Trade with Asia – price points of gas

We are part of Asia, and an island. We are isolated and that works for and against our security. Energy Security that is, our trading partners have different views on what is a benefit. As an island we need to transport singular purpose vehicles with product from point A to Point B in the most direct line and this method does not share any of the wealth or contribute to other points and their economy.

If you did not know Russia is on top of this issue and they intend to supply gas to Asia and have been into the driver’s seat in the last two years, to do so: A related project to the gas deal announcements is the intention to build a railway transport system from South Korea though to North Korea into Russia, and then connecting to the Trans-Siberian Railway. The intention is to create high-speed rail connections directly from South Korea to the markets of Europe.

“If such a natural gas line and railway were to be built — and there is strong support for this in parts of the South Korean establishment and business community — it would not only provide South Korean producers direct land access across Central Asia and all of Europe.

It would also provide the impetus for transforming the North Korean economy — and change that region’s frozen geopolitics in the process.

In short, if its vision comes to pass, Russia would become anchored in Asia as it never has been in the past. Better yet for Moscow, all major economies of East Asia would become linked to Russia in a way few had previously imagined possible. And that would be truly a pivot to Asia.” Source The Russia-China Energy Agreement Is the world’s largest commercial deal ever. By Kenneth Courtis, May 25, 2014

What about our (Australia’s) great trade hopes? We are deliberately killing off our innovation capabilities, our industries are moving out – even New Zealand seem more preferable! Even the US learnt it lesson that being a service industry country is a lesson of folly. It takes innovation and small innovations to grow into big to be great. So the question must be asked: Do we think we will be rewarded for thinking Asia revolves around Australia? I guess Russia is laughing uncontrollably at this time at such a thought. After all we have our leader saying I am confident, and the advisors or facts did not substantiate that. It seems that Russia will become enmeshed in East Asia in ways to pose new challenges for Russia and Australia.

The opening paragraph of this post said there are differing views on energy supply within Asia. This evolves around the fact that the new Russian Deal on Gas supply to China has been based on an oil price reference formula. Meaning when oil prices are high, the oil-based price formula for natural gas allows the sale of gas at a higher price than if it were based on spot-market natural gas prices. The implications are the entire world’s gas price will follow this formula. The only difference will be transport costs!

Should have mentioned earlier “the size of the Russia China Deal The largest previous natural gas deal which China has signed was with Australia, a dozen years ago. That was a $25 billion deal and runs through to the end of the next decade. The China-Russia natural gas deal is about 16 times larger.

By any measure, it is a big, big deal. Indeed, it is the single largest trade deal ever.” Again the source is Kenneth Courtis.

Now it seems the odd one out of this deal is Japan, our shining light, maybe:

“Japan is the world’s largest importer of natural gas. It continues to seek to diversify its sources of supply.

Japanese buyers are less focused on price than is China, as they also include in their calculations security of supply, stability of supply and consistency of the composition of imported natural gas. Japan also has accepted an oil reference formula for pricing its natural gas purchases.

Now comes the big question: Who in Australia is talented enough to head us in the right direction?

Lot of M’s – the collective fault within

Billion-dollar investor Warren Buffett is rumoured to be preparing for a US Stock Market crash, as is predicted by a number of pundits. Also expected is that a number of options could be open to investors to either alleviate or survive the down time period. What is predicted is a 50 % reduction or plunge in markets. Having lived the 2008 Global Financial Crisis a number of issues cross our mind. Such as the government policies to handle the situation will they be reactive or proactive? What will happen to the reserve bank policy? Where will you go to protect your wealth position? Will the need for welfare increase substantially?

On the latter the current Australian Government preferred budget policy says we must do it tough to get a surplus. All measure of expenditure will be cut ‘for our own good’. The difficulty here is that the expectation is there is an alternative to welfare. For example: A favourable market. Therefore a 50% plunge in the market will be a crisis with long-term damage to physical and economic circumstances. Ask around now and the evidence is there with small business indicators saying ‘we are stuffed’, ‘do they expect blood from a stone’, and then the irony of comments of we expect you to ‘do more with less’ and policies like the Clean Energy Legislation (Repeal) Bill 2013, also known as the Carbon Tax repeal, will save in the order of 4 to 6% of business costs and be replaced with short term (promised) measures that increases cost through other fees, levies, charges and taxes (even John Howard has said of the current budget before the parliament call it what it is ‘a tax’) increasing costs by around 17%. If you need references to the carbon price repeal go to www.environment.gov.au.

