Frailly – the morally weak resistance to Climate Change and Renewable Energy

Posted on Posted in Carbon Competition & Consumer, Carbon Risk, Hot airTagged , , , , , , , , , 1 Comment

Frailly might explain the morally weak and the extraordinary resistance of some to climate change and a useful tool in fighting it – renewable energy. You might notice a Minister will flounder and adding insult to injury make confounding and confusing statements, ad hoc, and as the selective audience wants to hear. Authors that have had entrenched positions in the past are now desperate to distant themselves from any association with the evidence they previously exposed. You want some examples?

Adding insult to injury: Federal Environment Minister Greg Hunt is on record as not denying cabinet rolled him on climate change. He has since approved the Carmichael Mine in the Galilee Basin in Queensland. What is confusing is that the mine owners may end up with stranded assets, as the world appears to be turning its back on coal for either environmental or economic reasons. How could that happen, aren’t the Indian owners on top of the game? The answer may be they diversify and spread the risks. It may be they are looking at the risks seriously too, and their significant investment in Australia is under Climate Change risk that cannot be ignored. In particular their investment in and the serious threat to Agriculture. Indian Conglomerate, Olam is reported: http://www.abc.net.au/news/2014-08-10/agricultural-giant-says-climate-change-absolutely-real/5659058 . Olam International chief executive Sunny Verghese has told Landline that agricultural producers and processors need to take action now.

“It is absolutely a reality that climate change is going to significantly impact agriculture,” he said.

“It impacts it both from the nexus it has with water, and the nexus it has with micro-climate as well, so it is probably the most important driver to future agricultural production, productivity and therefore price.”

Mr Vergese was on the Gold Coast this week to address the 2014 Australian Cotton Conference.

His Singapore-based company has operations in 65 countries, and is the world’s biggest trader in cashews, and the second biggest trader in coffee and cotton.

Olam International has had a presence in Australian since 2007; it owns Queensland cotton, manages 12,000 hectares of almond orchards in Victoria and has investments in the grain, wool and pulse industries.

“Mr Verghese said one of Olam’s initiatives to tackle the impacts of climate change was to reduce water consumption.

We have a target that in our tier one manufacturing and processing facilities we will reduce water usage per tonne of product that we supply by 10 per cent by 2015, and in our farms by 10 per cent by 2020,” he said.

“Similarly we can track the carbon dioxide emission that we generate across all our commodities in each country.

Again we have put some hard targets of how we are going to reduce that carbon emission footprint for every tonne that we supply by 2015 and 2020.

My view is that there is no point if I say I’ve generated half-a-billion after tax earnings, but I’ve depleted $200 million of natural capital from the environment.

Because then I’ve got to question myself, what is the point of all this overwhelming effort if at the end of the day you’ve really depleted the natural capital and left a huge bill to pay for future generations?”

Co2Land org is also aware of Indian companies in Iron Ore and other minerals in Australia and you might conclude they are balancing their portfolio as opposed to placing all the eggs in one basket. But are they also positioning themselves to expect trade-offs from the government? You might say – but hang on the government says no assistance will be given to industry. Then again we know the federal government in particular likes to offer diesel credits and subsidies if they contribute to mining! Those subsidies are significant – like $b’s.

Then there is NSW Planning Minister Prue Goward saying she supports sensible renewable energy, then says she resists approvals of new renewable projects! Also representing the Southern tablelands area of Goulburn district is the Federal MP Angus Taylor. He is on record as saying sun and wind energy should not be increased in the southern tablelands. Which ironically is very well suited in terms of sunshine and wind and infrastructure availability. Then it is reported Angus, when speaking on 2WEB – Bourke – and in the Australian Financial Review, recently said that Solar Energy is an important part of the energy mix in regional Australia. He even called for changes to the regulation of electricity distribution network charges. He essentially followed the Grattan Institutes recent report: “The key here is to look for low cost ways to move towards clean energy…Increasingly we are seeing that solar is likely to be the renewable energy to win the race”. Then comes the contentious bit for the network companies: The advantage of rooftop solar is that it doesn’t need the distribution network, which is …very expensive”. Go figure we say!

