Tag: government

CFI – a XANADU

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If you follow that Shangdu as the summer capital of Kublai Khan’s empire, then you would be forgiven for thinking the CFI is our XANADU and an enigmatic bright feature on the surface. Thereby, we have a problem because it is being profiled as exactly that and actively marketed by government as a series of experiments to showcase. Practitioners are asking: What about us in the ‘real’ world, can we believe something that looks good on the surface is enough? Some say yes, many no.

This conversation started because projects are to be funded that address recognised program gaps of the Carbon Farming Futures activities. This round: The Extension and Outreach Phase two submissions were due Wednesday June 12 5pm. Information is be found on Extension and Outreach daff.gov.au.

Some disquiet continues and numerous amounts of feedback do focus on the issue of the bankable when needing to finance, and other is the number of reference groups that were set up to work through the matters and the concern some of the critical consultation groups are difficult to contact or not able to be mobilized. A prime example being: The Biochar Reference Group. After some searching key people advocating the approach found part of the problem was people moving on to further their personal interests. The difficulty is that the group has funding to develop the soil carbon methodology necessary to be approved by the DOIC to produce ACCU’s (carbon credit units), and although soil carbon methodologies now has an active ‘reference group’ to attempt to push it along, the two subgroups (Mixed farming, and Rangelands) do not, or have not formally communicated what each are up to in their work levels. Compounding this the CFI is looking less of a ‘farming’ initiative in terms of reward systems, and as of the time of writing the government has not produced an example of a good news story on a true ‘farming’ credit. It is difficult to sell virtues without success stories and Gant chart the project support from the farming community without it.

A closer look at the cost of participating is also most interesting, and it is easy to see another genuine hurdle is related to the methodologies development. There is considerable variation in calculating the cost of participating, and some use this as an excuse that farmers are simply not ready to seek approval of their methods, some say it is simply too expensive to get approval. Some even say there is a genuine disinterest for government to get on with ‘innovation’ attempts.

In terms of cost we need to consider that published 8 April 2013 by Co2Land.org: ” It costs up to $1M to develop a methodology acceptable under CFI. Once accepted the transaction cost to create the ACCU’s is said to be about $70,000. Although it is not a definite cost, it can be less but a reasonable guide and it requires you to look carefully at the potential yield of each project and whether you can smear the transaction cost across the entire project to determine the minimum size for it to be a worthwhile program”.  Then Country Carbon ( www.CountryCarbon.com.au ) said the numbers posted by CO2land of transaction cost of $70k for ACCUs are ridiculous. They made no attempt to say what is a typical transaction cost other than a comment, and the spokesperson (identified as NC) said “I have no idea where they sourced those”. Curiously NC goes on to say: “The Clean Energy Regulator register shows only a few projects from farmers and only 1 I believe has done a transaction. 
I doubt very much that every methodology needs $1 million for development as well. Too many variables to generalize”.

Co2Land org agrees that too many variables are involved, and then notes two other people advocating for the CFI saying: “None of the methodologies applicable to general farming, that we have examined so far, appear to have net positive financial benefits. Some can lead to substantial unknown liabilities in the future or limit land use in overly prescriptive ways. 

If I am wrong in this please correct me, and show me where it does work and I will be happy to spread the good news”. 

And, “I am a farmer (even if less active than I would like) and all the ones I know are not only not ready to adopt but are only following the program with peripheral interest until such times that they are satisfied something of genuine benefit to their own operation has become apparent. Many I have talked to see it as another under handed greenie grab for the land, some of the prescriptions on approved methodologies certainly seem lifted from this camp. 

Methodology development using all our substantial ‘in house’ skills and resources we estimate to still cost in excess of $100,000 with no guarantee of success “(source identified as PK). Then source LK – not related, said “Many unresolved issues remain, however moving ahead is better than waiting for the ‘perfect’ answer in my view. Just wish for political consistency at this end – the fact that State Coalitions have stripped climate change policies bare is of most concern to me.”

In all this there does seem to be agreement that for farmers, environmental planting does not pay a sufficient return to justify the investment on carbon alone. NC also said “It is also considered that the RMT tool (modeling tool) is deliberately using carbon sequestration estimates well below average because no direct sampling is required for audit”. Possibly this is an oversight, maybe not? In this approach they have taken an ultra conservative approach and the indications are these carbon estimates are so low it is not economical to do it – participate in the initiative that is!  So it remains only one of those methodologies remain with few takers. Even the CSIRO was showing how low these estimates are for the RMT. Reported is the government has taken a decision to use the lowest rates possible for landholders carbon sequestration from tree planting. A good source of this view is https://twitter.com/CountryCarbon/status/332655918254792706/photo/1 

They go on to say: ”In simple language the govt will only recognize extremely low carbon sequestration rates regardless of what happens on the land. It is not even the mid-point average. So that farmers would earn very few carbon offsets. Therefore they say, why bother? 

Most of the extension and outreach to date talks about tree planting or piggeries. (Piggeries are a different question). Most projects approved are all about landfill projects and they are town councils.” They also say: “It actually has less to do with government cut backs or Coalition vs Labor politics and more to do with implementation”. More than one providing input say it may be just a simple matter as readjusting the RMT tool.

CO2Land org intends to continue this thread of knowledge and asks: Unless you be fortunate enough to have a government program that is more generous behind you. 
Should we lobby government harder to be more encouraging for innovation in CFI?

Notwithstanding, CO2Land org wish everyone the best with their endeavours in the initiative. Applauded is the intention is well founded, the legislations well intended, and the potential well received – but something is missing! Maybe it is a case of it is too difficult to include farming in CFI and the outreach context for farmers is that the potential liabilities that could be incurred by landholders using some already approved methodologies are not properly explained and/or are dismissed as of a trivial nature. The great harm in this possibility is that the program reputation will be tainted – irrespective of its intention of fairness. Even recent Government decisions on department restructuring (especially the Department of the long name – too long to repeat) and budget constraints required by departments and the continued efficiency dividends to Treasury are not helpful to the pledge. What is hoped for by farming advocates and practitioners is a more direct show of continuous steps to perfection for the farming community and eliminating any direction that might be seen as a series of steps to dismantle or derail such a worthwhile cause from its name sake – the Carbon Farming Initiative.