It beggars (pun intended) belief that we will be reduced to just that a nation of begging. Looking for a suitable term – mendicare (a Latin word for to beg). We would evolve the word mendicity to be the practice or habit of begging. Source www.answers.com/topic/mendacity. If you did not know, mendacity is derived as a synonym from Latin mendax and lying, and means habitual lying or deceiving.

On the subject of small business impacts in a recent DOE tender a Multi-use list (MUL) was written as part of the tender documents. Its purpose was said:

“Environment Quality Multi-Use List

1. To promote business opportunities for Small Businesses the Department intends establishing a Environment Quality Multi-Use List (MUL) for service providers that are small businesses. The MUL is expected to be open for registration from 1 July 2014 to coincide with the establishment of the Panel.

2. The MUL will contain the same scope of services as the Environment Quality Panel described in this RFT. Registration under the MUL will be restricted to Small Businesses employing fewer than twenty people. Registrants under the MUL will be required to provide services at rates that do not exceed the Standard Rates described in Part x, Volume x, Section x of this RFT.

3. Small Businesses may tender for this Panel and apply for registration under the Environment Quality MUL. “

Than on 28 May 2014 an Addendum was issued and as part of it said: “In the Request for Tender document under Part 1 – Section A, paragraphs 2.1 to 2.3 must be disregarded by potential tenderers. Any potential tenderer should respond to this RFT as the departments intention to establish an MUL will not go ahead at this time.” A sign of what is to come?

In preparing for the impending 2014 stock market plunge, even as a precautionary step, should our government adopt a better system of indicators – go beyond vitriol with the purpose to spread the blame, and for them to look seriously at the “Warren Buffett Indicator,” also known as the “Total-Market-Cap to GDP Ratio,” to have a tools that is capable of alerting what is breaching sell-alert status and a collapse that may happen at any moment? Source of the indicator story is http://www.moneynews.com/MKTNewsIntl/Stock-market-recession-alert/2014/02/10/id/551985/?promo_code=166D4-1&utm_source=taboola&utm_medium=referral

Being positive we can change our polies policies, what would we recommend?

a) Do what the budget or ideology wants you to do: Sell off all your stocks and assets and stuff the money under the proverbial mattress.

b) Risk everything and ride out the storm.

It is more a case of being sensible – whoops, too obvious!

If we look closely, we ourselves collectively are what are at fault. We allow ourselves to be complacent, and that is why we are allowing ideologues to blind us to the facts. The fact we need a multifaceted recourses and revenue base that involves a multiplicity of product offerings. The US has for instance learn’t that their greatness comes from innovation and small growing to big is part of their happiness index. Universally there are specific sectors of the market that are all but guaranteed to perform well. Some may struggle and it is cyclic. We need to think in 10 year terms and short term solutions that are blinkered could be costly.

Just as important are to accept the indicators over the historic sphere are markets rally to new highs despite any massive write-downs. This has nothing to do with luck. It has everything to do with using the tools correctly. In more correct terms being proactive in predictions and being reactive to the historic needs. Tools like a Crash Alert System, actually!

Problem – Communication Affective not Effective

Did they say that! A common response to what we hear around us. Then on a lifestyle site the problem of miscommunication helps explain why we react and why we might not understand the intended meaning: Michel De Montaigne, one of the most influential writers of the French Renaissance once said, “The greater parts of the world’s troubles are due to questions of grammar.”

More and more we are hearing the term gaffe used. The Prime Minister is often quoted as made a gaffe. How we react to being expected to know everything and know we know so little can be embarrassing. Think of this scenario, a stranger walks up to you asks for your opinion and you immediately try to read the situation before you respond. You notice an odd inflection here and one wrong preposition there, and you cannot find it in yourself to respond appropriately. You are stuck for the right words to respond and might even say something you later regret.

