Category Archives: Policy

A letter to the Federal LNP

I got angry about climate change again this week, in particular this stunt by NSW Liberal MPs. With my blood up after my first coffee for the day I wrote the below and sent it off. Maybe there are some points in there you’d like to take to your local members? Politics aside, the ACT’s response to climate change is the most appropriate in the country. It only appears radical because everyone else, particularly federal politicians, are doing so little.

 

Good morning Ms Goward,

I note with disappointment your media event and associated opposition to the ACT’s ambitious renewable energy plan. Two things in particular are disappointing and I would have thought below you. First, the idea that electricity should be produced in the region it is consumed, or any other product for that matter, is absurd and not how we have ever operated. Do the people of Lithgow complain about hosting our power plants? Do you drive out there and apologise from time to time? Do you feel guilt that the cheap power that has driven our economy is killing the residents of Morwell? A functioning economy has always depended on distributing costs and benefits and electricity generation is no different.

What I am most disappointed about though is the argument against the ACT’s principled stand. It appears from the article in the Canberra Times that you said “Ninety per cent by 2020 is really quite outrageous – it’s pandering totally to a green movement. It’s unrealistic, it’s impractical and wind turbines are notoriously unreliable as well.” This amounts to you asking the ACT to stop being ambitious. Their action is making you and the laggards in the LNP look bad. Rather then try and work harder on your own response you try and bring others down. It is disgusting and will be viewed with utter contempt in years to come.

You have an opportunity to do the right thing by your electorate and their children, by being ambitious and taking action. Yet you choose to bring others down instead. Party unity is one thing, doing the right thing something else entirely.

Why not think about the jobs in your region? Or the health benefits that come from reducing coal use and mining? The Goulburn region has a stunning wind resource, that can bring jobs and money to the region. While climate change ruins farms and rain patterns, you choose to do nothing and stand in the way of a new income stream for these properties.

I hope you change your mind and support the most ambitious and appropriate government response to climate change in Australia at the moment. I have not read a report yet that thinks Direct Action will work, and there are no penalties if it doesn’t. If you are serious about addressing climate change you can stand up and say something. If you are not, history will judge you very harshly.

I am available to speak further about this on [mobile number] and happy to discuss more appropriate policy responses to climate change if you desire.

Regards,
Evan Beaver

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More like Urgh Hour

I’ve been complaining loudly this week about how ineffectual Earth Hour is and as a result how much I hate it. I despair that this massive, well organised and well funded marketing machine has set their sights on getting people to turn their light off for one hour, once a year. Anyway, this is an old hobby horse of mine, and if you want to hear more, follow this link to my TEDx talk from last year.

What can we do then? What concrete actions can we take, and could Earth Hour promote, that would contribute to de-carbonising our economy and making our lives more energy efficient?

Buy GreenPower. This commits your electricity retailer to purchasing enough renewable energy to cover your use. This is a cost and effectively subsidizes renewable electricity sources. It is additional to the mandatory renewable energy target and audited by a federal government agency. I trust it absolutely, noting GreenPower is a product, and many electricity retailers have “green” supply options, which might not all be renewables. If everyone was on GreenPower Australia’s decarbonising job would be done.

Contribute to a community renewables project or put solar on your roof. Community renewables include: Hepburn Wind, SolarShare who I volunteer with or this excellent project in Freemantle. If you want solar on your roof use an accredited installer sourced through the Clean Energy Council.

Buy more efficient appliances. Chances are if your fridge is more than ten years old you should replace it, and the energy saving will cover the cost of a new fridge in 6-10 years. You can compare the efficiency of all sorts of new appliances here and there are calculators to work out how much you can save. I encourage you to leave the sticker on these appliances, or move it to the back, so you can make comparisons later and understand how much energy different things use. The star system is an indication of how efficient a unit is compared to a standard, which is updated periodically. To get a feel for how much different appliances use, compare the kWh figure, the number printed in the middle of the sticker. As an example, our fridge uses 320kWh a year, while a big plasma TV is closer to 450.

Ride your bike more!

Make your house more efficient. I’ve got a blog post here on how to make a Canberra house more efficient, and here at the Conversation on how to control heat flows in your house.

 

 


If the answer is nuclear you don’t understand the question.

When selecting technology to solve a problem, a common method employed is to have “eligibility criteria” and “merit criteria”. Eligibility criteria are the must haves; if you are selecting a new machine to generate electricity “does it generate electricity” is the obvious one. Eligibility criteria are all pass/fail tests. Merit criteria are what you use to split all of the options that pass. Say you’re comparing a diesel or natural gas engine to power a remote site, a merit criteria could be “is fuel available all year round?”

In this post I will focus on the eligibility criteria for powering Australia while reducing the greenhouse gas emissions associated with electricity production. I will spend a long time arguing that, no, nuclear should not be considered, because it is utterly incapable of solving the problem. In later posts I will discuss the merit criteria, where again nuclear falls down.

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Policy Watch: Energy Efficiency Opportunities

Big news for large energy users at the moment is the start of a new Energy Efficiency Opportunities  cycle. “Assessment Plans” for the second cycle are due at the end of December and about 300 corporations are pulling theirs together as I write.

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Levelised Cost of Electricity: What is this?

