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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

All about gas, coal has lost it

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Then consider:

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

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

But do we really have to lose the ETS mechanism?

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

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

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

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

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

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

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

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

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

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

“LNG spot prices for Japan at 3-year low

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

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

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

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

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

(Nikkei)”

Danger Danger no doubt!

Penalties for Solar – with and without

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

The Background:

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

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

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

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

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

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

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

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

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

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

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

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

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

Our want:

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

 

Selling short in the energy market – symptom or disease

Have you ever suspected your Energy Company of gaming the rules? Consider this: A energy retailer in NSW has argued they can remain silent on an energy supply transfer and then penalise the customer with adjusted early termination fees. Small business is particularly vulnerable to this activity. Have you been affected? Speak up now.

We write this after a story recently ran that was commissioned by the St Vincent De Paul, 28 May 2014, ‘Energy Retailer not Adequately Disclosing Additional Fees’. It would seem some success has been the outcome. You may find similar matters very common for small business and the protection is less clear. It also follows that small business can be classified under the electricity rules as large when under company rule they are small business. The tactics of taking advantage of a customer is part of our story.

Consider the retailers argument: Section 6.10 AEMO rules prevent them objecting to Transfers in NSW. A wonderful twist that Tony the Weasel would be proud of for sure. What this retailer then did was objected to a ‘to the market to transfer DCL’ (Form called a CR1000) and then withdrew the objection. They then remained silent on their intention to levy the charge. In one instance we know of near $10,000 is the adjusted fee charged.

We find it difficult to think other than they are gaming the rules and defining as it suites them. They are embarking on ‘it may be immoral, but is not illegal’ game at the expense of a trust in what we say not what we do.

If you want more evidence consider that the Energy and Water Ombudsman NSW (EWON) web site is showing up to 85% increase on complaints with energy retailers in 2013, benchmarked over 2012 figures. Just imagine what 2014 must have in store for the Ombudsman.

If we go back to the reference instance – it was claimed they broke a deemed supply agreement and fees are payable. The retailer then ignored requests for transparency of the charges and to explain how is was reasonable to claim so much money. The retailer even ignored that the new retailer offered to give back the customer without penalty to any party. It became obvious the old retailer only want the money and not the customer.

What is wrong with that – big business only says show me the money! We are all nothing but an asset.

Our frustration is such that when we looked for an explanation it seems most feasible that the retailer is actually short in the market for black energy. This term is where it is not renewable or green sources. In effect a panic that they are overexposed to the renewable market because of the current government sending out signals ‘old king coal’ will reign for some time. It follows that the amount of contracted energy into the future and the books determine the risk of that business. It would seem the retailer does not want you to consume black energy, nor do they want you to export renewable energy – you might notice if had considered putting in Solar Array, either covertly or overtly you might be discouraged.

If you accept this short sell idea you could consider the behaviour of finding reason to add fees to your exit is akin to double dipping. They want you to pay for what they do not have, or they have already sold it elsewhere. Possibly this matter should go before the AER, they are quoted as saying they have an eye on these sort of things.

If you check out the AER site and the government site www.energymadeeasy.gov.au you will notice they recommend you lay a complaint with the Energy and Water Ombudsman NSW (EWON). If you do so you should definitely know your wants for any outcome.

One want we recommend you consider is consistent and effective communication is your right.

 

Policy – Position – Agenda – where does it sit?

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

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

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

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

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

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

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

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

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

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

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

 

A glimpse of our new utility model

Change the name Hawaii for Australia in this story. Then you might get a glimpse into our new utility model. Just like in Australia – east or west coast, Hawaii Electric, the US state’s biggest utility, has failed to create a long-term, customer-focused business model. The problem, according to the Hawaii PUC as reported as said last week is “An increasing penetration of utility-scale renewables and distributed generation has ‘broken’ the traditional utility-customer regulatory compact….An overhaul of the traditional cost-of-service utility regulation model is being touted as a possible solution.”

Now we hear you say but Tony and Joe are going to put an end to the renewable industry in Australia by 1 July 2014. Well, according to the Climate Speculator and Tristan Edis the Environment Minister, Greg Hunt says his Cabinet Colleagues are dreaming. http://www.businessspectator.com.au/climate .