Then we have Rod Stokes The NSW Environment Minister advocating we will have a demonstration town in NSW that is to be disconnected from the network grid in 2014. It all sounds back to the future does it not? A time back when many towns were not grid supplied in the past, and local government actually were responsible for power generation too. The issue in those days was, and is now the efficiencies needed for payback. CO2Land org recently looked at a Monaro region town that wanted to go fully solar. Think 30 years paybacks. Why? 105 households and backup infrastructure needed for reliable supply. Maybe just a little premature on that proposal as we are sure technology will advance to better suit but sometime later we think.

What all this leads to is sensitivity and concerns. On the one hand you need to keep your customers happy. On the other networks need to either change how they do business or just keep on encouraging the regulator to actively discourage renewable energy. So what are networks going to do? Even that gets confusing – it seems customers don’t want change either, and some say for example: I left the city for a lifestyle change and I buy from the local businesses and I create jobs because of it. Then some company builds a wind farm nearby, and a solar farm is proposed too. I wont have that! Note the ’we’ is missing here, and the local businesses say that the wind and/or solar farm is good for business and workers come in and buy and people come to see the area’s attractions! Even move perverse is many of the objectors tend to be those that were not offered revenue from the project. Even neighbour against neighbour can occur because one allows a tower or panel on their land for a rent and the other missed out. Get it, like not in my backyard, but if you pay me it is OK? We find it interesting that the tree change types are happy that conventional power station plumes can destroy our fertile areas like the Hunter Valley and they don’t care!

Ok, so the answer is go bush and the Southern Tablelands local MP (Angus Taylor) says Solar is fine – in the bush and networks are expensive – sounds a bit of an oxymoron does it not?

Maybe the whole game is to discourage and to make it too hard, or is it just a ruse to confuse? If you want to be confused even further try reading the Business Spectator article: 7 August 2014, it was said “Finally, and perhaps more important than all the other arguments, future private owners of the networks in NSW and Queensland are likely to welcome asset write-downs, if it’s done before they put their money on the table.” The author does seem to suggest it is a plausible argument to suggest brown paper bags work best to influence an outcome? But, if so – won’t there be an inquiry?

Let us read through that story a little more: Why the power networks are wrong about writedowns,     BRUCE MOUNTAIN , 7 Aug 2014. If we select the key phrases:

“The Energy Networks Association has recently released some modelling that suggests consumers will be worse off if stranded network assets are written off. The gist of its argument is that such revaluations are perceived negatively by investors, who then demand a higher rate of return on their investment to compensate them for the risk.

The ENA’s argument seems fallible in a number of respects. Firstly, we need to question its assumption that networks investors have not already been compensated to bear asset-stranding risk. The regulatory calculation of the return on assets is based on an external ‘benchmark’. It is not based on the firms’ actual cost of equity and debt.

Prospective private investors, governments, consumer advocates, retailers (and the Energy Networks Association) might usefully focus on these questions. Better to get with the times than to try to hold back the tide. “

What concerns Co2land org about all this is the need to concentrate on networks as ’the investment problem’? We can understand that others might not be so convinced that we should merely think of networks being a commodity rather than a service. Even if you think of them as commodities – is it right to say – like the energy market can be fixed of its shortcomings, and then quote UK examples of why the problems will continue? Terribly confusing is it not old chap!

CO2Land org and our partners are prepared to accept that it is not solely the networks at fault. We feel certain parallels could be drawn but not one of the solutions can be directed to one side, we need new ideas to be brought forward and resist drawing parallels that do not exist. 

There may be an argument that it is necessary for chaos to exist in regulation land, so things can sort themselves out. But, that wont happen – too easy, Human nature directs it needs to be complicated!

All that put aside: what the networks need is a model to go forward with, so inevitably some write-downs and disquiet will happen. It will not be the end of networks providing they have strategies to move forward in partnership with renewables. Why else would the politicians being expressing they might change their mind, it cannot be all tactics to disrupt and detract progress – could it! 

