Category: Carbon Risk

Policy impacts, right side of the bell curve

Trust, Context and Success

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Trust, context and success. If you consider Australia has, during July 2014, dumped the Carbon Price (renamed to Carbon Tax in the repeal legislation). Then read the Republicans of America do seem intent to introduce a Carbon Tax, you must ask what is the context and what is the success factor they seek for it to appeal and be persuasive for it to be trusted? The textbook stuff will read: In the main economists agrees a tax is the way to put downward pressure on emissions. It follows the Republican faithful don’t like quantitative emissions controls, caps on emissions, or subsidies. However, they do like market forces to organise an economic response. The selling point is that emission can be cut where the market finds it is easier and cheaper to do so. So, can we say they trust a tax to be more persuasive?

Also, how many of you are doubting that your electricity price will reduce in a meaningful way because of the Carbon Tax repeal? Do you not trust? A company known to us recently asked (a wildcard throw-in) during a energy contract dispute to say: Will XXXXXX retailer be discounting their claim for future losses – because the carbon price should not now be factored in. If asked why should they discount – you say because they have claimed future loss as part of the reason for the claim.  Then ask will they be required to show where this is calculated? Who will police the repeal? Trust us the umpire says!

Consider this, you expect the umpire is there to help you – the policy says if you have a problem, call. You phone to clarify where the discussion might be going. The umpire says; you have to consider the impact of what you are saying. Your head goes into explosive mode – you ask yourself where is the natural justice in being implied the victim is a trouble maker, where is the fairness in having your accounts being set in limbo for so long. Is it right for them to continue to affect your business in terms of personal stress and reputation? Then comes a response you don’t expect – the perpetrator asks for more time to influence the umpire. This example may be hypothetical but we are sure you all have had such moments!

To trust – is it context, sincerity or actions that determine that we do? We notice that some will dress especially to impress – at the wrong time, some will gaff at the wrong time, some will talk to an audience about a matter and not know the audience is well briefed on why your view is obsolete. Does it matter one little bit? A little bit of course – the like-minded will be impressed, and the faithful is impressed. However, no one outside the group is impressed and the feedback from outside that group is awful.

We prefer to define what we are talking about before sprucing the benefits of a position. You might notice we said – benefits. This is not a cost benefits discussion or evaluation it is just looking at the positions one might take.

Start with: Trust (the noun), a firm belief in someone or something, acceptance of the truth of a statement without evidence or investigation, the state of being responsible for someone or something.

Therefore if you do trust not seriously, you doubt that you can trust others, that you cannot name what state of trust you are in, then sadly you may have programmed yourself as an advantage taker. Note the word advantage, which is very different to opportunity in this context. If you only seek advantage it is more difficult to find success. However, if you take advantage through an opportunity you may be successful.

“Success is where preparation and opportunity meet.” Bobby Unser, racecar driver and Indianapolis 500 winner. Unser knew all about opportunity and using it to his advantage. But if he wasn’t prepared when the opportunity presented itself, he could lose the race. Unser is one of only ten drivers ever to win the Indy 500 more than three times, and was the first driver ever clocked at more than 190 miles per hour (306kph) on the circuit.

We are now noticing that preparation is equally, if not more, important than opportunity. However, you need to be prepared for opportunity. You prepare through education, self-improvement practices to be ready willing and able to respond to opportunity.

Trust, context and success come from opportunities. Opportunities come from inspiration and motivation. Simply identify where your trust should lay, the context of the framework setting, educate yourself in how to prepare and be successful – easy is it not? If only I did not doubt myself!

 

The business opportunity of the century

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“Building the energy system of the second half of the 21st century is the business opportunity of the century. Recently, the countries that have most successfully capitalized on this have been the rapidly developing economies, particularly in Asia.” Source Christopher Field, co-chair, IPCC Working Group II.

Danger, danger! We are told we are open for business and Asia will follow? Are they having the last laugh, so what does economic participation agreements mean? We guess, nothing unless we are in sync with our neigbours because they are not denying climate change they are fearful of it and taking appropriate action. Also most interesting is, they address a ‘resilience framework’ – something that meaningfully reduces the probability of system failure. You might also note that squarely ties ecosystem, and economic systems as being inseparable. So why do we hear so much other nonsense as climate responses cost jobs – utter rubbish! Now consider:

“Singapore is taking steps to better adapt to the vagaries of uncertain climate patterns in Southeast Asia by embarking on a national study to understand the impacts of climate change on the country’s roads, drainage systems, power stations, and other infrastructure.

Officials from the Ministry of the Environment and Water Resources and the Ministry of National Development shared on Monday that all ministries and statutory boards will participate in this study, which will examine how rising sea levels, higher temperatures and more intense rainfall and flooding could affect the city state’s physical infrastructure.

The initial findings are expected to be released by 2016, and will feed into Singapore’s ‘Resilience Framework’, a blueprint developed by the Singapore Government in 2012 to safeguard against climate change over the next 50 to 100 years.