Than again, grammatical bloopers are not uncommon and even the most scrupulous writer will tell you it can happen. After all, with an infinite array of nouns, prepositions, infinitives, gerunds, antonyms, synonyms, homonyms and more, one is sure to ‘stuff up’ at times.  But, why is it more likely or very likely people will be confused in the use of ‘effective’ and ‘affective’? Because sometimes it is a tough decision making out the meaning and usage of these similar sounding yet unlike words – ‘effective’ and ‘affective’.

Look at the difference:

The etymology (meaning useful for determining whether a modern English word is descended from Old English) of these commonplace words empowers you to estimate the difference. The word ‘effective’ is derived from the word ‘effect’, which is used both as a noun and as a verb, while the word ‘affective’ draws its inspiration from the verb ‘affect’. Therefore, the nuance and usage of both ‘effect’ and ‘affect ‘will leave you with a better understanding of ‘effective’ and ‘affective’.

A dictionary might define ‘effect’ as “A phenomenon that follows and is caused by some earlier phenomenon”. Simplified, ‘effect’ is defined as the ending or result of a consequence. When used as a noun, ‘effect’ signifies the change caused by something. For example, in the sentence “The drought had a major effect on the world economy”, a change is followed by a phenomenon or an event. When used as a verb, ‘effective’ usually means producing or capable of producing desired result. For instance, “The new mosquito repellent proved to be very effective against dengue.” This sentence clearly shows the ability of the repellent to produce desired result and is hence effective.

‘Affective’ derives its origin from the word ‘affect’, which means “to have an effect upon”. Usually used as a verb, it often refers to an impact imposed by a person or thing. For example, “The advice of the Governor was affective to change their ways”. The sentence stresses the governor can influence the audience. Therefore, the Governor is an affective person.

Examples:

Effective –

“Effective communication in the workplace is a must for career success”.

“His advice was very effective to our upcoming business proposal?”

“Prolonged research enabled him to find effective treatment for the disease”.

“The pain killer was not so effective against my knee pain!”

Affective –

“The politician was affective enough to win the voter’s confidence”.

“The Treasurer’s speech was so affective that he couldn’t help thinking about it since!”

“The budget speech was affective”.

Just maybe the inability of governments (It was a problem for Labour as it is with the Liberals) to sell important messages could be a simple as the greater parts of their troubles are due to questions of the use of grammar. Did they really say that!

Mendacity – a policy choice, not the economy

Mendacity is an interesting word. “Are you aware, my lord, that mendacity is an organized body, a kind of association of those who have nothing against those who have everything; an association in …” www.thefreedictionary.com .

So what is the agenda for our government practicing mendacity, or at least willingly portraying itself as such? Take for instance being told we are part of a budget emergency, and the sky if falling. Attempting to instil fear into the population. Then outside bodies tell us, in financial terms Australia is reported to be one of only 6 countries in the world with an AAA reporting agency rating. The rating is enduring from the previous Government. What parallels can we make with other countries? Are the same issues facing them and how do or did they handle the financial pressures verses social responsibility?

In wanting to determine our story we only had to look across the ditch – the ditch is a colloquial term used by New Zealand to describe the body of water separating Australia and New Zealand. The recent federal budgets of the two countries draws a line on the difference in government style and puts forward that very similar conditions underline what is facing each country. Yet, the fiscal responses are different for each. It gets even more interesting when you consider the two governments’ are regarded as conservative – it gets truly bazaar.

What is different about New Zealand? Maybe it is all covered in the story “New Zealand forecasts 2014-15 surplus in budget that bears striking difference to Australia’s”. By New Zealand correspondent Dominique Schwartz :

In Australia we have been asked to go through pain. Whereas in New Zealand has been “served up one of the rarest of economic dishes: a forecast budget surplus of $NZ372 million ($340 million) in 2014-15, after a $NZ2.4 billion ($2.2 billion) deficit this financial year. Also on the menu were election year sweeteners including extended parental leave, and free doctor’s visits and prescriptions for children up to 13 years old.

By contrast, Federal Treasurer Joe Hockey delivered a hard-to-swallow $50 billion deficit accompanied by a collection of bitter pills, among them, co-payments for GP visits and cuts to welfare, family benefits and the public service.”

