Category: Carbon Risk

Policy impacts, right side of the bell curve

Double Jeopardy – Meter confusion in NSW – end of premium solar then what!

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Last week we posted about the effects of Gross and Net metering, and changes to feed-in tariff in NSW. Since then Renew Economy posted another take on the meter confusion as NSW prepares for the end of premium solar tariffs. The quotes are attributed to Geoff Bragg of the Solar Energy Industry Association.

Co2Land org feels there is another problem and that is the apparent state government attitude that ‘play space’ is their domain and targeted solutions are too hard to achieve as ‘real’ outcomes. What worries even more is that the data collection can also lead to Solar customers being easily targeted for use of system charges to benefit network businesses – double jeopardy you could say. That being the case microgrids, community projects and other disruptive to business as usual energy companies will be in for a difficult time.

Quoted: “There is fear that solar households will be forced to adopt “smart meters”, and pay a hefty fee of up to $700 unless they sign on for a long-term contract with a retailer. There is confusion about what sort of metering can be adopted. The Level 2 “sparkies” are outraged that their investment in training has been undermined.

 

The issue will be raised at a meeting of the solar industry this Friday, under the auspices of the Solar Energy Industry Association.

 

Spokesman Geoff Bragg says it’s pretty clear that the NSW government is opting to bring forward the “market-led” rollout of smart meters in NSW by energy retailers, about 12 months earlier than the national plan to make metering an open market in 2017.

 

“This approach is intended to solve the problem that about 130,000 of the 160,000 Solar Bonus Scheme customers will want to have their solar system Net metered & billed rather than their current Gross metering, to gain the best advantage from their solar PV system when the scheme ends on December 31,” Bragg says.

 

“Their intent is also not to be seen forcing a smart meter, or even a meter change, on anyone. But there are a lot of unanswered questions.

 

The first is:  Do we need new meters?  Bragg says the answer is complicated:

 

“As some have suggested, we might not need to change meters at all – some gross and consumption meter combinations could in theory be netted off at billing stage, some not, and with varying degrees of accuracy.

 

“In some meters, the full data set is in the meter somewhere, but existing meter readers don’t collect the full interval data set, just billing period totals. It’s actually very difficult to get any solid answers about what is possible, and what is not, in each network in each metering combination.

 

“Some have suggested that the upgrade to smart meters will cost up to $700 each, and that consumers will have to foot the bill, either by an up-front charge for the metering, or by being locked into long-term contracts.

 

“We can assume that energy retailers will compete for customers offering low, or zero cost metering upgrades, but will regional & rural customers get the same offerings, be left waiting, or even have to pay additional charges? Regional & rural customers account for a significant proportion of the solar installed in NSW. Will the offered tariff structures discriminate against solar customers with “free” smart meters?”

 

The question over Data:

 

“Data is everything in the world of individual empowerment and disruptive technologies; If access to metering data is the right of the consumer, then having real-time access to both solar production & consumption, can assist households & businesses make smart decisions about when to run appliances.

 

“As any solar household in NSW with a simple NET meter installed will attest, it’s impossible to know how much of your solar is being self consumed on-site, or being exported, until you wait for the tally at the end of a billing period and try to work it out from inverter and meter readouts.

 

“There are external metering solutions available to give you this information, but none of them are cheap and require professional installation. It would make sense to have this information available to all solar PV owners. Assessing households & businesses for energy storage is a whole lot easier with accurate consumption & production data.

 

“There must be IT start-ups waiting in the wings for access to our energy profile data. Can we instruct our energy retailer to give our personal production and consumption data to third parties? The NSW government supports the new innovative sharing economy; they have an opportunity to mandate a data stream that could unlock unimagined economies.

 

“It is still unclear what the minimum standard for any metering equipment will be. Will the various smart meters offered by different retailers be required to collect a data stream for Gross solar generation, and a separate data stream for Consumption, netting off the 2 data streams for billing purposes? Will the NSW government allow energy retailers to just install smart meters that only record the NET energy data, effectively blind to solar production, short-changing consumers?”

 

The question of Accurate, Clear Information:

 

“What the solar industry & consumers need is some answers from the NSW government about what is going to happen & when. They’ve had 7 years to plan for the closure of the scheme.

 

“We are tired of waiting for accurate, clear information. The NSW Department of Trade & Investment called a workshop meeting for stakeholders on the 2nd November 2015 to discuss the closure of the Solar Bonus Scheme, stating its intent to send a letter with clear information to all SBS customers in Dec 2015 or Jan 2016.

 

“It’s now mid-March and we are told the draft letter is still waiting for ministerial approval, but should be arriving in households around NSW in a week or so. We hope it is packed with clear, accurate information on what consumers need to do at what cost, and by when.

 

“Apparently there are separate teams in the departments, one dealing with the closure of the NSW Solar Bonus Scheme, the other dealing with the “market-led” rollout of smart meters. One team doesn’t seem to answer questions about the other team’s project.

 

The SEIA NSW annual installers meeting will be held in Sydney on Friday, March 18. Bragg says it is a full day conference for members and guests, aimed at PV installers designers and suppliers and this issue will be one of many on the agenda. NSW government representatives have been invited and have agreed to present to the SEIA NSW meeting on Friday.” Unquote.

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Gross and Net Metering, and Feed-in Tariff Changes

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In recent times, a number of people have asked for clarification about the effects of Gross and Net metering, and changes to feed-in tariff. This follows a number of reports in newspapers and information sources such as the RENEW ECONOMY of the effects of rules changes. Below is a simple take of the what.

 

In NSW, from 31 Dec 2016, around 160,000 electricity customers will be disadvantaged if they do not switch from gross to net energy metering, and it is estimated only around 85,000 would have switched in time. The question gets down to: What is driving the changes and what are the actual changes that need to take place too.

 

First thing to understand is on-site meter changes can take less than 1 hour. What complicates things is a new Chapter 7 of the National Electricity Rules, and the regulations for new metering businesses that will spring up as a result. Will the customer benefit or will it just cost them? The evidence is retailers will benefit from continuing to ‘own’ the customer, and the customer will pay for the ‘privilege’. So customers that own their Solar panels will be less disadvantaged than those still paying them off, etc. Chances are all will pay more.

 

What is the difference between gross and net metering?

 

The gross-metered scheme means the entire output of the inverter is metered, and the total energy consumption at the premises is metered by the flat-rate or time-of-use meter.

 

With net metering, the output of the inverter is combined with the general load of the premises, ‘behind’ the consumption meter. This meter now needs to measure both energy import (consumption) and export (feed-in) in separate registers.