The study was announced on Monday at the sidelines of an event organised by Singapore’s National Climate Change Secretariat and the United Nations’ Intergovernmental Panel on Climate Change (IPCC) to share findings from the IPCC’s recently released Fifth Assessment Report (AR5) and its implications for Southeast Asia. About 260 guests from the public sector, as well as businesses, NGOs and academia attended the event held at the Furama Riverfront Hotel.

The findings of AR5 conclusively state that “warming of the climate system is unequivocal” and that it is “extremely likely” that human influence has been the main cause of observed warming since the mid-20th century.

The report stated that in most projected scenarios, global surface temperature is also likely to exceed the 2°C limit. Most scientists at the Copenhagen climate summit in 2009 agreed that exceeding this limit of global surface temperature rise would result in dangerous climate change.

Scientists from the report’s working groups on adaptation, mitigation, and physical science also added that key risks for Asia included urban and coastal flooding, and water and food security.

No-regret policies for emission reduction

Singapore’s Minister for Environment and Water Resources Vivian Balakrishnan highlighted Singapore’s vulnerability to these extreme weather events and the importance of adapting to them as early as possible.

“We cannot take a positive outcome for granted. Even though we will do our part as a responsible member of the global community, we also have to adapt to climate change and make sure we are resilient in order to look after our own citizens in a warmer and more uncertain world”, he said.

However, there were uncertainties inherent in climate science, in the economics of climate change and in the political framework surrounding a global climate agreement that hampered global adaptation and mitigation efforts, added Balakrishnan.

For example, he said that it was “misaligned economics” that blocked the adoption of low-carbon technologies in a global economy that is overwhelmingly reliant on fossil fuels.

“This is what keeps us trapped in a high carbon trajectory”, he said.

To address this, Balakrishnan proposed three “no-regret policies” to achieve substantial emissions reductions; namely investing into research and development of low carbon and clean energy systems, mandating energy efficiency standards, and removing subsidies for fossil fuels.

Scientists from the IPCC speaking at the Monday event seconded the minister’s view that scaling up the low-carbon energy sector was necessary to limit global temperature rise. They added that the pursuit of clean energy also represented significant business opportunities for entrepreneurs and investors.

Christopher Field, co-chair of the IPCC working group on impacts, adaptation and vulnerability, said: “Building the energy system of the second half of the 21st century is the business opportunity of the century. Recently, the countries that have most successfully capitalised on this have been the rapidly developing economies, particularly in Asia”.

Jim Skea, vice-chair of the IPCC working group on climate change mitigation, shared that “there will be major changes in investment patterns in the energy sector if we are going to pursue climate change mitigation, and this provides enormous market opportunities”.

The panel of scientists identified three strands of scientific innovations in the energy sector as particularly promising. In the field of chemistry, developing better fuel cells, photovoltaic technologies and more efficient materials were raised as key areas that could drive clean energy forward.

Innovations in information technology such as smart grids and emerging biological research in increasing crop yields of biofuel crops were also identified as areas with high opportunity for investment.

While the potential for profit by developing new energy technologies prevailed in conversations about climate change mitigation, Katharine Mach, co-director of science of the IPCC Technical Support Unit, noted that there were business opportunities in adapting to climate change too.

“Adapting to climate change is largely about risk management, and risk is also one of the metrics that businesses are the most comfortable with. This focus on risk management is widely used in government and also in insurance and business”, she said.

“There are huge opportunities for businesses that adapt to changes in water resources and the weather extremes that will be playing out across the region”, she noted.

The scientists also expressed unanimous optimism that the world would collectively be able to meet the global challenge of climate change.

To illustrate that climate issues tended to pass through a cycle of initial denial and concerns about the high cost, followed by the gradual acceptance of evidence and political action, Skea cited the United Kingdom’s 1956 Clean Air Act, which was passed as a response to years of debilitating air pollution in London that took more than 12,000 lives. While the government was initially keen to downplay the severity of the smog due to economic pressures, it eventually introduced measures such as shifting to cleaner energy sources than coal and relocating power stations away from cities.

“Climate change is the biggest challenge of all because it is global. But I feel optimistic that the same pattern will be followed and that we will eventually deal with it”, he said.

Singaporean professor Wong Poh Poh, the coordinating lead author on AR5’s chapter on coastal systems and low-lying areas noted, however, that while new developments in science and technology were encouraging, the slow rate of political change did temper the his optimism somewhat.

The IPCC representatives shared that the process of putting together the next assessment report (AR6) would focus on addressing gaps in knowledge about Asia’s changing weather patterns and putting a number on the value of preventing catastrophic climate change.

This would be done by involving more environmental economists in the scientific process and ensuring that developing countries in Asia were more equally represented on the panel, said the scientists.” http://www.eco-business.com/news/singapore-steps-efforts-weather-future-climate-change/?utm_medium=email&utm_campaign=July+9+newsletter&utm_content=July+9+newsletter+Version+A+CID_a456bb2e4e5b7a34701ac945eeb190e2&utm_source=Campaign%20Monitor&utm_term=READ%20FULL%20STORY

So please will the real Greg Hunt stand up and say what he needs to say – I believe!