So as to balance the viewpoints, it is worth taking note of PricewaterhouseCoopers (PwC) New Zealand partner and corporate tax leader Geof Nightingale. From the Schwartz story it was said:

“I don’t think it’s a tale of two different economies, I think it’s a tale of two different policy choices,”

“The fundamentals of each country are quite similar. Australia’s forecasting economic growth of 2.5 to 3 per cent. New Zealand is much the same.

“Australia is forecasting to get unemployment down to about 4 per cent, New Zealand’s much the same.

“Australian politicians have ridden the mineral boom and failed to address the country’s deficits. What’s happened is corporate tax revenue has fallen off but structural spending has increased and so the deficit got wider”

Noting what the New Zealand prime minister John Key says: “His government has kept spending at about the same levels for five or six years as the country claws its way back from the global financial crisis and the Christchurch earthquakes.

We’ll be racking up $NZ7.5 billion worth of surpluses in the next three or four years; Australia will have amassed about $100 billion in debt.”

Mr Key continued that “the Australian economy is still reasonably robust and is not in crisis, but he warns the economy could face a crisis of confidence.”

Co2Land Org takes particular note of the issue being described as of a crisis of confidence.

Two important indicators are showing a genuine movement away from Australian:

A growing number of New Zealanders living in Australia are choosing to return to the greener pastures of home, and fewer are crossing the Tasman in the first place. The drift over the ditch has fallen from around 3,000 New Zealanders moving to Australia a few years ago to less than 350 now.

Mr Key says: “So what people are responding to is that they see a strong growing economy in New Zealand.”

According to Johnny Weiss, the founder of the Trans-Tasman Business Circle, reported Business is also making the move:

“We’ve seen quite a bit of relocation of Australian business to New Zealand.

As New Zealand maintains a competitive edge [regarding] pricing, costing and scalability it will be a very attractive place.

Business confidence is much stronger here than in Australia, so companies that want to move quickly find in New Zealand very good talent and quick decision making.”

Another difference is the Key government has not lifted the retirement age, nor are you subject to a means test your pension.

Nor does New Zealand budget to pay down net government debt, which is expected to peak at $NZ66 billion ($57 billion) in 2016-17, or 26 per cent of gross domestic product (GDP). Why do they not worry? Because they understand that: “The net debt gets smaller as a percentage of GDP [only] as the economy grows past it.

Why worry about Australia: Australia is one of New Zealand’s major trading partners, accounting for 40 per cent of all Kiwi exports.

So no matter how much Mr Key enjoys talking up New Zealand’s rockstar economy at the expense of Australia, he knows his nation’s fortunes will rise or fall along with those across the Tasman.

And Mr Key says he sees no storm clouds on the horizon. But we read into this that more confidence in Australia would be helpful for all of us. And, we need to add in New Zealand they raised the GST a few years back without affecting welfare of its citizens. Can we assume the agenda in Australia is to raise the GST to 15%, but they are so addicted to being fear raises they did not know how to be nice!

 

ERF funding – is it a play on words.

The Government is confident it will stem the march of climate change with its $2.55 billion Emissions Reduction Fund and its Green Army of tree-planting enthusiasts. So confident, in fact, that it has commissioned $10 million for a new icebreaker in Antarctica.

At least one problem is solved – broken ice will be served with drinks. It sort of makes sense does it not?

But, where is the money, it was not mentioned at all in the budget speech. Even more interesting is submissions on the draft legislation for the ERF are due to close 23rd May 2014. So how will it be funded if it is to start 1 July 2014? As kids often say, Daddy it will just wish-t-appear – how mature of them to understand the minds of our pollies!

In her coverage of the Federal budget Annabel Crabb makes another point on health – why strip away the ability to service our health in order to fund health research. A similar parody could be said a tipping point is fast approaching that mankind is under threat for its existence – anthropogenic influences of climate change will outpace the ability to research a medical solution. Doesn’t make sense except give the opportunity for a fiddle! On reflection Annabel said something about twiddle – could that be what she meant?

