24/02/2017

Tackling Climate Change Conservatively: How A Republican Calls For Action In The Trump Era

ABC News - Patrick Wood

Bob Inglis is on a mission in Australia to convince conservatives to combat climate change. (Supplied: RepublicEn.org)
Bob Inglis was a Republican Congressman, which to him meant one thing: "Climate change was nonsense."
It was the mid '90s and the representative from South Carolina says he didn't know anything about climate change except that it was something for the other side of politics to fuss over.
"I was just from the reddest district in the reddest state in the nation and it seemed that that was the business of the other tribe," he said.
Fast forward to 2004 and Mr Inglis was preparing for yet another run at office when his eldest son, who was about to vote in his first election, approached him.
"He said to me, 'Dad I'll vote for ya, but you're gonna clean up your act on the environment'."
"It was the first of a three-step metamorphosis for me."
The next two steps in Mr Inglis's transition from critic to climate action champion were visits to Antarctica and Australia's Great Barrier Reef.
These trips, and discussions with scientists along the way, convinced him there was a serious problem with the environment that had to be fixed.
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He rushed back to the US and promptly introduced a bill to put a tax on combustible fossil fuels.
It promptly fell flat and he promptly lost his seat in Congress.
That was 2010.
Since then Mr Inglis has become a fierce advocate of action on climate change, but with a very specific focus: to tackle the problem with policies that are true to conservative principles, and in so doing convince his fellow Republicans they should get on board.
And he's brought that message to Australia, where he is currently touring the country to speak at public forums as well as with political and business leaders.
"I'm trying to help conservatives to overcome their inferiority complex," he said.
"We apparently think we're no good when it comes to energy and climate."
Mr Inglis tracks the split between the left and right on climate change in the US back to the global financial crisis, which broke in 2008.
He said prior to that former US Republican president Ronald Reagan had success with the Montreal Protocol to address the hole in the ozone layer, and George HW Bush introduced a cap-and-trade program to address acid rain.
"But then came the great recession, and some people with some vested interests created a wave of publicity that built on to the very high tide of distrust and discontent in America, particularly in the right, and that wave came over the sea wall and shorted out all of the climate change equipment," he said.
"So really we've been bailing ever since and trying to rewire."

What are the conservative answers?
Mr Inglis is certain conservatives can take the lead on addressing climate change, and that the answer is policies based around ideas of free enterprise, limited government and accountability.
He has established a group, RepublicEn.org, which proposes environmental tax reform in the US.
Specifically, the group wants to eliminate all subsidies for all fuels and "make all fuels fully accountable for all of the costs they bring upon society."
This would mean taking into account the health costs and any damage to the environment.
"So if you made it so the incumbent fuels could no longer subsidise their soot by spreading it all across society and made them accountable for that, well yes the price of their electricity would go up, but not artificially, it would go up to its actual cost," he said.
"So if you put all of the costs in on all of the fuels … then consumers, in the liberty of enlightened self-interest, would seek cleaner, better fuels.
"Then in the free enterprise system, on a level playing field, innovation will happen."
Mr Inglis is not alone in his mission to spread a conservative case for climate action.
Another conservative lobby group, the Climate Leadership Council, has recently formed and includes veteran Republicans who propose a four-point plan to reduce carbon dioxide emissions, including the introduction of a carbon tax.
The council met with White House officials earlier this month to propose replacing nearly all of Barack Obama's climate policies with a carbon tax starting at $40 a tonne. It's something Mr Inglis is keen to follow.


Bob Inglis on Radio National

What hope do these ideas have under President Trump?
President Donald Trump's recent moves on environmental policies, as well as his previous comments on climate change, suggest a shift away from regulations and a renewed focus on fossil fuels.
The man he chose to head the Environmental Protection Agency, Scott Pruitt, is a known critic of the agency's regulations, having filed 14 lawsuits against the EPA during his time as Oklahoma attorney-general. One of them was over the EPA's attempt to limit carbon emissions from coal-fired power plants.
And the White House website's current statement on energy policies says "the Trump Administration is also committed to clean coal technology, and to reviving America's coal industry, which has been hurting for too long."