 

Some meters already the capability, and do net metering now, or can be reprogrammed. Some meters need to be replaced, as they are not capable of measuring power flows separately.

 

You now know meters and there capability is one thing. But, there is more:

 

To change from a gross feed-in tariff to a net scheme, three things need to be addressed: switchboard and general wiring, a potential meter change and ‘the’ tariff change.

 

You need to pay an electrician to look at the wiring in the switchboard, and the wiring change is generally straightforward. Budget the work to cost from $200. The wiring change likely is to disconnect the power from the inverter to the gross meter and move the wire to the part of the switchboard that feeds the general light and power circuits. This then becomes a ‘behind’ the existing consumption meter connection. The meter now functions as the net energy import and export meter.

Also at this point, after a final meter reading the old meter is removed from the meter panel and returned to the network distributor company, or whoever owned the meter.

 

The metering rules and regulations

 

In most cases it only takes minutes to physically remove, change or reprogram a meter.

However, the rules and regulations have changed. With change comes with it complications that include who owns the meter, who can do the work and what type of net-meter is used.

No longer do network businesses exclusively own the meter of residential and small business connections. No longer are Accredited Service Providers (ASPs), authorised by the distributors to install and change the meters. The former system was efficient and effective for the installation of the gross meter when all that needed was a contractor to make the wiring change and change the meter all in one visit with one authorisation.

Chapter 7 of the National Electricity Rules changes (the chapter concerned with the metering) guides that the electricity retailers have a lot more involvement in who supplies and reads the meters on a small customer’s premises. The change also has lead to a number of retailers now owning metering businesses themselves. The world of metering for small customers is no longer the exclusive realm of the distributor.

Also complicating things is that the vast majority of the existing meters out on smaller sites are the ‘accumulation’ meters (flat rate and time-of-use metering that is generally read quarterly) will stay with the distributor. However many of the new ‘smart’ meters will come those retailers with close links to the new meter companies. Also complicating the situation is those retailers that do not own metering businesses will continue to rely on the distributors or other accredited meter providers to carry out the metering work.

 

The tariff change

 

The change is due to the closure of the solar bonus scheme, under which households with solar panels can sell electricity back to the grid at a rate of either 60¢ or 20¢ per kilowatt hour.

From December 31, that amount is set to plummet to around 6¢ per kilowatt-hour as the scheme closes ‘as planned’.

This leaves the households potentially selling electricity to the grid for 6¢ per kilowatt hour but being forced to buy it from their retailer for around 30¢ kWh

Smart meters are required for customers to switch from gross metering – the current situation – to net metering, so they can potentially power their households with solar panels and sell any excess back to the grid.

 

How the meters are read

 

All meters are read, either manually or remotely (smart meters can be read remotely) by a meter data agency, the readings are then published to the Australian Energy Market Operator (AEMO). From there, both the distributor and the retailer can access the readings for writing up your bill. Some bills are bundled (a lump sum covers the retail and network transport cost), some unbundled (all costs are transparent).

What is different in a net-metered bill is there are two main line items:

The energy consumed over the billing period based on the reading of the ‘import’ register on the meter; and

The energy exported over the billing period based on the reading of the ‘export’ register on the meter.

 

Why you can’t keep the old gross energy meter to give you generation data

 

The gross generation meter most likely belongs to and is registered to the distributor, and for as long as it is in use it is their responsibility to read it and maintain it. The customer could ask to buy it from the distributor, but at the very least they will need to come out and remove their nameplate and delete it from their system. A call to the distributor is helpful here to see what their policy is.

A gross meter is made redundant when most inverters have been fitted as the inverters have an ‘energy generated’ readout on them anyway. It is just not part of the register.

Can’t you leave the metering as it is, and just subtract the generation reading from the consumption reading ?

No, and the reason is that the energy sharing changes moment by moment, and is charged at different rates. So the net off is also at intervals.

 

The process that kicks off a change of meter

 

It starts with a call to your electricity retailer.

When you call a retailer to request a swap from gross to net metering will most likely be speaking to a sales representative and they will take this opportunity to renew and recontract their arrangements with the customer. If you are out of contract expect them to be really nice with a special offer.

It is very likely the offer will include an upgrade to a smart meter (known as a type 4 or interval meter). It is very likely the meter will have a value to be passed on of around $600.

The benefit of the new smart digital meters is you can be offered more and newer services, such as monthly billing and access to energy use and energy out (feed-in) data through a retailer’s web services (where they offer the service).

 

So you know your rights

 

It is the customer’s choice whether to continue to use accumulation metering or upgrade to a digital (smart) meter.

There is no obligation for the customer to move to a smart meter (type 4), as quarterly manually-read (known as a type 5 or type 6) meter reading and billing will support net metering and provide the same net-metering benefit. So long as you do not export energy (and expect a feed-in rate.)

If a customer is not contracted to a retailer, then the field is open. Shopping around for the best deal is useful, as some retailers may offer a free upgrade to a digital meter or a more attractive energy supply contract.

 

Some important questions to ask of yourself and the retailer

 

How much will the process to change from gross to net metering cost me ?

You should be aware there are a number of steps in the changeover that may or may not be included in the discussion with the retailer.

Firstly, the visit from the electrician to change the wiring will generally cost a standard callout fee plus hourly rate – it could be a couple of hundred dollars if the switchboard is not well set up.

Secondly, the actual meter change or reprogramming is likely to attract a charge of between $50 and $600. That work is likely to be carried out by an ASP, and the fees listed in the distributors’ pricing information on their websites.

If your retailer wants to be really nice they will be offering attractive pricing to customers who sign a new energy retail contract or elect to take on a smart meter, perhaps to the point where the change from gross to net is ‘free’. But beware of the ‘free lunch’!

 

So you know more

Can I change early without losing any money?

No. The power flows through the meters change as soon as the switchboard wiring is altered.

A list of accredited metering providers is on the AEMO website, at

http://www.aemo.com.au/Electricity/Retail-and-Metering/Metering-Services/Accredited-Metering-Providers-National-Electricity-Market-MP-cat-A-and-B-services

 

Yield expectation – NSW Poles and Wires – for sale.

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Ok, the NSW poles and wires lease sale is now into the detail phase. Well actually that detail is reported to be already decided. What are not known are what will be said to the public, and that should be not too far away from being known. In fact the Premier has not wasted any time in encouraging ‘mums and dads’ investors to take out shares. As with all investments the price must be attractive to encourage you to buy. But there is another side of the coin. The institutional buyer must know the price to the user is higher enough to guarantee a return before they buy into the infrastructure. How is that done?