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Falling Short – F.I.T. in renewable power

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A desire to improve the competitiveness of Renewable Energy in Australia’s power mix is problematic and it is not necessarily technical limitations that hamper the project or is it financial limitations despite bank risk concerns. Especially if the later is supported by the Government bringing forward $160 million in Clean Technology Investment Program (CTIP) funding to 2014-15 to increase manufacturing investment and boost productivity and competitiveness – The budgets key message that CTIP program demand is strong and growing, and there is no change to the funding commitment.  It also is possible the coalition could maintain the $1 billion commitment to the investment programs, albeit it may be called something else for branding purposes.

Co2Land org argues it is not sufficient to be experience in, or have an understanding of the challenges in the design or deployment of renewable energy solutions. That is referring to only the infrastructure, energy output, utility area of responsibility, power capability, transmission and distribution capacity, or even storage technology as the solution set.

The more dangerous issue is the means that an uncooperative energy utility can muster a political wedge and creates sufficient doubt of the effectiveness of the program that will lead to a fall-out with the community. Recently in Australia Co2Land org has been given information that a bitter war is engaged between parties over such a Queensland power line duplication proposal and it all seems so unnecessary. As an observation there is room for both sides to move on this one. However, the agenda may be more complex and looking further afield Canada has some lessons we could learn from over the growth of renewables and why utilities might be so sensitive to the growth of such. It could be our problems in Australia are similar to the following as the Pike Research report that says energy is becoming increasingly democratized and the role of utilities is changing, from producing power and supply markets to purchasing it from distributed sources. We also know in Queensland the State Government has a large ownership stake in generation and supply – albeit they are not alone from the other states and it all gets down to variation of the model as opposed to opposition of the models of operation. Regardless each has ample opportunity to hamper success of ‘buy local’ feed-in into the grid system as the rules stand.

Looking further to the problems of Canada and the utopian belief that all would embrace the new world, it is reported by www.energymanagertoday.com, on 21 May 2013:

“Ontario has fallen short of its goal of creating 50,000 jobs and 5 gigawatts of renewable energy power with its ‘buy local’ feed-in tariff program, despite gathering early momentum by generating 31,000 jobs and turning one in 7 farmers into energy producers, says a report by the Institute of Local Self-Reliance.

Hydro One, the province’s largest utility, has been a major roadblock to progress says ILSR report author John Farrell, since it set a limit of sourcing just 7 percent of its energy from distributed renewable sources, compared with 15 percent for most US utilities. In US states where the cost of power is high, like Hawaii and California, utilities have upped the limits even further, at 25 and 50 percent respectively.

Farrell says Hydro One did not prepare to accommodate the boom in distributed power from the FIT program and missed deadlines to link up to new sources of power. As a result, despite overwhelming demand for FIT and contracts being signed for most of the 5 gigawatts, only 10 percent of the projects are producing electricity now.

Because of the demand for FIT, Ontario will actually be able to shut down all its coal-fired plants next year, and meet most of its 2030 renewable energy goals 12 years early – but its notable success has come at a price, since unprepared utilities were not able to bring the contracted energy on line.

The slow development led to political backlash that nearly toppled the ruling Liberal Party in the 2011 elections. It did lose its majority, which Farrell says jeopardized support for FIT. The Great Recession also stymied progress.

Since then, Ontario has reviewed the FIT program and revised its rules last year, doubling its focus on local ownership and participation. Farrell believes the move, which he says should have been adopted two years ago, will reduce political angst and local opposition and increase return on investments.

Farrell suggests that the Ontario Power Authority needs to streamline its process for developing renewable power with existing contracts and push utilities to get better at determining grid capacity. It should also review whether utility-scale mega projects make sense, given the difficulties in getting it to market. With these changes, “the FIT program may still live up to much of its early promise” he says.”

Sometimes you have ask – why do we ignore the obvious in Power Play? I answer is it is the nature of things to only see our side as a team play, and there is no I in team. ‘I’ referring to the society as a collective, and it has no advantage to be a collective outcome.

 

Confident with no confidence – QLD style CID

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Asking a cursory ‘Trust you are having a good and Happy Easter up in Queensland’. The reply was a shocker: “We are stuffed, I suppose the next thing we will get is a letter in the mail, stating we have to walk off our property so they can push every thing over for Ergon and the mines – Love Sharron”.  What was referred to is an alleged flawed process for the duplication of the 63 klm long 110kV power line from Warwick to Stanthorpe in Queensland, and the mounting speculation a public announcement has been held back from that process.

Ergon Energy is sponsoring the Community Infrastructure Designation (CID) process, under the Section 200 of the Sustainable Planning Act 2009 (SPA). The SPA details the process required for CID, providing an emphasis on ensuring that adequate environmental assessment and public consultation occurs prior to Queensland Government approval.

But it is suspected Ergon Energy has not been fully consultative with landowners and the community on the proposed corridor and cracks are appearing in the approval tactics under the Queensland Government’s CID process. According to the ‘grape vine’ what is held back is announcing mining is coming to Warwick, which is backing off Cherribar Resort owned by Chinese investors (a Resort set up to supply 400 homes for dignified living of people of Chinese origin), and the facilities includes the operating of their own airstrip. The timeframe is said to be in about 18 months, and soon after Cecil Plains coal seam gas and open cut mining has started.

CO2Land org then felt compelled to research this story further and then noted the Southern Free Times has been running stories on the progress of the proposal by Ergon Energy to build an additional power line to supply the Stanthorpe area. A quick check indicated this means 3 supply lines to cater for the area. (Stanthorpe – translated as old English meaning ‘tin town’ – is a town situated in south east Queensland, Australia. The town lies on the New England Highway near the New South Wales border 223 km from Brisbane via Warwick, 56 km north of Tenterfield and 811 m above sea level. The area surrounding the town is known as the Granite Belt. At the 2011 census, Stanthorpe had a population of 5,385.)

According to the local government council, the population of the Southern Downs Region has increased over the past 5 years at an annual average rate of 1.4%.  They say this rate is above the national average for inland regions not affected by the current resources boom. They also say the population increase has been brought about partly by the “tree change” phenomenon, and partly by the affordability of high quality housing – currently averaging 40% less than Brisbane prices. That said it would be hard for Ergon Energy to argue population growth numbers justifying such a large expenditure on an underutilized power line – at a community expense, certainly not justified for at least another 10 years without a resources boom planned!