Perhaps the last word should go to the Prime Minister, speaking on August 22, 2011:

“Nothing could be more calculated to bring our democracy into disrepute and alienate the citizenry of Australia from their government than if governments were to establish by precedent that they could say one thing before an election, and do the other afterwards.”

Source – Annabel Crabb is the ABC’s chief online political writer – www.abc.net.au .

Co2land org now asks about the $20 billion to be spent on health research, is that a play on words – a weasel? Another worry is as an Australian entity I am at a disadvantage at influencing the wealth of this country, and it is suggested we should register as an offshore entity and get preferential treatment in Australia? It is not a flippant comment: For example, register in Singapore as a $1 company ($500 setup cost), pass their Directorship rule test and there you go! You can sell back your Australian ideas as a new desirable off-shore package and thumb your nose on paying the correct tax. Albeit the UK now says money shifting will be discouraged via London markets. But I guess that only affects the likes of tech suppliers, mining etc. As they tend to use those markets.

What has this got to do with sustainable futures? Nothing. Even the economics make no sense in terms of society – but maybe a small community might do well from it!

Co2Land org has a theory it reflects in the term ‘hubris’. Hubris: The Inside Story of Spin, Scandal, and the Selling of the Iraq War (9780307346827): Michael Isikoff, David Corn: Books

www.amazon.com/Hubris-Inside-Story-Scandal-Selling/dp/030734682X.

The theory is we are being spun the same text book sell on something of an ideal as opposed to a solution. It is even something tried and failed in other political arenas of the world. As in Lewis Carroll’s Alice in Wonderland – Alice in wonderland grew a mile high after eating one mushroom. She was then subject to rule 42 which says that anyone taller than a mile must leave the court immediately. That thought line then mandates that if you think it is a joke you will be subject to rule 13. And, do not dare to ask what is rule 13. If you paraphrase this you just might understand Joe the Treasurer is a Lewis Carroll fan.

Maybe – yes, we are a fan of the real Malcolm Turnbull. He might just turn bull into hope. For those that did not know, he was a former Environment Minister in the Howard Government and is credited with strongly supporting sustainable solutions.

 

White Paper to Draft Legislation – ERF

In case you have not heard: The Clean Energy Regulator survives – it was an error the government has corrected on 7 May 2014. What was intended was to say the Clean Energy Fund is gone. Thank you Greg Hunt for your courage in having that clarified.

It is also hoped you heard late Friday 9th May 2014 the Federal Government released its exposure draft legislation for the Emissions Reduction Fund. They want you to be quick in responding -Two weeks have been given for the review, with submissions due EST 12 noon, Friday 23 May 2014.

The key matter is the draft legislation rebadges the Carbon Credits (Carbon Farming Initiative) Act. And:

  • A broader range of activities can create “carbon abatement” and include avoidance activities
  • A broader definition of additionality is given
  • A broadening of the authority of the Clean Energy Regulator
  • Establishing the Emissions Reduction Assurance Committee
  • Establishing that a yet to be (re)named CFI audit legislation will carry through the audit and assurance through the existing CFI audit legislation.

Why hoped you heard – well we did not want you going to sleep on us because we are boring!

Those that see opportunity are, for instance:

Currently celebrating their 30th year – Energetics consult and offer fee for service activities, and they say:

  • Immediately assess the abatement opportunities you have to create emission reductions to sell into the ERF
  • Understand your risk profile for future capital investments – has this shifted?
  • Assume you need a shadow carbon price
  • Comment on the draft legislation.

Of course the issue for their advise is for you to work out – www.energetics.com.au.

Those that see tragedy are, for instance:

The Climate Spectator www.businessspectator.com.au say,

“Half-baked outline

The half-baked nature of this scheme is revealed on the very first page of descriptive text within the Explanatory Memorandum, where it states:

The Emissions Reduction Fund … will allow businesses, local governments, community organisations and individuals to undertake approved emissions reduction projects and to seek funding from the government for those projects through a reverse auction or other purchasing process.

Government ignores its own red tape cutting advice

I was shocked to find no regulatory impact statement accompanying the ERF legislation, comparing this scheme against alternatives and why it represented a superior cost-benefit case.