Scott Pruitt questioned on climate change in confirmation hearing (ABC News)

Nevertheless, Mr Inglis said he remained hopeful President Trump would be open to his ideas.
"I don't for a minute think that Donald Trump actually believes that it's a Chinese hoax and conspiracy, he's clearly playing to the crowd," he said.
"Admittedly it's a 'bank shot', but there's a chance that he might decide to complete the sentence this way: 'Richard Nixon went to China; Bill Clinton did welfare reform; Donald Trump did climate change'."
For now, Mr Inglis takes heart seeing young conservatives joining the environmental cause and embracing principles that speak to their beliefs.
For him, it's a sign the right is ready to rejoin the discussion.
"I see it on talk radio in America, where on first hearing they're sceptical, but then they hear it in their own language," he said.
"They don't hear a progressive talking, they hear a conservative using conservative language, and that moves them."

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SA Electricity Problems Solved With Solar Battery Storage

Eco News - David Twomey


The company behind a $100-million solar plant with battery storage has said its project could solve South Australia’s energy woes as Australia’s conservative Liberal-Nation government announces a $445,000 investment into a pumped hydro-station for the state.
South Australia’s power supply has been scrutinised since the state was plunged into darkness last September, and was recently forced to “load shed” during a recent heatwave.
South Australian-based renewable energy company Zen Energy is working to build a $100-million solar power plant with 100 megawatt (MW) of battery storage in the region.
Chairman Professor Ross Garnaut said the battery would “solve most” of the state’s energy problems and if increased by a further 50MW it would solve “all” energy issues.
“The blackouts of the past year would not have happened if this was in place,” he said.
We think that it can make a major contribution both to grid stability and also to provide a buffer for when peak demand for power exceeds supply from other sources.”
However, Professor Garnaut said “arcane” rules and pricing in the national electricity market needed reform in order for the project to be viable.
He met with South Australian Labor Premier Jay Weatherill today to discuss the regulatory hurdles that he hoped could be removed by the Council of Australian Governments (COAG).
He said they already had financial backing for the project, which meant it could be in operation by next summer if restrictions were loosened.
“Our biggest hope is for reform of the arcane rules of the national electricity market which are standing in the way of a secure energy future; it’s one of the most regulated sectors in the Australian economy,” Professor Garnaut said.
“All electricity generators and users bid every five minutes for the price but then they average the price over half an hour.
“It makes life very difficult for a battery that can respond very quickly and it takes away some of the advantages of the battery.”
Energy Australia also received $450,000 from the Australian Renewable Energy Agency (ARENA) today to develop a pumped hydro-power station in the Upper Spencer Gulf.
Pumped hydro generates power by releasing water from a dam through turbines to a lower dam when there is high demand and pumping it back to the top at off-peak times.
The Liberal-National government said the project would store power and help stabilise the grid.
Mr Weatherill has previously touted the idea of breaking away from the national electricity market.
However, Professor Garnaut said reforming the national system would be a better option for South Australia.
Mr Weatherill said work was progressing on the state government’s energy plan which would recommit to a 50 per cent renewable energy target.
“We’ve got people beating down our doors promoting renewable energy projects which includes storage,” he said.
“The long-term future is renewable energy associated with storage which will secure the future of our energy sector here in this stage and also the nation.”
Mr Weatherill said the government would release its energy plan “soon” but the Liberal-National state opposition has accused the government of not having a plan.

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State Of Solar 2016: Globally And In Australia

Climate Council - Andrew Stock | Greg Bourne

Solar power is surging in Australia and around the world, on the back of scaled-up production and continually falling costs.
Our new report finds that the solar rollout will continue to go gangbusters this year, with more than 20 industrial-scale installations set to go ahead across the country, and another 3700 megawatts in the pipeline.

