a Business Spectator publication

A clean view

If we cast our minds back to the early days of the Rudd government, most people believed that the strong climate change policies espoused by the ALP had played a significant role in taking them to election victory. When the new government, just days old, ratified the Kyoto Protocol and put into motion the Garnaut review, meaningful action on climate change looked to be a foregone conclusion.

However, many in the clean energy sector who had been struggling for almost a decade to establish some semblance of an industry still wore furrowed brows. There was growing concern that many believed the war had been won and had therefore discounted the possibility of a significant defensive campaign against introduction of a carbon price. 

Of even greater concern, particularly as some of the initial new government euphoria was wearing off, that with so much focus on achieving a carbon price the piece of legislation most critical to the industry’s survival, the 20 per cent Renewable Energy Target (RET), was at risk of being delayed or even forgotten. 

Many who had lived through the Howard years knew that the same people that had enormous influence over energy and climate change policy for the past few decades had not gone anywhere. If anything, the increased public interest in climate change and government willingness to act was likely to see them redouble their efforts as they prepared to fight a vicious and protracted defensive action. 

These groups know how to get their way and they remain incredibly well resourced, as we have seen in both the recent CPRS and mining tax debates.

Given this history, it was not too hard to imagine that the introduction of a carbon price was going to be a long, drawn-out fight with the most likely end result being a carbon price that would be insufficient to drive investment in new clean-energy technologies.

Complicating this for the clean energy sector was the insistence by government that the CPRS and 20 per cent RET bills be linked. So not only would the carbon price be too low for cleantech investment, but the drawn out nature of these negotiations would result in years of further delays in new clean-energy build.

History now reveals that, just as a series of events had come together to make climate change a significant issue for Australians in the 2007 Federal Election, in 2009 a confluence of events such as the GFC, 'climate gate', the supposed failure of Copenhagen, political gameplaying and the aforementioned defensive campaign resulted in a softening of public opinion, a triple defeat of the CPRS bills and, as many have argued, the end of Kevin Rudd’s time as prime minister.

Through this maelstrom, the clean energy sector has remained focused on achieving the policy outcome that was most crucial to its immediate survival – the introduction of a workable 20 per cent RET. This was the primary obligation to shareholders, with failure resulting in lost jobs and investment and consignment of Australia to the position of a clean energy backwater.

The clean energy sector must continue to have a very clear and coherent strategy on seeking to achieve policies that ensure both its immediate and long term survival. 

The work done by many in the sector, including the Clean Energy Council, has not only seen the de-linking of the 20 per cent RET from the CPRS, but the legislation passed and then significantly improved to the benefit of large and small-scale technologies. Importantly, all of this was achieved with bi-partisan support. As an industry that seeks to invest in the energy of tomorrow and create jobs in regional Australia we should make no apology for our focused, results-driven approach.

Some may claim this strategy was selfish and short-sighted and that the industry as a whole should have done more in the CPRS debate. 

For the record, many in the clean energy sector participated in the CPRS discussion both at political and policy level, but were seen by most in the media as bit players in the rolling political brawl that it eventually became. I would also point out that given the circumstances and the nature of the debate being focused on winners, losers and compensation, that the clean energy sector found it difficult to find a logical entry point into this discussion. 

So, where do we go from here? The next three years will undoubtedly present us with new challenges and opportunities. A carbon price will be pushed once again onto centre stage and the clean energy industry should continue to be part of that debate where it is logical to do so and where it can be of use. 

But just as important to the businesses involved in the clean energy industry will be the emerging discussion on new transmission networks and increasing interstate connectivity that will help release the best renewable energy resources in the shortest period of time.

For large-scale clean energy projects, planning and community engagement will continue to be at the forefront of our minds as will attracting commercially acceptable finance and ensuring we work to establish competitive clean technology industries. 

As an industry, clean energy must continue to focus on the things that will drive business growth today so that it can build the industry capacity to meet tomorrow’s climate challenges.

Rob Grant is chief executive officer of Pacific Hydro and chairman of the Clean Energy Council.

Comments on this article

If Coal is the 'Problem' lets see the evidence ?

According the Alvin (below) "coal is the problem because it's too cheap" relative to renewable energy technologies.  Well bless my soul, no surprises there....  