However, the headline of Southern Free Times of 28 March 2013 read “Stanthorpe needs Power Reliability Says Springborg” – the opening paragraph included “The State Member said he remains confident in the decision making process of a Stanthorpe Power Line Community Reference Group, despite rifts in the group and a loss of community support”. Looking deeper into the story we find 6 of the 11 member CRG have resigned!    This sounds a bit odd – the State Member (also the Qld Gov Minister of Health) ‘remains confident’ and the CRG has no confidence in the CID process? So what is really going on here?

On reading the entire story it is noted a number of good points are raised in the Southern Free Times and the expected well scripted responses come from Ergon Energy.  But what was not covered were some big burning matters such as: Fair compensation for the loss of use or abandoning the use of your homes and property to make way for a duplication of the 110kV power line (it seem Qld in cutting the red tape for approvals also avoids the option of owners selling land affected at market price, or even accept a fair rent for the use of the land). Next, the line will be redundant unless significant growth for the need for power increases above the expected planned growth scenario. This is something the regulators must test for who benefits and whether the abandoning of the need in the lifetime of the line will result in undue costs to the community. Especially if the ‘grape vine’ is correct as to the actual need for such a large duplication.

The big issue in all this is not even remotely covered. That is the case for smearing the costs with the community when it may be a benefit for say a new mine or foreign investment interests, and that user might pull out of the area before the economic life of the line is reached.  We can think of numerous examples where this happens and one ripper is Cobar in NSW – the lines were put in and the mine shut down leaving the community to pay the costs. Costs that we now know could be avoided.

What evidence is there that financial and lifestyle costs could be avoided? The answer is actually in the responses from Ergon Energy to the Southern Free Times. A absolute major give away and indicator of the real agenda  – Ergon did not say that all alternatives had been evaluated, they said proposals to met expected demand for alternatives had not been included in time. They also said two lines currently serve the area including an 110kV and a 33kV line. They argued the 33kV line can only supply half of the current peak load. Extrapolate that to peak loads and the capacity of the current 110kv line is fine and allows for load growth of the predicted 18% over the next ten years. It also means demand response measures, if taken, will cater for peak load without new infrastructure. It also means a duplicate 110kV power line will at best be utilized 5% of the time – if you research the Power of Choice submissions with AEMO you will find similar analysis.

Also noted in Springborg’s response is he said new infrastructure was required and without detail other than a general statement the community is entitled to reliable power. Maybe the CRG should ask a few more questions, like:

  1. Why do you need more than what is stated as the need in growth scenarios (reference to published planning and forecasts from other than Ergon)?
  2. Why do you think technology will not provide solutions at a least cost other than conventional distribution of power? and,
  3. If a new industry development other than what is required by a community in growth were introduced would that industry pay a fair and reasonable rent for the infrastructure?
  4. Would a fair and reasonable rent be returned to the community?

Of course these questions are very likely to elicit more the well scripted replies to the questions, but then you could just ask them again only at a different level. For instance, if the state said the means is more important than the ends, it should be tested thoroughly.

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.

Has the Queensland Government and Ergon (a government entity) set the theme of better practice or has the quest for the means of the market overtaken good policy for the ends to look after the community?  If the means is more important can we say the community consultation businesses that influence, is only in the interest of making a market other than setting up community representative groups with limited knowledge of the true agenda? Therefore are these groups only to give comfort to the Minister of state that all is well on a certain issue?

The irony of flooding rain and a sunburnt country

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The irony of flooding rain and a sunburnt country. Most recently, floods hurt the Australian eastern states, and a matter of weeks before by devastating fires. This is focusing on the thought – Maybe climate change is closer than we think.

The ABC reporter Tracy Hutchison, on Monday 4 February 2013, made a comparison of Australia facing another summer of floods, and that we are not alone. She centred her story on how Indonesia’s capital grappled with a watery chaos and Beijing being brought to a choking halt by smog. Her point being “Australia’s recent re-acquaintance with devastating flooding in Queensland and northern NSW this summer has been another sobering reminder of the climatic shape-shifting wreaking havoc with lives and livelihoods across the country. 

Yes, Dorothea Mackellar might well have written of droughts and flooding rains in the early 1900s (while homesick for Australia as a teenager in England), but you’d be hard-pressed to find much wistful fondness among the many farmers who have watched livestock, equipment and expanses of primary produce wash away their livelihoods for the second time in two years. 

For many of these much-heralded ‘country folk’, the financial and emotional struggle of staying on the land will be too much; they’ve said as much in shocked-filled resignation as the water came back too soon. 

Watching on, from the fire-prone drier states, the unspoken narrative is screaming; where will these people go? What will they do for a living? And who will grow the food they were growing for both domestic and export markets?”

In another irony, the current Queensland Government did not see anything other than a cost/benefit analysis being required to manage the environment. Because of the events the Queensland Premier Campbell Newman is now considering the cost of the climatic events and it is hard to find a benefit calculation other than the need for a capital injection might have to come from public funds to mitigate the damage. One such project would be that some flood-prone residential areas in Queensland could be relocated “to avoid what looks increasingly like the recurring reality of extreme flooding”.

Another pair of ABC reporters, John Morrison & Kerrin Thomas, also on 4 Feb 2013 said New South Wales Premier, Barry O’Farrell, “says his visit to flood-affected regions on the North Coast has reminded him of his visit to Moree around the same time last year. 

Moree was flooded almost exactly one year ago, as floodwaters travelled downstream from Queensland. 

Barry O’Farrell told ABC’s Statewide Drive program the conditions in Grafton this year are very similar to those in Moree 12 months ago”. To paraphrase BOF’s (Premier Barry O’Farrell – we kid you not, it is a published acronym for his name) point is that the city dwellers think it is unusual and the country folk do not.  Too right mate it is bloody heart breaking for country folk, if you did not know!

The reality is what the city dweller is now able to see change, and the statement of BOF of “unusual” is losing credence as the numbers keep stacking up that something is wrong, and climate related events are becoming more extreme and records are being broken nudging the entire population to think again about climate change.