KEY FINDINGS

1. Globally, solar photovoltaic (PV) power is surging on the back of scaled-up production and continually falling costs.
  • 70GW (projected) of new solar power capacity was added globally in 2016, breaking last years’ (2015) record of 50GW capacity added.
  • China (34.2GW), the United States (13GW) and Japan (10.5GW) continued to lead with the most solar PV capacity added.
  • The solar sector employs 2.8 million people globally, outnumbering coal jobs. In the United States, solar now provides twice as many jobs as coal.
2. Solar costs are now so low that large, industrial-scale solar plants are providing cheaper power than new fossil and nuclear power.
  • Solar costs have dropped 58% in five years and are expected to continue to fall by a further 40-70% by 2040.
  • Electricity prices from new coal power stations could rise to A$160 per megawatt hour, while solar parks are around $110 per megawatt hour and are expected to come down significantly in price over time.
3. Australia remains a world leader in household solar
  • The cost of solar power is now well below the retail power prices in Australian capital cities, and continues to fall. The exception is the ACT which has the lowest retail prices in Australia.
  • Australia adds more solar power every year than the combined capacity of South Australia’s (recently closed) Northern and Playford coal-fired power stations.
  • Over 8000 Australians are now employed in solar and solar has the potential to create thousands more jobs as it grows.
4. 2017 will be a huge year for large-scale solar in Australia.
  • Larger solar PV installations are already taking off in Australia – on airports, mines, healthcare facilities and businesses.
  • In 2017 over 20 new large-scale solar projects will come online. A further 3,700 MW of large-scale solar is in the development pipeline (roughly equivalent to three coal fire power stations).
  • Australia is expected to reach over 20GW of solar PV in the next 20 years, equivalent to about a third of Australia’s current total power generation capacity.
5. A range of energy storage technologies will complement the growth of solar power providing secure, flexible power.
  • Solar and battery storage for households and businesses is already gaining traction in Australia – with more than 6,500 households installing the technology. Uptake is expected to triple in 2017.
  • Large-scale developments such the Lakeland solar and battery storage project and the Kidston solar and pumped hydro project (both in North Queensland) are demonstrating the potential of combining large-scale solar and energy storage technologies.
  • The Victorian Government is seeking expressions of interest to build a large scale battery storage facility in western Victoria to improve grid stability.

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23/02/2017

The Age Of The Giant Battery Is Almost Upon Us

Bloomberg - Joe Ryan | Brian Eckhouse

Photographer: Chris Ratcliffe/Bloomberg
  • Prudential, Investec among lenders financing storage projects
  • Falling prices and long-term contracts making storage bankable
The idea that giant batteries may someday revolutionize electrical grids has long enthralled clean-power advocates and environmentalists. Now it's attracting bankers with the money to make it happen.
Lenders including Investec Plc, Mitsubishi UFJ Financial Group Inc. and Prudential Financial Inc. are looking to finance large-scale energy-storage projects from California to Germany, marking a coming-of-age moment for the fledgling industry. The systems help utilities solve a longstanding clean-power conundrum: managing the unpredictable output from wind and solar farms, and retaining electricity until it's needed.
Battery costs have declined 40 percent since 2014 and regulators are mandating storage technology be added to the grid. That's encouraging utilities to offer longer contracts and developers are expected build $2.5 billion in systems globally this year. These trends are changing the risk profile, giving lenders confidence in batteries in much the same way that power-purchase agreements opened banks' doors years ago for wind and solar power.
"Having big money come in is the first step to widespread deployment," Brad Meikle, a San Francisco-based analyst for Craig-Hallum Capital Group LLC, said in an interview.
That's a shift from many of the storage projects we've seen to date as expensive components and unproven revenue potential made commercial lenders leery. Developers typically have financed systems from their own balance sheets, cobbling together revenue from short-term utility contracts or wholesale electricity markets.
"We see an opportunity in the space," Ralph Cho, Investec's co-head of power for North America in New York, said in an interview. "We're attempting to be a first mover."
Storage contracts to date in the U.S. and Canada rarely exceeded three years, said Bryan Urban, head of North American operations for the Yverdon-les-Bains, Switzerland-based storage developer Leclanche SA. Now utilities are signing agreements for three to seven years, and sometimes as long at 10 years, he said. And in the U.K., National Grid Plc is signing four-year contracts for storage services.

