Tasmanian Times

The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. No price is too high for the privilege of owning yourself. ~ Friedrich Nietzsche

The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. No price is too high for the privilege of owning yourself. ~ Friedrich Nietzsche

Clive Hamilton

Killing renewables softly with endless reviews

You have to feel sorry for people working in renewable energy. Their industry has been reviewed to within an inch of its short life, and the goalposts have been shifted so many times that they don’t know where to kick the ball.

And now they are to be reviewed again, this time by a panel that is hostile to them. The chair of the review, Dick Warburton, does not believe in human-caused climate change. So if there is no problem with greenhouse gas emissions, why would we need policies to reduce them?

He is joined, among others, by Brian Fisher, who has a long history of working closely with the fossil fuel industries. For many years he was the executive director of the Australian Bureau of Agricultural and Resource Economics, a government research agency that was castigated by the Commonwealth Ombudsman for taking money from the fossil fuel industries to finance its work on climate change policy. Fisher did not agree that his work had been “compromised” or that he displayed “poor judgment” in having his agency’s policy work partly funded by Exxon, BHP and the Australian Coal Association.

Renewables under review – again

The last review of the Renewable Energy Target (RET) was published just over a year ago, and was conducted for the federal government by the independent Climate Change Authority. I was part of that review and remain one of the Authority’s members.

The RET scheme currently mandates that electricity retailers must source 41,000 GWh of electricity from new renewable sources by 2020. During the six months that our review took, the most frequent plea from industry we heard was to provide investment certainty for the emerging companies.

Even the Australian Industry Group, no friend of strong greenhouse gas reduction policy, argued that any further change threatened to “reduce the credibility and reliability of energy policy as a whole”.

The Climate Change Authority published its findings in December 2012, concluding:

Transitioning to a clean energy future will require considerable investment over decades. A stable and predictable policy environment is crucial to fostering the confidence required for such investment.

The Authority’s 2012 conclusions echoed those from a decade earlier.

Back in 2003, the Howard government called its own review into whether to extend or end Australia’s first renewable energy target. Chaired by former Coalition Senator Grant Tambling, it came to the same conclusion — stop meddling.

In fact, the Tambling review recommended expanding the renewable energy target, “as a sensible insurance policy against significant greenhouse gas abatement measures being introduced in the future”.

History repeating?

Yet the meddling with the renewables industry has begun again. Even before the new Warburton review gets under way, the message has been sent to renewable energy investors: the coal lobby is back in town.

As former Liberal staffer Guy Pearse revealed in his shocking book, High and Dry, in the Howard years the fossil fuel lobby became so accustomed to setting energy policy that they bragged about vetting cabinet submissions.

The “greenhouse mafia”, as they called themselves, have certainly had the ear of the Coalition in the past. In May 2004, Prime Minister John Howard convened a secret meeting with Industry Minister Ian Macfarlane (in the same portfolio then as now) and energy executives to come up with alternatives to avoid expanding the Renewable Energy Target, which was then a piddling 2% objective.

Leaked minutes taken by Rio Tinto’s Sam Walsh show Macfarlane chiding senior executives of Rio Tinto, BHP Billiton, Alcoa, Origin Energy and others for their “roaring silence” and for letting renewables advocates set the public agenda. At the end of the meeting, the minutes noted Macfarlane:

stressed the need for absolute confidentiality. He said if the Renewables Industry found out there would be a huge outcry.

Falling demand boosting renewables’ market share

A decade on, the coal-fired generators need all the political help they can get because something has happened that no one predicted. Four years ago, after 100 years of uninterrupted growth, demand for electricity in Australia went into decline.

Energy analyst Hugh Saddler estimates that the fall from expected levels has been equivalent to the output of three coal-fired power plants. He attributes it to more energy-efficient buildings and appliances, structural change in the economy away from energy-intensive industry (including manufacturing), and residential consumers taking less power from the grid, in part because of huge growth in rooftop solar panels.

The decline in demand means that the 41,000 GWh of new renewable energy is expected to represent around 27% of electricity supply in 2020, instead of the 20% initially estimated. This is very good news, not least to those concerned about climate change – but not for coal-fired power generators.

But isn’t renewable energy too costly? Interestingly, the Climate Change Authority found that the entry of new renewables into the market has actually been driving the wholesale price of electricity down, both because they increase supply and because they have lower marginal costs of production. The profits of coal-fired generators are being squeezed, and they hate it.

For all their lobbying of sympathetic MPs and senators, there is a problem. Other than in some local communities where attitudes to wind farms have been poisoned by disinformation spread by groups like the shadowy Waubra Foundation (which shares a PO box with a mining investment company), Australians love the idea of getting energy from the wind and the sun.