The point is made again: It is not just Australia that is affected, in Jakarta right now, where record flooding has swamped the CBD for the first time in history. As in Queensland (suggested by the Premier Campbell Newman) there is increasing talk that relocating the Indonesian capital is the only feasible solution to an escalating problem. The ABC reporter Tracy Hutchison said, “Jakarta is sinking. Literally. Years and years of unregulated private water-bores has drained the city’s below-sea-level water table dry. The record rain, coupled with an underdeveloped drainage system and the penchant of Jakartans to use the city’s waterways as rubbish dumps, brought this city of 20-odd million to a standstill of a different kind…. Australians remember the massive economic and political impact when Brisbane flooded two year ago – the disruption and cost to business, the national flood levy, the daily Bligh/Newman media show, the rebuild…..The implications of a non-functioning Jakarta are immense and wide-ranging both for Indonesia and the region. But this is the reality…And while the Indonesian capital grappled with a watery chaos, further north a different kind of stultification was engulfing the Chinese capital. The soupy and toxic coal-fuelled smog that has descended across northern China sent monitoring devices off the scale in Beijing. 

Hospitals recorded a 30 per cent increase in admissions for respiratory-related illnesses and residents were ordered to stay indoors as state-run manufacturing was put on the kind of state-instructed ‘go-slow’ not seen since the Blue Sky policies of the Beijing Olympic preparations….There is something darkly delicious about China’s state-run manufacturing boom on a state-imposed go-slow because Beijing’s middle class, the beneficiaries of the boom, can’t breathe. It’s a vexing Catch-22 for China’s new leadership – how to keep a slowing economy buoyant but avoid a widespread public health crisis – and a new twist on boom or bust. Not to mention the regional economic implications for trading partners like Australia, whose coal-exporters might possibly be the elephant in the (Beijing hospital) room? 

It doesn’t seem that long ago that “environmental refugees” living on increasingly brackish low-lying Pacific island states of Kiribati and Tuvalu were dismissed as the political fodder of fear-mongering climate change campaigners. Now, sadly, relocations from what were once primary food-producing areas are a new way of life – and it’s not just Kiribatins and Tuvaluans feeling the watery heat. 

Widespread record flooding and deadly landslides have been a common theme across the Pacific this summer – PNG, Fiji, Samoa and the Cook Islands have all battled extreme weather events from ferocious cyclones and record rains. A 

It used to be that a few thousand people with wet feet in the Pacific never got much traction outside environmental campaigner circles; perhaps this faraway time of a planet impacted by a changing climate might be closer than we think”. 

Tracey Hutchison broadcasts throughout Australia and the Asia Pacific for ABC News Radio and Radio Australia.

Bringing this closer to home in the story “Fitzroy River continues rising amid ‘sea of water’” by Paul Robinson, Monday February 4, 2013 –the story is of central Queensland and the city of Rockhampton where it two has been hit by severe floods in as many years of the Fitzroy reaching up to 9.2m. This height has the potential to cut off the city for as much as two weeks at a time. Flooding also closed the Airport. However the problem for the city is that much of the water coming in also came from further inland, which brings its own problems in terms of trade. And extensive damage to agriculture. 

Quoted is “We’ve seen loss of livestock, there’s tractors that have been washed out of sheds, four-wheelers that are a couple of hundred metres down the paddock, there’s a lot of irrigation gear and pump sheds that have just gone missing, tanks, like a lot of fodder, round bales, small bales and lucerne, all gone,” he said. 

”Tourism hit

A central Queensland tourism body says tourist operators can expect further hits to business as Rockhampton prepares for Saturday’s flood peak. 

Capricorn Enterprise says highways cut by floodwaters severely damage tourism”. Also affected is rail infrastructure and mining activities and it is reported that “rail company Aurizon says coal rail lines to Gladstone could be closed for more than a week…. An Aurizon spokeswoman says crews are still unable to fully assess the situation because the rail line is under water. However, she says at the moment they expect the Moura and Blackwater systems will reopen within seven to 10 days. 

Freight operations along the coast have also been interrupted by flooding of the Queensland Rail network”. 
We should also say roads are also cut or restricted for use at different points too.

CO2Land org thinks maybe BOF had it the wrong way around. Country folk are finding it unusual that 10, 50 and 100 years events are happening, seemingly every 2 years. It is city folk that are tending to think it is normal and even the assistance appeals are failing to reach the targets.  Is it too late, how can we adapt at this rate? What is the cost of taking the high ground!

the notion of “cool” patch burning

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January 2013, has been very distracting and the extreme fire conditions have woken us from our usual persistence to stay in holiday mode a little longer. Traditionally it is a less than optimum time for putting forward ideas and getting anything done. Friends schooled in adult education training warned us NOT to try and run courses in January because people retain their school holiday mindset well into their senior years, and even if you can get them to turn up they will be distracted and inattentive.

Fire has been often characterized as the best servant and the worst master (you may have heard this expressed in many different ways). Last evening at a local rural firefighting service get together, as expected, the politics of fire was in the forefront of casual discussion. Yet, some very important debate happened of interest: We talked of fire management and the attitudes of each of us towards, and the implications for, landscape management.

Introduced into the discussion was how the government measured success of their many programs. We at this point input our interest to expand the Carbon Farming Initiative (CFI) methodology on savanna burning to a more focused area of controlled burning as was practiced by the indigenous in times past and the difference being in those traditional ways the management was to avoid total incineration and encourage regeneration and improve soil fertility.

In relation to the traditional burning practices cited, the various land managers, both government & private, agreed the need to stimulate considerable discussion was evident. Those that opposed said they were having some trouble accepting the notion of “cool” patch burning. They don’t like it because it leaves too much charcoal on the ground which they think will fuel the next fire, and the only answer is to ensure hotter more complete burns to reduce the fuel back to mineral ash. One even went so far as to say, ‘do you think the indigenous knew what they were doing, they had no intention of managing the landscape, fire was an accident that just got away from them and the benefits were accidental’. Our reply, does it matter that they planned the benefit, what matters was they learned something and have knowledge from the experience, and the issue must be effective communication is needed for a better understanding and to ensure that knowledge is not lost. To have the attitude that all that we need to do to manage the risk for the environment is indulge in recursive behavior is nonsense.

