Five things we learned this week …..

Will this be the year of Big Solar, or Big Solar Hybrid?

When we canvassed industry experts last year and gazed into our own crystal ball for the big clean energy themes in Australia for 2013, Big Solar was up near the top, next to energy storage. But it may have to share its billing with Big Solar Hybrid.

The owners of the Collinsville power station near Townsville have announced plans to close its ageing, dirty coal fired power station (bought for a single dollar more than a decade ago) and replace it with a mixture of solar PV (20MW), solar thermal (30MW) and a gas turbine (40-50MW), and has received funds from the government to investigate how much of the existing plant can be repurposed for the new “clean energy park.” (Answer, not much, a steam turbine or two at best).

The Solar Hybrid looks like being a bit of a theme, upsetting many who argue that solar thermal (with storage) should be built on its own merits. The Kogan Creek coal fired power station, also in Queensland (what is it with these ultra progressive Newmanites), will open its 44MW solar thermal booster later this year, and it seems that the preferred plan from the owners of the dirty brown coal generators in Port Augusta favour a hybrid model too. And ARENA chief Greg Bourne has indicated he leans towards hybrid plants too, at least to get the technology rolling.

There are several Big Solar only projects on the drawing boards, but these are all (cheaper) solar PV, including two 50MW plants from Investec in WA, the 20MW FRV project in the ACT, Infigen Energy’s 35MW proposal near Canberra, and Pacific Hydro’s 30MW idea, and a host of smaller ones, such as Belectric’s 5MW plant near Mildura. But no one’s broken cover with a recent solar thermal only plan, unless there’s a few quiet proposals being pushed into Olive Yates’ in-tray at the Clean Energy Finance Corp.

Which part of the phrase “China will have a carbon tax” does Tony Abbott not understand?

What parts of this sentence do you think Opposition leader Tony Abbott does not understand? “China will introduce a carbon price on energy production.” Tony Abbott and his climate change spokesman Greg Hunt have built whole policy platforms, and potentially new careers, on the claim that no other country has a carbon price, least of all the US and China. On Monday, there was Hunt “guaranteeing” that China would never, ever impose a nationwide “tax on electricity.”

If by never, ever, Hunt meant not before Tuesday, then he was right. Because the next day, the Chinese Ministry of Finance announced on its own website it would do exactly that: “China will proactively introduce a set of new taxation policies designed to preserve the environment, including a tax on carbon dioxide emissions,” said a senior official. This, it should be noted, is over and above the emissions trading schemes about to be trialled in 7 cities and provinces covering 250 million people.

As I thought of something bitingly witty to say about this, I had discovered someone else had already done so, in reference to the Republicans that Abbott and Hunt are so keen to ape. Here is the take from Brian Merchant from the US blog Motherboard, tweeted by 350.org’s Bill McKibben, who noted that the proposal itself was momentous because it would affect half of the coal plants in the world, taxed in favor of environmentally-preferable energy sources

“Hear that?,” Merchant wrote. “That is the sound of the Republicans’ seemingly indefatigable go-to argument against pricing carbon evaporating before their eyes … Unfortunately, those idiots will have to turn to other excuses now, dredging for scraps amidst an ever-dwindling pool of them. Back to that global cooling thing again, maybe? Or just saying ‘energy tax’ a bunch of times?”

Hey, has he been to Canberra, recently? Sounds uncannily like what he hear down under. The good news is that the official election campaign has not yet begun, so Tony Abbott still has the opportunity to repurpose his carbon slogan to something like this: “There will be a carbon price under the government I lead, because every other bloody country’s got one. It just won’t be a great big one. That is all.”

The carbon tax that wasn’t

Mind you, the idea that Australia has a “tax on electricity” may seem a little academic, or possibly just an attractive accounting tool, if a new analysis on the compensation package for our dirtiest energy polluters, the brown coal generators, is anything to go by. The conclusion by energy consultancy CM&E found that the carbon price was acting more like a subsidy than a tax, and the brown coal generators were set to reap a windfall of up to $5.4 billion over the five years of the compensation scheme – the spoils of being able to frighten the government into thinking that the lights would go out otherwise.

Of course, this conclusion was given a similar “it-can’t-be-true” reception like that afforded to last week’s analysis by Bloomberg New Energy Finance, which showed that wind energy was already (much) cheaper than new-build coal and gas fired generation in Australia, and solar would be soon. Trigger a reaction from born-in-the-50s energy types and central planners who could not possibly imagine bankers ever getting a little uncomfortable with the idea of new fossil fuel generation and raising the cost of capital to protect their risk, while lowering the cost of capital, and therefore the cost, of renewables.

“Fossilised bias” in financial institutions? 

Speaking of BNEF, the organization also produced a thought provoking analysis about the “institutionally fossilist” financial markets, discovering a litany of biases in financial regulation that tilt markets in favour of conventional energy, and which could potentially hold back the flow of investment into renewable energy technologies. BNEF CEO Michael Liebrich suggested the financial system was “pervasively biased against clean energy and clean infrastructure investment in favour of incumbent technologies”.

Liebrich pointed to upcoming Basel III regulations that limit the ability of banks to provide long-term non-recourse project finance, potentially impacting solar and wind farms, and new solvency regulations that could reduce insurance companies’ appetites to back long-term investments. And he noted that pension funds are important potential investors in clean energy projects, but struggle against rules on the matching of assets and liabilities. And publicly quoted companies are still not legally required to disclose climate risks, such as the increased frequency and ferocity of extreme weather events, despite being required to report on numerous other material risks.

Unsettling stats of the week:

“The global population of the obese now rivals that of the undernourished”   …… and then

…” the global public spending on R&D for improving food security now stands at one-fiftieth of spending on military armaments.”

Source: A chapter entitled “Feeding Australia in 2050”, from the Academy of Science publication Negotiating our future: Living scenarios for Australia to 2050 , launched this week.

What are we creating, a world of over-weight gun-slingers?  This could get ugly.