    20th century.

    Their theory is that only in periods of great economic disruption is the social shock strong enough to politically allow the forced introduction of the neo-con far right concepts of inducing ultra-weak government and ultra-strong business. Nice for the rich, awful for everyone else.

    We will watch the govt and a coterie of elite vested interests attempt to impose the same in Australia. First kill off all the climate change mitigation legislation, especially renewable energy that threatens the coal barons. Then reduce govt expenditure and raise taxes in a ‘shock’ budget’ (except of course $12Bn for military technology), etc. The claim is that our economy is in bad shape. Actually it is right now, the envy
    of most other developed countries.

    The thing that really bugs me is the claim that Abbott has a mandate for this from the Australian people. IMHO: The only mandate he had was to replace a dysfunctional Labor govt. If he is allowed to continue for his full term, Australia will require several decades to recover, just as they have in South America and the other countries where these shock tactics have been applied.

  • sm

    Can you please provide a link to a document showing the terms of reference for ‘the modelling will assume that there will be no carbon price out to 2030, and will not factor in any abatement targets’?

    Since if these are the TOR then that does not coincide with the Emission Reduction Fund and Direct Action. Although not very good tools they do imply a price on carbon in Australia. Then again, it does very much coincide with climate change not being on the agenda at the G20 in Brisbane

  • wideEyedPupil

    The PM doing his best goanna impersonation as he rips the heart of the nations attempt to do something (anything) about that false religion Climate Change.

  • Dark green

    What a corrupt process the LNP & ACIL are running, every individual concerned should be deeply ashamed of themselves. Please keep up the coverage of this grotesque farce and name every name, so that we can know who is responsible.