In the case of the energy utilities: It is the federal body, the Australian Energy Regulator (AER). It happens that the AER, and very shortly after the NSW Election where the mandate has been won to sell off the 99 year lease of the ‘Poles and Wires’ to highest bidder, will be setting the price for the future with an interim decision by April 2015 or very near to that date. That decision would determine network prices for the next five years.

So if you think about that you can see that the NSW Premier is technically right – no price movements will be because of the ‘sale’. You might also see why the oversea of the ‘sale’, the former ACCC chair, can say prices will not be greater than the regulator (AER as it turns out) determines. You could find it argued you will pay more, but it is not the sale process that increased the prices. That may be a slight of hand from the politics, but it is still a fact.

Then to put a balance on what an investment might be expected to return, we have a story – Is the search for yield becoming unsustainable?

By business reporter Stephen Letts, 30 March 2015. “The rotation out of investing in high-yield dividend companies into ‘growth’-focused enterprises is gaining momentum. The past month has been particularly striking. One of the key engines of the yield story – the utilities sector – has gone into reverse, falling on average 1.5 per cent this month after a solid 12 months of outperformance.

At the same time, investors exiting the yield play are piling into information technology and industrial stocks hoping for more exciting returns.”

Co2land org now considers: Is the NSW Government too late in getting the float of the poles and wires to market. We use the story above again to quote: “Manufactured yield is not sustainable.” Also quoted is: “Goldman Sachs says the low risk approach is to avoid companies that have been “manufacturing yield” by relying on debt, assets sales and underinvestment in their businesses. Interestingly many of the companies with the largest “cash shortfalls” are the utilities that have been at the forefront for the search for yield. Leading the pack is the power utility and network operator, AusNet Services. Goldman Sachs has found AusNet Services experienced at a $2.2 billion cash shortfall over the past five years, which represents about 62 per cent of its average market capitalisation over the period.

Duet and APA – who are in the same line of business – have shortfalls of $1.1 billion and $650 million respectively.”

Therefore we see an ominous gathering of indicators that suggest the NSW float might not be the good it is promoted as being.

We think the ‘real’ issue will be the pressure to reduce the price by the user. The providers for a ‘demand response’ should also be persuasive to avoid prices rising by virtue they can determine the demand needs for energy. Why the later because, they have the power to defer capital investment needs assuming the network growth need dictate investment in the failings of the system.

The ‘elephant in the room’ is there too! It is of course the remodeling of the energy networks business model and the rise of cheaper embedded energy networks with renewable energy sources.

Tis interesting times!

The year of the Global Social License – 2015 Carbon Economy

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The ‘social license’ is behind the shift to a carbon economy and the shift from the petro-chemical industries. The discussion moved from the automotive industry and how consumers willingly take up the new products that promote better environmental outcomes. It was further discussed that a similar change is influencing the other industries. The shift in the valuer attitudes is remarkable in that whatever economic theory you are predisposed to, or learnt in school, you will in all likelihood find value by participating in the carbon economy.

History has a way of repeating itself, and Adam Smith as the ‘father of capitalism’ described the ‘guiding hand’, which can be interpreted as a ‘social license’ that is part of 2015 regulatory thinking. Even those that follow Karl Marx writings will find a ‘social license’ forms a valuable and insightful regard to the specific mechanisms of an economic system.

We find that Marx and Smith diverged drastically in their political ideologies (not unlike the Labor and Liberal parties in Australia). However, their economic theories were similar in that both hold the labour theory of value as a core belief. Each believed that the number of labour hours put into an object created the value and thus the worth of the object. This is where the carbon economy differs in that the value is clearly in the hands of the valuer and not the politic as our government would like. It could explain why the traditional control mechanisms are not working, there is a disquiet in the community, and effectively communicating the political message ‘of value’ is seemingly on an uncomfortable setting.

The Austrian school of economics espoused its theory of subjectivity. From this theory, it follows that a product possesses value only if there exists a valuer. They say the object must be useful to a consumer in some way; if it is not, it is not valuable. The consumer’s feelings or subjective analysis give the object its value. Because of the laws of supply and demand, if the subject warrants a high value it will be commensurable with a high value.

The carbon economy can already show subjectivity of the price sets its value without regard to your politics. We say this as the carbon economy is already seen that the more desirable or valuable object on our connection to the trinity of human existence, with heaven and earth. The trinity concept is as much eastern as it is western in its connection. How high a price we are prepared to pay is to be proven. But, there is a universal willingness to try and it indicates this is the most logical reason for its value.

The carbon economy also indicates that the labour theory of value is incorrect because even though hours of labour might have gone into building an object, if no one wishes to purchase it, it has no worth and cannot be made commensurable with anything else. That not us saying that it is the indications of commercial reality that includes the need for sustainable outcomes to be demonstrated through the money practices of today and it strongly appears the social license is driving this trend.

For the success of the carbon economy lessons, from history you cannot ignore Marx and Smith. They still influence our current economy and we will still be affected by their ideas. Albeit these times do indicate a leaning to Smith is more fashionable. That said, Marx had brilliant insights into the workings of an economy and thought extensively about the mathematical side of economics. Political theory aside, Marx’s writings are valuable and insightful in regard to the specific mechanisms of an economic system. Smith is not called the “father of modern economics” for naught. The idea of the laws of supply and demand and the invisible hand can be found in high school and college economics teachings around the globe. Aside from the mistaken labor theory of value, Smith’s economic and moral theories are respected and employed in modern free trade economic systems today.

There is much debate about whether or not the so-called “moral Adam Smith” is compatible with the “economic Adam Smith.” Some believe there is a discrepancy between his discussion of morality and virtue and his thoughts on capitalism fueled by self-interest; Others brush off this claim as mere misunderstanding and say Smith’s “virtue” consisted of at least three major elements: prudence, justice, and benevolence. Prudence – a characteristic of self-interested conduct and economic pursuits. Justice (described as a ‘negative virtue’) – conduct in accord with public laws meant to restrain excessive self-interest. Benevolence (the highest form of virtue) – featured through private relationships.

Where carbon economics will not agree with Smith is that one may choose to relish only their commercial virtues; the person may become successful in business, but not be a completely moral being and have a place in our society. Carbon Economics would say they have no social license.