 

 

Can you opt out of a contract – energy companies can in AU

Posted on Posted in Carbon Competition & Consumer, Hot airTagged , , , , , , , , Leave a comment

Recent articles said energy retailers have all the power when it comes to contracts. Our friend the chook farmer tackled that notion and won. But the really disappointing thing was the retailer was reluctant to apologise, instead they said ‘as a Customer Service gesture xxxxxx have reversed…”. That said another retailer that was caught up in to saga was very generous in the way they handled the matter. You might feel as we do – the later can be recommended to our friends for future Business! The energy user also deserves special praise for the courage to stand up to what we saw as bullying.

Published on 31 July 2014 by the Canberra Times http://www.canberratimes.com.au/business/all-power-to-the-energy-companies-when-it-comes-to-adjusting-prices-20140731-zyvp9.html , it was a story that expressly said Electricity companies appear to be able to opt out of contracts. This does fly in the face of what a student might remember as Contract Law 101 – reasonable man, offer acceptance that sort of thing. Well it does seem the energy contract also known as an Energy Supply Agreement (ESA) or Retail Supply Agreement (RSA) is a one way contract – user can be used sort of thing. If the user has limited rights how did chook farmer win when it was stacked against him. It actually had nothing to do with the interference of National Electricity Law (NSW), pressure from the ombudsman or common sense. It was the greed of the energy company itself in that they cooked up a scheme and sent out a letter a couple of years ago saying if you do not reply you will be deemed on contract for 3 years – You better check your agreements chappies, you might be contracted and don’t know it!

The answer to the ‘win’ was the energy company relied on a deemed contract. But, they failed to ensure they had an executed original contract in place. The timeline was in 2012 they said by their conduct they had a contract duly executed from 2009. In 2014 they decided they no longer wanted the customer and allowed the customer to transfer to another retailer. Then retrospectively they wanted a $10k plus penalty payment for an early exit. Where the sneaky weasel went wrong was the energy company did not have an executed 2009 ESA to prove a contract existed in the first place.

Well it seems in Australia and NSW in particular an energy company can write into the contract a clause that overrides contract law. That is a price can be varied at any time the supplier wishes. The example above also highlights another problem – the retailer ignored the pleas for justifying the attempted charges. That is correct they refused to be transparent, and the claimed they had no need to show how they arrived at the numbers. Previously co2land org has written of Rule 72. It does seem the same principle is used in this instance.

We mentioned Ombudsman also, do you know they are member funded by the people you might complain about? This means they do not operate to instigate, they mediate within rules. If the rules are stacked against you, well – use your imagination! Better still read the direct quotes on the industry behaviours from the Canberra Times article: “The industry’s regulator has decided that your power supplier can raise charges whenever it decides, rejecting a plan from a consumer group to force utilities to comply with the terms of a contract.

Electricity suppliers have been accused of seeking to entice new customers by offering attractive deals on two- or even three-year contracts – except the small print gives the supplier an opt-out, the ability to raise prices when it wants.

As a result, a consumer who has shopped around to find a plan that suits them can find the prices have changed even before they receive their first bill.

This prompted the Consumer Action Law Centre, through its arm the Consumer Utilities Advocacy Centre, to seek to have power companies blocked from being able to unilaterally change fees and charges. It went to the industry’s regulator, the Australian Energy Market Commission, asking it to act.

But the regulator decided not to, preferring instead to ask retailers to be upfront about any changes.”

Co2land org would have hoped for increased certainty around the market. The advocate tones of what is needed clearly show the Australian situation needs to change. It seem the strong are protected and the less well prepared to be exploited. How does this fair with the rest of the world? Again quoting the Canberra Times: ”Retailers can manage those risks better than households….They know the market. Instead, all of the risk lies with the household.” The Consumer Action Law Centre spokesperson then said: “The regulator’s decision is at odds with that of regulators in other countries, such as the UK regulator Ofgem, which last year blocked power retailers from raising prices on fixed-term contracts, which are disadvantageous to the customer. Similarly, power companies are prevented from levying termination charges when their fixed-term contracts expire.”

Our final word: If we want so much to copy others good legislation, this UK example is a good place to start and make a difference too!