Saying there was a communication problem was the catalyst for a more rational response and the group was then more open to accept they needed to engage in more than polite conversation and to actually open themselves to the thought our indigenous colleagues deserve an audience for what they say is a solution to our degrading rural scape.

Further background material can be followed up as Posted on January 20, 2013 by co2land

CFI – ‘black swan event’ treatments

SMART the Sustainable difference – Built environment.

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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.

COAG Powers – playing ball EPBC, Energy Market Reform

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A business’s focus should not just be on project management, which is a reactive stance, but ’project mastery’ – this includes not allowing stakeholders to tug it in a multitude of directions, making it impossible to set clear goals and deliver the goods on time – finding the balance between sticking to the original plan and remaining flexible – avoiding ‘score creep’ (where the scope of a project is not properly defined, documented, or controlled) – and keeping to the path. Says The Harvard Business Review as sent out by Caring for our Country’s Garry Reynolds.

Linking how this could affect the effectiveness of the intention of the Council of Australian Governments (COAG) intentions (Meeting – Communiqué Canberra, 7 December 2012) from its 34th meeting in Canberra [As a note COAG has for 20 years been meeting to discuss Business and politics]. You could wonder it COAG can deliver despite it continues to reiterate its commitment to focus its attention on policy reforms of national significance, and to keep its agenda as streamlined as possible.

If we focus on COAG Environment and Energy Reforms:

Posted on December 7, 2012 by co2land “EPBC Powers – COAG passing the ball?” where we raised an analogy over federalism and enterprise models and “If you translate that to Federal and State and Territory government workings, you might see the possibility of a run away train through select enterprise if the influence is replaced by vested interest other than the good of society, or our long term future”, and then recently COAG, on Environmental Regulation Reform, “re-affirmed its commitment to broad environmental regulation reform that enhances efficiency and increases certainty for business, while maintaining high environmental standards”. It follows that the Commonwealth will progress its legislative reforms in response to “the Hawke review of the Environment Protection and Biodiversity Conservation Act 1999 to further streamline and strengthen environmental regulation”.

As we previously said COAG wants to articulate ‘standards’ that the Commonwealth has proposed and that State and Territory processes would need to meet these standards as ‘accredited’ arrangements. COAG writes it “represent an important milestone in COAG’s reform agenda” and “Jurisdictions have made consistent efforts to improve regulatory arrangements, including increased use of strategic tools and commitment to early engagement with proponents.  COAG welcomed the release of the Commonwealth’s Statement of Environmental and Assurance Outcomes and draft Framework of Standards for Accreditation”.

The issue may be in the following: “As a further step to improving processes relating to environmental regulation, COAG agreed that all jurisdictions will direct their regulatory and referral agencies to eliminate duplication and to avoid sequential assessments and delayed approval processes and also to utilise common information requirements for both assessments and approvals”. The operative being co-operation and avoiding ‘score creep’ as states and territories are known to seek.

Energy Market Reform, in 1996 we saw the introduction of the National Energy Market (NEM) and its strong appeal was for urgent and concrete action to reduce the price of energy through ‘contestability’. In 2012, “ COAG noted the strong call by business for urgent and concrete action on energy market reform to help moderate the impact of high electricity prices on consumers and business, particularly the need for greater access to more flexible pricing”.   While the concepts differ in that contestability was the original answer to lower energy rices, in particular Electricity prices, what COAG has now endorsed is a more comprehensive package of energy market reforms for jurisdictions in the National Electricity Market than in 1996. In this instance ‘reliability standards’ are to be addressed additional to rules and price.

Set up for the job of the reforms are, “the Standing Council on Energy and Resources (SCER), with advice from the Business Advisory Forum (BAF) Taskforce.  In addition to agreeing to the recommendations from SCER and the BAF Taskforce, COAG agreed in principle to adopt the new best-practice framework for reliability standards (to be developed by the Australian Energy Market Commission and which give primacy to affordability for consumers at agreed levels of reliability and take account of regional considerations) and to transfer responsibility for applying the framework to the Australian Energy Regulator (AER), with a final decision by the end of 2013”.

It is additional funding from the Commonwealth that is being made available to enable the AER to review “its resources, independence and operational arrangements”.

COAG secretariat acknowledges the full implementation of the reform agenda (to be taken forward by Energy Ministers), “will take sustained commitment over time”, and the oversighting progress needs to be vigilant.  Further details on the reform package are available at www.coag.gov.au.

It should also be noted the domestic gas market is not forgotten and “COAG requested SCER to provide advice to its next meeting on challenges facing domestic gas markets”.

A bit more from Caring for Our Country co-ordinator, Garry Reynolds:

The International Energy Agency is projecting a glut of energy as the US becomes the largest producer of oil and an exporter of gas – CO2 emissions will continue to grow, but energy efficiency could help buy us time in addressing climate change and save money. Source: Climate Spectator 13 Nov 12.

Global demand for fossil fuels, especially coal, is forecast to grow strongly – yet carbon emissions will have to peak soon if the worst of climate change is to be avoided – coal met 45% of the growth in global energy demand between 2001-11 – roughly triple the contribution from renewable energy sources such as solar and wind. Source SMH 17 Nov 12.

Australia is betting big on the expansion of coal as the world’s 4th largest producer (6% of the world’s coal production) – committed projects to expand coal capacity total $9.8 billion for ports and $16.7 billion for mines – the Government is hoping that the long term development of carbon capture and storage will mitigate the greenhouse effects of the expansion.  Source SMH 17 Nov 12.

Because of the variability of wind and solar power, every 1,000 megawatts of renewable energy production capacity needs 600 megawatts of coal or gas power as a backup. Source SMH 17 Nov 12.

The US glut of cheap natural gas is leading major coalminers to look to the construction of new ports on the US West Coast to massively increase exports to Asia. Source New Scientist 13 Oct 12.

Hydro Tasmania is the largest generator of clean energy in Australia. Source Planet Ark 24 Oct 12.