Adam Smith began writing on the importance of a free-trade economic system while he lived in mercantilist England. Smith had the foresight to realize that the mercantilist system was flawed. Mercantilism stressed the need for “large reserves of bullion” to reap economic benefits. Smith disagreed with mercantilist theories and expounded on the importance of free trade. The Wealth of Nations sought to discuss just that, the wealth of the nation as a whole. Rather than focusing on how much land the rich had or what the king acquired, Smith discussed how each individual person could successfully reap his or her own economic benefits and thus add to the nation’s wealth. He cited that in a free trade economy, a person has the ability to earn money and should then use it to purchase other goods (or capital to create their own business) which will then lead to growth in the economy. Smith believed that by earning and spending money, the economy would be stimulated and thus grow.

Smith wrote The Wealth of Nations during the late 1700s, during which a mercantilist society still existed. He realized the need for a better and more efficient economy that would benefit each citizen and the entire nation at the same time. What you may not know is that Smith merely envisioned the free society, he did not actually live it.

Marx wrote in the late 1800s, when the industrial revolution was in full swing. He personally saw and studied the filthy and dehumanizing conditions in which British factory workers labored. That experience led him to think capitalism was the source of every ill in society. He was only exposed to the exploitation of workers who labored long hours for meager wages while rich factory owners’ reaped benefits. In addition to his geographical and historical background, there are two key reasons as to why Marx indicted capitalism for all the problems in the world, these also exemplify his error: He believed that the class in which a person is born is the one in which he or she will remain. He blames capitalism for entrapping human beings

The beauty of a capitalist system is that it is free—we can own property, start a business, and live our lives as we so desire, provided we are not harming anyone.

There is the issue: providing we are not harming anyone. This where the social license is best measured. It is the measure of the carbon economy. What we can hope is that we will live to see the carbon economy proven – those actions are not harming anyone!

Environmental Project risk – 2015, no option to do nothing

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There is a rise of project risk if you ignore sustainable practices. Banks are introducing the need to consider that you be aware of that responsibility. 2015 is shaping itself as the review year of regulatory response and licenses to assign risk. It follows that we are on track to the need to focus on compliance action verses the risk of no action being greater. The evidence is you are endangered as a species or at best targeted by Australian jurisdictions if you ignore what your facility or business might do to reduce the risk. For instance environmental licensing regimes are being reworked so that compliance activity can be aligned with actual facility risks. These checked activities take into account the operator history and what is a nearby sensitive environment.

You may not be aware of AELERT – their website says:“We are a collective of environmental regulators from all levels of government across Australia and New Zealand.  We create a platform for environmental regulators to connect and collaborate in their work.

Member officers connect through AELERT to exchange resources, knowledge and experience about environmental regulatory practice and work together to drive continuous improvement and new approaches to the ‘regulatory craft’.”

What is growing from this collaboration is NSW will launch its risk-based licensing scheme on July 1, 2015, and Victoria’s three-year roll-out of its Licensed Operator Risk Assessment scheme will be completed in 2015, while Queensland is also well into a process of risk-profiling the sites it regulates.

The other issue is that compliance to regulatory needs has another element in 2015: It is called ‘social licence’ and is likely to be the dominant phase of 2015. Our opening paragraph referred to banks, and this form of license, and we quote:

“And it’s no good having the official go-ahead to build a coal port or mine if activists have made sure that no financial institution will back it (see related article).

Many environmental groups have become so dismayed at what they perceive to be a large-scale wind-back of environmental legislation that they no longer consider official processes capable of delivering a fair result. Their concerns have been magnified by the de-funding of public interest environmental lawyers (see related article), new restrictions in Queensland on rights to appeal decisions or even be notified about projects (see related article), and Tasmania’s new law cracking down on rights to protest (see related article).

For many groups, that means strategic community campaigning – ranging from blockades to shareholder activism – is now often seen as the best option.”

To Co2land org these license events are the equivalent to the actions of the political pendulum and as history displays no matter what the swing the middle is where it will travel.

The pendulum for carbon pricing was set in 2014 with the repeal of the Carbon Tax, and the reliance on the Emission Reduction Fund to take the battle over the policies of what Australia should use to reduce emissions. To again to use out quoted source:

“But 2015 will mostly be about how deeply the nation should cut them. In Australia, one legacy of the 2014 struggle over carbon policy is that we will have two major reviews of suitable targets – one led by Prime Minister and Cabinet (see related article) and another by the Climate Change Authority (see related article).

Both will be important. Although the PMC review will represent Australia’s official position, other governments are likely to judge the Government harshly if its proposals fall far short of what the Climate Change Authority suggests. Meanwhile, businesses themselves will come under increasing pressure to set corporate emissions reduction targets that are based on climate science.

There is now an international campaign – with high-profile backers including CDP, the World Resources Institute and WWF – urging companies to do so.”

Our current Government has introduced an emission reduction scheme – albeit with a $0 baseline and it is called Direct Action Plan. The Senate referred to the Environment and Communications References Committee for inquiry and report on the matter on 10 December 2013. All good to go now and you expect no problems!

Then SAI GLOBAL, 2 February 2015 reports in the Carbon + Environment Daily that in the climate change arena, “nervousness about the capacity of Direct Action to deliver emission cuts and about the Federal Government’s commitment to renewable energy will lead to growing pressure for states to pick up the perceived slack.

The actions of the NSW, ACT and South Australian governments show they already consider they have a major role to play in helping their citizens deal with climate change, and the newly-elected Andrews Labor Government in Victoria has indicated it shares this view.

As well, both NSW and Victoria are reviewing coastal legislation in 2015, a task that will inevitably have a strong focus on climate change adaptation.”

Co2land org is taken back to the Howard years of government and recalls the shift from Greenhouse Gas Abatement Actions to Climate Change Adaptation strategies. So if this all sounds back to the future it really only means the makeup of our current government is recycling its policies as business as usual. A rebadge of funding here and there of course. If you think this is cynical it is not meant to be it is a concern that we are seeing the continuing rise of risk and that even the most strident of climate change deniers are acknowledging risk is risk, and exposure to risk requires assessment to minimize the fallout. That is a fact it is not a political position and it is common to survival.

An excellent example of taking risk seriously is Cotton Australia where in their periodical Cotton Matters, 28 January 2015 they write:

“The Australian cotton industry supports programs to reduce emissions through improving efficiencies and a first assessment indicates the draft method is technically sound. However, Cotton Australia considers that at this stage it could be challenging to garner involvement due to a potentially inadequate benefit:cost. Implementing a project involves administrative obligations and costs (e.g. for independent audits) as well as the need to manage financial risk.

