Poles and Wires Apart – NSW style

Being it is an election issue – What do you think about privatisation of the electricity assets? A fair question we said, but the wrong one! We feel the ‘real’ question is will the price of supply go down either way? Then it becomes obvious if you use the word ‘redundancy’. In the Queensland election the word was replaced with an emotive ‘gold plated’. In the coming NSW Election there is no mention of either term. The political sides prefer to attack and defend on diverting money streams that would flow onto ‘infrastructure’ projects.

Our point here is that ‘poles and wires’ are infrastructure and there is a level of build required to a) Meet demand. B) Provide reliable pathways. The c) route is actually the political risk to an incumbent that makes the decision to support or reject a build decision and that might not have any basis of a) or b). So c) can be why redundancy is so important when they build.

It is time for a new incumbent politician to be elected. Both sides understand the previous administration built into the system excessive redundancy. This equates to – those assets offered for sale or lease will be attractive as very little needs to be done for another 5 years before meeting demand and system reliability becomes an issue (a and b).

If the current state government is re-elected they can honour their pledge that in 2019 no price rises will occur because of the assets passing into private hands. The potential buyer will find the ‘redundancy factor’ attractive in guaranteeing a profit.

If a new government is voted in they will ‘protect you’ from price rises and continue a revenue stream for the infrastructure needs of the state. They will simply have a different emphasis on what infrastructure to spend. For example less will be spent on Roads and Rail and more on other social needs. The new will be able to do this by avoiding spending as redundancy is built into the system.

How much redundancy is built into the NSW System? The question is not so easy to answer. Because Transgrid the transmission network had something like $15b to spend a couple of years back and the Distribution network companies spend considerable amounts on their needs. The ugly ducky in terms of the need to spend is still looking to be Essential Energy by virtue of the area and geographical spread of its territory. Essential is essentially regional NSW.

What neither party is telling you are what Essential Energy will do to address a new business model to meet the challenges in the next three years.

The question is really, will history repeat itself and will the need to further build after the redundancy period morphs into a massive rebuild program. Building program cost money and in any user pays system you will pay for the need to supply. You will pay either as a taxpayer or a direct cost. The politicization factor will decide what the koala will bear. Koala in this sense is the voter.

To back this up we read with interest the writings of Keith Orchison, 9 March 2015, ‘Who’s telling porkies about NSW’s poles and wires?’ You will find the story in the Business Spectator. He says, “Where the wheels fall off the propaganda cart, is when you look forward and also when you bear in mind what Mike Baird wants to flog. The Premier plans to sell half of Ausgrid and Endeavour Energy, the two largest earners, all of TransGrid, the high voltage business, and none of Essential Energy, which delivers power to 95 per cent of the state and has been declared untouchable by Baird’s National partners.

Broadly speaking, any loss of revenue will be about half the total networks income for the government. Then the question is how much income is that likely going to be?”

“You can then halve these numbers for ‘lost revenue’ because Baird proposes to hang on to half the distribution duo that delivers most of the moolah.

One way of looking at this is that there is about a $3bn to $4bn hole in the ‘anti’ brigade’s bucket on this issue over the remainder of this decade.

These campaigners have not been too fussed about accuracy in other respects, either.

For example, the $1m worth of advertising currently running on NSW television screens is supported by an assertion that power prices in Victoria have risen 60 to 70 per cent since electricity privatisation, but this ignores the fact that network charges in that state have fallen during this period.

Work done for the NSW Treasury by Ernst & Young shows that Victoria’s network charges fell 18 per cent in inflation-adjusted terms between 1996 and 2013. Over the same period, they rose 122 per cent in NSW.

Now the voters of New South Wales can’t be expected to go out and research all this stuff for themselves, so what is the role of the Electoral Commission in vetting the integrity of the campaign?”

We say no more – it has been said! Now you vote – clear as mud is it not!

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Energy Utilities changing Models – A Battery of Choice

As one would normally do, chat about renewables and impacts on the utilities business model while relaxing with friends. It was a case of too much uncertainty over how the consumer would be treated because of change. Central to the discussion was that a provider to the electrical distribution system could threaten the current regulatory and centralized generation models of ‘essential services’.

What does this mean?  The business as usual model is failing where supply centric economics demanded you build additional load capacity and transport the capacity to the place of need. This model also meant the assets, including the customer, was owned by the utility. If you think of it this way, Governments tend to discourage demand side solutions. Demand Management was tended to be more of a series of incentive programs for utilities to duplicate infrastructure to transport to the demand source.