'Uncertain Revenue'
"Instead of these short uncertain revenue streams, you now have longer-term contracts that investors can get behind," said Logan Goldie-Scot, head of energy storage analysis at Bloomberg New Energy Finance in London.
The industry still faces significant hurdles. While costs have fallen, batteries are still an expensive way to manage electricity. Developers have little data to demonstrate how their systems will perform over time. Also, existing rules for wholesale power markets were mostly written for traditional equipment that generates and delivers electricity, and the industry is still developing market mechanisms to determine how to value and pay for storage systems that offer different functions.
The market is fragmented with a variety of different technologies, including lithium-ion batteries, flow batteries and flywheels. They have different capabilities and developers offer different types of services. They can smooth the flow of power on the grid, absorbing power when there's too much and delivering needed jolts when demand spikes.
That means the industry is still figuring out the best uses for storage systems, and banks don't want to wind up backing the Betamax of storage. Plus, several one-time high flyers ended up filing for bankruptcy in recent years -- remember A123 Systems Inc., Xtreme Power Inc. and Beacon Power Corp. -- leaving lenders gun shy.
The most important business stories of the day. Utilities have been experimenting with energy storage for decades, and while momentum has been slow, it's starting to take off. It took 30 years to install enough systems to add up to a gigawatt, and Sekine expects 1.7 gigawatts expected to go into service in 2017 alone. State regulators are a key driver, with California ordering utilities to install at least 1.3 gigawatts of storage by 2020, and Massachusetts on track to set its own targets by July.

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Government 'Clean Coal' Push Would Be Likely To Make Australia's Emissions Worse

The Guardian - 

Coalition plan for more efficient coal plants could well increase emissions in a sector that is the second most polluting in the developed world
Once the Hazelwood power station in Victoria closes, there will be a significant improvement in Australia’s electricity supply emission intensity. Photograph: David Crosling/AAP
The government has indicated it will act to allow the Clean Energy Finance Corporation to finance new coal-fired power plants on the basis that these coal plants have lower emissions than existing coal power plants.
While such power plants may have lower emissions than Australia’s ageing and extremely inefficient existing coal plants, they would most likely increase Australia’s emissions rather than decrease them. And this is in a context where Australia’s electricity supply is the second most polluting in the developed world (beaten only by Estonia).
The new coal power plants the government is promoting as clean emit around 700kg to 750kg of CO2 for every megawatt-hour of electricity they produce. Is that really worthy of the term “clean” and would it help reduce our emissions?
To help you judge, the chart below shows how such a power plant compares to the emissions intensity of not just Australia’s existing coal plants and also Australia’s overall grid’s emissions intensity in 2016 (taking into account the power it also gets from gas, hydro, wind and solar). On that basis the plant looks somewhat cleaner. But is that the right benchmark?
With the closure of the Hazelwood coal-fired power station shortly, there will be a significant improvement in Australia’s electricity supply emission intensity. In addition, by 2022, which is probably the earliest point a new coal power plant could be built, Australia will have added a significant amount of new zero-emission power plant capacity from wind and solar to meet the renewable energy target.
Using the government’s own analysis of future emissions based on existing policies, our grid’s emissions will be lower than these so-called clean coal power plants.
As some added context the chart also shows the emissions intensity of a new baseload gas power plant and also the grid emissions intensity of electricity globally and in North America and Europe.
Illustration: Tristan Edis/Green Energy Markets 
So the government’s plan for the Clean Energy Finance Corporation to fund new coal plants would most likely make Australia’s emissions worse. And by international benchmarks it looks appallingly emissions intensive.

