Lethal Heating: 05/09/18

09/05/2018

Budget 2018 Was Old News For Energy Policy – The Next Big Headlines Won’t Come Until July

The Conservation - David Blowers

No money for new coal - and no change to the current situation for renewables, despite the treasurer’s claims. AAP Image/Dan Himbrechts

As with many previous budgets, matters relating to energy and climate change were relegated to little more than a footnote in Treasurer Scott Morrison’s 2018 budget speech. And even the contents of that footnote told us nothing new.
This will bring relief to some, but cause frustration for others.
No money was set aside for a new coal-fired power station, despite the plaintive calls from the backbench in recent weeks. Nor was there any extra help for consumers struggling with sky-high electricity bills. There was no extra funding for the government’s Emissions Reduction Fund, but neither was money cut from the Australian Renewable Energy Agency or the Clean Energy Finance Corporation.
What Budget 2018 did contain was three “announcables” – or, to put it more accurately, re-announcables.
First, Morrison declared that adoption of the federal government’s National Energy Guarantee would save the average household A$400 a year on its electricity bills. This is a bit of sleight of hand. Yes, modelling for the NEG shows that consumers’ bills will be on average A$400 lower than in 2017. But much of those savings will occur before the NEG comes into force in 2020.
Second, the treasurer declared that:

All energy sources and technologies should support themselves without taxpayer subsidies. The current subsidy scheme will be phased out from 2020.

The subsidies to which Morrison refers are from the Renewable Energy Target (RET). But it is hardly news that the scheme will to be phased out from 2020. This has been known for a decade. In fact, it’s a bit of a stretch to say the subsidies are being “phased out” at all.
After 2020, existing or new renewable energy projects will still be able to generate the same renewable energy certificates for every megawatt hour of electricity they produce, which they can then sell to retailers. The ability to generate certificates – and therefore generate a subsidy – will only end in 2030. The difference between the pre- and post-2020 RET is that there will be no annual increase in the target.
Finally, the treasurer pledged that the federal government will keep up the pressure on the big energy companies to give consumers better electricity and gas deals. This announcement is a signal as to when we can expect to see the next real action from the government on energy. It will come in July, when Morrison receives the report on the Retail Electricity Pricing Inquiry, which is being carried out by the Australian Competition and Consumer Commission (ACCC).
The Turnbull government will be keen to act on the ACCC’s recommendations, given the looming federal election and the pressure on all politicians to find a way to cut voters’ energy bills.
So if we want some real headlines on energy, rather than some reheated footnotes, we will be waiting for a couple of months yet.

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Turnbull’s Election Budget Dumps On Climate And Renewables

RenewEconomy - Giles Parkinson

AAP Image/Dean Lewins

What is widely regarded as the last budget to be delivered by the Turnbull government before the next federal election ceded no ground on climate policy, insisting that it’s much criticised emissions reduction targets would remain unchanged.
Budgets are not usually the platforms for changes in climate or energy policy, but they are an expression of the importance that the government of the day attaches to certain programs, its values and its priorities.
For the last few years, it has usually been just an opportunity for the Coalition government to steal from budgets – from ARENA, the CEFC and The Climate Authority and this budget appears no different.
The budget delivered by Treasurer Scott Morrison on Tuesday night found $15 billion for short term hand-outs to average wage owners and promised a $140 billion handout in the future for mostly high wage owners.
But it couldn’t find a cent for any emissions reduction policies, and its only comment on climate and energy was to flatly reject the idea that encouraging more renewables will deliver cheaper electricity prices, as the renewables target is forecast to do by 2020.
Instead, Morrison – the man who brought a lump of coal into parliament in the middle of a heatwave last year – mocked the very idea of renewables.
“We will maintain our responsible and achievable emissions reduction target at
26-28 per cent, and not the 45 per cent demanded by the Opposition. That would only push electricity prices up,” Morrison said.
“And we will not adopt the 50 per cent renewable energy target demanded by the Opposition that will also only put electricity prices up.”
Energy minister Josh Frydenberg nodded furiously in agreement. And that was that for the Coalition’s climate and energy vision.
Morrison even claimed annual power bills will fall by $400 on average for every Australian household from 2020 “following the introduction of our national energy guarantee.”
But even what he called the “National Energy Security Board” has made it clear that the vast majority of those reductions will come from the benefits of the renewable energy target the government has demonised.
Morrison then went on to say that “all energy sources and technologies should support themselves without taxpayer subsidies. The current subsidy scheme will be phased out from 2020.”
This is the reference to the RET, but as environmental groups point out, the diesel fuel rebate scheme is budgeted to cost $30 billion over from now till 2021, including $1 billion a year just to coal mining companies.
Meanwhile, spending on the environment has been cut further, with no new monies for the emissions reduction fund, leaving Australia on a path of increasing emissions and no policy to address even its own inadequate Abbott-era targets.
Environmental groups also noted that budget cut continued – most notable to the Department of Environment and Energy, whose funding lost another $169 million and whose funding by 2021-22 will be 43 per cent lower than when the Coalition took office in 2013.
The Climate Change Authority, the independent body that Abbot tried to kill after it dared point out that Australia needed to aim a lot higher to meet its Paris commitments, is further trimmed, losing another $550,000 to just $2.9 million – less than half its first budget in 2011.
“This is a reckless budget that actively encourages climate pollution, invests little in clean energy and slashes investment in Australia’s wildlife, forests and rivers,” said Kelly O’Shanassy of the Australian Conservation Fund.
“This is a values choice by the Turnbull Government to slash investment in the clean water, healthy country and safe climate that sustains all Australians.
Labor’s climate spokesman Mark Butler labelled it a disgrace, noting it also confirmed the removal of the energy supplement for older and vulnerable members of the community.
“This budget makes official what we already know; Malcolm Turnbull’s Government is failing to tackle crippling power prices, failing our international obligations under the Paris Agreement, and most importantly failing all future generations of Australians.”
The one bright spot?
The budget papers still include the $110 million promised for the Port Augusta solar tower and molten salt storage project in South Australia.
“The above figures incorporate the Government’s decision to make available up to $110 million for an equity investment, if required, to accelerate and secure delivery of a solar thermal project in Port Augusta, South Australia,” it says. But still no word on when.