Nevertheless, businesses in the carbon market are working to develop smarter services and products to help manage complexity, risk and reduce project costs. A sufficient price for carbon would help overcome these.

For these reasons, the researchers, economists and technical specialists at CottonInfo eagerly await the results of the first Emissions Reduction Fund reverse auction the coming months of this year to firm up the likely carbon price and revenue potential for future projects.”

From this Co2Land org finds the price of carbon will prevail, and the mid point of the pendulum will not be $0. There will be ‘degrees’ of difference that will set the price and price has the capacity to reduce greenhouse gas emissions adequately and effectively.

One risk for the Emissions Reduction Fund (ERF) is as the federal government’s centrepiece for emissions reduction, and it relying on being used to purchase lowest cost abatement, and participation in the ERF is voluntary and open to everyone is that it may be window dressing.  The key is the reference of being ‘open to everyone’. The issue is that interested parties must establish a project, which must follow the rules outlined in a ‘method’. What is not well know is that a minimum block of emissions reduction from the method exists and set by an arbitrary decision process. In short individuals may not particulate without complexity. Complexity by virtue of the need to be fully aware, upfront behaviour of how the detail and requirements in undertaking a project: the risks, costs as well as the benefits are presented. That said the other aspect is the market is immature and finding who to trust as having your interests as a ’license’ is a risk.

Killing off domestic low cost energy mix – Queensland style

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It was some surprise amongst friends that Angus Taylor (thought to be the rising star of the Liberal Party) said gas was the future of a low-cost energy mix. This seemed at odds with Tony Abbott’s (the Prime Minister’s) view that coal is the key. Some react to that story as an OMG moment. We take the story as one that is a design to disguise and deflect on what is actually happening and lead the consumer to a path to pay more. Some might even say it is a centrifuge of fluid appeal. The opening line story is from:

http://www.goulburnpost.com.au/story/2791033/angus-at-odds-with-abbott-over-coal/?cs=181

So there is no confusion as to what we believe: Lets us declare we are pro-market. What we question is whether pro-business rent-seekers are slewing benefits for the rent-seekers at the expense of the consumer. After reading the article immediately below, the story should unfold as to why the opening paragraph was so well linked:

Will Queensland defy the trend of declining demand? By Paul McArdle Wed, 24 December 2014 | Topic Summer 2014-15 in the NEM –

“As early as 2011 and perhaps earlier, we’ve been posting commentary about how growth in electricity demand was slowing, and then began to decline.  Across the NEM this trend does not appear to be slowing (and there are a number of reasons for this).

However, within Queensland we wonder whether what we’ll see this summer and next will buck this trend?

Earlier this week we noted articles (Gladstone Observer, Courier Mail and SMH) about the arrival of the first LNG export tanker in Gladstone.  Billions of dollars of investment have been sunk into this new east-coast industry, a fair percentage of which being focused on the upstream tasks of releasing the coal-seam gas and delivering it to Gladstone.  With the three projects each opting for electric compression of gas delivery to Gladstone, we’re looking to see a sizeable increase in demand for electricity as a result.”

Good stuff, hey! Can you see that only a few benefit? We cannot save you, but we can make you aware!

Lets us look at some of those linked ‘demand risers’ in more detail:

The $170m Bauhinia rail electrification project has just been completed and is a spur line to link with the Blackwater System in Central Queensland. The Blackwater system too was upgraded to double its electrical capacity, so rather than using diesel trains carrying coal from the Rolleston mine all the way to the coast it will be all electric powered haulers, which will no doubt further increase electricity demand. Queensland now has electric locomotives rated to 4,000 kW each as opposed to the previous 3000kW. So this means each locomotives at 100% load factor it would be 4 GW of demand! For more information go to –

http://www.aurizon.com.au/projects/bauhinia-electrification-project

Therefore you can expect: Each new coal train is likely to have three locomotives and each locomotive is about 4 megawatts load rated and drawing current directly from the overhead wires. This is and 12MW additional load on the network for each new train. This load was not required before.

We then read the Queensland people and business in general will pay more for gas than other states in Australia. Despite that state having more than enough gas for domestic purposes. Our Queensland contact said it has something to do with the resources rent policy of the state government. We noted that the quoted price, last week, from traders is Brisbane trades for gas in the order of $4.21 per GJ. This was an increase, which was coincident on the arrival of the first LNG tanker in Gladstone to export gas. At that same time Sydney prices rose to $4.00 per GJ. However Victorian prices remained at around $3.50 per GJ.

Now, 13 January 2015, Paul McArdle reported Brisbane hub for gas trades had reached $8.69 per GJ, Sydney $4.52 and Victoria 3.75 per GJ. While we could argue Sydney and Victoria are merely movements in the market, it is obvious Brisbane is a seismic like demand wave pushing up prices.

We no longer need to speculate that higher Queensland gas prices will mean gas for electricity peaking generation plants will be a higher price. Being that the energy market is a spot market the higher bidder sets the price. In short, as electricity demand increases so does price. What this means for electricity generators is higher demand, higher Queensland gas prices, and the market rewarding them because the higher bidder sets the electricity price for them to benefit. How much higher Queensland gas prices will go will be interesting to follow. We no longer speculate as 13 January also see Queensland peak electricity prices running as much as 300 precent plus higher than the remainder of the eastern seaboard on that day.

A short while a go the Federal Government with the Queensland Government’s endorsing repealed the carbon tax (the inception program was called the Carbon Price) as it was claimed it was to blame for higher energy prices! But now those bodies welcome higher prices, and the investor rent seekers want to hear this glorious venture has raised higher revenues from higher prices. It may be immoral but it is not illegal they say.

We are told gas prices must increase to match world demand and the price continuum. But that is seeming a hollow argument as even Japan now appear to be reluctant to source or pay for our LNG. This is a shift from their previous willingness to pay high prices for gas. Why this shift? Because, new low-cost LNG producers elsewhere are joining the supply side, and Japanese LNG demand is moderating to lower levels of need. Other factors to indicate a lower LNG demand is lower oil prices, and alternate energy sources coming in lower priced too.

Why will the demand increase in Queensland, the key to this is three projects each opting for electric compression of gas delivery to Gladstone, and therefore an increase in demand for electricity as a result.

The confidence trick here is QCLNG and APLNG are electrified using electricity from the NEM, and the GLNG upstream project has gas turbine driven hub compressors and electric driven nodal compressors supplied by open cycle gas turbine generators. Therefore it is the gas prices that is be the price setters for the electricity price, not any increase electricity demand on the NEM. Good double talk is it not?

