Five things we learned this week .... | RenewEconomy

Five things we learned this week ….

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Fossil fuel industry lines up for all-you-can-eat energy buffet; why shale gas means US is simply exporting its emissions; carbon tax and Obama; Australia’s solar PV industry has grid parity thrust upon it; and is there such a thing as the “no wind turbine syndrome”

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All-you-can-eat buffet for fossil industry

The International Energy Agency’s annual World Energy Outlook publication is a 670-page omnibus, the reference point of a multi-trillion dollar global energy industry looking for guidance on how and where they should invest their billions. In the last few years, however, it’s come with health advice attached, and in a way has resembled a breakfast menu at one of those flash hotel buffets – a diet-conscious , healthy continental option with cereals and fruit (recommended), the all-you-can-eat cooked alternative, and a more modest version where you can eat all you want but hold the sauce.

This year’s edition even carried a warning on the first page that consuming more than one third of the contents of the buffet would cause serious indigestion and regret from future generations. But most people, lamented the IEA’s executive director Maria van der Hoeven, particularly those in the coal sector, were opting for the you-can-eat option, including the sauce, and were being egged on by their investment and banking friends at the same table – albeit with the precaution of wearing napkins so the ketchup wouldn’t run down their shirts.

No surprises, then, that Australia’s Energy Minister Martin Ferguson dived straight into the pastries, ordered two omelettes and an extra lashing of bacon and wondered if the hash browns (with carbon capture) couldn’t be exported. “The World Energy Outlook predicts that fossil fuels will remain the dominant fuel in the global energy mix to 2035, with coal meeting nearly half of the growth in global energy demand over the last decade, even outstripping total growth in renewables,” he hoorayed in a press release, before taking up the theme again at a CEDA conference, marveling at the US shale gas boom.  “Australia too can benefit from recent developments that allow us to unlock our unconventional gas resources. Indeed, our reserves are so significant they may one day exceed our conventional offshore gas supplies.”

The balance of emissions payments

But let’s have a look at this so-called shale boom. It has caused a massive energy switch from coal-fired generation to gas-fired generation in the US, and is even predicted to make the country energy independent. This big switch may look good for its domestic carbon accounting, but is it good for the world?

A study this week from Tyndall Manchester raised serious doubts. “If shale gas has caused displacement of US coal consumption in the power sector then emissions are only reduced in net terms if that coal is not burned elsewhere or at another time. Coal exported to countries with growing economies and without an effective emissions cap is likely to represent an increase in emissions.” And here’s the thing – US coal exports in the past year have reached record highs, notwithstanding the actual and anticipated closure of several hundred coal plants.

“Wherever displaced US coal is combusted, in the absence of polices to force fossil fuel substitution there will be an absolute increase in global emissions and hence a reduced probability of avoiding the 2°C characterisation of dangerous climate change,” the report notes.

“Provided normal levels of profit can be realised from the extraction of fossil fuels, it is difficult to envisage a market-led energy system not extracting and combusting such fuel. Given the global market for fossil fuels is growing and  …. in the absence of meaningful emission caps, shale gas extraction within a market-based energy system will lead to an absolute increase in emissions. “ Of course, that applies to Australia coal and gas exports as it does to US exports.

Will Obama, or won’t he?

But will there be global emissions caps. Will there be one in the US? There has been a lot of talk in the past 10 days week that a carbon tax could be back on the agenda in the US, a surprising circuit breaker for the tax deadlock in Congress, and as a potential solution to the looming fiscal cliff. This was even suggested by a leading Republican lobbyist, Grover Norquist, before he was slapped down by the Koch brothers, who bankroll much of the hard right Republican and tea Party candidates in Congress.

Exxon Mobil even suggested they supported a carbon tax – though not a cap and trade scheme. Could this be an opening for a refreshed and re-elected Obama Administration, particularly given the fact that the president is now talking about climate change as a major issue for current and future generations? “Ee have an obligation to future generations to do something about it,” he told journalists at a press briefing this week. Not so fast. Said Obama’s spokesman Jay Carney on Thursday: “We would never propose a carbon tax, and have no intention of proposing one.”

Solar PV industry has parity thrust upon it

Meanwhile, the solar industry has often talked about “grid parity” – the ability for it to supply electrons via solar panels on rooftops and compete with grid-sources electricity prices – and now it is about to have grid parity thrust upon it. The surprise decision by Federal Government today to bring an early close to the Solar Credits program, which offered a multiplier of renewable energy certificates to rooftop installations, means that rooftop solar is largely on its own when it comes to subsidies.

It will receive no more certificates for electricity produced than any large scale installations, and in most states the tariff being paid for the export of excess electrons back to the grid is little more than the wholesale market. In some cases, it is nothing at all. For the utilities, this will come as a relief, because rooftop solar threatens to do spectacularly devastating things to their business models. Their last recourse will be to take regulatory measures to prevent the deployment of the technology – and there are signs this is already happening.

Wind in the willows 

The continued noisy campaign against wind farms is driving the industry to the point of distraction. A lot of stuff was aired again this week at the Senate inquiry into wind turbine noise, prompting Alan Jones to air the complaints of a Victorian wool farmer who was worried about her sheep. Clearly, the industry is getting frustrated. Infigen Energy chairman Mike Hutchinson – who appears to belong to a poorly recognised minority, an Anglo Saxon male engineer of a certain age who actually supports a carbon price and wind energy – suggested to shareholders this week that “it is as valid to blame the absence of a wind farm for the symptoms of remote sufferers, as it is to blame a wind farm for local sufferers.” Which suggests that you may be equally justified to blame your headaches or your dog’s constipation on not having wind turbines in your backyard. Not that he is really suggesting this – it was just to highlight the extreme claims of the anti-wind brigade. “The fact remains that there is no credible scientific evidence that the incidence of such symptoms is in anyway correlated with wind farm location, let alone of any causal link,” he said.

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  1. Ronald Brak 8 years ago

    It is interesting that Martin Ferguson thinks we can export vast amounts of natural gas when natural gas use in Australia is currently considerably below where it was expected to be at this time. Two important causes of this, improved efficiency and solar PV, are not unique to Australia and can also reduce gas demand in countries Ferguson hopes we will be exporting to. As a result there may be much less demand than he expects.

  2. Concerned 8 years ago

    Facts and figures,or opinion?
    How can Japan for instance do without gas?

  3. John 8 years ago

    I have recently listened to a presentation by Kevin Anderson, Deputy Director of the Tyndall Centre in the UK, talking about the likelihood of achieving a 2C limit – it makes for sobering listening.
    A lot of the assumptions made over the recent past have used either old data or extremely optimistic assumptions (or both) – like timing of CO2 peak & rate of increase in emissions. Just looking at the figures gives one pause to wonder if there will be the will to achieve the reductions required.
    We need to wake up and decide what kind of planet we want to live on (or not) – this will not only affect our kids, our future will depend on the action taken in the next couple of years. We need to stop kidding ourselves that we have time to play around with.

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