So, what happened to change the balance? The obvious: Technologies improved, carbon became issues for society and clean energy and renewables were being shown as a better way to address the logistics of meeting demand where it was needed. As a result some of the conventional infrastructure was at risk of being a stranded asset and the need to build conventional infrastructure required incentives from Government to reduce the financial risk. For example, the Demand Side Incentive scheme (DIS) formulated at about 2004 is dramatically underspent but is comforting for utilities in being a facility to reduce the financial risk.

If we note the changes in the needs of society as a driver for change: Governments and their policies encouraged that traditional public ownership be phased out to pass the needs to private investment. Government was happy for this ‘fix’ as they see it as the asset is sold for a value and ongoing regulated charges and fees and taxes are being paid to treasury, and that is a public benefit. The perfect storm in Australia is this action is also one of the drivers for electricity tariff increases in Australia. Recently the state of Queensland announced a 21% increase to its general tariff.  A source, CO2Land identifies as SF said: “Therefore those consumers with solar PV are subsidising those consumers that don’t have solar PV”.

From that last statement we can assume government policy (Federal and State) is very much the catalyst that resulted in the model change. Whether the change was necessary was more of a political move in this instance. It followed that technology and innovation evolved and the model change was inevitable. If you follow the beliefs of the 5th Column existing, this was done by infiltration of the policy areas by a particular group. It follows, in contemporary Australia, Government policy is more reactive than before, and since the 1970’s the rule of law was modeled as to be reactive to the needs of the dominate influence. Below is an explanation of this view as posted by CO@Land.org on 3 April 2013. Where:

Co2Land org now asks: If we consider the four primary schools of thought in general jurisprudence :

  •   Natural law is the idea that there are rational objective limits to the power of legislative rulers.
  •  Legal positivism, by contrast to natural law, holds that there is no necessary connection between law and morality and that the force of law comes from some basic social facts although positivists differ on what those facts are.
  •  Legal realism is a third theory of jurisprudence which argues that the real world practice of law is what determines what law is; the law has the force that it does because of what legislators, judges, and executives do with it. Similar approaches have been developed in many different ways in sociology of law.
  • Critical legal studies is a younger theory of jurisprudence that has developed since the 1970s which is primarily a negative thesis that the law is largely contradictory and can be best analyzed as an expression of the policy goals of the dominant social group.

If you think of the debate of tariff increases. Then you should consider it may have been ‘an expression of the policy goals of the dominant social group’, as critical to that issue. We should then think about the set of claims that the “Renewable Energy Targets” (RET’s) had undesirable consequences, and how governments (Federal and State) now realise that the larger than expected number of early adopters who signed up for the long term contracts are now having a negative impact on state & federal budgets, and this is one of the dominate drivers for electricity tariff increases in Australia. For those needing an introduction to the scheme, the RET’s are a federal government initiative commencing during year 2001, and from those bills and legislation various states and territories introduced those targets as various incentive schemes for customers to invest in solar PV with generous feed in tariffs. This incentive had the effect of distorting the demand supply balance, and the popularity embarrassed and alarmed treasury. If we use SF as the source again; “Queensland Govt initially offered 44cents per kWh this has now been reduced to 8cents. That said the response from the customer was rapid with Australia now having 2500MW of solar PV with and average capacity of 3.5kW.”

CO2Land org chose to give an example of Queensland for convenience, as this states geography and population patterns influence the custom that those consumers with a service, are asked to provide subsidies to those that do not.  In the case of electricity you could argue the subsidy required is determined by the length of the extension cords needed. You might understand why that state found it Initially appealing that solar PV was a localized delivery point. However, managing the asset is a different matter.

We are seeing similar issues being evident from around the world – business as usual is failing as the utility model. The danger is stranded assets and less control being possible. A story titled The Clean, Simple Solar and Storage Solution to US Utility Business Model Woes .

http://www.renewableenergyworld.com/rea/blog/post/2013/07/the-clean-simple-solar-and-storage-solution-to-us-utility-business-model-woes?cmpid=SolarNL-Thursday-July4-2013&goback=%2Egde_67258_member_256399748

Tells of an interview with former United States Secretary of Energy Stephen Chu on utility business models.  While the gist of what he said wasn’t new to me, the clean and elegant way he laid out what he sees as the future of utilities and solar power is worth sharing.