 

Trust, Context and Success

Posted on Posted in Carbon Risk, entrepreneurTagged , , , , , Leave a comment

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!

 

Waltz with your innovation – 1,2,3 step

Posted on Posted in Carbon Competition & Consumer, entrepreneur, HeadshipTagged , , , , 1 Comment

What really goes wrong with the next step from innovation is a common question. The most probable answer is scientific reputation. Followed by you. Followed by your assistance choice. Think this: You have a really good solution for a problem you have identified. You put your energies into making it possible. So you go from inventor to innovation. Chances are it goes wrong at the next point – what is known as the valley of death in the leap to commercialisation. You spend vast amounts of money in relative terms and still no significant progress. There is plenty of talk and countless possibilities. However, there is very little progress.

Chances are you challenged conventional wisdom – first mistake. Someone else has something to lose. Chances are you have improved a widget – next mistake. It was someone else’s cash cow. Chances are you did not realise you have set a new standard, or at least the potential to change is recognised. This means you are causal to change. Have any of you ever thought that what you cause to change might not like to change?

Once you have spawned you idea and it is in front of your eyes, and you dream of the introduction to the market. We all think for the good mankind here it is, wonderful!

To have your idea move to being accredited it must be measured in some way. By what measure soon becomes a dilemma. Does it produce an electric current, does it produce noise, and does it produce gases and so on? This is where scientific reputation becomes important. Chances are you need some sort of national accreditation body give it a number of some sort. The most common delay to the introduction of your idea is proving it is a benefit. A couple of examples are the CSIRO writes of the promise of a particular technology, financiers have promised funds, buyers are prepared to place orders. But, you only now go to the EPA or some enforcement equivalent body asking for the merits to be rewarded with an exemption or sanction of some sort. Your mistake – market acceptance is not enforcement acceptance. Now considerable effort is needed to save your initiative. You may even need to change your design because of scientific reputation.

Will you accept the notion you must change? In an article, http://www.entrepreneur.com/article/235608 , JULY 15, 2014, Steve Tobak wrote: “As a veteran of Silicon Valley, I’ve had the distinct pleasure of working with more than my fair share of talented and innovative entrepreneurs. Sadly, some of their behavior was just dysfunctional enough to royally screw things up for themselves and their companies…… That’s not meant to be as irreverent as it sounds. I have always felt empathy for founders and their stakeholders. After all, it’s not as if I were some paragon of virtuous behavior when I was an executive, either. Nobody’s perfect……… Nevertheless, you can’t fix a problem until you face the truth. So whenever I have an opportunity to help a promising startup that can’t find its way or a mature company in need of a turnaround, it is difficult to watch them fail simply because those in charge aren’t willing to deal with their limitations…….. Any decent psychiatrist will tell you that on some level smart people do understand what’s really going on. They do have common sense. They hear what others are telling them. They know what they’re doing. So when they suppress it, bury it in their subconscious, hear what they want to hear – call it what you want — that, my friends, is a choice……….    I bet I know what you’re thinking. There are lots of reasons why startups fail. Yes, there are. I’m sure I’ve seen them all. But if you dig down a bit, the root cause of most of them is that their leaders choose not to see what’s staring them right in the face. Think about it. You find a reason and I’ll show you an entrepreneur in denial………. Lots of companies run out of cash. But while some can’t raise capital, you would not believe how many can and simply don’t. Oftentimes, their founders aren’t willing to give up a piece of the pie. They try to bootstrap a promising venture and end up starving it to death. Or they have too high a burn rate, aren’t willing to invest the time it takes to raise a round of funding, wait too long and run out of time……… It’s hard to imagine how many beneficial ideas, inventions and innovations never see the light of day because they offer solutions that don’t actually solve any real problems. Or they’ve come up with concepts, not products……… Lots of entrepreneurs are not in it for the long haul or for the right reasons; they think they can make a quick million or feed their egos. Some don’t think they need a unique value proposition or competitive differentiation. Others have holes in their strategy so big it would take a miracle to fill them.”