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The Climate Bombshell The Politicians Didn't Touch

Fairfax - Michael Pascoe

Never mind the politicisation of energy and carbon policy – the market and legal system is moving rapidly to instil the discipline and punishment the government isn't game to discuss.
That was the core of the climate change bombshell dropped by the Australian Prudential Regulation Authority on Friday. The policy vacuum will be filled by the personal liability of company directors and the disclosure requirements of financial regulators.
APRA's Geoff Summerhayes highlighted the potential exposure of banks' and insurers' balance sheets to real estate impacted by climate change and to re-pricing or even 'stranding' of carbon-intensive assets in other parts of their loan books. Photo: Jonathan Carroll
If the ABC's Insiders program and the federal Environment and Energy Minister, Josh Frydenberg, are any guide, Canberra hasn't yet grasped the importance of the speech by APRA executive board member, Geoff Summerhayes, to the Insurance Council of Australia forum.
In keeping with the Paris Agreement Australia has signed and the Financial Stability Board's (FSB) policy development, APRA leaves no room for climate sceptics. Both the obvious physical and perhaps less obvious "transition" risks of climate change are real and present dangers to the financial system APRA is charged with safeguarding.
And it's the transition risks of moving to a low-carbon economy that Summerhayes fingered as being particularly important for financial entities. APRA and its international counterparts fear the impact on banks, superannuation funds and asset managers of changes in policy, law, markets, technology and prices that are part of the agreed transition to a low-carbon economy.
Spare a thought here for the board of the Northern Australia Infrastructure Facility (NAIF) as it considers Adani's application for a billion-dollar loan to build a railway from the Galilee Basin to the Queensland coast. While being lent on by pro-coal government members, NAIF directors would do well to consider why Australia's banks seem to have no interest in financing the line. It's not just a green PR issue – it's the danger of being left with a stranded asset and directors being personally liable.
Summerhayes quoted legal opinion that it's only a matter of time before directors who fail to properly consider and disclose foreseeable climate-related risks are held personally liable for breaching their statutory duty of care and diligence under the Corporations Act.
The same consideration would weigh heavily on Clean Energy Finance Corporation (CEFC) directors if the government changes the legislation to allow CEFC to lend to new coal-powered electricity generators.


APRA's blunt climate change warning
The Australian Prudential Regulation Authority's very blunt warning of the obvious physical risks and transition risks of moving to a low-carbon economy. Michael Pascoe comments.

Summerhayes noted that much of the early focus on climate change risks had been on insurance firms and their exposure to losses from increasingly frequent and severe natural disasters, but there were a variety of other potential issues.
"These include the potential exposure of banks' and insurers' balance sheets to real estate impacted by climate change and to re-pricing or even 'stranding' of carbon-intensive assets in other parts of their loan books," he said.
"They also include exposure of asset owners and managers – an important consideration given the size of Australia's superannuation sector and its heavy weighting towards carbon-intensive equities and a relatively resource-intensive domestic economy."
Frydenberg on Sunday gave the impression the government was determined to bet Australia's energy future on the coal industry finding a way to make carbon capture and storage (CCS) economically viable.
The policy vacuum will be filled by the personal liability of company directors and the disclosure requirements of financial regulators.
Given the Coalition's refusal to price carbon so as to give CCS here even a small chance of success, that looks as sensible as an individual betting their financial future on winning OzLotto. That sort of policy response, driven by the coalition's internal ructions, climate sceptics and concentration on simplistic immediate "hip pocket" politics, contrasts with broader forces APRA comprehends.
APRA's view is that the Paris Agreement provided a very reliable signal that policy and regulatory efforts would intensify.
"The transition now in train could potentially lead to significant repricing of carbon-intensive resources and activities and reallocation of capital," Summerhayes said.
"This process will be highly sensitive to changes in regulation, technology, the physical environment and behaviour by investors and institutions – and interrelated perceptions and sentiment about all of the above. Inevitably, even under a sanguine view of how smoothly this transition happens, there will be systemic impacts and implications that have to be carefully monitored."
The Summerhayes speech is APRA's first public stand on climate change. It has not rushed to it, coming nearly two years since the G20 asked the FSB to consider climate change risks and more than a year since the board established its task force on climate-related financial disclosures.
It's in step with the insurance industry increasingly finding its voice on climate change issues after going a little quiet during the Abbott government days of overt climate scepticism.
In another context at the same ICA conference, ASIC chairman Greg Medcraft spoke about the legal licence tending to follow the social licence. On the risks and financial impact of climate change, it seems the market and legal judgments will proceed without political leadership.