Similar to how in the past telephone companies – he specifically named AT&T – used to own the entire telephone system from the overhead telephone lines up to and including the phone in your house, Chu feels that utilities ought to own solar panels and energy storage systems that they put on their customers’ roofs and in their garages. He said if utilities could outfit homeowners with solar panels and a 5-kW battery system, they could continue selling that customer power just as they do now. The utility would own the system, maintain the system and the customer would have no out-of-pocket expenses for it other than continuing to buy power at the same rate or at perhaps an even lower rate.

 In the three-minute interview, Chu didn’t explain another huge reason that utilities should consider this option: distributed generation used in this way counteracts the need to build additional generation as the load capacity needs increase.  And lastly and most important, the utility gets to keep its customer.

Utilities should probably get clear on their approach soon. When it’s just a quarter or a half of one percent of a utility’s customers that have their own PV and are selling their solar power to the grid at the retail rate, the utility doesn’t care. But energy storage and PV panel costs are dropping, and once that percentage of utility customers’  that are zeroing out their bill goes to 5, 10 or 15 percent then “it’s a big deal” said Chu.

Chu said he told utilities that PV and energy storage is going to come and they should “form a new business model” NOW so that what today is a potential revenue loss, could become an area of growth for them in the future.  Plus, he said this model would eventually lead to a more stable grid for us all. “

CO2Land org is finding it difficult to solely blame the RET Scheme as the problem. The evidence is the splitting of the RET’s scheme into a ‘small scale’ offering for predominately solar PV is the problem. It is appropriate to say any change to the utility models would and did have a cause and effect disruption on the industry, and cause and effect type of disruption suggests any intervention will introduce more shocks in the industry, and we can expect that ideologies will continue to influence the Governments policy advisors who are without a full understanding the implications. It also follows that a large dependence on small scale or residential solar PV services implies a need for significant workforce skills shifts to cater for the growth and scope of the model change for utilities to take control of the assets at a domestic level to be to be effective. That is a significant cost driver, and it is reasonable to ask why should the utility be the provider of choice for these services where it would serve to drive up prices?

In defence of RET’s large scale systems, it follows that large systems do not directly affect the utilities mechanism to preserve the current regulatory model, but they shift the balance so that the model needs to be reviewed of the purpose and objectives in the delivery of the product. It follows that centralised generation models are what utilities do very well, and large scale transportation and distribution are well established capabilities of the industry. Expanding that capability to large commercial rooftops and installations might be a good idea. However, it too is not without the need for change. Albeit less dramatic than small scale.

CO2Land org is not proposing we should concentrate on picking winners for the model change.  However, ‘the battery concept’ leads to deeper thinking. The demand initiative needs to be expanded and a battery concept is not just a means of storage of an electron! It can mean tools and equipment that is readily available to balance the total load needs, and not just peak demand requirements. We know solar’s great weakness is peak availability profile and traditional batteries concepts take up rare earth minerals to manufacture. Are they already defunct? A far more sensible battery concept is something that can utilise what we have already consumed and discarded to be returned to there natural elements while producing energy and balancing the supply needs.  If you prefer think of it as a provider it can be an insurance tool for a supply imbalance, So can what they do be a source of energy rationing and balancing that fits neatly into the traditional delivery mechanism.

One such battery concept is the waste to energy gasifiers and their products including pyrolysis retorts. These can easily be written into the current infrastructure and be part of any new regulatory mix – even provide a result for policy without implications – it is not creating anything new – just making something old new again!

For the future, CO2Land org can see a lot more independent renewable sources becoming the norm, and utilities will be using energy exchanges to sell power to customers. This differs from ownership of customers in that bidding could be managed power purchasing agreement with give and take provisions in the price. What regulators will have to deal with is that nationwide and globally installing microgrids for Businesses and Communities will need to fit into economic as well as technical delivery models. A real power of choice if you prefer to think that way.

Danger in oversimplifying energy savings – built environment

When organizing energy procurement opportunities you can experience frustration with the need to use simplified language in order to tell your client how they will make the cost savings. The danger in presenting over simplified information is the data might be clearly shown the distortion of savings that may occur. However, the simplified information package cannot illustrate the effects when small but significant changes to operations, occupancy rates of building, seasonal variations, how government policy changes will impact on the cost equation.  What comes to mind immediately is the Carbon Price in government policy, and the opposition in Australia stating they will retrench that price – it then becomes important to consider how different energy retailers might treat it in the energy agreement – something very few thought about until recent times.