Solar homes as a political force

Solar photovoltaic panel uptake across Australia. ACIL Allen Consulting for the Australian Renewable Energy Agency

Going solar in the suburbs: solar PV uptake in Brisbane. ACIL Allen Consulting

While most Australians took a set against the carbon price, the Renewable Energy Target has always enjoyed strong public support, even if it does increase average household electricity bills by $1.30 a week, or $68 a year, as the Authority’s report found.

Australians particularly like the element of the scheme that encourages the installation of rooftop solar energy. The surge in demand caught everyone by surprise, and now 1.4 million homes across the nation generate their own electricity from the sun.

And contrary to popular myth, that’s not just happening in wealthy homes. Research for the federal government late last year found that outer suburbs and regional areas have led the way in going solar, as these maps of Australia and Brisbane show. (You can see detailed city and state maps at the end of this report.)

For this reason, the government knows it cannot simply kill off the scheme as the mining lobby, some power companies and many Coalition MPs and senators would like.

Instead, it is easier to choke renewables slowly – and the Warburton review is the government’s way of slipping the rope around the industry’s neck.

Clive Hamilton is a member of the Climate Change Authority.

The Conversation This article was originally published on The Conversation. Read the original article.

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16 Comments

16 Comments

  1. Leonard Colquhoun

    February 23, 2014 at 12:44 am

    The claim in Comment 15 that I portrayed “scientists as authoritarian ideologues” is wrong. Not the scientists.

  2. john hayward

    February 22, 2014 at 7:58 pm

    Devilishly clever, Leonard, #9, to portray scientists as authoritarian ideologues, elections as the true test of science, and the plutocracy as an expression of the public’s will.

    You could fool anyone.

    John Hayward

  3. bob hawkins

    February 22, 2014 at 7:19 pm

    I listened to the ABC RN interview with Warburton around midday today. I didn’t like what I heard, and ended up wondering how a person like this could even venture to suggest that he will be objective in his thinking. His CV alone should have been enough to discredit any claim that may be made by his master, PM Abbott, that he is the right person for the job.

  4. Shaun

    February 22, 2014 at 3:00 pm

    #11 “Hydro got it years ago and has met demand with a mix of modes only going for big wind energy projects lately when demand for ‘green’ power is in a growth phase.”

    Can’t argue with that and they used 4 basic modes once demand exceeded hydro supplies after 1997. In order, they were:

    1. Drawdown of storage
    2. Oil-fired generation
    3. Gas-fired generation
    4. Import of coal-fired energy via Basslink

    The power has to come from somewhere, and until the recent government-induced green energy boom it wasn’t coming from anything other than big dams or fossil fuels.

    Back to Victoria, no realistic amount of energy efficiency is going to drop demand 45% over the next 20 years in order to avoid the need to replace Yallourn W, Hazelwood and Morwell power stations.

    Nor can the problem be solved with wind energy unless there is also the construction of storage. And storage on that scale realistically means some big dams for pumped hydro. That’s all very doable, the wind is there and sites for the dams are there too, but there’s a lot of work involved to install 3000 wind turbines, 6 dams and 3 hydro stations plus the associated transmission lines.

    Leave the decision too late and one or two large coal or gas-fired plants will be the result.

    I totally agree with the notion that we cannot carry on “business as usual” with constant growth. No argument about that one whatsoever. But right now we’re essentially sleepwalking into a crisis. It’s like having a plane take off from Launceston heading to Melbourne without enough fuel to get there. It’s all fine until the engines stop and then it’s a disaster.

    It’s much the same with power generation. Looking at Victoria once again, if demand is going sideways and nothing is being done about future supply then at some point a crisis will occur. You can’t just take 45% of the electricity supply away over a short time, whilst also raising the cost of gas and gas-fired electricity in a big way, and not expect some pretty serious social consequences etc.

    As with practically all things relating to the energy supply side, the problem is not a lack of ability to supply per se. It’s a lack of actually doing something, and a lack of ability to do it CHEAPLY enough to make the economic system work that is the problem.

    How many Tasmanian families will once again shiver through this winter? There’s plenty of means of heating, the trouble is actually having access to them and the cost.

  5. Simon Warriner

    February 21, 2014 at 12:31 pm

    All this talk about supply side solutions ignores the use of demand side solutions.

    Infra Red thermal imaging technology has reduced rapidly in price and very effective imaging devices can be had for less than $3K. In the eighties a utility in central USA avoided the cost of constructing a new power generation plant by allowing its consumers access to infra red imaging cameras for no charge. The customers used the technology to identify and fix insulation problems in their homes.