Then Hugh Saddler said, 7 January 2015, via WattClarity: “The excellent data available through NEM-Review tells me that a large new continuous load of around 400 MW came on line in Queensland on 27 October last. This suggests that the 2014-15 summer peak is likely to be considerably higher, for equivalent weather, than in recent years; this has already happened on 9 and 17 December. However, without knowing what the load is, it is difficult to be certain with such a prediction.”

The later we find most interesting and it is the unknown that is more to worry about. About what price you will end up paying.

Now back to Paul McArdle he continued to say:

“1)  We can see that, in summer 2014-15, we have already experienced a higher demand in Queensland than was the case in the whole of summer 2013-14 .

2)  Queensland demand (with respect to the competition) has already peaked to the level of 8,472.23MW

3)  That demand peak occurred as late as 17:15 on that day (hence as the effect of solar PV injections into the grid had receded).  This is something we would not have seen several years previously!

4)  We also see that price volatility is starting to look as something like what happened in summer 2012-13 as well.”

Co2land org concluded it will continue to be a good time for ole king coal generators in Queensland and those state consumers will pay the price. A price that will lead to other east coast states rising their prices too. However, it will not the market causing the rise it will be rent seekers and their influence on the policy makers.

The ray of sunshine is it may become too expensive for policy makers to bear!

Our goal – to inspire and learn, a new year resolution for 2015.

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Resolutions are always good to start a new year with: Committing to Gamification sounds like a good one. The goal is to maximize enjoyment and engagement through capturing the interest of learners and inspiring them to continue learning. Then it occurs one element you need is narrative and at least one other is immediate feedback. Then it occurs what we are being conditioned, or thought we are being conditioned by our leaders, corporate and political. Other evidence of this is the narrative we increasingly hear is playing down the unpleasant rather than getting to the point – an example of spinmeisters at work deploying euphemism(s) expecting we let the words wash over us without scrutinising the underlying reality.

So now our good intention is turning out to be a communication strategy and not so much a goal to inspire – We are openly massaging our message to our stakeholders to transition our moving forward. But what if, if the intention was only pro-business and pro-market? By this we mean to benefit the rent-seekers only.

It then occurs that while we have good intention in our resolution, others might not share our values that climate change is real and urgent. That merely adapting for ‘climate variability’ is a loser view. It would seem, according to Dr Neil James: Workers, corporate and politicians alike are digging in for a long fight between the ideology of each for 2015. Reported is you just have ask around and you read and hear; “Minister’s who can’t or won’t compromise, Union’s lack the strength to force their issues, and a workforce wondering what is going on here? “

Co2land org does guess it is about the game after all, and we are still in hope for a happy new year. As was said in Monty Python’s Life of Brian – always look on the bright side of life.

Also introduced are the further extensions of language to confuse and obfuscate, and from Dr Neil James, executive director of the Plain English Foundation and the author of Writing at Work was said:

“In Australia, the nation’s finances dominated the political “narrative”. The Treasurer divided the nation between “lifters” and “leaners”. The finance minister huffed that our public broadcasters were merely being subjected to an “efficiency dividend”. The government later admitted that, yes, this meant their funding was being cut after all.

Then Amanda Vanstone weighed in as a member of the National Commission of Audit with what must be the mixed metaphor of the year: Let’s fix our roof while the sun is shining because we’re on a course to hit the rocks and we have to fix it.

In the era of the mobile device, we are subjected to more information in more places at more times than ever before. It has never been more important to deconstruct this kind of doublespeak and uncouple the corporate spin. 2014 provided plenty of examples of what to watch for in the year ahead.”

Then there are the ‘we are here to help you’ matters – Like the National Disability (NDIS) scheme where parents of young children are being helped. But there is a catch; your special school can now bill you for the government contribution equivalents and other fees that leave them out of pocket in a way not done before.

Then there are those innovation help schemes. One example from a LinkedIn group member involves the ‘improved’ Commercialization Australia Scheme, called ‘Accelerating Commercialisation Australia’.

Under the heading: Accelerating Commercialisation Australia – up close and personal, Mark Dunn wrote – “Having read all the paperwork, FAQs and consumer guides, I lodged an application with Accelerating Commercialisation, and found out what they are really targeting.

Basically, this is product development funds. You have to have your prototype product or service, and are seeking assistance to convert it into something that a customer wants, e.g. making samples to distribute, or working with customers to determine detailed specifications, or working to develop markets.

The rules say the grant scheme is potentially good for $1 million, for 1:1 matching funds, but to quote their advisor, ‘there is not actually very much money’ in the fund.”

Being we cannot help ourselves we set about looking at common reference tools and found:

Accelerating = Slow down (dictionary form antonym)

Commercialisation = making it easy for companies to engage and successfully exploit

Australia = a sing-along medley of mountains, deserts, reefs, forests, beaches and …

I guess with a sense of humour you could say come a waltzing Matildas with me!

But do we need it, to suffer anymore in 2015 with the ‘necessity’ of euphemism, obfuscation and metaphors aided by corporate and political spin?

Then we read something that is food for thought in showing we are all full of it, and that ideology has little to do with success. It starts with the headline: Government running costs to reach record high as disability expenses mount, by Markus Mannheim, 3 January 2015: The Goulburn Post – “Former public service commissioner Andrew Podger, now a public policy professor at the Australian National University, said the expenses were a better indicator of efficiency than the size of the workforce because they included costs racked up by private contractors as well as public servants.

There have been a lot of experiments in efficiency over the years – outsourcing was one, another is shared services to try to take advantage of economies of scale …” he said.

“We had a period of decentralising government bodies and now we appear to be moving back to centralising a lot of work back into departments.

But you can’t say one method is more efficient or cheaper than another: it should be decided on a case-by-case basis for each program.

Real running costs grew rapidly under the Howard government. Labor, meanwhile, managed to restrain its operating expenses despite its massive spending projects to counter the global financial crisis.

Last month, as part of the Coalition’s “smaller and more rational government” agenda, Senator Cormann detailed plans to abolish or amalgamate about 250 government bodies, though most were small committees.

He also released a paper outlining the Coalition’s philosophy on the role of the public sector.

As a principle, government bodies should not be given preference as service delivery agents, where others are more capable of providing the same service …the minister wrote.”