And, it appears universal that the common mistake in the information delivery is the over simplified explanations that can be interpreted as all actions the client takes is a linear function in terms of costs. When in reality the issue is the bigger the contract in terms of dollars the greater the impacts of what you do to affect energy used will affect your price paid for the total energy consumed.

Then we find we are not alone: It is common to make mistakes, and it all comes down to oversimplifying the estimates when presenting the cost savings.

When researching the phenomena it was found Lindsay Audin wrote  “Common Mistakes Made By Energy Managers” recently and we share much of his thoughts. So similar in fact, it is also what Co2Land org has been discussing with Ecoprofit Management (www.ecoprofitmanagement.com.au ). What we need to exercise care in is the data has a message, and to paraphrase into simplified information may miss very important part of that message:

1.    Beware of using averaged electricity rates. Customers in a tranche other than domestic tariffs will be rated for electricity charges for both how much electricity is used in terms of kilowatt-hours (kWh) and for how fast electricity is used in terms of kilowatts (kW) – The  “peak demand charge” and the variance of how fast you use electricity can be as much as 50% of a total bill change.

Note a) The danger in using averaged electricity rates as a simplify in estimating dollar savings from energy upgrades, is it is likely you might calculate an average electricity rate by dividing the total cost of electricity in a month by the kWh used in the same time period – therefore the rate includes the cost of peak demand in it.

Note b) Some upgrades to equipment may fail to reduce peak kW demand – examples are using motion sensors to control lighting needs and such measures will save kWh, but may fail to reduce peak kW demand because of changes to occupancy rates and timing of production loads changing to operational needs to be met. It also follows that controlled lighting might also only happen when the peak of energy use has already passed. In the case of motion sensors for lighting if they don’t cut peak demand, they won’t reduce the kW charge of the bill.

Note c) “This same problem arises with photovoltaic (PV) panels that generate power. A system rated (for example) at 100 kW will, at some point, provide that level of capacity – but not necessarily at a building’s peak time. Full PV output occurs when the sun is highest (between noon and 1 PM), unless the panels are mounted on a motorized platform that follows the sun. Commercial buildings usually peak between 3 and 5 PM, at which point PV output may have dropped considerably.” – Audin.

Note d) “Under a power purchasing agreement (PPA), a PV vendor owns the system and sells the output to the host customer at a small discount off the average utility price, typically for 15-20 years. Once again, that averaged price assumes all the PV power is being provided during the building’s peak. Studies have found that is often not the case. Depending on how much of one’s bill is for peak kW, the true value of the kWh from PV may be significantly lower than the vendor’s price.” – Audin.

Note e) It is then obvious that an averaged electric price overestimates dollar savings, and in all likelihood and unless there is data to prove otherwise, only savings based on the kWh can be assumed as a simple measure.

2.    Beware HVAC savings might not result from a lighting upgrade. Do not assume a watt for watt drop in cooling or assume a heating constant to replace the lamping output. It will not be a proportional saving of kWh in a linear fashion.

Note f) “Reducing lighting kWh cuts fixture heat output, but – for several reasons – that may not always translate into a proportional air conditioning (A/C) savings. For example, chillers run for only a portion of the year, while lighting is on most of the year. When lighting wattage is reduced in a room served by a constant volume air system containing electric reheat coils, a drop in cooling load may be made up – watt for watt – by an increase in reheat output. Not only will there be no cooling savings but even the kWh savings from the lighting upgrade may be negated.” – Audin.

Note g) “A 100% outside air system (e.g., serving a lab) may remove a significant portion of fixture ballast heat in its exhaust air instead of returning it to the cooling coil, thus mitigating some of the assumed A/C savings. If any of the upgraded light fixtures are outdoors or in uncooled spaces (e.g., stairwells, bathrooms, basements, mechanical rooms), their reduced heat output will never be seen by the A/C system. If, on the other hand, that reduced heat output necessitates an increase in winter heating through electric resistance baseboards, the net winter electric savings from the lighting upgrade may also be minimal.” – Audin.

3.    In Co2Land org’s mind the greater mistake is assuming maintenance savings will occur.  Repeated again and again are claims that new equipment will need less maintenance. It may be true, but in all likelihood it will have a cause and effect that might not be adequately assessed.  Consider this scenario: A new boiler is fitted with inverter technology and will require less maintenance. Staff will be cut because of this, or retrained, or reassigned elsewhere. But when maintenance is required of a harmonic distortion occurred the building’s maintenance budget will blow out and little or no actual measurable savings from new equipment will be reported. Admittedly it will most likely be in the preceding budget periods that this affect will show itself.

