A new report prepared for the European Commission shows that onshore wind is cheaper than coal, gas or nuclear energy when the costs of ‘external’ factors like air quality, human toxicity and climate change are taken into account.
The report says that for every megawatt hour (MW/h) of electricity generated, onshore wind costs roughly €105 (£83) per MW/h, compared to gas and coal which can cost up to around €164 and €233 per MW/h, respectively.
>>Nuclear power, offshore wind and solar energy are all comparably inexpensive generators, at roughly €125 per MW/h.
“This report highlights the true cost of Europe’s dependence on fossil fuels,” said Justin Wilkes, the deputy CEO of the European Wind Energy Association (EWEA). “Renewables are regularly denigrated for being too expensive and a drain on the taxpayer. Not only does the commission’s report show the alarming cost of coal but it also presents onshore wind as both cheaper and more environmentally-friendly.”
The paper, which was written for the European commission by the Ecofys consultancy, suggests that the Conservative party plan of restricting new onshore windfarms will mean blocking out the cheapest source of energy when environmental and health facts are taken into consideration. It has been suggested the Tory plan could be done through a cap on onshore wind turbines’ output, lower subsidies or tighter planning restrictions.
“Any plans to change policy for onshore wind must be looked at in the context of this report,” said Oliver Joy a spokesman for EWEA. “Investors need long-term visibility. ‘Stop-start’ policies as well as harsh retroactive changes can blindside investors, driving up the risk premium and cost of capital.”
….
“Despite decades of heavy subsidies, mature coal and nuclear energy technologies are still dependent on similar levels of public support as innovative solar energy is receiving today,” Frauke Thies, the policy director for the European Photovoltaic Industry Association told the Guardian.
“The difference is that costs of solar continue to decrease rapidly. If the unaccounted external costs to society are included, the report demonstrates that support to fossil fuels and nuclear even by far exceeds that to solar.”
Go to
to read the whole article here, or see the European Commission report here.
I extracted the figures for subsidies of different kinds from the report. They make interesting reading for those of us in Australia who are aware of the massive subsidies that the coal and coal power receive in Australia. I would have expected that the EU would be rather less supportive of carbon-rich energy, but found that in 2012 coal received a subsidy of €10.1bn which is the same amount allocated to on-shore windpower and overall, onshore wind and solar receive €24.8bn, compared to €22.3bn allocated to coal, natural gas and nuclear. You’d have to ask why, as mature industries, the latter group require this level of subsidy.
You probably didn’t expect to see a post on pension funds in this blog, but if you think about it we all want to be able to get through our “third age” without having to think too much about where the money is coming from, and without being forced into unsustainable options just because of a lack of funds.
On Tuesday in attended the one-day ‘Economic Growth, Climate Change and the G20’, conference hosted by the Asia Pacific Centre for Sustainable Enterprise at the Brisbane Convention and Exhibition Centre. One of the best conferences I’ve ever been to for a lot of reasons. Everyone was “on message”, the facilities were fantastic, the room held 250 people without being crowded or anyone not being able to see or hear the speakers. But what really made it great were the members of the four panels and their moderators. I’ve never been at a panel-type conference where the panel members were so knowledgeable and lucid in relevant fields.
One of the panelists in the session that addressed the question of how capital markets address un-burnable carbon (think “stranded assets”) was Dr John Hewson.
Dr. Hewson’s business career before entering politics in 1987, was as a company director and business consultant and included roles as Foundation Executive Director, Macquarie Bank Limited and as a Trustee of the IBM Superannuation Fund. Dr. Hewson’s political career included 7 years as a ministerial advisor (to two successive Federal Treasurers and the Prime Minister) and a further 8 years as the Federal Member for Wentworth in the Federal Parliament. He was Shadow Finance Minister, Shadow Treasurer and Shadow Minister for Industry and Commerce, then Leader of the Liberal Party and Federal Coalition in Opposition for 4 years. He has worked as an economist for the Australian Treasury, the Reserve Bank, the IMF.