All about gas, coal has lost it

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It is all about gas. Coal has lost it, but it is a good distraction. Petroleum is a convenient price setter. Renewables are the future and the trick is to be to get the traditional utility models to take ownership. But what is the price?

World wide scholarly types have put forward a number of maps of energy analysis for, Japan and globally. Japan is topical because they are more likely to be a first tier part of Australia’s trade. 

The trade approaches call for model development for energy demand, costing, efficiency, and green house gas emission – We trust you noted that models needed included Greenhouse Gas emissions. Why? Because Japan for its energy security must consider its short and long selling trades on energy. Energy needs include considering an individual process basis including fuel cell technology, vehicle technology, internal electricity needs and the usage strata on all levels including regional or national levels with a multiplicity of competing energy processes.

That said, Japan is only one of our global partners with similar concerns. All must consider in their national interest what are some of the comparable energy pathways. Those pathways include: Coal importation, fuels used for electricity production, electricity use in either residential, commercial, and transportation sectors etc. In all these considerations the answers can change over time and some of the drivers will be the relevant technology needs, the gaps in sustainable delivery mechanisms to meet the demands and gaps in supply, and they must also consider the time frames needed to close each fuel supply type and substitute them.

Australia’s politics is sending up a big smoke screen – Coal is King. World prices and demand says something different something like ‘Coal is dead long live the Coal’ 
 We hear of ‘clean coal’ and then we hear it is a nonsense. What is certain is it becoming an undesirable fuel source. This is not saying unnecessary it is simply saying much less attractive on the world stage. Why, technology can now provide better fuel sources without the climate change consequences. So much so that at any price, coal is too expensive. Coal can be burnt, but needs processing to be useful for other purposes. The term embodied energy come to mind here. It means the amount of energy needed to convert may be higher than the value of the material compared to alternative process. Then there is gas! Gas can be used for its molecule – to make fertilizer for instance, to fuel your stove, boiler, it can be a by-product of another process such as syngas. Your waste can even be used to produce it. Gas can be processes or extracted to supply. But the choices are better, cleaner. Granted, not the best energy source, but far more sensible than relying on coal. Hence, the now is all about gas.

Then there is the markets that determine viability to produce. Despite what our Australian policy makers might be telling us – the truth is more than ‘real’, it more than to be affective it is about being effective. It is not good enough to be positioned well, you also need an effective agenda. Or, at least have you agenda smarter than the other guys. What is there to critique about our stance, now:

Carbon Tax – the UK, US Republicans are all active in thinking a Carbon Tax is good. It is a market mechanism that works. This flies in the face of Australia’s Environment Minister saying it does not – even though the evidence suggest Australia’s Carbon Emissions reduced 11% since the introduction of a carbon price. Even more perplexing is why the Australian government put forward to confuse carbon price and carbon tax. For instance in the legislation for clean energy was the term the Carbon Price. The ‘price’ included offsetting for a transition of industry to a low carbon future. In the repeal legislation is substituted the words Carbon Tax as meaning Carbon Price. The UK and US clearly think there is a difference between the two definitions.

An example of the critics is, on 9 July 2014, Lord Deben – a UK Tory and is noted from the Thatcher years to now as expert on the environment has issued a statement through the ABC saying the Abbott Government “appears to be more concerned with advancing its own short-term political interests” than dealing with global warming.

Also, on 7 July 2014, Solar Reserve chief executive Kevin Smith told the ABC’s Four Corners program the company had been deterred by a drift in policy and the planned scrapping of the carbon tax.

It was also concerned about the appointment of Dick Warburton, who doubts that carbon emissions are causing global warming, to lead a review of Australia’s Renewable Energy Target.

“That policy change pretty much took the life out of the renewable energy sector as far as large-scale projects for utility applications [are concerned],” Mr Smith said.

“Other markets around the world are advancing. Australia is going to get left behind.”

On Mr Warburton’s appointment, Mr Smith said: “Clearly that appointment was made because they want to move back towards conventional fuels, coal and oil.

“It’s pretty clear that the policy in Australia is now being centred around big coal. The coal industry clearly has rallied to move policy away from renewable energies because they view renewable energy as a threat and want to move back to convention coal.”

“Just think, these coal companies won’t be able to sell their coal overseas unless they get sequestration or offset commitments and the only way they can do that is if they have an ETS; they can’t pay for it unless they’ve got carbon credits.

“They’ve killed themselves. Coal is dying anyway, but they’ve killed themselves even quicker.

“The whole politics of climate change has regained a bit of ground.”

Then consider:

Palmer United Party’s commitment to keep part of the architecture of the carbon laws in place – the Renewable Energy Target, the Clean Energy Finance Corporation and the Climate Change Authority – is a big win, and the reality is it’s driven by the market, ‘Newman’ says.

