Lethal Heating: 10/22/17

22/10/2017

Behind Closed Doors At The Energy Briefing: A Rocky Start To Turnbull's Energy Pitch

Fairfax - Peter Hannam

There was a moment of stunned silence at a hastily arranged teleconference of energy ministers on Tuesday evening, just hours after the government's long-awaited electricity scheme had been released.
Some of those present at the meeting – described as "testy" by several participants – had requested more detail on the plan. All they had received were two briefing papers – 12 pages in total – and a media release.

PM's policy sell

Amid opposition from State leaders over the government's new energy policy, Malcolm Turnbull has some work to do, to get them to agree.

But Environment and Energy Minister Josh Frydenberg told the ministers, "You all have everything I have".

"There was a startling lack of detail and information," Queensland's Labor Energy Minister Mark Bailey said. "That's a small amount [of detail] for such an important issue."
"What we were given was not undercooked – it hadn't even seen the inside of an oven," said a senior energy official who was on the call.
While Prime Minister Malcolm Turnbull had succeeded in steering his plan through the Coalition party room, it soon hit the shoals of state and territory opposition.
The 45-minute meeting of energy ministers had begun in chaotic fashion with Frydenberg excusing himself briefly for a Parliament division, and handing over the conference to Kerry Schott, the chair of the Energy Security Board.
"Kerry Schott said the plan was very conceptual and needed a lot of work from COAG," said Shane Rattenbury, the energy minister in ACT's Labor-Greens government.

Energy Minister Josh Frydenberg and Prime Minister Malcolm Turnbull with energy regulators at Tuesday's press conference. Photo: Alex Ellinghausen

"Desperate'

Illustration: Matt Golding.

Rattenbury compared the proposal – which requires electricity retailers to ensure yet-to-be-determined levels of emissions reduction and reliability – to the eight-month effort behind the Finkel Review, led by chief scientist Alan Finkel.
Finkel held meetings around Australia, journeyed to the US and Europe for research, assembled an expert panel and conducted modelling for a Clean Energy Target, "in a perfectly plausible and practical way", Rattenbury said.
"Now it's been ditched for something pulled together in two or three weeks. It shows how weak this proposal is and how desperate [the Turnbull government] is.
Frydenberg declined to comment on the teleconference, but said the scheme relied on "the best advice from experts".
"We are seeking to implement the [plan] to deliver a more affordable and reliable energy to Australian households and businesses," he says.

Business backing
The proposal has some support from the business community, keen for the end of partisan "climate wars".
"The more we look at it, the more comfortable we are with it," one executive at a major retailer told Fairfax Media.
Bloomberg New Energy Finance, a respected consultancy, also found the scheme "innovative and elegant", saying it could steer as much renewable energy into the market by 2030 as the 42 per cent share envisaged by the Finkel Review.
And even federal Labor is indicating it has left the door open to accepting a plan that the Prime Minister calls "game changing". Even so, the lack of a regulatory impact statement for so wide-ranging a policy shift is just one of the concerns within Labor.

'Fundamentally opposed'
But it is up to the states and territories to approve any plan since COAG consensus is needed for changes of this scope. A quirk in the way the National Electricity Market was set up means it must also pass through the South Australian legislature.
South Australia's Labor Premier Jay Weatherill has been the most outspoken, telling the media on Thursday, "We're not going to support this because it reduces incentives and support for renewable energy".
"It cuts our state-based renewable energy target and it subsidises the coal industry at the expense of renewable energy," he said. "At a fundamental level, we're opposed to it."
Lily D'Ambrosio, Victoria's Labor Energy Minister, was also highly critical. "[Turnbull's] modelling is dodgy and his claims about reducing power prices [by $100-$115 a year for average consumers] can't be believed," she said.
Ministers from Coalition-led NSW and Tasmania were largely silent in the Tuesday call, several Labor counterparts said. NSW Energy Minister Don Harwin declined to comment.
"He's not really saying anything, and as the energy minister from the biggest jurisdiction, that's odd," one of the officials present on the Tuesday call said. "But it's not like they're cheering about what the feds are doing."

