23 August 2016, The Conversation, Australia’s new focus on gas could be playing with fire. Gas is back on Australia’s agenda in a big way. Last week’s meeting of state and federal energy ministers in particular saw an extraordinary focus on gas in the electricity sector. While the meeting promised major reform for the energy sector, the federal energy and environment minister, Josh Frydenberg, highlighted the need for more gas supplies and “the growing importance of gas as a transition fuel as we move to incorporate more renewables into the system”. Gas is certainly a lower-carbon energy source than coal, but gas prices have soared as Australia begins shipping gas overseas. So what might this mean for energy and climate policy? Rising gas. In 2013-14 natural gas-fired generation rose to account for 22% of Australia’s electricity generation, although the figure falls to 12% in the National Electricity Market (NEM), which excludes Western Australia and the Northern Territory, both of which use a large amount of gas. Among the NEM states, South Australia relies the most on gas-powered generation. This means that gas generators generally set the state’s average electricity price, which has usually been higher than those in the eastern states. Average electricity prices in Victoria, New South Wales and Queensland tend to be set more often by coal power generators than by gas. Read More here
Tag Archives: Renewables
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
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
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