Wednesday, October 18, 2017

Malcolm Turnbull's energy policy offers hope via carbon price

Prime Minister Malcolm Turnbull's electricity and climate package is a welcome attempt to end a decade of policy mismanagement by providing the stability and certainty industry has been pleading for to underpin much-needed investment.
Let there be light: Prime Minister Malcolm Turnbull
discusses his climate and energy package.
The potentially crucial breakthrough is that the package appears to envisage a market-based price on carbon emissions, widely acknowledged as the most rational and cost-effective mechanism for the transition to renewable energy, the price of which is becoming compellingly competitive.

It is too early to assess whether the policy is the "game-changer" Mr Turnbull claims; it is yet to be fully detailed and depends on the support of the states, a number of which want a faster shift to renewables. Federal bipartisan support is also vital to the certainty and confidence required by investors.

Read today’s Editorial in today’s Melbourne Age - “Malcolm Turnbull's energy policy offers hope via carbon price.”

Doctors call on health super funds to pull $1.7 billion out of coal and oil companies

Hundreds of Victorian doctors and medical staff are pressuring their super funds to quit investing in coal and oil for the sake of health, as they did with tobacco five years ago.
Hundreds of medical staff in Victoria are pressuring
their super funds to divest from corporations that
are based on fossil fuels.
The group, which includes some of Australia's leading health experts, says there is overwhelming evidence that climate change is already making people sick and causing thousands of deaths.

They want the two largest health super funds, HESTA and First State, to divest from fossil fuel-based companies, arguing the nest eggs of the medical profession should not be built on industries that make people sick.

Combined, the two default health super funds have about $1.72 billion invested in these heavily fossil fuel-based companies, according to Market Forces, an environmental investment advisory group.

Read Adam Carey’s story in today’s Melbourne Age - “Doctors call on health super funds to pull $1.7 billion out of coal and oil companies.”

National energy guarantee would cut 6 per cent off power bills in best scenario

Even the best energy policy will do little to reduce costs for consumers, experts have warned, as the Turnbull government resists pressure to substantiate claims its new policy will save Australians $2 a week on power bills. 
Minister for Environment and Energy Josh Frydenberg, Deputy
 Prime Minister Barnaby Joyce and Prime Minister Malcolm
 Turnbull during Question Time at Parliament House in
 Canberra on Wednesday.
 In Parliament on Wednesday, Labor seized on suggestions the reduction could be closer to 50¢ a week but Energy Minister Josh Frydenberg stood by the claim of an average $115-a-year saving between 2020 and 2030.

"The national energy guarantee is a credible, workable, pro-market policy that will deliver lower power prices for Australians and involves no taxes, no subsidies and no emission trading schemes," he said. 

A report this week from the Australian Competition and Consumer Commission found a 63 per cent power price rise since 2007 had put consumers under "unacceptable pressure"

Read Eryk Bagshaw’s story in today’s Melbourne Age - “National energy guarantee would cut 6 per cent off power bills in best scenario.”

Malcolm Turnbull's national energy guarantee plan masks a carbon price

The Turnbull government's new national energy guarantee could introduce a de facto carbon price, measuring the cost of emissions for the first time since the Abbott government scrapped the carbon tax in 2014.
Placing a price on carbon: One default outcome of a National Energy Guarantee.
The long-awaited energy plan, released by the government on Tuesday, requires electricity retailers to ensure improved reliability levels while also reducing carbon emissions in line with Australia's Paris Agreement commitments.

Buried in the detail of advice presented by the new Energy Security Board to state and federal governments is a mechanism to be added to the National Electricity Market in two stages in 2019 and 2020 that could produce a default carbon price.

"Some electricity retailers will not be able to meet the required emissions profile, while others will overachieve," it reads. "Therefore a secondary exchange will occur between retailers to balance their portfolios."

Read Peter Hannam’s story in the Melbourne Age - “Malcolm Turnbull's national energy guarantee plan masks a carbon price.”

A Kite That Might Fly

The notion of tethered wind turbines that generate electricity from abundant and reliable high-altitude winds seems futuristic. Now, KAUST research led by Georgiy Stenchikov has identified the most favorable areas for high-altitude wind-energy systems in the Middle East.
Windmills could harvest wind energy from the lower
 100-150 m and suffer from intermittent wind supply.
 But there is abundant wind resource higher up which has led
 researchers and energy companies to explore the potential
for using winds at high altitudes. © ImageSource
The results confirm that there is abundant wind energy up there that could feasibly be harnessed, bringing the possibility of high-altitude power generation a step closer.

“We are very enthusiastic about taking this work forward,” says Udaya Gunturu, who studies atmospheric processes at KAUST.

Read the Science and Technology Research News story - “A Kite That Might Fly.”

Tuesday, October 17, 2017

The NEG a carbon price by any other name

Assuming the effective design and implementation of a final policy framework, the government’s announced National Energy Guarantee (NEG) provides an alternate approach to maintain reliability in the NEM, and contribute to Australia’s emissions reduction commitment under the Paris Agreement.

Below we outline our initial analyst response and implications for energy and carbon market dynamics.

Read the RenewEconomy story by the executive director energy and carbon markets at RepuTex Advisory, Hugh Grossman - “The NEG a carbon price by any other name.”

The no-name policy with little chance of reducing power prices

The National Energy Guarantee is to all intents and purposes an emissions intensity scheme. Its impact will depend entirely on the required intensity.

Figure 1 Electricity Co2 emissions for 28% reduction from 2005 in electricity. Source: National Greenhouse accounts, Clean Energy Regulator, ITKe
If our COP 21 commitment is taken to mean the NDIC of a  26-28 per cent reduction in CO2 from 2005 levels then we think that only a further 1.2GW reduction in coal replaced by about 4GW of renewables is required (see Fig 1, 2 & 3) by 2030. That’s less than 400MW a year.

We think the big gentailers will backend this as much as possible. They have various incentives to do that and the proposed rules entrench their place in the system.

If our COP 21 commitment/obligation is taken to mean providing our share of emissions reductions to keep the world to less than 2°C, then that means a >50 per cent reduction in electricity emissions by 2030 and that would require a lot of new investment. However, we think the current federal government hasn’t a snowball’s chance in hell of making that kind of effort.

Read the story by David Leitch on RenewEconomy -“The no-name policy with little chance of reducing power prices.”