Note h) Research you case studies thoroughly, and do not assume marketing is telling the truth, the whole truth.

Our underlying message is to exercise caution when you try to explain with too little detail, and do not assume the other party is wanting you to explain all as a simplified explanation.  It might even pay to ask – can you make the time to understand all the implications?

Think eco profit management

Think eco profit management and it means reducing energy options to affordable solutions that improve the organizational bottom line, enhance brand image and accommodate operational expansion. It is showing clients how to implement energy and carbon management systems with confidence. A piece of cake – easy to understand.

Winton Evers the MD of www.EcoProfitManagement.com.au practices sustainability management . Formerly a Chartered Accountant, Winton came across the GHG Accounting Standard and realised how much organisations could improve their financial and environmental performance by managing their carbon emission sources. So why the frustration Winton, asks CO2Land org? The answers could be obvious, it is the obtuse that form opinions in our ‘smartphone’ world at the expense of ‘real’ experiences.

Then we read of another sustainability professional, Mary C. Alford, PE, in another part of the world saying the facts are “The largest companies have embraced sustainability – why? Because it has been shown to save hard dollars – and it has the side advantage of positive spin to customers and even employees (and many other advantages that we know, but let’s pick our battles). But when the corporation is ultimately answering to stockholders, the interest is only in one pillar of the triple bottom line: profit”

Mary continues to ask us to think of the following “What is the carbon footprint of inefficiency? What is the carbon footprint of a failed project? What is the carbon footprint of meaningless travel or pointless meetings? I believe that the selling of sustainability starts with the selling of ‘lean’ business practices. They go hand in hand. Sustainability needs to be rebranded away from granola and polar bears and recycling for corporate boardrooms and rebranded for profitability. (And just for the record – I like granola and polar bears and I recycle everyday – but when I bought a Prius, I only pointed out, to my corporate clients that asked, how much money I saved).

Co2Land org has also noted the increasing use of the connotation of sustainable and the inferences of deniers of change that one that practices sustainable is part of the ‘green’ or ‘granola’ sect. It is possible but, increasingly as Winton and Mary are saying it is about the need to balance the economy, for profit of longer than the short term and CO2Land org advocates if we evaluate and cost benefit is part of the equation it would seem mother nature is fighting back and cost of doing nothing has no benefit. We are clearly saying Climate Change is real, and it does not matter if it is man made or other cause, we have the technology, but do we have the will to innovate?

On a lighter note Urban Dictionary enlightened us with the following definition and antidotes:

Definition 1 granola

Thumbs 475 up, 233 down

 

 

 
  A person who dresses like a hippy, eats natural foods (granola), and is usually a Liberal, but in all other ways is a typical middle class white person, and is likely to revert back to being straight when they finish college.

Did you see that granola chick at the farmer’s market buying bean sprouts?

Yeah, her new Volvo was parked next to me.

Definition 2 granola

Thumbs 278 up, 126 down

 

 

 
  A tree hugging, free spirited hippie minus all the drugs.

Melissa is a granola.

Definition 3 granola

Thumbs 753 up, 189 down

 

 

 
  An adjective used to describe people who are environmentally aware (flower child, tree-hugger), open-minded, left-winged, socially aware and active, queer or queer-positive, anti-oppressive/discriminatory (racial, sexual, gender, class, age, etc.) with an organic and natural emphasis on living, who will usually refrain from consuming or using anything containing animals and animal by-products (for health and/or environmental reasons), as well as limit consumption of what he or she does consume, as granola people are usually concerned about wasting resources. Usually buy only fair-trade goods and refrain from buying from large corporations, as most exploit the environment as well as their workers, which goes against granola core values. The choice of not removing body hair (see amazon) and drug use are not characteristics that define granola people, and people, regardless of granola status, may or may not partake in said activities. This definition is sometimes confused with hippy.

Jack: My best friend is vegan and only buys produce that is organically grown from local farmers. Her and her feminist, vegan boyfriend are both in Greenpeace and advocate for queer rights. She waxes her legs but she’s still granola.

Jill: So that means she’s not a dyke? And she grows her own reefer?