'Monumental' task
The mood of the states and territories wasn't helped, either, with Frydenberg giving them just 24 hours to comment on the modelling the Turnbull government wants Schott and the board to complete by November 13.
Analyst Dylan McConnell from Melbourne University said the proposal suggests the Australian Energy Markets Commission would have to complete a "monumental" amount of work, effectively redoing the Finkel modelling.
Another likely bone of contention for the states will be Frydenberg's request to model the impact of the Snowy 2.0 pumped hydro scheme – still little more than an incomplete feasibility of a scheme that could cost $4 billion – while all of their various renewable energy targets have been omitted.
"Assuming Snowy Hydro will be operational in the period is more than optimistic," one Labor insider said. "I get [the need to model] a sensitivity, but in the main policy case, as seems to be implied - [but] that's putting a lot of faith in a project that hasn't passed any assessment phase."
"The government is adamant that the NEG is cheaper than an Energy Intensive Scheme or a Clean Energy Target," he said, referring to two policy options dismissed by the Turnbull government. "You'd think this is the opportunity to prove that claim."

'Awkward'
The manner of the Turnbull government's approach to the energy plan has also raised concerns about the use of public servants. The Energy Security Board, set up as one of the agreed recommendations of the Finkel Review – was on its first public outing.
"It's unfair to compromise these highly regarded public servants to seek a fix to [Turnbull's] own internal issues," one senior state official said. "This work is not part of [the board's] terms of reference."
Bailey, Queensland's energy minister, agrees: "The Turnbull government has put the board in an awkward position."

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How Rooftop Solar Is Saving Billions On Energy Bills For All Consumers

RenewEconomy - Giles Parkinson

A major new study has underlined the crucial role played by rooftop solar in moderating energy prices: without it, the study says, the aggregate cost of electricity would have been several billion dollars higher over the past year.
The study by Energy Synapse, commissioned by the community lobby group Solar Citizens, reinforces previous estimates of the broad benefits of the more than 6GW of rooftop solar installed on more than 1.7 million household and business rooftops.
That capacity is ,often demonised by vested interests as “free-loading” on the network and other consumers, but the study proves otherwise.
It notes that in NSW alone the savings from rooftop solar – by reducing demand at crucial times and challenging the dominance of the big generators in the wholesale market – were between $2.3 billion and $3.3 billion in the 12 months to April, 2017.
That’s how much the wholesale price is lowered from what they would have been if rooftop solar was not present in the market. Even though rooftop solar only provides 2 per cent of total generation, the study found it clipped prices by $29-44/MWh – up to 50 per cent higher than the actual price.
That stands to reason. Major generators have long complained about how solar is “clipping their margins”, and networks have also underscored the other major finding of the Energy Synapse study by pointing out that rooftop solar is narrowing and lowering the periods of peak demand.
Mark Byrne, from the Total Environment Centre, points that if the estimates are right, then the benefits to all energy consumers each year are twice the cost of the up-front support for rooftop solar, in the form of rebates and the STC market.
“That means all consumers got a return of at least double their investment in a single year – and the beauty of solar is that it should keep delivering benefits for an average of 20 years,” Byrne says.
“That’s a massively good investment in constraining wholesale prices for all consumers, including those without their own PV. And the returns in respect of merit order impacts will get better as more people put solar on west facing roofs and install solar batteries.”
It is also important in the context of Australia’s energy debate. The Coalition government appears poised to release a new policy designed to inhibit the roll out of at least large scale renewables, despite even the Australian Competition and Consumer Commission finding that more competition would likely cut prices.
The ACCC report was a perfectly times riposte to the Coalition and conservative argument that renewables are forcing up prices.
“The consumer watchdog has belled the cat. Power prices are going through the roof because big companies are gaming the system, not because of renewable energy targets,” said The Greens energy spokesman Adam Bandt.
But the ACCC report – commissioned by the Coalition government – is breathtaking in its cynicism of what can and should be done about it.

Its major findings – that the absurd cost of electricity paid for by consumers is the result mostly of the “gold plating” of the network, followed by soaring wholesale prices and retail costs – is not new. Environmental schemes account for just 7 per cent of the total bills (see bill above).
ACCC chairman Rod Sims says the high costs – they have risen by 63 per cent more than the cost of inflation over the last decade – is because customers are effectively getting screwed by the networks and the generators and retailers.
But then, extraordinarily, he says nothing can be done.
He defends the actions of the big generators as “rational, profit maximising behaviour” that is “consistent with the National Electricity Rules (NER)”.
Of the network costs (which account for half household bills and largely explain the difference between Australia and other countries) Sims says these are “locked in”, refusing to countenance the argument that may be the network should take a write-down on the value of what he admits are their over-inflated asset bases.
In fact, the only measure that ACCC appears to recommend is for the government NOT to introduce a Clean Energy Target, despite the pleas of the Finkel Review and everyone apart from people associated with the Coalition, the Minerals Council of Australia and the Institute of Public Affairs.
The ACCC report itself recognises that increased competition from renewables is one of the principal ways to help reduce prices and challenge the incumbents. But Sims argues against this, saying that the costs of such initiatives are “smeared” across the consumer base.
This has been the argument of the incumbents for the best part of the decade, and it is truly shocking and disturbing, but not unexpected, that Australia’s main pricing regulator should repeat them.
Like so many other regulatory assessments, it ignores the considerable benefits of renewables, and rooftop solar in particular, and the fact that these considerable benefits are also “smeared” across the consumer base.
Energy Synapse’s analysis shows that rooftop solar mitigates prices because of the “merit order effect” – by creating electricity at zero marginal cost, it moves the “bidding stack” to the left and lowers prices.
Anyone doubting the ability of small amounts of demand can influence prices need only look at the Australian Energy Regulator reports which highlights how the big generators game the FCAS markets, pushing “availability” down just one MW below requirements so only high prices capacity comes into the market.