Amidst a bonfire of red tape, the government had assured us that they were going to force public servants to see regulation in a ‘new light’ by following a seven-step guide to evaluating new regulations.”

Then finish off saying “I wonder when we’ll see the detailed cost-benefit analysis for the ERF relative to other regulatory alternatives, such as a simple price on carbon emissions.”

For CO2Land org the ‘scary spice’ is the mechanisms can change at any time at the whim of government – regardless of the pain you the business offered or suffered. Again the need for consistent policy is far greater than the words spoken to date. We also tend to agree with one aspect of Energetics spiel – prepare your alternatives. Just in case. And, you don’t have long to comment.

 

 

Is chalk and talk past tense – a victim of ‘dash for cash’.

I guess the days of chalk and talk are over, in my view, merely a taste of things to come. From conversations throughout the education sector, there is wide-scale disenchantment and frustration with the system and the apparent breach of promise our politicians speak on school funding will be the straw that breaks the camel’s back, and bring many to the point of protest – students, teachers and parents.

The question that appears to be wanting in the ‘dash to slash cash’ mindset is changes are needed but what is surviving in the face of technology upgrades is education remains the means of survival and how we learn to fine-tune the way knowledge is delivered.

That said, according to Leanne Mezrani writing for the Project Manager – www.aipm.com.au – in the February/March 2013 edition (but still very relevant) “truly effective teaching relies on the give-and-take between teacher and student. Feedback can be as subtle as a facial expression or tone of voice”.

What is all this based on? Invaluable lessons learnt through industry experience, face to face feedback and deliver using a combination of face to face, online and project based assessment. According to Leanne’s article. So rather than cuts more needs to be spent on knowledge delivery. Especially when we are slipping in world ranking and failing our regional area needs on education.

Is there a revolution or evolution of education delivery though technology? Evolution we think, and if you consider this timeline, also courtesy of Leanne Mezrani:

1911 – first distance education scheme in Australia offered by the University of Queensland and extended to correspondence schools in the 1920’s in NSW and Queensland.

By 1933 – correspondence lessons replace the last itinerant teacher.

In 1935 – All Australian mainland states now have Classroom lessons broadcast by the Australian Broadcasting Commission (ABC).

1960 – The school of the Air is established. Lessons are broadcast by radio from the Royal Flying Doctor Service in Cloncurry Queensland.

1975 – The personal computer meant users did not need to rely on mainframe computers for use of education software.

IN the 1990’s – Leaning tools went through a significant upgrade in graphics and sound. CD-ROMs become the preferred method of content delivery.

1993 – Under ownership of Monash University Open Universities Australia was formed as a nation wide means of providing distance education using printed courseware and non-commercial television.

1999 – e-Learning was the term used for internet and other interactive or electronic media sources.

2008 – Massive Open Online Course (MOOC) used as a term to describe an online course offered by a US University. The significance – online classes offered free of charge.

2011 – The Centre of Online Learning Excellence is launched by Open Universities Australia with the purpose of becoming a centre of best practice in online education.

2012 – A total of 20 universities and other education providers across Australia offer 1700 units and 180 qualifications through online courses.

2013 – it is recognized that MOOC was a revolution, but it seem only the highly self-motivated student derive any great benefit from this type of learning. What is now apparent is that is it is an evolution of delivery as the average student is more likely to require motivation and inspiration, and are likely to lose their way in an environment that doesn’t offer scheduled classes or feedback from instructors.

The CO2Land org reads, April 2014 – Australia rates 14th in the place to get a quality education. Rating first is South Korea because of the way they give quality time to students. Since writing this post it has come to our attention Australia is now 15th place according to BBC, 8 May 2014. Also worth noting is that UK is second to South Korea according to BBC.

Does it make you think – dash for cash or offer quality learning? What gives the better future payback?

 

A glimpse of our new utility model

Change the name Hawaii for Australia in this story. Then you might get a glimpse into our new utility model. Just like in Australia – east or west coast, Hawaii Electric, the US state’s biggest utility, has failed to create a long-term, customer-focused business model. The problem, according to the Hawaii PUC as reported as said last week is “An increasing penetration of utility-scale renewables and distributed generation has ‘broken’ the traditional utility-customer regulatory compact….An overhaul of the traditional cost-of-service utility regulation model is being touted as a possible solution.”

