China is proposing to introduce an absolute cap on emissions by 2016, and bring forward its emissions peak. It is being hailed as a potential breakthrough in international climate change action. More importantly, it makes the Coalition’s carbon policy look a nonsense, and further undermines the case for the huge coal projects proposed by Gina Rinehart and Clive Palmer.
Articles by Giles Parkinson
Giles Parkinson is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the former editor of Climate Spectator.
The carbon markets, the electricity industry and even BNEF now think it is more likely than not that Australia’s carbon price will be repealed. It’s just that it’s likely to be decided by someone we’ve never heard of, or a big Labor back-flip. Either way, it won’t be progress.
SunPower, the US solar giant, says module costs continue to fall sharply, battery storage will be economical “very shortly”, and it’s about to move into the energy management business. And it says, solar has “barely scratched” the $2 trillion global electricity market. No wonder the utilities have hit the panic button.
Utilities release a new report that suggests non solar households are paying $30 a year to cross-subsidise rooftop solar. That’s less than one tenth of the cross-subsidy on air-conditioning. But air-con is good for the utilities business, rooftop solar is not.
Joe Hockey refuses to endorse support for renewable energy, saying he had only just received the Budget Papers. Meanwhile, Coalition politicians are said to have signed up to speak at an anti-wind rally outside Parliament House.
Australian network operators say growing penetration of rooftop solar is cutting volumes, but its revenues are up because it can charge more to its customers. Can anyone see where this is headed? Network operators no longer have a licence to print money. Even market analysts have a sell recommendation.
ARENA has suffered a 5 pct cut in funds, and had a further $370 million in funding deferred. However, the agency says the “reprofiling” may suit its investment plans, as it considers tariff support and contracts for difference to augment one off grants. And it is about to launch a new $400 million off-grid and remote renewables investment program.
The investment world might be taking greater notice of the global ‘carbon budget’ – issuing warnings about capital risk on investments with a clouded future – but as the world’s atmospheric CO2 levels sail past 400 parts per million, Australia’s politicians plough on regardless.
As utilities in Australia and the US act to protect their business models against the growing impact of rooftop solar and other technologies, new alliances are being formed to protect the rights of solar customers. The “democratisation” of electricity is putting centralised production in direct competition with their consumers.
WA’s new energy minister doubts the fact of climate change, is pro-nuclear, thinks brown coal is clean, hates windmills and says solar is too expensive. He also thinks a ‘negawatt’ is an activist plot. Given that Australia now has a full house of backward-thinking, conservative energy Czars, what chance do renewables have in this country?
IPART continues to demonise the costs of renewable energy support mechanisms, at the same time as adding to those costs by sanctioning above market cost pass-throughs. And consumers will pay nearly double those costs to feed into a kitty so that their neighbours can be offered “discounts”. Anyone hear the sound of laughter?
It is finally dawning on Australia’s largest energy utilities that not only are their customers unfaithful, they are also ignorant. So Origin Energy has turned to lolly wrappers to try and inform its target market. Sounds like fun, but it belies a deeper problem for the energy industry: the age old oligopoly is under threat from the democratisation of energy.
New report suggests rooftop solar should be embraced as a natural hedge against volatile electricity prices, and to hasten transition to low carbon system. But it warns that incumbents are lined up against the technology, but politicians would be ill-advised to side with the owners of legacy assets.
The Climate Change Authority launches its review of Australia’s emissions caps and trajectories, and for the first time will consider an appropriate carbon budget for the country. That could come as quite a shock to some industries, and politicians. Meanwhile, Citi warns that super funds will come increased pressure to manage their exposure to fossil fuels.
The sweeping success of UKIP in last week’s local elections has implications for Australia. The first is that no policy document should be more than three words long. But Tony Abbott already understands that, and it’s bad news for climate change and clean energy policies.
The Clean Energy Finance Corporation may enter financing contracts for renewable and low carbon projects before July, when its funds become available. CEO Oliver Yates also says solar leasing will be an area of interest. Meanwhile, Greg Hunt tweets a dodgy number.
New study finds $7.3trn of natural capital costs not being priced by the global economy. If it was, none of the top 20 regional sectors would be profitable, let alone cover their cost of capital. Time to change our economic measurements? One ANU academic says business-as-usual is a ‘utopian fantasy.’