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Budget 2018: Funding Cuts Put Paris Climate Goal Further Out Of Reach

Fairfax - Peter Hannam

Australia's 2030 Paris climate pledge will be harder to achieve after the Turnbull government ended funding to its "centrepiece" emissions policy and omitted spending on new carbon-cutting programs, analysts say.
Spending on climate issues is projected to drop from $3 billion in the current year - or 0.6 per cent of total spending - to $1.6 billion for 2018-19.
By 2021-22, the outlay will shrink further to $1.25 billion, or just 0.2 per cent of the budget for that year, the government said.
The $2.55 billion Emissions Reduction Fund [ERF], which was set up by the Abbott government to substitute for the carbon tax, was not topped up in this year's budget.

Australia signed up to the Paris climate accord in 2015, pledging to cut emissions by 26-28 per cent by 2030, compared with 2005 levels. Photo: AP

The lack of climate funding "is really, really distressing", Tim Baxter, a research associate at Melbourne University's Climate and Energy College, said. "This isn't the trajectory we need to be having right now - we need to be amping up, not winding down."
Climate change was also absent from Treasurer Scott Morrison's budget speech, save for a mention that Australia would "maintain our responsible and achievable emissions reduction target at 26-28 per cent [versus 2005 levels by 2030], and not the 45 per cent demanded by the opposition".
Labor's climate spokesman Mark Butler, said the government's climate and energy policies were "nothing short of a disgrace", and that Australia's emissions "will keep rising all the way to 2030".
"This budget delivers zero new policies or funding to drive down pollution and combat climate change," Mark Butler, Labor's climate spokesman said. "They are not even continuing their wasteful direct action program" he said, referring to the ERF.
Fairfax Media sought comment from Environment and Energy Minister Josh Frydenberg.
The onus to find fresh sources for emission cuts has increased, given the government's insistence that the electricity sector - accounting for about one-third of total carbon pollution - should only meet a 26 per cent reduction out to 2030.

The electricity sector accounts for about a third of Australia's greenhouse gases.

That target, embedded in its signature National Energy Guarantee, is considered to be unnecessarily low even by major electricity companies because of the availability of increasingly competitive renewable sources of power.
"To reach our Paris goals we're going to need to see considerable investment elsewhere in the economy, " Mr Baxter said. "This budget has done nothing to provide for that."
Under Paris, Australia has agreed to reach net-zero emissions by the second half of this century as part of the international pact to avert dangerous global warming.
"There are certain areas of our emissions that will be considerably more difficult to deal with, whether it's fugitives or transport," Mr Baxter said. "We don't actually have a road map to getting to zero in those sectors of the economy."
Most of the ERF money has been allocated, with much of it going to the rural sector to encourage carbon sequestration in vegetation and soils.
Large-scale land-clearing in Queensland and an increase in NSW will most likely have increased emissions from the land in recent groups, the Queensland government and environmental groups say.

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