 

However, what Alvin & indeed others here at CS repeatedly fail to define is what the real problem with coal is - clearly it's not cost, as it's already 'too cheap' so presumably we're back to the same old claims that generation of CO2 is creating unsustainable AGW.  

 

OK.  Then let's see your evidence & in so doing perhaps Alvin &/or others at CS could be good enough to please rebutt/critique the following article covering both 'coal' & renewable technologies.

 

http://www.climatesceptics.com.au/documents/on-coal-fired-power-electricity-generation.pdf

 

Business cases and feed in tariffs

Mark and others, there is an excellent argument supporting carbon taxes by whatever name, but what is the limit?  The current Federal grant towards domestic rooftop PV is an example of pure waste, followed by unjustifiable feed in tariffs of 50 or 60 cents, by comparison with which, the wholesale value of the power is about 4 cents per unit. 

 

How is this factor of 12 to 15 justifiable?  Broadly speaking, each tonne of black coal will generate two MWh of electrical power.   The maths work out to a subsidy of a staggering 1000 x 46 cents x 2 = $920 per tonne of coal left in the ground, or about $3300 per tonne of CO2 avoided.

 

This level of subsidy for solar photovoltaic is totally stupid by any standards, when nuclear is available and competitive with coal using current technology and even better once Type IV plant become fully commercial in a few years.

 

The same cost-benefit approach should and must be applied to all clean sources of energy if our money is to be well spent.

 

As for comments to the effect that GHG and climate change are not real - tell that to the scientists and your grand-kids.  Sad, but true, we have no alternative but to get our engineering, financial modelling and politics lined up, or this little globe called Earth will pay a very heavy price. 

 

Footnote:  My personal guess it that carbon abatement will/must cost at least $20 per tonne, perhaps much more, but nowhere near $1k/tonne of black coal.  That type of nonsense will do serious harm to the cause of clean energy.

  

You got what you deserve

Well Joe and Tim, if you'd gone for a carbon market everything would be transparant

kick up enough political fuss, deny the reality of climate change and you get the distortion of an administrative solution instead of a market solution

tough

Coal, you idiots

It's interesting, I come to Climate Spectator because it offers thoughtful insights from people who know their industries. then I read the stupidity of Jim Simpson and Tim Le Roy.

Jim, coal is the problem. It is too damn cheap. The only way to make renewables competitive is to put a price on carbon pollution. A CPRS or carbon tax will do it and make renewables commercially viable at the same time.

 Tim Le Roy. If we don't offer incentives we will be crying all the way to the bankruptcy courts and asking China to bail us out through their incredible renewable energy industrial powerhouse. Try looking long term.

You want to screw the public, forget a carbon price and make them pay directly for electricity infrastructure. There has been verty little investment in Australia's electricity infrastructure because for the past decade money markets have decided not to touch it until a carbon price is introduced.

So, that leaves the mums, dads and businesses to foot the bill. That hike next year in electricity bills has got to do with a lack of investment in infrastructure not a carbon price.

Add a carbon price, there will be spike and then a levelling off. Do nothing and the prices will just keep increasing.

A Tarnished View more Likely !

Opinion Pieces such as this by Rob Grant serve only to confirm that big business remains intent upon keeping it's greedy head stuck well & truely into the public purse of 'Feed In Tariffs' & subsidies etc rather than a genuine concern for a problem that doesn't exist ie AGW & claims that CO2 is a pollutent - NOT!

 

If your renewable energy alternative solution(s) are so good, don't wait for us!  Put your money where your mouth is, finalise your Business Case & take it to an IPO inviting share holder support.  Easy....  What's keeping you?  Surely not another flawed model like those that formed the basis of the now discreditted UN IPCC's Climate Change Reports!

 

Any commercially viable energy solution will no doubt find lots of willing supporters (Green most likely) who will presumably stump up with the necessary capital to compete in the open market against current base load power generation technology.  We'll be barracking for you all the way..  

   

Incentives

Bottom line of this article is "Let's work out how to screw the unknowing public for more subsidies". Ensure the true costs and impacts of these products are never disclosed. Laugh all the way to the bank.