Co2Land org say there is another problem we should also mention. Be very careful with who you ‘are allocated’ to help with commercialisation – their motive may not match your own expectations. Example: You see a long-term relationship with your enterprise; they may see the need for you to make a company exit. Who is right – the right of the company or your association right!

So it is a three step, a waltz no doubt: reputation, you and your partnership choice.

Project Homeless awards ceremony

Posted on Posted in Headship, UncategorizedTagged , , , Leave a comment

Awareness projects are not all about protest, or colours, or training. Highlighting is crucial to understanding and this story deserves it place – Project Homeless awards ceremony

A partner of Co2Land org, Ecoprofit Management (EPM) is also a major partner with Screen My Shorts Inc.  Screen My Shorts are the festival organizers of project Homeless. To quote EPM: “This filmmaking initiative was purposely designed as a global event for filmmakers to participate, contribute and raise awareness whilst giving them opportunities to develop their craft. Their creative works then become a community resource for education, entertainment and inspiration. The principle sponsor of the initiative is Parramatta City Council.

The Project’s awards ceremony was held at Riverside Theatre, Parramatta on Friday, 11 July. With entries coming in from all around the world vying for $11,000 cash prizes, the films were of a very high standard.

Many of the films shown were emotive and thought provoking.

‘Being homeless seems not a pleasant experience, however, it is the purest expression of sustainability. In 21st century, sustainability is not solely about the environment, it’s also about human lives. A harmonic environment where nature and human co-exist is a Utopian dream. For environmental sustainability, of course we can apply all the kinds of R-methods (reuse, recycle, reduce, etc.) in construction; while for the human sustainability, we have to come up with solution which tackle both the physical and psychological needs so that they can live long in a healthy way.’ Reference: http://www.cloudscap.es/project/homelessness-new-expression-sustainability

The take away message for EPM is clear: people don’t choose to be homeless!

To view all the short film finalists, visit http://www.screenmyshorts.com “.

Co2Land org would like to add – people do not choose to victims, it is the feeling of being helpless that makes us victims.

The business opportunity of the century

Posted on Posted in Carbon Risk, HeadshipTagged , , , , , , , , , , Leave a comment

“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!

Financial Oppression

Posted on Posted in Hot airTagged , , , Leave a comment

As happens, we are seeing 2010 warnings reignited it was said: Give me an example. Try Real Power Systems v’s Wannon Water (2011). So what was the point? Financial Oppression was said.

That said, we looked for straightforward examples and it was not hard. However, Financial Repression also strung up at us at the same time. The difference? The later is the act of Governments to deliberately bring hardship provisions forward – but lets leave that for the politicians to argue why and why not. Is it happening? Have you done your tax returns yet? Read the 2014-15 budget provisions?

What is the bigger issue disturbs us more: That people want to give up, give in and forget there is a galaxy much bigger than us and is more amazing. Yeah OK it sounds really ‘Monty Python’ but why do we let it happen? Money, it is good and it is bad if not managed well. Then comes the argument it is about the resources. Corporations have almost infinitive resources, individuals tend to just despair and accept they do not have sufficient resources to fight.

Then comes another story, written as an enlightening and explanatory of how some we trust let us down:

“While sitting in Church this morning, I heard some very disturbing news that motivated me to write this article.

I am sure that the numbers are close to being the same all over the country. But, the disturbing thing about the news in church was the fact that the suicide rate was up to 15% and that was a dramatic jump from previous years.

The pastor talked about the reasons why. The bottom line to these “tsunami” of our society’s ills is credit and the economy. The majority of these people had credit issues and didn’t have the resources to pay their bills.

Let’s go way back in history. In the old world, I believe it was one of the great generals of history that eliminated debtor’s prison. His reasoning was that most of the debtors were farmers. If, they stayed in prison, then who would grow the crops to feed his army? Hmm. Well, that was a couple of hundred years ago and before the emergence of credit as we know it.

But, nevertheless, it was still credit. You borrowed, you owed, you couldn’t pay therefore you were punished. Have we come so far that we have become to retreat back to that same situation that prevailed hundreds of years ago?