We must finish with tying all this back to our advocating for a sustainable world, and the headline:

Heat is on Abbott government over climate change as world turns, 3 January 2015. “This could be the year of extinction for the climate-change denier” writes Peter Hannam. He goes on to say about the stance of the NSW Coalition Government: “When the Baird government unveiled the first high-resolution mapping of how global warming is expected to shift the climate for NSW, Victoria and the ACT by 2070, officials were quizzed why they weren’t using “climate variability”, a term favoured by federal Coalition counterparts, to describe the outlook.

This is the NSW government, we believe in climate change!” came the immediate response at the last month’s media briefing”.

Co2land org now asks is Gamification to be accessed in a similar way to narcissism. Classified as good and bad! We say we are good!

An Inconvenient Truth – regulatory response ash to waste

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An inconvenient distraction: A vexatious type can make it difficult for success and a friend points out ‘a difficulty’ and you find yourself in a position of lampoon. The issue is should what you report be directed or controlled. To illustrate we published, 13 December 2014, “Maybe the question is better put this way: Plants don’t need carbon, soils do. Biochar is but a hazardous waste from pyrolysis”. This was not a position statement; it was outlining a problem of perception promoted by deniers that you should think of it as an ash.

On 13 December 2014 we also wrote – “The quandary for most of us when we express our thoughts is we can be regarded as excessive or obsessive for seeking out an agenda”. In this story CO2Land org had an agenda – to make one aware. To be aware that moves were afoot overseas to have ash declared ‘waste’. The below the radar application if you want to make more of it.

What is difficult to accept is that the catalyst for this change was the coal fired power stations in the USA. The story unfolds as:

On 22 December 2014, http://www.wastedrive.com published that – Feds: Coal ash classified as solid waste – by Nicole Wrona. This followed a story published by Dina Cappiello The Associated Press on 20 December 2014 through the Casper Star Tribune. Outlining: “The Obama administration on Friday set the first national standards for waste generated from coal burned for electricity, treating it more like household garbage rather than a hazardous material.”

To directly quote wastedrive.com – on the affects of the new regulations:

Dive Brief:

  • New federal standards will categorize coal ash as a solid waste instead of considering it a hazardous material.
  • The classification was determined despite pushback from environmentalists. The regulations do not extend to shuttered power plants, but would apply to closed ash ponds where utilities are active.
  • States will continue to ensure standards surrounding the waste are followed. The federal government would have taken over enforcement had the decision turned out differently or if the waste had been dubbed “hazardous.”

Dive Insight:

  • The Environmental Protection Agency (EPA) said it would protect citizens from the risks associated with coal ash waste sites while pledging to hold corporations who operated ash waste sites accountable. The rules are expected to increase leak monitoring, control blowing dust, and to require companies to publicly release test results.
  • Waste Management had predicted a substantial amount of growth for the company if the rule were to be approved. The ash waste stream is larger than the waste stream currently handled by the company.

Recommended Reading:

Now back in Australia the Carbon Farming Initiative is sympathetic to bio char from pyrolysis. The difficulty is the regulations that are responded to by the EPA of each state. The question now is will this USA EPA ruling be followed in Australia? Will bio char too be cleared of any stigma of a perception either implied or express that it is an ash – should be leave this to experts?

It is not that simple. As we said previously what is needed to be truly progressive is the commitment to investigate the potential. Do we need a senate inquiry to get that moving? We see some wonderful benefits where multiple products could be extracted from just a simple classification change being the catalyst.

The facts they say: About the poles and wires selloff.

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The facts they say: About the poles and wires selloff. Revenue is a weird thing and it is all about your plan. That is short term gain verses long term revenue. What can get missed on that point is what is changing around you can be a bigger factor than the emotion around the change. That factor is technology and the transition strategy to survive – to survive you need to transform how you do your business or get pushed aside. The other issue is not only the technology challenging you it is the skill required to understanding how to take the opportunity to exploit the rise of the technology. These comments are as important for Energy Network companies as they are for banks, the financial services industry, sales, commodities traders, agribusiness and manufacturing. Dare we also say, political response, too.

One group we know of, http://www.solarcitizens.org.au has been active in seeking “to change the game”. They are referring to the practices and the behaviour of companies that run electricity networks. They are targeting those that control how we get our electricity and are encouraging concerned parties to participate, by way of a submission into the Australian Senate Inquiry, and submissions closed 18 December 2014.

The Senate is looking to spotlight whether it is fair that power prices have surged across the board in Australia. Whether it is because of the unnecessary upgrades to the electricity network, known as ‘gold-plating’ of the grid. What is being investigated, and you can see the full terms of reference for the Senate Inquiry here:

  • Whether energy companies have misrepresented information to the energy regulator for their benefit
  • Allegations of price rorting by companies
  • Whether current network arrangements discriminate against homes and businesses who generate their own power, and
  • The possibility of establishing an independent body to investigate and prosecute poor behaviour.

Those that say the plan to sell off the poles and wires claim privatization leads to higher prices, reliability of supply declines, maintenance is avoided with disastrous consequences, and what could the most persuasive of all: Once it is sold that revenue source is gone!

Then we read ABC News 21 December 2014 the story headed New Tas energy plan will drive down power prices: Government.

“A new energy plan for Tasmania will result in lower power prices, the state’s Energy Minister says.

The Government is inviting Tasmanians to have their say on its new draft energy strategy.” Public submissions are open until mid-February.

This is said to be an opportunity to attract new business to Tasmania and for better ways to utilise the state’s existing energy assets.

They also moot the possibility of a second Bass Strait to the mainland interconnector and expanding their hydro generation output by 10 per cent.

They also quote the Energy Minister Matthew Groom:

“This is about a mindset shift, this is about recognising that the energy businesses are primarily there to deliver energy advantage to Tasmanians, and central to that will be the lowest possible power prices that are genuinely sustainable……………..We saw power prices increase by more than 65 per cent over seven years……..That’s unacceptable and under this new strategic direction, it cannot happen again.”

The strategy includes more work on encouraging competition, with the Government still open to selling Aurora Energy’s customer book.

We should say the truly progressive part is the commitment to investigate the potential of using forest residue for biofuel.

CO2Land org has empathy with the cause. That said we should realize the poles and wires (Electricity Networks), historically are a 130 plus years old system. Some did not have the network system for some times after that, and some still do not have access. It also follows that regulators and those consulting to the companies were constantly expecting continuous load growth on the network. The evidence is that is not now happening and predictions are it is now a very different market. In our opinion anything that can be gamed is a market and will be treated as a commodity by the players. The selloff of the networks is evidence also that the predominately state owned utility companies want to divest themselves of ‘services’ and the new owners will have the reign to treat all as a commodity. If you do not believe us – think of the new rules coming into play referring to ‘Cost reflective’ for network charges.