And, most relevant to the topic of his panel at Tuesday’s conference, Dr Hewson is also the chair of the Asset Owners Disclosure Project (AODP), an independent global not-for-profit organisation whose objective is to protect members’ retirement savings from the risks posed by climate change.
A key activity of the AODP is an annual survey and assessment of the world’s 1000 largest pension funds, pertaining to their management of climate change risks and opportunities. This results in published rankings to allow members, stakeholders and industry to see which funds are better than others at managing climate risk. These funds currently manage in excess of US$52 trillion and of this high-carbon assets often constitute 50-60% portfolios, with low-carbon assets typically representing less than 2% (DB Climate Change Advisors, January 2010).
You can look up the AODP Climate Index of pension funds to see whether your super/pension fund is there and how it rates. You can use the drop-down box at the top of the page to restrict the range of funds shown (e.g. Australia, or Asia-Pacific). It’s interesting to see that six Australian funds are in the top-20 globally.
As a footnote, Australia’s Local Government Super (for local government employees and Councillors) ranked top of the 1,000 funds assessed last year, and second this year, for their climate-change-ready investment portfolio – while our Lockyer Valley Regional Council is still developing a climate change policy.
Went to the talk by Nicole Foss (the person behind The AutomaticEarth website) in Laidley on Saturday afternoon on the threats to Australia from the combination of excessive personal debt, over-leveraged banks, the approaching global limits to growth (including peak oil) and climate change.
This wasn’t some gloom-and-doom hand-wringing session. Foss takes a solution-oriented approach and explored a range of choices available to people at the individual, family and community levels. She covered the alternatives, ranging across urban, rural, suburban retrofit, intentional community, eco-village – and summarised the advantages and disadvantages of each option.
Along the way she offered Australia an outline of a “Plan-B”: stop basing the economy on feeding the Chinese demand for resources; stop trying to feed 60 million people (and destroying Australia’s soils in the process) instead focussing on food security for Australia into the long term; and replace the sense of complacency with a sense of urgency.
Nicole Foss, who sometimes writes under the name of ‘Stoneleigh’, is a Canadian sustainability, energy, and finance expert. She is best known for her works on her website, The Automatic Earth. She was editor of the Oil Drum Canada website where she wrote on the connections between energy and finance. She now lives in New Zealand.
The event was organised by SavourSoil Permaculture (a Laidley-based small business), and in my opinion made an important contribution to local understanding of the most significant issues facing us and the Earth and, most important, provided a window into the approaches we will need to adopt to ensure personal and community resilience. Thanks Michael, good to see people wiling to make such a contribution to the community.
Rafaele Joudry from Atamai Eco-Village in the north of New Zealand’s South Island (where Foss now lives) gave an overview of Atamai and its philosophy.
I’ve just finished reading Enough is Enough: Building a Sustainable Economy in a World of Finite Resources, so I’m pretty ‘primed’ in terms of statements urging “economic growth” as the solution to the world’s economic ills. One thing the book has made me realise is just how often we are bombarded with the mantra of economic growth, and how much it is seen by politicians, conservative economists and the media as the only way to achieve social, industrial and political goals. And if you combine references to the need for economic growth with the media’s fascination with economic indicators such as GDP and stock market indices, it’s really clear that we are on an economic growth express train.
I’d always been of the view that targeting economic growth is the lazy policy option, believing that we can have a fair, effective and comfortable society without growth – it would just take a lot more brain-power than the average policy formulator is willing to apply. However reading Rob Dietz and Dan O’Neill’s book convinced me that a steady state economy is the only way forward, though I felt that there was little chance of there being any kind of mainstream movement toward this approach before it is too late. How often do you even see or hear the term “steady state economy”?
Well, an article in today’s edition of The Conversation might indicate that we are going to hear about it a whole lot more in the near future. It’s an important opening to a conversation that the world has to have now (and should have had long ago). I hope it won’t spoil the story if I tell you the author’s conclusion: Climate stability demands nothing less than a wholesale economic shift – moving beyond growth and into a culture of consumption based on sufficiency. Or as Dietz and O’Neill say: Enough is Enough. Read the book next.