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22/02/2017

Labor’s Climate Policy Could Remove The Need For Renewable Energy Targets

The Conversation - 

A strong, certain price signal could see the dawn of a new period of investment in renewables. EPA/NIC BOTHMA
The federal Labor Party has sought to simplify its climate change policy. Any suggestion of expanding the Renewable Energy Target has been dropped. But there is debate over whether the new policy is actually any more straightforward as a result.
One thing Labor did confirm is its support for an emissions intensity scheme (EIS) as its central climate change policy for the electricity sector. This adds clarity to the position the party took to the 2016 election and could conceivably remove the need for a prescribed renewable energy target anyway.
An EIS effectively gives electricity generators a limit on how much carbon dioxide they can emit for each unit of electricity they produce. Power stations that exceed the baseline have to buy permits for the extra CO₂ they emit. Power stations with emissions intensities below the baseline create permits that they can sell.
An EIS increases the cost of producing electricity from emissions-intensive sources such as coal generation, while reducing the relative cost of less polluting energy sources such as renewables. The theory is that this cost differential will help to drive a switch from high-emission to low-emission sources of electricity.
The pros and cons of an EIS, compared with other forms of carbon pricing, have been debated for years. But two things are clear.
First, an EIS with bipartisan support would provide the stable carbon policy that the electricity sector needs. The sector would be able to invest with more confidence, thus contributing to security of supply into the future.
Second, an EIS would limit the upward pressure on electricity prices, for the time being at least.
These reasons explain why there was a brief groundswell of bipartisan support for an EIS in 2016, until the Turnbull government explicitly ruled it out in December.

Moving targets
Another consideration is whether, with the right policy, there will be any need for firm renewable energy targets. This may help to explain Labor’s decision to rule out enlarging the existing scheme or extending it beyond 2020.
If we had a clear policy to reduce emissions at lowest cost, whether in the form of an EIS or some other scheme, renewable energy would naturally increase to whatever level is most economically efficient under those policy settings. Whether this reaches 50% or any other level would be determined by the overall emissions-reduction target and the relative costs of various green energy technologies.
In this scenario, a separately mandated renewable energy target would be simply unnecessary and would probably just add costs with no extra environmental benefit. Note that this reasoning would apply to state-based renewable energy policies, which have become a political football amid South Australia’s recent tribulations over energy security.
An EIS is also “technology agnostic”: power companies would be free to pursue whatever technology makes the most economic sense to them. Prime Minister Malcolm Turnbull explicitly endorsed this idea earlier this month.
Finally, an EIS would integrate well with the National Electricity Market, a priority endorsed by the COAG Energy Council of federal, state and territory energy ministers. State and territory governments may find this an attractive, nationally consistent alternative that they could support.

Strengths and weaknesses
A 2016 Grattan Institute report found that an EIS could be a practical step on a pathway from the current policy mess towards a credible energy policy. Yet an EIS has its weaknesses, and some of Labor’s reported claims for such a scheme will be tested.
In the short term, electricity prices would indeed rise, although not as much as under a cap-and-trade carbon scheme. It is naive to expect that any emissions-reduction target (either the Coalition’s 26-28% or Labor’s 45%) can be met without higher electricity costs.
Another difficulty Labor will have to confront is that setting the initial emission intensity baseline and future reductions would be tricky. The verdict of the Finkel Review, which is assessing the security of the national electricity market under climate change policies, will also be crucial.
Despite media reports to the contrary, Chief Scientist Alan Finkel and his panel have not recommended an EIS. Their preliminary report drew on earlier reports noting the advantages of an EIS over an extended renewable energy target or regulated closure of fossil-fuelled power stations, but also the fact that cap-and-trade would be cheaper to implement.
Labor has this week moved towards a credible climate change policy, although it still has work to do and its 45% emissions-reduction target will still be criticised as too ambitious. Meanwhile, we’re unlikely to know the Coalition government’s full policy until after it completes the 2017 Climate Change Policy Review and receives the Finkel Review’s final report.
Australians can only hope that we are starting to see the beginnings of the common policy ground that investors and electricity consumers alike so urgently need.

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