“That’s enough for now; we’ll regroup. We’ll get there.”

But do we really have to lose the ETS mechanism?

The suggestion Is then that the government cross benches are not happy:

This disaster started to unfold to vote for the ETS in 2009?

“A Victorian senator, Judith Troeth, a senior figure in the Liberal Party’s moderate faction, and a Queensland senator, Sue Boyce, crossed the floor to vote with Labor senators when the legislation was finally put to a vote,” reported the Sydney Morning Herald at the time.

Both these women are now gone. But maybe there are a few other senators willing to vote with their conscience.

It’s a time for bravery. There are Titanic shifts everywhere right in both the US and Australia and impressively they are from the conservative big end of town.

Last week was the think piece in the New York Times from the über-conservative Republican politician Hank Paulson, a former US Treasury Secretary, that ricocheted around the world.

It was based on a bipartisan report, Risky Business, that argued that global warming was no different to the global financial crisis and even more dangerous. And yet it was if the world was ploughing straight into a mountain, Paulson said.”

You might even note here – we are not talking technology, it is the passion of addressing the ‘real’ issues.

We wonder what would happen if you introduced the technology issues with wind-based electricity for water electrolysis for hydrogen production and the use of hydrogen in fuel cell vehicles, the use of biomass to produce biofuels for transportation. I bet the vested interests would do all they can to stop the innovation. Despite how short sighted it is to oppose.

To recap why we mentioned our agenda needs to be smarter. Consider this:

“LNG spot prices for Japan at 3-year low

TOKYO — Spot prices of liquefied natural gas for Japanese buyers have been hovering at the lowest level in about three years due to increased supplies and sluggish demand.

     Spot prices are about $11 per million British thermal units, about the same as immediately after the March 2011 earthquake in Japan. From February this year, the price has dropped about 40%.

     Supplies for Asia are increasing. An LNG project in Papua New Guinea, in which Exxon Mobil and JX Holdings have stakes, began production in May instead of the originally scheduled September or later. Now, more than 300,000 tons of LNG from Papua New Guinea flow into the spot market monthly. And shipments from Indonesia and Australia are also steady.

     In contrast, demand is not as strong. Ten Japanese power companies had 2.44 million tons of LNG inventories at the end of April, up 13% from a year earlier. With the temperature through May having been warmer than usual, these companies did not have to generate as much electricity as a year before.

     In South Korea, state-owned gas company Korea Gas piled up LNG inventories as the country restarted nuclear power plants. It is now asking such Japanese companies as Tokyo Gas and Chubu Electric Power to buy its excess.

(Nikkei)”

Danger Danger no doubt!

The wax lyrical, but fact – bad behaviours in the Energy Industry

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The Checkout in its wax lyrical style ran a story on Energy contracts including exit fees.  Had we not seen it we may have felt we were alone in our concern for the behaviours in the industry. Obviously, this media version was directed for the public appetite, but the story is based on fact! Consumer laws are very weak and the National Electricity Laws strongly favour the Energy Companies.

The Checkout story was run on the ABC (Australian) on 26 June 2014, 8PM. It is also interesting that it did not highlight a single company practicing or should we say taking advantage of ‘trust me’ then doing the screw you turn on you the user – it highlighted a common practice among many retailers in the industry. We appreciate residential customers have some protections, but that in NSW is set to change or should we say leave many people further exposed to the behaviours. Whilst the market will be fully deregulate, it would seem the Laws and rules of the industry will not be amended soon.

Those with legal training, or savvy enough will avoid the pitfalls and probity issues of the simple thing and essential commodity – energy needs. However, in a conversation with the other side (a energy retailer) recently they admitted that they too found it difficult to follow the rules. Why, consider this: You want to change the wording on your contract – a simple word change on a clause. You have a dispute and that word is found to ‘not flow’ with the rest of the contract. Therefore the wording of the National Electricity Law is to be relied on. It overrides what is written in your contract. Ok that is the scary part. The practical is that mum and dad’s are told ‘we care, we will look after you, you will save, that’s good is it not ‘– you say yes, and Call Centre then declares you are now under contract. So simple – but, you don’t save. That issue is covered off so well in The Checkout Story.

Business customers have a little more exposure in that depending on their size, according to the market, as opposed to Corporations Law, they will need to be careful of the Energy Service Agreement (ESA), the Contract, they have presented to them. For instance, most have terms and conditions in the standard form that will penalize for exceeding consumption caps. The penalty can result in the price offered being withdrawn and you being placed on a default tariff that can be hundreds of percent higher than what you negotiated. Another trap is that you need to be mindful that the network charges are not negotiated in most standard form agreements. You might say, the rules say a network tariff review must be conducted – but beware it is not binding on the retailer that they be negotiated unless stipulated on the contract.