We might get cheeky here and refer to CO2Land org’s last posting, 7 May 2014 – Fantasy and Budgets, in particular on after eating a mushroom Alice in Wonderland grew a mile high – we guess it was a magic one! However, no amount of distorted truths can hide the reality and its acceptance here, as in the US state utility regulators, there is a need to take steps to incentivize changes to the utility business model, and utilities should lead on these issues, instead of being dragged along. One furphy that can be dispelled by recent reports cannot attribute renewable to price increases, again quoting, 8 May, 2:22 PM, Explaining electricity markets to dummies by TRISTAN EDIS: “While economic modeling shows that the injection of lots of solar and wind power via the RET will lower wholesale electricity prices, 95% of politicians and 98% of journalists struggle to understand and accept it” (RET refers to Renewable Energy Target). We can only say, sad but true.

Now back to the utility change model, rather than waffle on like a ‘polly’ – aussie slang for politician. You might better get a grip on the case and idea by directly reading –

http://www.utilitydive.com/news/hawaiis-overhaul-of-the-utility-business-model/259923/

We should also add that in Australia, after eight years of study there is no evidence that Wind Energy in South Australia has been causal of wholesale energy price increases in that state or the eastern seaboard to which it is connected. To refer to that story refer to the Climate Speculator again.

Have got to go now – put my waste into the gasifier, produce syngas to start the generator for our power needs, it is cold overcast and foggy outside – need a backup for the solar on the roof. It is just like having a battery without acid. Sorry Alice!

Ironic RET – the sum is bigger than the whole.

The conversation was fluid, and as the Renewable Energy Forum wound down to its closing stages. What was obvious was we all shared a concern that what is policy is not what was understood as the intention of the policy. If we make example of the Renewable Energy Target (RET): After a review of the 2001 target set under the Mandatory Renewable Energy Target (MRET), the Australian Federal Government in August 2009 committed to the RET and it was designed to ensure that 20 per cent of Australia’s electricity supply will come from renewable sources by 2020.  Then in June 2010, the Federal Parliament passed legislation to separate the RET into two parts to commence on 1 January 2011 – the Large scale Renewable Energy Target (LRET) and the Small scale Renewable Energy Scheme (SRES). These changes are in order to provide greater certainty for households, large-scale renewable energy projects and installers of small-scale renewable energy systems.

What has happened since is the 20% Australian Federal policy changed to GWh available targets.

What is wrong with that you say? Well previously 20% meant 20% no matter how much the demand for electricity grew. In other words the renewable energy requirement will grow to ever-higher numbers as electricity demand grew at approximately 5% per year. This suggested traditional generators would lose market share to new renewable starters. To get accord on the issue, the setting was then addressed as a Gigawatt target that said 20% was desired but was ‘real’ in that it actually reduced the % of the renewable energy production each time total energy demand increased. What now worries the traditional generators that agreed to the accord is that demand is reducing at around 2% pa and that it is trend, ironically because of the policies of the new Australian Government towards manufacturing and innovation. So at the time of change to Gigawatt target until demand actually dropped we saw the actual % of the target drop to about 13% and now it will rise on predictions to have demand reduce we will find the target will again be closer to 20%. It even affects the Energy Retailer in that the risk of being caught ‘short’ or ‘long’ in the market is a much bigger risk.

Another issue is that states and territories always need to do more, and they have set their own targets. The Australian Capital Territory (ACT) recently amended its 25% target to reflect 90% by 2020.  ACT have even introduced a 20 cents per kWh feed in tariff (FIT) to encourage large scale renewable to supply business and industrial needs in the region. What they have effectively done is create a capacity market inside a Spot Market for electricity.

So – If you studied my phone records, what would you unearth about me and my intentions, seriously? The irony is metadata collection on individuals might give you the wrong conclusion. Why is that so? I am a collaborator and a competitor, the cluster I might frequent will change according to the clients needs. Imagine this I am at the Renewable Energy Forum, I tell all about the wonderful deal I have done based on coal fired generation, that it was a wonderful outcome – and all agree they needed to know that outcome. They now knew what tactics they needed to counter those arrangements. But as metadata it might read or profile, they are here, they are everywhere, what are they up to – must be no good!