Australia’s 20 per cent Renewable Energy Target has delivered $18.5 billion in investment, with the potential for $18.7 billion more if the policy is retained in its current form according to the Clean Energy Council – it is cutting emissions and paying for itself. Source  REneweconomy 25Oct 12.

And, the best for last : ‘Innovation is obvious in hindsight and radical in foresight’ Hargraves Institute 23 Oct 12.

Non-Kyoto Carbon Fund discussion paper

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What is a position paper when it does not necessarily represent the views of the Government or any Government Minister – It could be a discussion paper and one very recent issue on the CFI related discussion is a position paper prepared by the Land Division of the Department of Climate Change and Energy Efficiency to promote discussion ahead of developing program guidelines for the Non-Kyoto Carbon Fund. The paper titled Non-Kyoto Carbon Fund Discussion paper for public comment – November 2012.

If you are wondering what does it mean, firstly you need to understand that the Non-Kyoto Carbon Fund is about abatement activities that do not count towards Australia’s emissions targets. It is about a market based incentive for CFI credits that do not have access to other markets. Equally important the Fund will not duplicate other grant-based or research and development funding provided under the Clean Energy Future Plan.

So why do it?  To encourage investment and promote innovation all related to reducing emissions or store carbon and would not have been contributing in other ways to Australia’s emissions targets. A big part of this objective is the ‘learning by doing’.

Looking closer at the Carbon Farming Initiative it is a legislated framework to ensure that abatement is real, permanent and additional. If you want to investigate what is thought of this statement you can read CO2Land orgs post  Real, Additionality, RECs

Posted on August 14, 2012 by co2land “Curiosity lead to checking out the reporting standard AS/NZS ISO 14064, finding it is silent on the word or term ‘real’ and completely avoids the topic of additionality, was fascinating given that you can’t even conceive of an offset without the concept of additionality!

CO2Land org now ponders: If ‘real’ cannot be a guarantee of a good project outcome. It follows that the use of the word or term ‘real’ can be seen as a initial or promised activity increase and not be seen as a guarantee of an increase in the carbon offset (it could be real activity and still lead to a decrease of carbon offsets). So if I say it was real at the time I acted; it was an act in good faith only. The issue with the word ‘real’ is it literally means the activity is a cause of change.

This lead to thinking of the impact this has on the Carbon Farming Initiative as legislated when the Gold Standard and Carbon Fix require that projects be “real”, but no international standard could explain what they mean by using the terms.

CO2Land org looked a little harder (we don’t want this post to be no more than ‘hot air’) and found:

◦    Specifically ISO 14064-2 (project accounting) does not include ‘Real’ because during development of ISO 14064-2 ‘Real’ was regarded as a programmatic rule/criteria, which is outside the scope of ISO 14064-2.

◦    ISO 14064-2 is a standard rather than a program

◦    ISO 14064-2 (Clause 5.4) specifies the following requirement in regards to additionality: “The project proponent shall select or establish, justify and apply criteria and procedures for demonstrating that the project results in GHG emissions reductions or removal enhancements that are additional to what would occur in the baseline scenario.”

◦    Additionality is incorporated into ISO 14064-2 is based on the core principles of ISO standards in general, i.e. that ISO standards not be a barrier to trade (WTO-TBT – anyone following development of ISO 14067 (product) will know this is a major issue). As such, ISO standards must be policy-neutral (extended to include program-neutrality). This is of course very important for market confidence.

◦    ISO 14064 deals with the concept of additionality by requiring that the GHG project has resulted in GHG emission reductions or removal enhancements in addition to what would have happened in the absence of that project. It does not use the term “additionality”…Thus the project proponent may apply additionality criteria and procedures, or define and use boundaries consistent with relevant legislation, policy, GHG programmes and good practice.”

◦    Although the concept/requirement of additionality is within the requirements of ISO 14064-2, the simple reason why the ‘term’ additionality is not present within the requirements of ISO 14064-2 is because of certain sensitivities/perceptions/politics of certain parties involved in the development of the standard. ”

If we press on with the currect discussion paper: You should be aware the Non-Kyoto Carbon Fund will only purchase credits issued under the Carbon Farming Initiative (CFI) and the department states the rigorous CFI integrity standards apply to both Kyoto and non-Kyoto projects.

To quote the Department: “The CFI is based on internationally accepted principles for ensuring that abatement is real, permanent and additional; and incorporates safeguards against adverse impacts — for example on biodiversity, water availability and employment. It allows landholders to generate carbon credits for abatement actions, whether or not they contribute to Australia’s emissions targets. All abatement — including Kyoto and non-Kyoto abatement — is subject to rigorous integrity standards, which cover:

  • Measurement:  each CFI project must use an approved CFI methodology to ensure that abatement is measurable and verifiable. CFI methodologies are supported by peer reviewed science and assessed by an independent expert committee (the Domestic Offsets Integrity Committee).
  • Additionality:  abatement must go beyond legal requirements and common practice within a comparable industry and/or region.
  • Leakage:  measurement methods must account for leakage and variability and use conservative assumptions.
  • Permanence:  sequestration from establishing trees or building soil carbon must be permanent.

The CFI is administered by the Clean Energy Regulator. It is supported by legislation and includes measures to minimise fraud and dishonest conduct. The CFI framework gives buyers confidence that offsets make a genuine contribution to climate change mitigation. “

Co2land org does not intent to verbatim the paper and you can easily get a download of  the discussion paper at:  http://www.climatechange.gov.au/government/initiatives/carbon-farming-initiative-non-kyoto.aspx .

But if you prefer we can explain what is Kyoto versus non-Kyoto activities. Kyoto protocol was ratified by Australia in 2007 and we agreed to to limit our national emissions in the period 2008-2012 (the first commitment period) and the Government has recently announced its intention to join a second commitment period, consistent with our domestic commitment to reduce emissions by 5 per cent from 2000 levels by 2020.

The Non-Kyoto Carbon Fund promotes land sector abatement that does not contribute to Australia’s internationally committed emissions targets, but represents genuine abatement nonetheless. Some non-Kyoto activities are likely to transition into the Kyoto framework (or its successor) over time.