The most significant impact is felt in summer (see graph above), when the generators are at their most rampant, pushing up prices in the face of soaring demand in the summer heat as air-conditioners are switched on and gas and coal fired capacity is withdrawn or fails due to heat stress.
But small scale solar is also saving money on most days. This graph below illustrates an average day in NSW.
“It is worth noting that small solar was able to continue to put significant downward pressure on prices in the late afternoon around 4pm, even though the output of these systems was only at about 40% of max generation,” the report says.

There is one potential gremlin in the system – around 6pm. The report explains:
“The other interesting point is that our lower estimate for the 6pm Trading Interval shows an average price reduction of -$12/MWh, meaning that small solar could have produced a higher price (and hence increased cost) in this interval.
“This is due to our adjustment of bid stacks at high levels of demand to account for peaker plants operating for more hours. Despite this one Trading Interval, the overall effect of small solar PV is to significantly reduce wholesale pricing.”
Byrne points out that even if the Energy Synapse estimate is out by a factor of two, it still represents an extraordinarily good return for the rooftop solar support scheme.
One other graph from the ACCC that is worth noting is the average spot price on state-based wholesale electricity markets over the past decade.
As has often been said, but rarely recognised, South Australia’s high wholesale prices are historical, and pre-date the state’s big push into renewables. In 2007, the state’s electricity prices were nearly double that of other states – and that’s before it had any significant wind power.
That renewable capacity added in subsequent years actually helped moderate prices, and they have only jumped in the last two years – as in other states – when the big generators exercised their unfettered market power.

That renewable capacity actually helped moderate prices, and they have only jumped in the last two years – as in other states – when the big generators exercised their unfettered market power, or as Sims prefers to describe it – acted in an economically “rational” manner.

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Portuguese Kids Hit Climate Lawsuit Crowdfunding Milestone

Climate Home - Megan Darby

Following the second bout of deadly forest fires this year, seven children are preparing to sue for stronger climate action through the European Court of Human Rights

Portuguese youth plaintiffs, from left to right: Simão and Leonor; Cláudia, Martim and Mariana; André and Sofia (Photos courtesy of GLAN)

Seven Portuguese children have hit their initial fundraising target to bring a climate lawsuit through the European Court of Human Rights.
A crowdfunding drive on Crowd Justice raised £20,000 ($26,000) in its first month for preliminary legal work. Global Legal Action Network (GLAN), which is coordinating the effort, has set a new “stretch target” of £100,000.
Mariana (5), Leonor (8), André (9), Simão (11), Sofia (12), Martim (14) and Cláudia (18) are lining up to sue multiple governments for stronger climate action. Their surnames have not yet been released.
It comes as the death toll in Portugal from forest fires in June and October exceeds 100. The extent and severity of the wildfires has been linked to global warming.
“What worries me the most about climate change is the rise in temperatures, which has contributed to the number of fires taking place in our country,” Cláudia said in a statement.
She added that “older generations should invest in controlling more effectively the amount of dangerous gases that are released into the atmosphere” and that she was “taking in this case for the children and for the future generations who are not responsible for the current state of the environment”.
GLAN and barristers from London’s Garden Court Chambers acting on behalf of the children plan to argue inadequate climate policies jeopardise their human rights, primarily the right to life.
“We will be arguing that the court must base its conclusions as to the extent of the emissions cuts which each state we sue must make on the available climate change science,” said Gerry Liston, legal officer with GLAN.
As well as deeper emissions cuts, the legal team will be calling on governments to keep fossil fuels in the ground.
The 47 countries signed up to the European Court of Human Justice are responsible for 15% of global emissions.