Are the rules setters correct? One argument that has gone for some time – at least since 1996 that we are aware of, is the fairness of cross subsidies within the networks charges being to transfer cost burdens from the sparse population region to the concentrated population region (country and city users). If you think of what the Australian Energy Regulator (AER) is saying and the Australian Energy Market Commission (AEMC) is saying it now it is enough it must change. Where it gets ugly is when you ask is the issue a question of to whom is the favour for – Business as usual and the rent seekers, or those that are bold and go forth with the transition to change.

Again, that all leads to the need to develop new business models and that need will be regardless for the reasons we started in para 1 of this discussion – the factor of technology.

A very likely model is that energy networks will adapt and change, and part of our believe of this is there will still be a need for some form of infrastructure to deliver the power. It will not matter is it is micro grid or long runs of poles and wires. The infrastructure will have new build, maintenance and upgrade needs. And, who pays? You do no matter what is the model.

A Quandary – Nit-pick or constructive critique of CFI ERF

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The quandary for most of us when we express our thoughts is we can be regarded as excessive or obsessive for seeking out an agenda – the agenda to change that might be procedurally correct, but fails to address the main issue. For instance the Emissions Reduction Fund – Irrigated Cotton draft determination and associated documents (the consultation process closed 12 December 2014). The main issue, as with other Carbon Farming Initiative methods, is that it is harder for leading growers to be rewarded, as there is no recognition of past improvements.

In the main we found the draft cotton determination, draft cotton explanatory statement and the draft cotton equations, as is, to be sound. It has its process thought through well enough and while we could say some of the flow could be improved any further submission could appear to be nit-picking as opposed to constructive criticism.

Was there room for constructive critique? Yes, but these are areas we might like to adjust the eligibility criteria. Also a little tweaking of what appears too broad in the descriptions. They are areas that could be argued as wrong, but they really are areas for the regulations or legislation to be adjusted. When you access the process of a determination your role amounts to comment on the process that is laid out in the draft determination. It is not the appropriate place to express frustration with the rules. Expressing your frustration is really the domain of the politics.

Being we mentioned the ERF – Irrigated Cotton draft determination, we should let you know what is it about. The first thing is it is the opportunity for growers to obtain certificates called the Australian Carbon Credit Unit (ACCU) under the Act 2011 called the Carbon Farming Initiative (CFI). The reference to the Emissions Reduction Fund (ERF) is part of the CFI Amendment Bill 2014. The fund is designed to help reduce Australia’s emissions by providing and incentive for business, landowners, state and local governments, community organization and individuals to adopt new practices and technologies which reduce emissions. The ERF does include incentives for business activities and farming practices. To find more go to: http://www.cleanenergyregulator.gov.au .

A bit more about our thoughts on the determination and consultation on the Draft Energy Reduction Fund: Irrigated cotton.

  • The ‘system’ is for irrigated cotton growing mainly in Queensland, NSW and Western Australia.
  • The incentive is to encourage Nitrogen fertiliser use efficiency and efficiency is a measure of the ratio of lint yield to nitrogen applied via synthetic fertiliser (kg lint yield per kg N).
  • An increase in nitrogen fertiliser use efficiency is equivalent to a decrease in emissions intensity from synthetic fertiliser use in irrigated cotton (t CO2-e per kg lint yield).
  • Because nitrogen fertiliser use efficiency is calculated using both nitrogen fertiliser use and yield, credits for emissions reductions can be generated by reducing fertiliser use while maintaining or increasing yield, or by increasing yield without a corresponding increase in fertiliser use. This approach also ensures that credits for emissions reductions cannot be generated through a contraction of yield without a reduction in fertiliser use.
  • The draft Determination therefore enables irrigated cotton growers to adjust nitrogen fertiliser rate according to paddock yield potential in the project area, provided that nitrogen fertiliser use efficiency increases.
  • There is support for a broad range of activities to improve the efficiency (reduce the emissions intensity) of fertiliser use in irrigated cotton, including activities to improve lint yield without a corresponding increase in nitrogen fertiliser application rate, and activities to modify the rate, timing, method and efficiency of nitrogen fertiliser application.
  • Proponents have the flexibility to select management actions that suit their individual circumstances.
  • In this draft, cotton is the only crop in the production system eligible for generating credits for a reduction in emissions from synthetic fertiliser use.
  • Emissions from other crops grown in rotation with cotton, with the exception of green manure, are excluded from this draft Determination.

What is Synthetic fertiliser?

Inorganic are sometimes called synthetic fertilizers since various chemical treatments are required for their manufacture.

Synthetic fertilisers do not include solid or liquid organic products created using waste products of other industries that do not meet these labelling and minimum nitrogen content standards. For example, synthetic fertilisers do not include manures, such as poultry litter or beef feedlot manure, or mulches and composts, such as composted ginning trash.

What is a Green Manure?

A green manure is a legume that is planted in a paddock to improve the soil for a subsequent cotton crop. A green manure crop is not harvested and the above ground growth is returned to the soil. Examples of green manure are vetch, faba beans, chickpeas and annual clovers. Non-legume crops which require nitrogen fertiliser are not included in the definition of green manure

What is Organic fertiliser?

Organic fertilizers are usually (recycled) plant- or animal-derived matter. The main “organic fertilizers” are, in ranked order, peat, animal wastes, plant wastes from agriculture, and sewage sludge.

If you picked up on peat as a organic fertilizer and the reference that it has no nutritional value to the plants, but improves the soil by aeration and absorbing water. You might ask why is biochar not a fertilizer?

Bio char

It gets down to two issues:

  1. Bio char is described as a sequester of carbon and as such binds carbon to its properties.
  2. So broad is the definition that it is seen to be the product of ‘burning’.

The later point is where it gets interesting and frustrating. This is because the technology for fine chars is thermochemical decomposition of organic material at elevated temperatures in the absence of oxygen. In another speak, Bio char is created by pyrolysis of biomass.

We do not argue that is a fertilizer. What we argue is it is an agent to improve the efficiency of fertilizer use.

Another potential for confusion is linking soil carbon to bio char. Soil carbon is a condition and bio char is a conditioner. If you think one is the constant and the other the agent for change it makes sense does it not?

That leaves the issue of if it is helpful why is it excluded from the incentives?

Maybe the question is better put this way: Plants don’t need carbon, soils do. Biochar is but a hazardous waste from pyrolysis, looking for a below-the-radar application. Do we have that application? But that is for another discussion and a case study!