I don’t think our politicians nor do our bankers realize the havoc, pain and hardship that the average person is under because of one issue alone. That, my friend is the cost of credit. If, you don’t think that your neighbor is worried about not having enough money to pay his bills, then you are living in “la la” land.

Lets take a look. I had written a previous article about the rule of “72” and how it impacts everyone. Time to explain it just a little more in depth. Lets just say that your, Mum has $10,000 and puts it into the bank. She is very happy because the bank represents security. In fact, if you tell her that she can make more by buying municipal bonds, she gets the “broom” out and comes at you.

So, here is Mum with her secured savings. Now, lets say that her friendly banker, with that “snaky” grin gives her a passbook for her to keep track of more money she puts into his bank. He offers her a (04%) interest on her money. Now, divide that (04%) into 72 and see what the number is. It is exactly (18).

Yes, that mean it takes (18) years for her ($10,000) to double.

Amazing that this is not taught in the higher universities in our county but everyone that has gotten his “masters in street finance” knows this.

Ask any bookmaker what the rule of “72” is and he will spit it out like “fire from a dragon”.

Now, lets just go into a different room. Lets say that you got a credit card. Now, lets say that because you were late on a payment, they jumped the interest rate to (36%). Yeah, it happens. But, here are some real shocking numbers. Listen up.

I am going to start with a basic small amount of ($300.00). This seems to be the amount that the average family started out with. Now, lets just say that you for some reason was either late or went over the limit. When you combine both of those problems, you incur a penalty of ($78.00) per month. Go ahead and add up both of the penalties.

Now, here is where the “hidden gun” comes into your life and virtually “steals your hard earned money” and they never pulled the trigger. If, you think that some petty thief that held up the local gas station to feed his family is a bad guy, and he only got ($50.00) lets put this in your pipe and smoke it.

Lets add up those late fees and the over limit fees for twelve months.

Hmmm. According to my calculator that comes out to be ($938.00) and when you add that on too the initial ($300,00) you now have a total owed of ($1,238.00)

Worried? You should be. This is what is happening and has happened to hundreds of thousands of Australians – and millions in my country of America. Now you owe at the end of one year ($1,238.00) and when you multiply (36%) annually, you now owe the credit card company ($1,682.98) at the end of only twelve months and you haven’t bought anything.

Here is where the tears turn into blood. Let’s jump ahead to the end of year two. Now, you might have gotten some phone calls but nothing that broke any dishes. But, at the end of two years, here is what you owe the company that gave you a ($300.00) credit card and never put up any money. They collateralized your signature. Anyway at the end of two years you owe ($2,288.85)

This my friends is the main reason why people commit suicide, politicians turn the other cheek because of the strength and influence of the lobbyists, the banking industry wants you to believe they want to help you, but when you fully grasp the mechanics of the “rule of 72” you either throw up your lunch, kick the dog, argue with the wife or get drunk.

But will this problem go away? Not unless you grab the bull by the horns and learn what to do.” Source – http://www.money-tips.com.au/articles/228/1/Financial-Oppression/Page1.html

Why write this? We started talking about Energy Retailers and how at least one does seem to practice ‘rule 72’ regardless of the morals. With relief we did not mention which bank but we all know their behaviour by recent publicity.

All about gas, coal has lost it

Posted on Posted in Carbon Risk, Headship, Hot airTagged , , , , , , , , , , Leave a comment

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!

An honest opinion – Why Electricity Prices are Rising

Posted on Posted in Carbon Competition & Consumer, Carbon Opportunity, Hot airTagged , , , , , , , , , Leave a comment

It started, if one cannot express an honest opinion to one another – than we have no freedom. So why was a recent writer not particularly pleased when we said: “The ‘why’ needs a follow up and maybe a sharper focus on the Institute of Public Affairs motivations”? By this was meant they are an institution that makes a claim as the ‘The Voice of Freedom – Freedom and Optimism” – yet they seem so negative to progress and innovation. So we feel it is fair to say what motivates needs a sharper focus.

