Five things we learned this week…

Much has been expected of the Rio+20 conference that starts in a few weeks, just as it was for that other great aspirational event, the Copenhagen Climate Change conference in 2009. So much so that more than 100 country leaders, including our very own Julia Gillard, are planning a visit to Rio de Janeiro to tout their commitment to a green and sustainable economy and celebrate how far the world has come since the first Rio sustainability conference in 1992. What? Oh.

And therein lies the problem. The real name for Rio+20 is the “UN Conference on Sustainable Development”, and no amount of branding will help it avoid the inevitable squabbling and compromise that goes with being a UN construct. And it is pretty much the same cast that has made progress in climate talks so slow that it makes molasses look runny, as one delegate lamented this week.

Representatives have been gathered in New York this week to receive a pep talk from UN chief Ban-ki Moon and for “emergency” and “make or break” talks about framing a document that could be delivered with a straight face by world leaders in Rio. So far, it remains at an impossible 80 pages with more brackets than there are delegates, and much eternal bickering. Just to give an example, the Holy See wanted to remove references to sexual and reproductive health in the chapter on health and population, and also suggested the word “green” – as in jobs – be replaced with the word “decent”. We’re not sure it will catch on. Decent jobs? Decent energy? The decent economy? The Decents political party? Bob Brown might be getting out just at the right time.

GAG! The Golden Age of Gas

The multi-trillion dollar global gas industry, including Australia’s, have been seeking to bathe in the reflected glory of the International Energy Agency’s latest treatise on the “Golden Age of Gas”, and its predictions that the fossil fuel will treble in use over the next two decades. But as endorsements go, this prediction was made through gritted teeth. Gas may have lower emissions than coal, but even if countries and developers adopted best practice on CSG and fracking, the IEA said it would not likely affect the global path of emissions much (less than 0.5 per cent by 2030) because while it might displace some coal-fired generation, it was also likely to push aside low carbon options such as renewables and nuclear. The world is still heading to 650ppm and average temperatures rises of 3.5C.

The IEA underlined its point that gas would only be acceptable as a transitional fuel if carbon capture and storage was available, but even the IEA can’t see this happening until 2035 at the earliest on any significant scale. And it noted, with some irony, that if all the hydraulic fracturing that is planned for the US goes ahead, then 80 per cent of the potential area that could be used to store Co2 underground could be compromised. Considering that carbon capture is the easy part of the proposition, and proponents fret over the storage solution, this may not be good news.

Scotland the brave

Not only do the Scots want independence from England, they also want to be the first country to 100 per cent renewables, a target they hope to reach by 2020 – mostly with the help of a lot of wind turbines built in places where Donald Trump wants to build hotels and golf courses, and tapping into offshore sources such as wind and wave and tidal. But the proponents got a nasty dose of reality from a leading energy analyst, Citi’s Peter Atherton, when he turned up to an energy committee and dismissed the plans as “borderline fantasy.”

Atherton, who has also been critical of the UK’s nuclear strategy, noting it would be ruinously expensive to implement unless the government accepted all the risk, told the MPs that the renewable plan would only work if oil and gas prices remain high in perpetuity. “You are making a bet that fossil fuel prices will continue to rise greatly forever, so you are taking a very long position on oil,” he said. “And you are betting that the consumers of the UK generally, or somewhere else in Europe, will be willing to pay for all this. Those are two big bets. I’m not sure I’d bet £45 billion on it and I’m not sure I’d bet the economy of Scotland on it. You might want to slow down and see whether those assumptions turn out to be right.”

Carbon complexities

As politicians in Canberra exchange insults and untruths about the impending carbon price and its potential impact, there appears to be growing confidence in Europe that a mechanism may be found to underpin their own carbon scheme, which has been rendered all but useless by a price slump caused by the economic unpheaval and a massive surplus of credits. Deutsche Bank’s Mark Lewis, one of the leading energy and carbon analysts in Europe, says the issue as now moved from a technical debate among bureaucrats to a broader political issue.

The key, as usual is Germany. Lewis says there are two key factors here. Germany corporates are telling Chancellor Angela Merkel that without a higher carbon price, courtesy of more ambitious abatement targets or other measures, then they are simply unable to invest in low carbon technologies, and Merkel’s biggest domestic agenda – the decarbonisation and denuclearisation of its energy grid – will be impossible. Merkel also needs the support of the Greens in forthcoming election.

While proposals to lift the EU abatement target for 2020 from 20 per cent to 30 per cent have been vetoed by Poland, there is now talk that an interim target for 2030 may be possible. “I think the mood music has changed,” Lewis told RenewEconomy during a visit to Australia this week. “This has moved .… to a debate among national governments. That is a step change (because) to get any kind of action on this you need the governments on board.” The over-riding caveat on this, of course, is the future of Greece (and/or Spain). Disaster there means all bets are off.

Solar and the age of cheap energy

The tabloids and the talk back radios, and even the “quality press”, have been full of doom and gloom articles about rising electricity prices and the cost of green energy schemes, so what happened this week when the Australian Energy Market Operator delivered a report suggesting a possible step change in the Australia energy industry, and a potential $30 billion-plus investment in rooftop solar PV by Australian households over the coming two decades – all because solar PV was now cheaper at the socket than the grid?

Well, not a lot as far as we can tell. The story, which we covered on two occasions, with typically restrained headlines such as “Rooftop solar PV to be energy game-changer in Australia” and “18GW of solar by 2022? That depends on who’s connected”, was basically ignored. Seems like good news is no news.