Jack: Just because she’s granola, doesn’t mean she does drugs. Also, granola status has nothing to do with sexual preference.

Jill: Well maybe she’ll know where to buy hemp and how to tie-dye?

Jack: She’s granola, not a hippy. Some granola people are hippy and vice-versa, but they’re not the same thing.

 

Maybe the real medicine is: if we have a bit of a laugh and settle down we can work an understanding – a sustainable one!

patterns of behavior – natural gas prices up

Researching Gas Cogeneration for the built environment you will be told many different stories about feed stock prices. The more common story is we are over the costs blow-outs because of world shortage around 2006, so expect prices will go down. However, the opposite is likely to happen, the costs are going up. Why? The answer is complex. It depends on how you participate and where you participate.

CO2Land org takes note of ValueInvestorcanada.blogspot.com that has a very good article going through this argument from the perspective of an equity analyst. The premise of this article is rising gas prices would be good for people holding stock in gas suppy companies. The argument is based on American activites, being:

1 – Any energy company that can move capital spending away from natural gas drilling and into oil is doing so (Ed. a major driller doing just that).

2 – U.S. LNG import facilities are being converted to LNG export facilities. That will allow producers to get world prices, which are 4-6 times higher than North American prices.

3 – A continued shift from coal to natural gas as a source of power, for economics and the environment.

4 – At some point won’t the government get behind a plan to move to natural gas as a transportation fuel? Instead of having to rely on the Middle East, Venezuela and Nigeria to provide oil to the U.S. wouldn’t it make more sense to use natural gas which the U.S. has in abundance?

5 – Producers have hedges in place at the high rates they could get a few years ago. When those hedges expire they will only get a price for gas which might be below their break even level.

Then www.energyshop.com posts:

Dec 2012 – Driven by Oil Shale Economics, Natural Gas Prices Primed for Slow and Steady Rise – Forbes

“As long as oil stays close to $90 per barrel, it appears likely that the gas supply will continue to throttle back, and the supply overhang will continue to dwindle. In the meantime, demand is likely to grow in a variety of sectors, prices will rise, and a longer-term price equilibrium will eventually kick into place. Gas at $5 to $6 per mmBtu may well be in our foreseeable future. So, for now, drillers are generally going to prove up reserves and sit on them until the price of gas relative to oil makes it profitable to produce. ”

The last paragraph above clear shows a strategy is most likely to be based on profit. For those interested mmBtu as shown above can be interpreted as between 1.054GJ to 1.060GJ and 1GJ at 3.9 degrees C is 26.8cubic metres of natural gas. Source – Society of Petroleum Engineers (www.spe.org)

The Australian Experiences

In Australia we are seeing very similar patterns of behavior and we believe LNG exports to ASIA will be the price setter for energy prices in the foreseeable future.

We also note that cash strapped State Governments will seek to maximize the royalties from natural reserves including Natural Gas, Shale Oil, Petroleum and Coal Seam Methane extraction.

All of this will not be a surprise to most people, however the elephant in the room lies in how it is regulated and ‘allowed’ to get to your need. In Australia and in particular the Eastern Seaboard the federally based Australian Energy Market Operator (AEMO) has oversight, yet State based jurisdictions allow different treatments of price setting.

In more detail:

Victorian Wholesale Gas Market Data

A range of real time data sets from the Declared Wholesale Gas Market in Victoria uploaded from the Market Information Bulletin Board (MIBB) including price and withdrawals, ancillary payments, bid stacks, consumption, demand forecast, effective degree day, registered participants, heating values, gas quality data and more. Source – AEMO.

Short Term Trading Market

A range of data sets offering real time data from the Short Term Trading Market (STTM) system including ex ante market price, provisional market price, mos stack data, allocation quantity, schedule log, hub and facility definitions, total contingency bid & offer, default allocation notice, contingency gas price and more. Source – AEMO.

Viva la difference between the two market information sets as the STTM price represents a delivered price of gas to the Hub. That is, it includes both the commodity and the cost of transportation to the hub, unlike the Victorian Declared Wholesale Gas Market price which is a commodity price only.

Then come the area distribution effects on facility charges, the fees to distribute and that can include the trucking or reticulation. Other government changes and fees also.

The price you WILL pay, may change at any time.

Because of the range of commodity, transport, reticulation and delivery charges and government charges numerous bodies have argued it in itself brings about investment uncertainty. All well and good to talk about, however, one constant remains regardless to what is intended it is the opportunity to game that will not set but influence the price you will pay.