That last paragraph also highlights what you need to know. Your consumption caps are not binding on the network company. The ESA is a contract for supply from the retailer – it protects the retailers from its risk in the market. The transport and distribution networks will rely on what is the constraints of the system and set limits as it sees affects its asset. An example: Your retailer ESA says 20% variation allowed. Your network company – generally a default and deemed contract according to law, say we will impose a demand tariff on you when you exceed 160MWh per annum load. It may be good it may be bad depending on your circumstance. But, what is does not do is connect your circumstance to your ESA. You should also be aware the majority of business is distribution connected and prices set for the transport are determined by an approved formula. If you are large enough to be classified for a transmission connection you can have sway in contracting and negotiating what you take from the system. For the very large customer you also need a team of lawyers to complete the deal.

Now, all above is about import power, what if you want to export power – small scale generation – well what was called a power purchase arrangement (PPA) is now a Energy Supply Agreement (ESA) as described by the Australian Energy Regulator (AER). Before we go any further did you notice the near same term and the same acronym meaning something similar but very different in what it does. To use the words of our good friends Solar Professionals: “Can I start by saying that the creation of an ESA template is both very expensive and lengthy in duration. Multiple legal aspects have to be considered when drafting these contracts, from property law, banking institution requirements, GST impacts, numerous funding and system requirements not the mention standard consumer law principals and all the requirements from the AER.” We include this to let you know what is needed is complex and has a very detailed need.

So what started off as a wax lyrical presentation, now shaped the focus on what (watt) can really hurt you – electricity! We guess once the carbon tax is gone, another way to tax will follow! Lets us be a little devil – they might impose a transport tax on delivering you energy? Well it makes sense – they make the electrons cheaper but now the transport cost is fairer?

On that matter of the Carbon Price our politicians are saying they will force the ‘energy companies to pass on the savings’. Did you know the majority of your Carbon Price is blended into your network charges? It is not transparent. The energy retailers cannot unbundle what the network companies levy you. Maybe the politicians need an education too! Yeah, that has appeal – Politicians ESA 101. Or more correctly they might prefer: The tax is dead, long live the tax!

 

Penalties for Solar – with and without

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A chook farmer said I love my chooks, I tried to be responsible and I get kicked in the head. It is making us sick and the business will suffer. The sin – the family business wanted to install Solar Arrays 99kW of – trying to make it better all round.

The Background:

The chook farm (Poultry) is in the Barnaby Joyce/Kevin Anderson territory and the owners were trying to put to rest concerns over the industries practices. That is they wanted to build a better environment for their chooks. The attraction of going for Solar PV – because it made good sense and the flexibility of the installation would give the chooks the opportunity to live more of their existence in more comfortable digs. These solar panels allowed a bit of innovation in the design of the system and they could use the panels to shade the chooks. The extensions to the sheds would provide safe free space in a commercial environment.

You know what – he had a bad idea. The energy retailer said no way you cannot change your import profile. The energy retailers export part of the group – they would be the buyer of the export energy said – sorry cannot help you. The other end of the scale, being the solar supplier business said we couldn’t guarantee the small-scale renewable certificate price in the contract either. It follows that is an estimate only and the SRES is under review. Interestingly, at this point the discussion gets down to, is the government policy or the governments position that influences the price. After all it is the government policy that sets the price – and they have a position the market is influenced by the policy! We suspect they have not thought that through themselves either.

Here we had a bank-approved investment of greater than $300,000 to create a better place for the chooks and the environment hanging by a thread. The energy retail company that sold itself as having a customer charter to help you and the environment broke the thread.

Solar out, done, dusted – the chook farmer still had to run a business. Should we say business as usual – old sheds, no runs, no nirvana, just the same situation dollars are king.

They still need electricity – the most crucial need is the tunnel ventilation systems – half an hour without – 7000 chooks with heat exhaustion – gone.

After the energy retailer making it clear they are not interested, the cavalry comes from another retailer, they send out notices 1000CR, and the old retailer says we have no objections (initial resistance then they notify they have no objections to the new retailer) and the changeover happens – the difference in price is also outstanding and the chook farmer can now buy new equipment and build new facilities with the savings in the energy price – yes, they got a price so good – the difference could be put into improvements and make it better for the much loved chooks. It all looked like a ‘win win’ situation or should we say ‘cluck cluck’ – even a t-shirt is printed and proudly worn saying ‘cluck cluck’.

All goes well for a couple of months – then the letter. The old retailer demands $10,182.92. Those charges being listed as “adjustment Early Termination Fee – $9,257.20 and the remainder regulated fees and other government charges. They said the farmer broke their contract and fees are payable.

Extremely bazaar behavior is that the old retailer ignored requests for transparency of the charges and to explain how is was reasonable in the demand – in fact they have also ignored that the new retailer offered to give back the customer without penalty from them – you can assume the old retailer only wants the money. This is the same retailer who refused to entertain the new system without penalties according to their terms of contract. The term is generally called consumption caps or similar.