Now we hear you say but Tony and Joe are going to put an end to the renewable industry in Australia by 1 July 2014. Well, according to the Climate Speculator and Tristan Edis the Environment Minister, Greg Hunt says his Cabinet Colleagues are dreaming. http://www.businessspectator.com.au/climate .

We might get cheeky here and refer to CO2Land org’s last posting, 7 May 2014 – Fantasy and Budgets, in particular on after eating a mushroom Alice in Wonderland grew a mile high – we guess it was a magic one! However, no amount of distorted truths can hide the reality and its acceptance here, as in the US state utility regulators, there is a need to take steps to incentivize changes to the utility business model, and utilities should lead on these issues, instead of being dragged along. One furphy that can be dispelled by recent reports cannot attribute renewable to price increases, again quoting, 8 May, 2:22 PM, Explaining electricity markets to dummies by TRISTAN EDIS: “While economic modeling shows that the injection of lots of solar and wind power via the RET will lower wholesale electricity prices, 95% of politicians and 98% of journalists struggle to understand and accept it” (RET refers to Renewable Energy Target). We can only say, sad but true.

Now back to the utility change model, rather than waffle on like a ‘polly’ – aussie slang for politician. You might better get a grip on the case and idea by directly reading –

http://www.utilitydive.com/news/hawaiis-overhaul-of-the-utility-business-model/259923/

We should also add that in Australia, after eight years of study there is no evidence that Wind Energy in South Australia has been causal of wholesale energy price increases in that state or the eastern seaboard to which it is connected. To refer to that story refer to the Climate Speculator again.

Have got to go now – put my waste into the gasifier, produce syngas to start the generator for our power needs, it is cold overcast and foggy outside – need a backup for the solar on the roof. It is just like having a battery without acid. Sorry Alice!

Fantasy and Budgets – a dream time.

Don’t pick that mushroom! Why – then it came back, Alice in wonderland grew a mile high after eating one. She was then subject to rule 42 which says that anyone taller than a mile must leave the court immediately. Just thinking out loud as I remembered our treasurer is a self-professed Lewis Carroll fan. So is the budget buildup all a big joke? Before we go on, rule 42 is a joke – said to actually mean the average number of lines on a page of a paperback book. Can we speculate what is contained in the budget is written down as 42 lines on a page?

Is this an allusion, a trip into the fantastic, extraordinary and, completely obvious. An amazing revelation and remarkable. WOW, it explains so much beyond the books. It even debunks the notion that a computer could provide an answer to the meaning of life. Do we have a Brian in parliament? Its ok it won’t hurt a bit! The pain is to be brought down on budget night.

Ok, Joe does not like science. But, he might still hope that science will come up with answers to the big questions. After all when looking for meaning, science has answered the most questions so far. However, it hasn’t provided answers to the most fundamental questions like why we are here, what is the carbon tax for. But just because it hasn’t yet, doesn’t mean it can’t or won’t when we own it. Having said that, it is possible that questions of meaning is simply of a different sort to question of what matters. We know the physical world is where science is proven so powerful. That being so, it is easy to understand why we are saying something rather than nothing, because just as with mathematics it might make no more sense asking if an equation is happy or if union people in a movement are friends, it can be satisfying just asking the question.

Now we get serious – do you know the mind of god. Is it possible? Let us pre-empt a possible answer: Though we haven’t run up against a class of questions that we couldn’t answer yet, it is a fiendishly difficult area, we have yet to exhaust all possible answers. Why all these questions are this some sort of deep thought madness?

When you have no answer, no meaning, no sense being made of the political universe, and you think you would not be any worse off if you had no government – That’s it the answer, install robots and computers for the job! But who would understand the need for life? Who would accept that life is a gift

To put it another way, life is a gift. It is good. It flourishes in experiences like love. But, such philosophy can no more provide meaning than science can. Why, because life’s giftedness, its goodness and its loveliness are essentially spiritual qualities. They can be assessed by rational enquiry. But they cannot be accessed by the cool calculations of reason. They must be experienced. I know now why Joe said we must experience pain! How else could we see a world in a grain of sand, and capture something of the world needed to be transformed through the beauty and meaning of his ideals.