Oh dear, getting paranoid about the RET review are we? No actually feeling very positive. Why? CO2Land org can remember at least 7 reviews of different sorts on the matter. Yes, something will change, and distortion in the market place will be adjusted. Maybe even new models for the industry will be mandated to accommodate change or the transition strategies for the inevitable continued growth will be clearer.

Why be so confident? The Abbott government largely is a carbon copy of the Howard era. Even when Howard introduced the Mandatory Renewable Energy Target (MRET) it was not his preferred vehicle to protect the environment, but it was a means, through pluralism to remain in power.   In this case to appease the Democrat Party faithful (sorry Green Party faithful but that is a fact). Abbott is a former Howard Minister, as is many of the Abbott cabinet, and the difference is, in Abbott’s case, is the need to appease right wing entity(s). The problem with the right wing groups is they tend to be Elitist and leaning toward returning to feudalistic ideals.  Howard tended to favour Roman times, and you must suspect Abbott does too.

So CO2Land org does not believe that Abbott, who previously endorsed Carbon, is doing anything other than adjust the rules to appease concerns and continue with what China is doing – encourage continued renewable uptake.

What if Turnbull takes over as Prime Minister, would it be better? By degrees we suspect rather than radical. We can be encouraged that Turnbull does continue to support the ideals of sustainable business.  In our opinion he had one fault, too honest in his previous stint of party leader. Maybe he did learn that lesson – don’t be too visible in setting your agenda.

Don’t give up on renewables surviving the RET review  is our advice. If you note the style of the current executive it is similar to neurolinguistic programming, that in effect means we just give up trying to comprehend meaning. More proof listen to the language being used; ever changing degrees of view point and you might even notice yourself saying: Did he not say something else yesterday – I give up!

Don’t give up because the Pollyanna moment is to come, suddenly, Abbott will say I always supported the environment, I was waiting for the right moment and mechanism. It is about how a relevant government can govern to maintain a community obligation. NOTE: All weasel words have been carefully chosen so no disclaimer is required!

Regenerative Energy a better product

Very recently, in conversation it became obvious, that apart from hard line protagonists, on both side of the political divide they agree that climate change is happening. The disagreement is whether is it anthropogenic and how exact any remedial action might be in saving the planet. In common with all is that reliance on fossil fuels will remain to dominate our need for comfort. The degrees of the need for comfort and the energy needs to supply it will be lowered or raised by how we control our demand.

But, you know it might be possible that innovators are coming up with better product – a more affordable alternative that provides the same service. More affordable, not just in terms of price but also cost of resources.

If you have followed CO2Land org you will notice there is a strong emphasis on regenerative energy and innovation. You might also notice a practical stance on comments on the campaigns for emissions trading systems (ETS). It had never been denied that ETS has a role for helping switch from coal to natural gas right now and to some extent renewables. It is also advocated that the Mandatory Renewable Energy Targets (MRET) in Australia has encouraged uptake of renewable energy. But carbon allowances themselves have not been observed as being able to produce a better product.

Regenerative energy might be a better product and while renewables have made inroads and are already on the right path in the electricity sector. If you don’t think so take a look around you and you will see wind power is quickly moving to be a mature technology, and the cost of solar having plummeted in the past few years, and China is about to flood us with even cheaper solar products. Another reason to consider regenerative as a better product choice is efficiency as waste can be stored in what you might describe as a battery waiting for peak demand periods before being used. Our comforts for heating, transport, mobility, communications and peak energy use can be provided without the need for compromise.

CO2Land org is optimistic that this transition can succeed mainly because people will view it all as an improvement in their lives. The down side is there will be business as usual type resistance to the term ‘unburnable carbon’. Meaning if we remove the increasing demand trend for finding new fossil resources – such as shale oil and gas – and instead stretch out the fossil reserves by lowering current demand, and hence allow us to leave this carbon in the ground we will be accused of hurting jobs and shareholder returns.  What would be even more interesting is how BAU types could reinforce the constant negative when we can continue to feel comfortable.

Motivation for the post comes from:

http://www.renewablesinternational.net/keeping-carbon-in-the-ground-requires-a-better-alternative/150/537/73336/

 

Keeping carbon in the ground requires a better alternative

Thoughts on the new IPCC report