Maybe the old retailer sees it all as a lucky dip – a chance to double dip. As Co2Land Org posted in the story on selling short, 23 June 2014, they do not want the customer to consume as they have already resold the capacity and the penalty is ‘money for jam’ so to speak. Where it came to the Solar PV, maybe it was a long selling issue and they are exposed to having too much liability in the market and government inconsistency of their position or policy is causing some angst at the commercial level. However, it still seems very plausible they intend to double dip no matter what.

Now our chook farmer has a delicate situation – kill the purpose of innovation – blame the world – and give in. No they are not giving in – they really care – they love chooks – it is about giving the chooks a good life for ours too they say. But, does anyone else care! We bet a lot of farmers feel exactly the same!

Listed now are some of the problems they have to put up with in trying to communicate with the old retailer:

  • Sometimes they spell my name correctly, sometimes not and it may seem a small communication matter, but it is a communication issue.
  • They use common terms to mean other things. Even lawyers get confused with what is meant. We have gone from “No further action” to “discuss payment” being the same thing.
  • They have ignored our request to show the charges are reasonable.
  • Without our knowledge we were ‘deemed to be on contract called an Energy Service Agreement (ESA) which is what we are penalized for.
  • We will now very likely have notes on our credit reference that is adverse or at least noted.
  • Our new retailer wrote saying the old retailer lifted objections to the transfer.
  • The old retailer gamed by remaining silent to them intending to penalise while the changeover happened, and the dust to settle.
  • They remained silent on their plan, and they issued no written notice or objection.
  • It took so long to anyone to listen – then we get a sort of answer. Finally, an apology – I (singular) was on leave but the hanging out will continue sort of thing.
  • If you ring them twice in the space of 10 minutes you will get different answers to our questions.
  • They are fast to answer the phone, but very slow or hinder progress on complaints.

We have checked out the options and went to the government website ‘energy made easy’, and it suggests you lay your complaint with the Energy and Water Ombudsman NSW (EWON).

Our want:

Go away old retailer, what has come back is bewildering and we believe wrong.

 

Want less intrusive government and good policy – US influencers

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Bloomberg reports the US republicans can warm to a carbon tax. Why? Because it is a solution that does not require subsidies to work and it allows the market forces to set the economic response. The hook – all the money is used to offset income tax.

Now back home, despite previously advocating a Carbon Tax as late as 2009, the conservative Australian Government is set about to dismantle the carbon price (also referred to as the carbon tax) and preferring to introduce other taxes/charges/fees that will be greater than the impost of the Carbon Tax. Considerable opposition to the plan is gathering pace, and it is based on the uncertainty of the alternative measures.

So how do the Americans intend to sell the Carbon Tax and what is the appeal that is persuasive for the Republicans? For a start in the main economists agrees a tax is the way to put downward pressure on emissions. The Republicans don’t like quantitative emissions controls, caps on emissions, or subsidies. However, they do like market forces to organise an economic response. The selling point is that emission can be cut where the market finds it is easier and cheaper to do so.

Now we hear the argument: ‘Some’ Republicans oppose the notion that Climate Change even exits! Well to use the President of the Australian Solar Council words spoken on 5 June 2014, when politicians resist they will come around to change their thinking easy enough. You could interpret that as – I oppose to recognise because change present problems that require actions. You could also say in ‘yes minister’ style: One will be courageous when it becomes unavoidable. You could say if you reduce the risk, and it is to reduce the likely hood of a voter backlash it is a good thing.

To follow on with the tax argument, we quote: “Instead of listing all the fine things a carbon tax could buy — some tax cuts here, a bit of budget-deficit reduction there, and plenty left over for additional spending on infrastructure and other good things — advocates of such a tax should simply offer to give back all the revenue in the form of tax cuts elsewhere.

It’s a worthwhile trade because a tax is by far the best way to reduce carbon emissions, which again is the whole point of this exercise. Consider a modest tax of $16 a ton of carbon dioxide, rising at 4 percent a year above inflation. It would reduce power-sector emissions by more than the EPA proposals for the energy sector would, and curb emissions across the rest of the economy as well.

A $16 a ton tax would also add about 16 cents to the price of a gallon of gasoline and raise household energy costs by 5 percent to 20 percent, depending on the source. Such costs — to “families and businesses,” of course, because what politician in his right mind wants to impose a new tax on families and businesses? — are most often cited by opponents of the tax.

The answer is twofold. Yes, families and businesses would be paying a new tax. But no, families and businesses would not be paying more tax. The new carbon tax would raise about $1 trillion over 10 years and almost $3 trillion over 20 — a handy sum. That would be enough to send every U.S. resident a check for about $300 in the first year (with bigger checks to follow) or $1,200 for a family of four. It would be more than enough to cut the corporate tax rate to 28 percent from 35 percent, for instance, or take a bite out of payroll taxes, or some of both.