Oh yeah, OK it was all a bad dream, I though I better write it down before I forgot it. Then someone really scared me and said the answer is rule 13! I must have dozed off again. Oh my god, he does talk like that! Bolt upright and awake now it is so real.

Bidding process – The White – ERF Paper

Lets talk more about the bidding process, assuming you managed to read the Energy Reduction Fund White Paper released 24 April 2014. We talked about profiling you risk in our post ‘The White – ERF Paper’ on 2 May 2014. It has been attracting worldwide interest. What we don’t know is why it is so. We can only speculate many are expecting a ‘big bang’ or ‘flip flop’ for the policy. Regardless, it is better than doing nothing, so lets assume we can get past the regulatory uncertainty and look at things assuming you business can access the funds, has eligible projects, and has in place safeguard mechanisms.

First question you need to ask is are you strategic or tactical in your approach – or a hybrid. We might suggest hybrid is a good hedge. Why because you can be reactive to changes without being too hung up on risk factors. Also, providing funding could be as easy as the 2014/2015 Federal Budget being approved, without the specialist legislation. Yep, the good ole executive bypass is possible. But that is the government’s risk.

To bid in you need to create a program with a project size that has a prospect of being awarded funding. We note that some say, and repeated by Energetics (a consulting firm that is known to influence policy on Climate), claim 2,000 t CO2 equivalent abatement will get you a jersey. However, remember this is a reverse auction – the lowest price wins! There is no guarantee the best project will win. You could be forgiven for getting a little suspicious over who and what will be rewarded.

That said, the usual suspects for the preparation to be included in the bidding, may actually preclude you too! Namely, the requirement of ‘additionality’ for the projects. Back in 2012, August 14 – CO2Land org looked a little harder at additionality and its association with the word ‘real’ (concluding real was used as a synonym) and found:

  • Specifically ISO 14064-2 (project accounting) does not include ‘Real’ because during development of ISO 14064-2 ‘Real’ was regarded as a programmatic rule/criteria, which is outside the scope of ISO 14064-2.
  • ISO 14064-2 is a standard rather than a program
  • ISO 14064-2 (Clause 5.4) specifies the following requirement in regards to additionality: “The project proponent shall select or establish, justify and apply criteria and procedures for demonstrating that the project results in GHG emissions reductions or removal enhancements that are additional to what would occur in the baseline scenario.”
  • Additionality is incorporated into ISO 14064-2 is based on the core principles of ISO standards in general, i.e. that ISO standards not be a barrier to trade (WTO-TBT – anyone following development of ISO 14067 (product) will know this is a major issue). As such, ISO standards must be policy-neutral (extended to include program-neutrality). This is of course very important for market confidence.
  • ISO 14064 deals with the concept of additionality by requiring that the GHG project has resulted in GHG emission reductions or removal enhancements in addition to what would have happened in the absence of that project. It does not use the term “additionality”…Thus the project proponent may apply additionality criteria and procedures, or define and use boundaries consistent with relevant legislation, policy, GHG programmes and good practice.”
  • Although the concept/requirement of additionality is within the requirements of ISO 14064-2, the simple reason why the ‘term’ additionality is not present within the requirements of ISO 14064-2 is because of certain sensitivities/perceptions/politics of certain parties involved in the development of the standard –

And, the following references helpful in gaining a more complete understanding:

Oh dear, I wonder if they understand the standard says the concept should be policy- neutral. Why to give confidence to the market, elementary is it not?

But, here comes the good news. If you are aware, adopt a pragmatic approach, and are proactive in that you go low first up and go early you might just get there for your funding. All you got to do is keeping improving on your targets into the future.

What projects might have the better chance of winning a place. Energy Efficiency projects are probably the best suited for the auction process and the pre-qualification needs.

The conclusion: If you have done nothing meaningful before about your energy use. You can now be rewarded? Good policy, hey!

To ponder, Mark Jackson – a professional, asked in the Australasian Renewable Energy and Carbon Professionals Group on LinkedIn: “Is anyone else getting a sense that renewables are not getting a fair airing…budget etc”.