The Kyoto Protocol establishes an internationally-agreed framework for measuring and reporting greenhouse gas emissions. Australia ratified the Kyoto Protocol in 2007, agreeing Land sector activities that contribute to Australia’s Kyoto Protocol emissions target (Kyoto activities) include:

  • activities that reduce agricultural emissions;
  • reforestation (land that was clear of forest before 1990); and
  • avoided deforestation (those present in 1990).

Under a second Kyoto Protocol commitment period (from 2013), it will be mandatory to account for forest management.

Rules:

* The carbon pricing mechanism allows CFI credits from Kyoto activities can be used as offsets.

* You can use the CFI to credit abatement from activities that do not currently contribute to Australia’s Kyoto Protocol emissions target (non-Kyoto activities).

* Credits generated from non-Kyoto activities will be eligible under the Non-Kyoto Carbon Fund, but cannot be used as offsets under the carbon pricing mechanism.

Transitioning activities into the Kyoto framework

  • International climate change negotiations are ongoing. What we have the moment is an intention to join a second commitment period.
  • Forest management and other voluntary land sector activities were not followed in the first commitment period because of risk. Risks that the gains from carbon sequestration could become losses from natural events, such as bushfire and drought. New provisions allow countries to exclude emissions from major natural disturbances when accounting for forest management and reforestation.
  • Accounting for forest management will become mandatory for parties under a second Kyoto Protocol commitment period.
  • Other land sector activities — including the storage of carbon in agricultural soils, grazing land management and the restoration of wetlands — will remain voluntary. Or at least until the Government assesses the impacts in Australia’s national accounts.
    • If activities enter the national accounts, credits from those activities would become allowable offsets under the carbon pricing mechanism and would no longer be eligible under the Non‑Kyoto Carbon Fund.
    • Fence sitters will be delighted. There will be arrangements to help stakeholders to manage uncertainty around the timing of any transition.

What happens if non-kyoto activities are brought into the Kyoto framework? The proposal is :  A voluntary opt-out clause would allow Non-Kyoto Carbon Fund participants to choose to sell to other buyers, if activities become eligible offsets under the carbon pricing mechanism.

What happens from here?  “The Department of Climate Change and Energy Efficiency will continue to consult with stakeholders on the design of the Non-Kyoto Carbon Fund. Interested parties are encouraged to make submissions on the proposals outlined in this discussion paper.

Draft program guidelines will be published in the first half of 2013, for further stakeholder comment. This will be followed by the release of final program guidelines prior to program commencement.”

In the mean time, if you are an interested stakeholder – Submissions are accepted until 14 Dec 2012 from stakeholders. Follow the full discussion and make your comments as described and email to cfi@climatechange.gov.au .

Indicators of hope – Environmental and Sustainability

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In the 2012 victory speech President Obama call out “the destructive power of a warming planet”. It is reported it was more than words and some action will come from the make-up within the state houses and Congress from this election.

In a story along a similar vein Kate Sheppard for Mother Jones, part of the Guardian Environment Network – guardian.co.uk, Friday 9 November 2012, wrote about wins and the people that will champion the changes. These being: Jay Inslee – Washington State’s new governor; Martin Heinrich – New Mexico’s next senator; Angus King – Maine’s next senator; Pete Gallego – the next congressman, Texas’ 23rd District; Carol Shea-Porter – congresswoman, New Hampshire’s 1st District

Directly quoting Sheppard:

“1. Jay Inslee, Washington state’s new governor. Inslee, a Democrat, who has represented Washington in the House of Representatives since 1993, has long been a champion of renewable energy and sound environmental policies. In 2007 he coauthored the book Apollo’s Fire: Igniting America’s Clean Energy Economy, on that very subject. He was a member of the Select Committee on Energy Independence and Global Warming (back before the Republicans nixed it) and the co-chair of the House Sustainable Energy & Environment Coalition. He was also a key figure in shaping the climate bill that passed the House in 2009. As governor, he has pledged to continue that leadership.

2. Martin Heinrich, New Mexico’s next senator. Democrat Heinrich defeated Republican Heather Wilson in the race to succeed retiring Senator Jeff Bingaman. Heinrich authored the Clean Energy Promotion Act, a bill that would have expanded the number of renewable energy projects on public lands. (It didn’t pass, but it was a nice idea.) Before joining Congress he was a board member of the New Mexico Wilderness Alliance and was appointed to serve as the state’s Natural Resources Trustee, who oversees the assessment and protection of the state’s resources.

3. Angus King, Maine’s next senator. King, an independent, is drawing attention because he won’t say whether he plans to caucus with the Democrats or the Republicans. But environmental groups are certain that he will be a strong voice for climate action, based on his record as governor of Maine. After leaving office, he went into the wind energy business, building a 50-megawatt wind farm in Oxford County. He won endorsements from the League of Conservation Voters and the Sierra Club.

4. Pete Gallego, the next congressman from Texas’ 23rd District. Gallego, a Democrat, defeated Republican incumbent Quico Canseco in this very close House race that featured fights about Jesus and a rare, eyeless spider. An outside group sent a mailer to voters accusing Gallego of siding with “left-wing extremists” in the debate over protecting this spider’s habitat from the construction of a new highway. Gallego won the endorsement of the League of Conservation voters based on his record of, in his own words, promoting a “robust, environmentally-friendly economy.”

5. Carol Shea-Porter, the once-and future-congresswoman from New Hampshire’s 1st District. Shea-Porter served two terms in the House but lost her seat to Republican Frank Guinta in the tea-party surge of the 2010 election. She reclaimed it on Tuesday, rallying support with a poignant appeal for action on global warming: “If Americans want to fix this climate change problem, they will first need to fix Congress in November.””

Co2Land org shares that many people will breath more easily at hearing there are indicators of bi-partisan support and the appointing of persons that care accordingly after the US presidential election.  Our friends have indicated they are happy to hear there are words saying we will work together, that governments will govern, and do more than just put bumper stickers on our possessions.

Balancing energy in your business

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In previous arguments the Zero Waste community has been either instructed or advised that revenues from electricity generation using waste materials have no economic benefit, or are too little in the amount of return to be feasible. Other reported arguments are that the material products from the waste stream process have a significantly higher value than generation revenue. Those assumptions can be assumed to be no longer relevant if we approach the problems in a different light. Nor should we discount that technology will advance many techniques and the risk of each decision should be taken on a case by case and/or site by site basis.