This would inevitably lead to an argument over which taxes to cut. At which point, admittedly, the debate could bog down all over again. But at least it would be framed by a shared assumption: that a carbon tax is good policy. It gets liberals a more effective climate policy, and Republicans a less intrusive government.

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.”

Now back in Australia, eh what was the problem? I guess we have an issue with setting our priorities – we prefer to impress bar flies!

Have a chuckle – without coal we are third world!

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We had a chuckle when we were told carbon is killing jobs. If it were not for the coal industry we would be a third world country was said. Then chided in a fellow that looked Greek but claimed he is Irish; I was born and bred in the Albury district, and when I was a boy we were told the Myrtleford area in Victoria would die without the Tobacco industry. Tobacco farms were everywhere it was the lifeblood of the community. Well, Myrtleford has survived and it one of the true natural beautiful places in the world and extremely well sought after and prosperous – and no Tobacco – all gone. Mark my words, we can live without coal too – Australia I mean!

All this kicked off over the words ‘natural resource’ and even if it was harmful it was a natural product and this should be sufficient when combined with the economic benefits of the use of. Therefore it was reasonable to consider the claims to the extent that the economy would suffer without Coal Mines. It was concluded that problems would exist, but it was overblown in the effect. The overblown claims had one purpose – to appeal to public perceptions and gaunter support for its importance – and the industry’s survival. The difficulty for the industry is they want us to completely ignore market realities. For instance the falling off of demand, price, and global imposts on carbon pricing. So much influence has those factors got that a local view has no relevance anyway!

So we must say, for local views to be true they would need to defy what is the evidence for existing National and Global infrastructure and markets. Take for instance this story:

Coal not bedrock of Hunter Valley economy, jobs, By Sophie Vorrath on 13 June 2014: “ A new study has found a huge gap between public perception of the coal industry’s importance to the NSW economy and jobs, and the reality of its contribution to the state’s coffers and its people.

The report, Seeing through the dust: Coal in the Hunter Valley economy, launched by the Australia Institute on Friday, finds that Hunter Valley residents believe the local coal industry employs four times more people than it does, and that coal royalties contribute 10 times more income to the NSW Budget than is the case.

It’s a discrepancy, says the report’s author, Roderick Campbell, that illustrates how successful the industry has been in inflating its importance.”

The story goes on to say:

“The coal industry’s public statements invariably emphasise its apparent economic importance. But when the industry is placed in context we see that coal is not the bedrock of the Hunter economy,” and

“The reality is that 95 per cent of Hunter workers do not work in the coal industry and only 2 per cent of NSW government revenue comes from coal royalties.”

As Co2Land org has already mentioned. It is an issue Australia wide. Actually, it may be better described as a global issue of national importance. When you look strategically, it is seen as a war! The tools used are the spread of ‘misconception’, or distortion of truth.

In the article above and reported elsewhere is that the United States (US) has introduced new Environment Protection Agency (EPA) regulations that outline and describe misconception as a war on American jobs, economic growth, and GDP. The point of these regulations is a focus on CO2 emissions from coal-fired power plants.

In the media US economist and New York Times columnist Paul Krugman recently wrote, “coal mining accounts for only one-sixteenth of 1 percent of overall US employment; shutting down the whole industry would eliminate fewer jobs than America lost in an average week during the Great Recession of 2007-9.” The columnist goes on to say “the so-called war on coal – or on coal workers – this happened a generation ago, waged not by liberal environmentalists but by the coal industry itself,” when it turned to machinery to produce more coal, using far less miners. And coal workers lost”. We need to note here that in Australia our Liberal Party is not liberal, it is better described as Tea Party like. It is confusing, but!

Despite all the grand rhetoric, the bigger issue facing the coal industry is cost, and its cost position as the global shift to low-carbon technologies begins to render the fossil fuel uncompetitive. As an aside all are now called ‘natural fuels’ and it might seem ‘clean’ is gone from the Australian policy.

Back to the Hunter Valley, the Seeing through the dust report is quoted “the a subsidiary of Brazilian mining giant, Vale, sacked 500 workers from the Glennies Creek underground and Camberwell open cut mines near Singleton, blaming poor global coal prices for its decision”.

We can only comment with: The spin is spinning, but in the end it will get down to cost – but we don’t need to pay the earth!

 

Policy – Position – Agenda – where does it sit?

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The President of the Solar Council made the point: The political position of denying does not matter in the end. From that we can conclude that ultimately the posturing will change as the influences around them change and the policy models too will change.

If you have rang a Call Centre recently it is very likely you might have been confronted with ‘its policy of ‘. No longer do they say is ‘the position of ‘. Why is this?

Policy – the business dictionary like to say it is the declared objectives to achieve and preserve – the free dictionary likes to say a plan or course of action intended to influence and determine. Most others say something very similarly, so we can conclude the meaning is a rule or contract when used as a noun. We can say the synonyms can also include a Rule, Strategy, Plan, Procedure, and Dogma, Program. All of which is a Guiding Principle.