    The resulting drop in demand was good for the customers and good for the utility company whose public owners avoided the need for capital expenditure.

    Nowadays, with wages tied to the size of the balance sheet, that response may not be so readily forthcoming from managers, but it worked then and can work now, and for far less cost. IR cameras then were over $50,000.

    As for the wider issue, it should scare everyone witless and purple. What happens to a population whose numbers have tracked the availability of cheap fossil fuel based energy ever upward? That paradigm is ending, fast. It is at the heart of the global instability we see before us.

    The graphs generated by the intellectual effort that was “limits to growth” are chilling in the extreme and since their production the tracking of actual to projected outcomes has been far more accurate that gives cause for optimism.

    We live on one of the best locations on the planet if we want the comfortable life provided by electrical energy. We need leadership capable of leveraging off that fact and ensuring the opportunity presented by it to our progeny is not flushed down the sewers of history along with all the nonsense the current and currently prospective political leadership seem hell-bent on delivering to us.

  6. phill Parsons

    February 21, 2014 at 9:54 am

    Not 4 cars Leonard. Oh my, how do they drive them all and do the tv appearances as well?. They must have longer days than mere mortals.

    You would complain or question if Gore gave up his wealth and donned sack cloth before he was ignored. Perhaps that is the preferred position for those who crit his wealth which in other cases are lauded as a goal.

    Tell me again who are the hypocrits?.

    #10 Fingers why there is a battle over the energy future. New fossil fuel power stations are unlikely to be built if the need for power can be met by smaller investments in multiple modes in multiple location in small parcels.

    Hydro got it years ago and has met demand with a mix of modes only going for big wind energy projects lately when demand for ‘green’ power is in a growth phase.

  7. Shaun

    February 20, 2014 at 11:29 pm

    Investment 101 – RISK and RETURN.

    If risk is low then a lower return is acceptable. If risk is high then the return on investment needs to be high in order to warrant taking the risk.

    Regardless of what the actual policies are, frequently changing them automatically raises the risk profile of investing in the affected industry.

    In general, there is a lack of investment in the electricity industry outside (1) renewables and (2) low risk investment such as transmission and distribution networks.

    There is little investment going on with coal-fired generation these days. Whilst we still get most of Australia’s electricity from coal, most of the plants that produce it are getting old.

    In the case of NSW, Vic and SA the whole lot were commissioned between the late 1950’s and the early 1990’s, with a big chunk in the early to mid 1980’s. They have a finite life and will in due course close.

    Looking specifically at Vic, the newest coal-fired plant entered service in 1996, construction being committed in 1988. Of all coal-fired generation in service in Vic today: 2% was commissioned in the 1950’s, 22% in the 1960’s, 17% in the 1970’s, 44% in the 1980’s, 16% in the 1990’s. It’s a similar pattern in the other states.

    Gas – There have been some peak load plants built in recent times either new or a relocation of old 1960’s plants from overseas. But very little has happened with baseload generation. There’s a bit but not a lot and in recent times new investment has dried up.

    Now, power demand is being partly exported offshore (industry relocation) and partly substituted by renewables (largely solar in the context of peak demand – recent events have shown wind to be pretty much useless in that regard) so there isn’t a real need to expand supply as such. But old plants do wear out, and of course being heavily reliant on power stations that your grandfather built means that we’re relying on less efficient technology too.

    And now we’re killing off investment into renewables as well.

    Go forward a couple of decades and we’re going to have some real issues in the 2030’s as many existing plants reach the end of their useful lives and we have no real plans for replacement.

    It took 11 years to get a single kilowatt out of the Morwell mine development (Vic) and 24 years to complete all construction works and get everything working.

    That’s just one example but it illustrates the point. All this energy infrastructure takes quite a long time to build, especially if it’s being done on a massive scale. And no matter what you think of Hazelwood (at Morwell) environmentally, it is undeniably a massive operation and very impressive in a physical and engineering sense.

    It’s much the same with Tasmania’s hydro schemes. Eg construction on the Mersey-Forth scheme extended over 10 years and it was 5 years before any power at all was produced and 6 years before production reached a significant level. Much the same with the other schemes, they all took many years to design and build.

    So what’s the plan when, for example, Yallourn and Hazelwood (both in Vic) finally grind to a halt 20 or so years from now? They’ve been the mainstay of Victorian energy for most of the industry’s history, but they have a finite life and the end is clearly in sight. Not only is the equipment getting old but the coal is running out too – but the mid-2030’s the mines will be worked out and the machinery will be worn out. Game over.

    Yes I’ve focused on Vic quite a bit, but that’s the state with the biggest shock coming really. Two decades from now, almost half of Vic’s power supply simply stops and there’s no real way around it.