Levelised Cost of Electricity, or LCOE is a means of comparing generation technologies, by considering the cost of the electricity that comes out over its lifetime. Simply put it is the lifetime sum of all the costs; construction, planning, maintenance, land purchase, waste disposal, pollution charges, mining, divided by the amount of electricity produced during it’s lifetime. Choosing some non-indicative numbers, if you spend $2000 installing solar panels, and they generate 4000kWh over their life time, your LCOE is 50c/kWh.

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The Energy White Paper

No, I haven’t read it, and I have no intention of doing so. I’ll probably refer to it in the future, but sitting down and reading the thing in any sort of casual manner, no, that’s not going to happen.

Here it is if you’re an enthusiast

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Contracts for Closure: Dead.

Contract for Closure negotiations cease.
“Not angry, just disappointed” seems to sum up the reaction to the untimely death of the Contracts for Closure process. Electricity market observers in the circles I move in weren’t that surprised to see the program cancelled, mostly due to forces beyond their control, but disappointed that it had to come to this

Contracts for Closure (CfC) sought to effectively purchase some of the dirtiest generating capacity in the NEM, and close it in an orderly fashion. Participation was determined entirely by the emissions intensity of the business (above about 1.3T/MWh from memory), which captured:

  • Alinta Energy (Playford B in Port Augusta, South Australia);
  • HRL (Energy Brix in Morwell, Victoria);
  • Hazelwood Power Partnership (Morwell, Victoria) (91.8% owned by International Power GDF Suez Australia);
  • RATCH-Australia (Collinsville, Queensland); and
  • TRUenergy (Yallourn, Victoria).

Hazelwood is the big hitter in that group, at 1760MW, and regarded as probably the highest carbon intensity of any power-station in the world. Yallourn is just up the road from Hazelwood, and uses roughly the same sort of coal and slightly newer technology. It’s still not that great. Playford B and Collinsville are both small plants in the 200MW range, used principally during the summer/winter peaks. Peaking baseload if you like. HRL’s Energy Brix is right next door to Hazelwood, and uses Hazelwood coal to run a boiler, which dries and compresses Yallourn coal into briquettes. There is a heat recovery system installed in this boiler, which runs a small (~40MW) steam turbine, but my understanding is that this hasn’t provided electricity for some time. When it did though! Their emissions would have been amazing.

CfC was in a difficult policy position, but for a laudable goal. As I’ve mentioned previously, the carbon price is there to distort the trading market in favour of lower-emissions electricity. The factor that balances “cleaner generation” with “energy security” is the carbon price; politicians want to distort the market, but there is a risk that if they distort it too quickly generators can’t operate and we lose supply. Many would argue that $23 a tonne is much closer to the energy security end of this spectrum, but in the first couple of years that’s okay. CfC then was created to bridge the gap between the desire to drive change in the market and the desire to keep electricity coming out of the wall. Rather than waiting for the slow attrition of businesses failing, or even the spectacle of proper destruction, Government decided to take a couple of GW out of the market, and make sure that it was replaced. Sounds simple?

But the process has been very difficult from the start. No one knew how much money Government had for the job; no one could know, or their bargaining position would have been severely compromised. Then there’s the question of how much are these businesses worth? This too is a ridiculously complex question. Taking Hazelwood as an example; they have the world’s cheapest fuel source, right next door, and it will probably last for 300 years. The capital is already invested, so their costs are mining, maintenance and operation and now an additional carbon price. None of the other costs change, so how long until a carbon price renders the business unprofitable and they close? Then what profit would they have made in that period, and if someone paid that upfront would they close now? There are also questions of how to contract an orderly retreat from the market? Does the plant need to be operable but mothballed in case of emergency? If the plant caught on fire before the contract ran its course do they still qualify? All of this was known before they started and a bunch of smart people had some answers organised.

Then once the negotiations opened, matters turned out to be more complex than imagined. Electricity demand data was released that showed network demand had dropped for each of the last three years; this severely impacted Treasury forecasts of future profitability of these plants, but intuitively one expects this decreased the value of the plants. Less electricity to supply, same amount of generators. Concerns were raised about the flow on effects of closing Energy Brix; the briquettes are used throughout the La Trobe for starting coal-boilers, but also, they are used to drive thermal processes in large dairies throughout Victoria. Pasteurisation and dried milk products could mean that the Government was no longer going to close an electricity generator. Talk about perverse outcomes.

Here is Minister Ferguson’s official reasoning

“The Contract for Closure negotiations have taken place constructively and in good faith, but there remains a material gap between the level of compensation generators have sought and what the Government is prepared to pay,” Minister Ferguson said.

“Recently published forecasts for lower energy demand in Australia presented serious questions around the value for money evaluation of proposals. The recent announcement to link with the European emissions trading scheme and remove the price floor did not alter this outcome.

“I have said throughout this process that we had a set envelope of funding and were not willing to enter into contracts at any cost – this is about the responsible expenditure of public funds.”

So they didn’t have enough money? Among other things sure, but this points to what I consider a major problem with energy policy in Australia; that since Kevin Rudd changed the influence of the Department of Prime Minister and Cabinet, to essentially the political arm of the APS, unsubstantiated policy ideas have come thick and fast, with the Departments delivering them left to sort out the details. Maybe with a bit more work up front this wouldn’t happen? God forbid.

And so now all that is left to close the worst generators in the country is the carbon price and public opinion. I have wondered for a while if we’ll see more community direct action against these guys, and recent reports from Newcastle suggest this is already happening.