The Energy Users Association of Australia (EUAA), www.euaa.com.au , has presented several stories in January alone on the gas crisis that looms in Australia and now have a dedicated company page that features what is sees as the issues. The Australian Financial Review on 21, 22 and 23 January 2013 ran stories of a similar view from a number of sources. One story by Peter Roberts commented Western Australia’s reserving of 15% of gas supply for domestic use is under threat and it is further reported large Australian Companies cannot get supply contracts further out than 2 years, and those proposing new facilities are not able to secure any gas supply contract, or are finding it very difficult. In terms of what has happened around the country in gas prices since 2009 the following average gas price increases have been, despite adequate supply capability, Queensland 98%, NSW 79%, Victoria 80%, South Australia 78%, Western Australia 170%.

In term of what this means, the CEO Brickworks is quoted as saying his group now pays $8 GJ in Sydney (up from $4 GJ), Brisbane and Perth $12 GJ.

All writers expect the prices to rise more, and the reasons are given that transitions in the market are bringing conditions of uncertainty, and the export markets are getting policy priority. In another example it is quoted Japan is paying $15 GJ for Natural Liquid Gas (the form gas is transported).  The conclusion is therefore you will need to be very careful in how you evaluate your future gas price in your projects. In particular when considering fuel substitution focused projects such as cogeneration.

Co2Land org intends to look deeper into the price effects and predictions of the energy market and will post these accordingly.

 

Contaminated Land – Research data

Reported is that research is ramping up into the number of areas responsible, or have responsibility for management of contaminated land. Worldwide, it appears the impediment to date has been the concern of uncovering unintended consequences by the actions that might be taken. This is understandable if you add that in order to take notice you need to understand the problem. It also follows that any data collection effort will serve as a proving ground for a methodology to deal with the problems that are uncovered. That in itself introduces another problem in that developing a Methodology requires funding or promises for funding.

Knowing that even governments have funding issues internal to themselves we could ask: So where should we start in Australia?  The immediate noticeable group addressing the quality of data issues of ‘real’ remediation challenges is the federal Department of Finance and Deregulation (DoFD) which has a Special Claims and Policy Branch that is leading a strategic data collection project examining the manner in which contamination issues are addressed. However, its purpose is to address Commonwealth Land Decisions-making and gather data only from entities covered under the FMA Act (Government Agencies) and CMA Act (Authorities). The Department has set out the project is to be collecting information in the earlier part of 2013. Whilst a let down to some, it is a start to identifying the effort needed.

Concurrently, Canada is turning its attention to those that refuse to clean up where they have polluted, and Environment Canada is beginning feasibility studies of remediation technologies that could be used on federal properties contaminated by chemicals.  Source: http://mobile.firehouse.com/news . A watching brief on Canada’s and other overseas, state and private groups suggests it is very wise to manage contamination within property decision-making groups and that they undertake research into solutions under key terms that may be available to reference available literature and what might be uncovered.

What CO2Land org has noted is that DoFD is finding the need to validate their understanding of the Commonwealth’s legal obligations relating to contamination liability – to clarify what they must manage as opposed to should manage.  (Those that follow this thread might recall – Posted on January 6, 2013 by co2land, Contaminated Land – Obligations to manage – was written to help the reader to understand that managing the environment means many things and it is not necessarily so that moral decisions will be made). This implies there are many areas of uncertainty and any contamination related advice would be welcome to help them target key areas of uncertainty.

In relation to the DoFD data project, Posted on January 8, 2013 by co2land , Contaminated Land – Remediation challenges was written Presently for a majority of contaminates, there are no endorsed standards or guidelines within Australia that define, for each category of land use, safe levels of soil contamination. What we do have within the National Environment Protection Measures Act 1998 (NEPM Act) guidelines is an adopted remediation criteria recommending investigation levels. Our suggestion is this investigation criterion is far too conservative and not well adopted or able to properly adept to manage health and environmental risks. Also written was CO2Land org noted that the federal Department of Finance and Deregulation has a number of areas responsible or have responsibility pertinent to management of contaminated land and wonders if it might be data collection that is the greater weakness in terms of the abilities for adequate and timely responses. This new post suggests DoFD is now prepared to push the boundries into uncertainty for those areas not previously covered by the scope of the land policy functions. CO2Land org also notes the timeframes for the project indicates the willingness for the data to be available for the 2013/14 Strategic Review Program – we applaud you for that. Small steps by a leap forward in terms of past efforts.