    Also by that time the end will be firmly in sight for Bass Strait gas as well (the oil is already just about all gone) and the older gas-fired power stations at Newport (500 MW) and Jeeralang (466 MW) will be at the end of their lives too.

    Where’s the plan to replace it? Start now and renewables are an option. Wait another decade and realistically the options are coal, gas or nuclear with another coal-fired plant and associated mine a likely outcome. Wait until 2030 and Vic is pretty much locked into gas, itself likely to be supplied from somewhere outside the state.

    Australia desperately needs a sensible, national energy policy in my view. Not just one about renewables (we’re going to need at least some fossil fuel for quite a few years yet – that’s the practical reality). Not just about gas. Not just about coal. But a comprehensive plan as to how we power the country and which is flexible enough to cope with the range of likely scenarios with consumption levels.

    And then there’s the elephant in the room which hasn’t been mentioned yet. Oil….

  8. Leonard Colquhoun

    February 20, 2014 at 5:18 pm

    But, re the claims and counter-claims in Comments 1 and 5, some people might be justly skeptical about how political ideologues have seized upon “global warming” as a way to further an authoritarian agenda, motivated by an attitude of “We know what’s good for you, and you don’t”, and all you bogans will do as we say^. And, we’ve got the degrees to prove it.

    Road. Hell. Intentions. Good.

    ^ But not necessarily as we do: item – Mr A Gore’s 200 square house and its huge energy use. And, nearer here, Cassie + Nikkie’s four cars.

  9. john hayward

    February 20, 2014 at 3:54 pm

    Yes Simon, #4, the Gummint’s mendacity dam burst some time ago and the flood appears to have overwhelmed everyone.

    John Hayward

  10. Pete Godfrey

    February 20, 2014 at 10:03 am

    Unfortunately the only way the renewable energy industry will be left alone is if.
    The government decide to charge for access to the sun and wind and the industry get smart and cough up lots of money in political donations.
    How do they think the fossil fool industry got so powerful, it is called greasing the palms in some parlances.

  11. phill Parsons

    February 20, 2014 at 9:23 am

    illogical ideological idiots will say and do anything to remain in power as #4 demonstrates.

    If Australia had a media that was not under the thumb of their owner the government would not use such a banal excuse for ‘navigational errors’.

    The culture wars, the battle of ideas as it was once known, will test the loyalty of Howard’s battlers as Hockey reduces their entitlements and Abbott says what he does not mean.

  12. Keith Antonysen

    February 20, 2014 at 8:16 am

    No 2, davies, if Warburton had a qualification in climate science, then it is possible to suggest he is skeptical of man made climate change. However, as he does not have any qualification, he is a man created climate change denier.

    Otherwise, if Warburton can answer the questions I listed in the Murdoch thread, then he has credibility in being a climate change skeptic.

    http://oldtt.pixelkey.biz/index.php?/weblog/article/reassurance-from-rupert/show_comments

    It very clear that any kind of review that the Abbott gang have created are stacked with right wing extremists.

  13. Simon Warriner

    February 19, 2014 at 11:51 pm

    Yes John, you picked the navy thing dead right.

    The expectation that the navy cannot do with millions of dollars of navigational equipment what most $150 gps units will do if used correctly is an insult to the collective intelligence of the Australian people.

    If we had a media that took its role as a vital pillar of a functioning democracy seriously the twit would be laughed out of the country, and his entire cabinet with him.

  14. phill Parsons

    February 19, 2014 at 11:21 pm

    Some are able to decipher weasel words whilst others are more gullible.

    Those who still have doubt are out of step with the experts in the field and now with the governments of China and the USA who have agreed to work together to reduce emissions.

    With no credible alternative those who benefit from fossil fuels are left with resorting to a form of words that tell the other fossil fools they are on side and don’t want any of that renewable stuff.

  15. john hayward

    February 19, 2014 at 7:32 pm

    Tony doesn’t betray the slightest embarrassment at blatantly stacking an enquiry into an issue which virtually all educated and honest opinion regards as probably the most urgent problem facing humanity.

    Nor does he when claiming that the Navy could sail through its own radar,sonar, and GPS warnings six times “inadvertently”.

    This is no ordinary scoundrel/fool, and he’s hand-picked his team.

    John Hayward

  16. davies

    February 19, 2014 at 6:54 pm

    Clive Hamilton says “Dick Warburton, does not believe in human-caused climate change”.

    However, what Warburton has actually said is “he is sceptical that man-made carbon dioxide is the major cause of global warming”.

    Spot the difference? If the author cannot get get even the most basic information right then how accurate is the rest of the article?

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