What was it all about? It started with the comment: “Good article on the ‘what’ – Elegant, eloquent, easy to read. The ‘why’ needs a follow-up and maybe a sharper focus on the Institute of Public Affairs motivations? That regulators tend to anticipate growth and expenditure from information supplied by the networks. Then there is the ‘how’. How did this happen, or at least more detail on the how! For instance: Is falling demand from energy efficiency, or the commercial sector in decline and/or manufacturing slowdowns/showdowns. Will it happen anyway because to be more effective you need to be more efficient? “ The article being commented on was “Why Electricity Prices are Rising, 27 June 2014” – posted by Turlough Guerin. In the preamble he said “When I worked in the telecommunications sector someone told me that you don’t need a PhD to understand how pricing works – but it sure helps. Perhaps the same holds for electricity. However there is no doubt that power prices are rising across Australia. This is clear not only from federal government statistics, but you need look no further than your power bill with the average household now paying close to $1000 each year.”

But, CO2Land org finds a major issue with the use of past data in determining the facts. – For instance the variable are changing in their focus, the model of the business are changing or at least being forced to change. More importantly the changes are being driven by the need to more efficient. All brought about the world wanting us to be measured on comparative advantage of our products. It you do not believe us: Why is carbon a focus elsewhere in the world? Why is it that penalties are being sought against those that do not seriously consider carbon in the world markets? This is not an argument on the setting of the price, it is about the need to be aware that future predictions from past data is dangerous, and you must consider the circumstances are changing.

In the article above, it was good, but only because it was the first installment in what should be a series of facts being presented. For instance we could write about why Victoria sold it assets and that at that time Victoria had an excessive redundant infrastructure available, and this gave rise to ‘a good buy’ to those that buy the asset with a cash cow potential. Bring that forward to today, and those that own the Victorian Assets have a conundrum; the private owners need to find more money to improve the services in a tight market. Now if we move to NSW, today, we see a very different problem; they are trying to sell a run down network that might not be viable to buy. Queensland has another set of problems and the long runs between population centres and the concentration of the southeast corner make dissimilar circumstances that make it difficult to say a common variable affects the business.

All that said what are the variables? We propose a new model the give weight to:

  • What is the costs to maintain the existing the Poles and Wires (Transmission and Distribution networks)
  • What is the costs of stink of politics – Science v’s Fiction argument
  • The reality of a carbon market and its global significance to our local markets
  • The existing infrastructure – new and aging generation coefficients
  • The existing infrastructure – transmission and distribution future needs
  • The infrastructure – gas system – this is a very complex issue as it is sensitive not just to the environment as it is to world politics. In effect we have very little control of what is happening in that industry. Why because the deals done elsewhere are linking the gas price to movements on peak oil price predictions.
  • The potential of the suite of alternative energy sources. This means the current infrastructure is very likely redundant. The really sensitive fact is that the models of distribution will change because of it.
  • The Electricity Demand. Be it new or additional generation, the transmission and distribution constraints, the regulator findings or simply consumer behaviour (despite climate change); the biggest problem is the supply demand balancing equation. The supply demand balancing equation is persistent is being 20% of the time is setting 80% of the costs. It then follows that of that 20 % of time the larger costs are 80% likely to occur 5% of the time. With this sort of issue it become apparent consumer behaviour set the theme. We should also put out there to you business slowdowns affect consumer behaviour.

That last comment leads us to the question: Is electricity a commodity or a service? It is not a new question, and political ideology will elicit different answers. Our point is no mater what you think the provision of electricity does determine if we are third world or not. In the pure sense price is simply the cost of providing? Ironically, when you crunch the numbers of our Treasury recommendations our ‘budget emergency’ does seem to settle on 17% increases in everything as good. Justifying the need is far more complex.

So while we liked the quoted story, it is only the first part of a big story. If you are looking for a really good read of how it all happened in Australia, read: Booth Robert R (2000) Warring Tribes: the story of power development in Australia, West Perth WA: Bardak Group. Robert is no longer with us, but bet you he would have plenty to say – had he been here.

 

 

 

 

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

Posted on Posted in Carbon Competition & Consumer, Carbon RiskTagged , , , , , , , , , , , , Leave a comment

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!