SMART the Sustainable difference – Built environment.

Should we redefine ‘sustainability’ and can it still have substance in its objectives? The answer could be in redefining sustainability as ‘Smart buildings’. The redefine would be sustainability as a synonymic with smaller environmental footprints, and more importantly, tools to monitor and verify the impact of technology implementation in economic terms. In this way actions could translate actions into economic benefits. The cost benefit test that is linked to sustainability in this way would tick most boxes (output become outcomes – in the policy context) and these dollars makes the sustainability message all the way to the top line enterprise decision makers.

In a post published to IDC Energy Insights’ Smart Building Strategies Program.  It was said: “This new level of transparency and measurability will reshape the future of sustainability and generate radical efficiency.” More information about this program and report can be found here: http://www.idc-ei.com/getdoc.jsp?containerId=EI238359#.UMe58uS7P3o

In a similar discussion at a meeting with Cogent in Sydney during December 2012, it was said:

We have the NABERS program (NABERS is an Australian national rating system that measures the environmental performance of Australian buildings, tenancies and homes. Put simply, NABERS measures the energy efficiency, water usage, waste management and indoor environment quality of a building or tenancy and its impact on the environment),

America has LEED (Leadership in Energy and Environmental Design) and is a voluntary, consensus-based, market­-driven program that provides third-party verification of green buildings), and

We both have a comprehensive Energy Star (The Energy Star program was developed by John S. Hoffman, inventor of the Green Programs at EPA, working closely with the IT industry, and implemented by Cathy Zoi and Brian Johnson.[5] The program was intended to be part of a series of voluntary programs, such as Green Lights and the Methane Programs, that would demonstrate the potential for profit in reducing energy consumption and greenhouse gases by power plants.[5] Initiated as a voluntary labeling program designed to identify and promote energy efficient products).

While much of this discussion was on water and energy efficiency and the application of embedded generation the dilemma of future fuel sourcing which includes the policies that affect the price is that prices will rise and it will be as much the fault of intervention as the demand curve.  What was agreed was that the next generation of ‘smart’ requires changes in rules and applications to be value for owners and operators. It is also in context the means to mitigate litigious actions.

Then on 27 December 2012, we heard of the resignation of:

The Obama administration’s chief environmental watchdog, EPA Administrator Lisa Jackson, is stepping down after a nearly four-year tenure marked by high-profile brawls over global…
news.yahoo.com.

Prior to the 27 December 2012 announcement the IDC EI report said “media attention has fueled heated debate around the inferior energy performance of some certified LEED buildings.  While USGBC and its LEED certification program have been very successful in bringing efficiency and sustainability front and center in corporate consciousness, these programs do not prescribe actions to ensure ongoing efficiency.  The next step is determining what will best promote ongoing efficiency and superior building performance.

VERGE at Greenbuild, the two day launch of this year’s USGBC annual conference, tackled the continuous improvement challenge head on.  The big takeaway is that the adoption of new data-driven technology can deliver ongoing efficiency and sustainability with unprecedented success.  Data, however, is only as transformative as the tools that make it actionable. If data is to define the future of sustainability, then the future of information technology will define how facilities become radically efficient — true smart buildings.  IDC’s four pillars of the future of IT are the answer to call for radical efficiency.  Social business, big data analytics, cloud computing and mobility will be the IT enablers for the new future of sustainability”.

Co2Land org encapsulates in brief these findings:

1. Social business can accelerate the transformation of facilities into smart buildings.  Improving practices, tactics and strategies.  “These platforms are also venues to showcase the benefits of technology implementation and successes”.

2. Big data analytics. Integrate new generation technologies and system architectures as reliable valuable grid resources. Thereby, the design will extract value from very large volumes of a wide variety of data.  These tools focus on automated demand response programs.

3. Cloud computing will be an important enabler of scaling smart buildings through the cost effective and flexible delivery of essential analytics and data management tools.

4.  Mobility will ensure facilities managers adopt and use smart building solutions.

Co2Land org see the defining of sustainable this way carries the promise as ‘Smart buildings’ generate business value for owners, occupants, and utilities through next-generation IT architecture utilizing social business, cloud computing, big data analytics, and mobility.  Our other reference included SMART the two way difference!( Posted on November 25, 2012 by co2land  ).

We should also expect 2013 to be a year of great change and challenges with or without GFC II.