If you consider the traditional energy procurement approach: You enter into a standard contract agreement, you concede the terms of your connection conditions and may actually be penalized if you fail to take the load assignment. The problem from this perspective is the supply side is assumed the only legitimate interest in providing energy security. The concept of energy is more legitimate if you refer to the supply and demand balance.

All community is affected by the rising cost of energy, and a number of specialist companies are offering products that approach the three essential considerations in the cost of energy: The energy price, the delivery cost and the carbon price. Something is being done and the “Power of Choice” is doing what it can to address the issues.

The reasons to accept that change is possible is the AEMC and the Senate are the essential bodies that will influence and inform how the implementation of an effective balancing of the National Electricity Market (NEM) and that Demand Participation is the result that is saving $billions for the community, and continuous saving thereafter. If you think this is a relatively new idea, the reality is under the term Demand Response (DR): Alan Fels, Chair of ACCC, on 19 November 2001 made a considerable issue the balancing equation; The Parer Review 2002 presented “Towards A Truly National And Efficient Energy Market”; The EUAA April 2004 presented “Trial of a Demand Side Response Facility for the National Electricity Market”; The ERIG Review November 2006 advocated “Review of Energy Related Financial Markets”; AEMC (formerly by NEMCO) carried Stages 1 & 2 of the Demand Side Participation Review and Stage 3 is in progress.

What does this means if you want to design or reengineer your process products under carbon constraints? On the 1st July 2012 some 250 Australian businesses became lawfully liable to pay $23 for every tonne of CO2e emitted from ‘operational controlled’ facilities emitting 25,000 tonnes or more of scope 1 Greenhouse Gas emissions. A recent survey by the Australian Institute of Management (AIM) revealed that only one third of the organisations surveyed agreed or strongly agreed with the question “My organisation is prepared for the implications of the carbon tax”. It follows that an organisations’ total carbon capabilities are critical to creating the transformational business response necessary to not only remain competitive in the short term, but to prosper in the long term. The process for creating this outcome is heavily dependent on having essential carbon management knowledge and skills in place, and an awareness of the commercial & competitive impacts under the carbon pricing mechanism. Small to medium enterprise (SME) are not a liable entity, at the time of writing and where you may not have as yet assessed the impact of the carbon price, you should be aware the large liable businesses pass the cost down through the supply chain.
The supply chain and operating costs will be having an impact on all consumers and suppliers. We know government assistance programs are available to help mitigate the cost pressures & fund critical investment in areas such as energy efficiency. What we do additionally can be our benefit in reducing all manner of waste including energy and energy products.

On 17 October 2012 the Clean Energy Regulator issued a report, and as a selective reference, said that the year ahead is focused on amongst other things ecological sustainable development and that will favour the innovators prepared to rethink business as usual. The Australian Tax Office (ATO) also provides R&D incentives offsets for those groups, and the Productivity Commission encourages rethinking.

It might be time, if you have not already, consider curtailment opportunities, renewable generation, cogeneration or trigeneration (albeit some high profile projects may well prove to be an embarrassment for overblown claims), or combinations of technologies with emphasis on energy savings.

CO2Land org is aware of licensed energy retailers that are operating where you will be rewarded for sharing risk in the energy price, similar companies also can offer demand incentives that you might also have though less than likely. In this scenario at least one retailer will individually profile the site and make an offer for the output or develop a hybrid contract to suit.

Some of the products developed or can be adaptive to your needs to be developed is:

  1. For generators:

Short term grid balancing, renewable and base load, hedging strategies, Greenpower.

  1. Auto load management with shed load or transfer to generator capability
  2. Price substitution, Load shed offers.
  3. Structured options according to risk tolerance and managed adjustments.

The message is you are no longer obliged with the status quo as a price taker, and you can start the discussion and work for what works for you.

If you are confused with the terminology, hopefully the following will help you better understand: The energy market has three components that affect the price we pay: Price response (PR), Demand Response (DR) and the Emergency response (ER).  Electricity price is proven to be largely inelastic, and as we are more reliant on alternative energy sources we notice the costs tend to be absorbed. Therefore our only real option to mitigate the price is a Demand Response (DR). DR is proving its ability to offset the most volatile price driver in the market. For the supply side the capex and opex growth on the distributed network is a large cost driver, generation is the marginal cost of capital to develop the projects. Demand Participation (DP) can help slow down the cost drivers and the supply side will welcome the cost reductions or the ability to reduce accelerated infrastructure build times. In this instance think build and increase capital required for infrastructure projects (pole and wires builds and maintenance needs to cater for the demand growth). Emergency Response (ER) is an energy security problem and is reactionary to large events with little warning.

CO2Land org also notes success with DP and that DR has been implemented in a number of electricity markets. This includes DR for Reserve Capacity in Western Australia’s Wholesale Electricity Market (WEM) which works very well.  In New Zealand, with a focus on frequency control being particularly important.

In hindsight, the lack of an effective DR mechanism in the NEM has cost electricity users an estimated Present Value (PV) of $15.8 Billion[1] (this is in the order of a 9% impost on their annual electricity bills).  The power to change is with you.

Previously CO2Land org posted, 7 Sept 2012, The Power of Choice – review by AEMC of DR and to recap the “Power of Choice” Review is an unfinished work, and CO2Land org has experience in the material of Demand Response (DR). DR is most effective as a formal aggregation of small amounts of demand reduction from a larger electricity users who are contracted to reduce this pre-agreed amount of their demand at times when their are extreme wholesale prices, extreme peaks in demand or in emergencies.  It is much cheaper way to address these short term events than our current outdated approach of spending billions of dollars on more generators and networks which are only needed for a total of about 40 hours per year.

References to support this view are:

[1]

  • Alan Fels, Chair of ACCC, speaking at the Inaugural EUAA Conference on 19 November 2001
  • The Parer Review 2002 “Towards A Truly National And Efficient Energy Market”
  • The EUAA April 2004 “Trial of a Demand Side Response Facility for the National Electricity Market”
  • The ERIG Review November 2006 “Review of Energy Related Financial Markets”
  • Stages 1 & 2 of the Demand Side Participation Review (Stage 3 still in progress)