22 August 2016, Renew Economy, Gas bubble looms as energy ministers baulk at zero emissions target. State and federal energy ministers hailed progress they made in their COAG Energy Council summit late last week, but they may have condemned Australia to another great big investment bubble – this time in gas infrastructure. The meeting of ministers – brought forward by the apparent energy “crisis” in South Australia – resulted in a couple of promising steps that may help contain price surges of the type seen in recent months, but it seems to have ducked action on the critical issues. On the plus side, there is the creation of two new gas trading hubs that might improve transparency into a notoriously opaque market, and the potential for a new electricity inter-connector linking NSW and South Australia to be bought forward. But elsewhere, not a lot of tangible progress was made. The ministers baulked at calls to write zero net carbon emissions into the electricity market goals, despite that being implicit in the Paris climate goals that Australia has signed up to.And if the energy ministers did avoid turning the meeting into an anti-renewable jihad – as they were lobbied to do and might have been tempted under a previous federal energy minister – they did come face to face with some of the significant barriers to the rapid transition to a low emissions grid that they profess to support. One such example came from the Australian Energy Market Operator, whose chairman Anthony Marxsen stunned the audience on Friday when he suggested during a presentation that battery storage technology could be up to 20 years away from making a commercial contribution. Some dismissed this as garbage and a plug for the gas industry. AEMO is 40 per cent owned by industry “players”. Another is the painfully slow progress from the main policy maker, the Australian Energy Market Commission, which has been dragging out crucial rule changes most people believe are essential to moving to new technologies. Read more here
Category Archives: The Mitigation Battle
17 August 2016, Renew Economy, First act of Coalition’s “innovation” government: strip funds from ARENA. Malcolm Turnbull’s Coalition government has taken a new line of attack against the Australian Renewable Energy Agency, and sought to wedge Labor on the issue by adopting the Opposition’s own pre-election policy platform on the future of the agency. As part of its $6.5 billion “omnibus” budget repair package to be put to parliament in its first act of the new government, the Coalition proposes to change tack: instead of stripping all of the remaining $1.3 billion legislated funds in ARENA’s budget, it now proposes to remove $1.023 billion in funds – as proposed by Labor before the election. Labor’s threat to strip ARENA of $1 billion in funds was made in an apparent fit of pique earlier this year over the failure of NGOs to criticise the Turnbull government when it announced the creation of the Clean Energy Innovation Fund, using monies already allocated to the Clean Energy Finance Corp. Labor argued that instead of applauding a move by the Turnbull government to “re-brand” previously allocated monies, it should have been critical of the move to de-fund ARENA. So it decided to abandon its own support of the key agency. While Labor later said it was prepared to review that decision, party sources admitted to the Australian Financial Review on Wednesday that it remained a “grey area for us” because of their pre-election policy. On ABC Radio, treasury spokesman Chris Bowen refused to commit Labor to protecting ARENA. Stripping ARENA of $1 billion of funding would be a huge blow for the emerging technologies in Australia, which usually need grants to test out new business models and applications, as witnessed by ARENA’s support for two key battery storage projects in South Australia, and its support for large scale solar. Read More here
11 August 2016, Renew Economy, Frydenberg to push ahead with repeal of ARENA grant funding. New environment and energy minister Josh Frydenberg says the Coalition government intends to go ahead with its plan to strip $1.3 billion of funds from the Australian Renewable Energy Agency and end its grant-funding mechanisms, and says he expects Labor to support it. In an interview with RenewEconomy on Thursday, Frydenberg also canvassed other policy areas under his new combined portfolio. Among the highlights: He repeated his pledge that the current renewable energy target is “set in stone”, despite a big push from some in the fossil fuel industry to have the target weakened further. He will seek “co-ordination” from the states on their climate and energy policies, although he did not say whether he would be insisting that individual states abandon their own targets. (Three states – South Australia, Victoria and Queensland – and one territory, the ACT, have renewable targets that are more ambitious and longer lasting than the federal target, which is equivalent to a 23.5 per cent target by 2020). In a response that will disappoint many in the climate policy arena, Frydenberg insisted that next year’s climate policy review will be a “sit-rep” – a situation report that will assess the ability of current policies to meet existing targets – and will not look at longer-dated targets (such a zero emissions by 2050), or as an opportunity to set more ambitious targets. He says the price of gas is the key component of future electricity prices, and he will be bringing “many” of the recommendations by the ACCC and the AEMC to the COAG energy ministers meeting next week. He said he was monitoring the progress of solar thermal with storage plants, such as the new $1 billion plant in Nevada, although he did not mention any specific policy or initiative to bring the technology to Australia. The tone of the interview – which you can read in full here – was one of caution. Frydenberg shows no sign of deviating from Coalition policies, even if he does recognise that a lot of effort needs to be thrown at climate and clean energy policies to avoid an economic and political train crash. Read More here
2 August 2016, Renew Economy, South Australia takes on networks over soaring grid charges. The South Australia government has decided to take on the monopoly electricity network operator in the state as it continues its campaign against the market dominance of the powerful energy oligopoly, and their ability to pass on huge price increases to consumers that are often blamed on wind and solar. Network costs in South Australia – like most of the country – account for more than half the average household bill. Consumers were hoping to get some relief after the Australian Energy Regulator knocked back some of the planned spending by SA Power Networks, but its ruling is now being challenged in court. Energy minister Tom Koutsantonis says he will send a senior public servant to appear before the Australian Competition Tribunal this week, accusing SAPN of “cherry picking” individual spending decisions from the AER in the hope of boosting its overall spending allowance. It’s a crucial intervention by the state government, and comes amid huge public controversy over its ambitious renewable energy plans, and the already high penetration of wind and solar that could reach 50 per cent by the end of the year. Recent high wholesale electricity prices have been blamed by many in the Coalition, and the Murdoch media, on the state’s reliance on renewables, even though most independent analysts and market regulators blame soaring gas prices, grid constraints, and other factors. South Australia has long had the highest electricity prices in the country, a point underlined by federal energy minister Josh Frydenberg last week, who also pointed out that the recent spikes in wholesale prices used to be a regular event even before the build out of large wind farms and rooftop solar. Read More here