Our point. You have every right to question if it is an appropriate course of action. Why because it indicates the decision is primarily based on material interest.

Position – Think the right or appropriate space. Where your point of view could also be described a thesis or the laying down of a proposition.

It also can be characterised by the unsolicited offer to an existing customer with wording such as ‘you do not need to do a thing’. Then some time later you are penalised because you did not object. Do you want an energy use example?

Well think this: Step by step the instructions are tweaking you into being positioned. However, is this an acceptable principle? Maybe, so long as the policy is accountable.

Then there is the issue of what is the purpose of the policy. In the name of justice is often cited. It then must be broken down into for whom? If it is for the workplace, than it is vague. If it is for welfare, it is wide reaching. Here lies a problem, it can be vague and wide reaching and have no other purpose other than to be resisted and discarded. In effect the agenda you did not know about.

Back to the Call Centre: Do they have an agenda? We can assume they want you to accept what they do is the correct position. You will than accept that their view is correct, and they can say we have wide reaching evidence of the acceptance of our policy – you can conclude the agenda was for acceptance of the positioning.

Do you have a position on the renewable energy policy? Talking at – yes there was some disagreement, the Chairperson of the Australian Institute of Energy, on 5 June 2014, it was clear the definition of what was effective as the tools for success was not obvious. What we are saying is that ‘any action’ taken must be clearly a benefit over the established position. For instance: Solar is technologically superior as a generator. Energy Efficiency reduces the need to generate. They both affect the transport needs of the energy. They both can be local fixes in constrained areas of the network, and conversely they can affect negatively in areas of a distribution system that has not any capacity issue. It gets even more perverse when you consider the transmission network – moving from one distribution area to the next. The battle then becomes who can best serve in the supply demand balancing equation! Answer, it can be both. However, we are then talking about energy security. In this aspect the reference is to the balance between sustainability and reliability and cost efficient power. When we do we are speaking in terms of the national security.

For another discussion we might talk about energy conservation verses energy efficiency. Hint – the definitions must be addressed before you can proceed.

 

Work Smarter – retail v’s wholesale rules

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The various ways innovation can be killed off achieves only one goal, to prevent us from doing things smarter. In 1994 the Department of Finance issued a statement aimed to clarify working smarter. In 2014 the Australian Government again said: We need to work smarter. What does smarter mean? You could take the view it is a balancing term where working smarter is a term that illustrates the rigor and complexity of the English language. Smarter used this way works equally well in arts, literacy, and performance tasks. However, what if it were used as a verb as an irritating means to stop something innovative?

The US gives us a good example of this where the legal challenge to a regulator that issued a rule for good and smart behaviour needed to be defended because it balanced the demand supply equation and that disrupted business as usual. This example was blogged by Joel Eisen: D.C. Circuit Vacates FERC Smart Grid “Demand Response” Rule.

“Joel B. Eisen is Professor of Law and Austin Owen Research Fellow at University of Richmond School of Law. His scholarly work is available here.

Last Friday (May 23), in Electric Power Supply Association v. FERC, a D.C. Circuit panel split 2-1 and vacated Order 745, a Federal Energy Regulatory Commission (FERC) rule designed to promote “demand response” (DR). DR is a rapidly growing and valuable means of reducing electricity demand, thereby benefiting consumers and the environment. It is also an important part of the Smart Grid, in which smart meters and devices that communicate with one another and energy service providers can further promote these goals. Indeed, former FERC Chairman Jon Wellinghoff has called DR the Smart Grid’s “killer app.”

The case tested a question of near first impression about the Smart Grid: which level of government regulates it? For now, the D.C. Circuit has held squarely for the states, concluding that DR regulation is a matter of exclusive state jurisdiction. If the decision stands, it will have many adverse implications for federal regulation to advance the Smart Grid and use the wholesale electricity markets to achieve energy reductions and environmental goals.”

What was the argument for the smarter innovation? 1. Directly affects wholesale rates by reducing prices and improving overall market functioning. 2. It has the effect of enabling demand-side resources, as well as supply-side resources, and improves the economic operation of electricity markets. 3. The regulator believed there would be limited Demand Response participation in the markets without encouragement.

The disruption to the smarter solution was achieved by dissention. It was not an issue of being straightforward and sensible, it was that it was competing with the established market and compensated those other than the supply side of the market. The smarter practice affected (can do) the wholesale market in a positive way, but it was “a part of the retail market. It involves retail customers, their decision whether to purchase at retail, and the levels of retail electricity consumption.” The regulator was empowered to regulate practices affecting the wholesale market, not the retail market.

So dear innovators, we have a situation: Working smarter has drawbacks, it can inflict pain, it can wound and be irritating to watch the dissenters argue you have no right expecting a retail outcome where it might affect the wholesale heaven of the established. It does tend to put the perspective on the ‘valley of death’ referred to in commercialization preamble!

 

Lot of M’s – the collective fault within

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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!