A newly released report called Better Growth, Better Climate draws the seductive conclusion that “we can create lasting economic growth while also tackling the immense risks of climate change”. But while…
Economic growth is incompatible with the rapid emissions reductions that are now necessary. AAP Image/David Crosling
A newly released report called Better Growth, Better Climate draws the seductive conclusion that “we can create lasting economic growth while also tackling the immense risks of climate change”.
But while the report, spearheaded by former Mexican president Felipe Calderón and UK climate economist Nicholas Stern, wisely points out the importance of efficiency improvements and renewable energy, it fails miserably to back up its core message.
The fact is that the world has a finite carbon budget, and we’ll blow that budget – sooner rather than later – if economic growth remains our objective.
Carbon budgets
The fundamental weakness of the new report can be shown by considering the implications of the world’s carbon budget, a notion that has entered the vocabulary of climate science in recent years. This concept refers to the maximum carbon emissions that can be released into the atmosphere if the world is to avoid dangerous climate change.
Although the science underpinning the carbon budget is increasingly robust – and has been built into the modelling of the Intergovernmental Panel on Climate Change (IPCC) – scientists, politicians, and the broader public have been slow to recognise its radical socio-economic and political implications.
The unpalatable truth is that, for developed nations, continued economic growth as conventionally measured is incompatible with climate stability. Indeed, a safe climate requires that we now need a phase of planned economic contraction, or “degrowth”.
The prospect of deliberate economic contraction will strike most people as an outrageous proposition, but the numbers below speak for themselves. My research has focused on this need to power down our energy-intensive economy if we are to avoid blowing the carbon budget.
This does not simply mean producing and consuming more efficiently and shifting to renewable energy, necessary though these changes are. It also requires that we produce and consume less – a conclusion that few dare to utter. Fortunately, the extent of wasteful overconsumption in the developed nations means that degrowth can actually be in our own interests, if we manage the transition wisely.
Degrowth and the carbon budget
To set our carbon budget, we have to answer three initial questions:
What temperature rise above pre-industrial levels should we be aiming to avoid?
What risk of exceeding this temperature limit are we prepared to accept?
How should the resulting global carbon budget be distributed between nations?
In order to unpack the economic implications of carbon budget analysis, I draw on the seminal work of climate scientists Kevin Anderson and Alice Bows, whose analyses are based on the following answers to the above questions.
1. Temperature
The world should aim to keep warming below 2C relative to pre-industrial levels. This threshold has been reaffirmed in recent international climate negotiations, including at Copenhagen and Cancun, so it represents an agreed goal.
Nevertheless, in recent years evidence has indicated that many ecosystems are more sensitive to increases in temperature than previously thought, meaning that 2C might not be a “safe” threshold after all. Many scientists, not to mention the small island states, argue that a 2C average rise in global temperature would be extremely dangerous, and that 1.5C or less would be more appropriate. Far from being a radical goal, 2C is actually a moderate one.
2. Risk
Because the future effects of further carbon emissions are complex, they can only be expressed in terms of probability. For the purposes of this analysis, we’ll aim for a carbon budget that gives us a 50% chance of avoiding 2C of warming. Given the dire consequences of exceeding the 2C threshold, the precautionary principle really demands a far higher probability of success than 50%, but let’s stick with this for now.
3. Distribution
Developing countries (known in UN climate negotiations as “Non-Annex 1 countries”) deserve a greater per-capita share of the global carbon budget, primarily because they are home to billions of people who still live in poverty and because these nations are less responsible for historic emissions.
Nevertheless, a stable climate calls for ambitious assumptions about when developing nations’ emissions should peak and begin to fall. Anderson and Bows assume that non-Annex 1 nations will peak in emissions by 2025 and then decarbonise at an unprecedented rate of 7% per year.
Such ambitious emissions cuts would also benefit developed (“Annex 1”) nations, because less of the global carbon budget would be consumed by the developing nations.
The carbon budget for the developed nations is calculated by subtracting the developing nations’ budget from the global budget. In order to keep to this budget, developed nations must reduce emissions by 8-10% each year in absolute terms (rather than per unit of economic productivity) over the coming decades. (For more detail on this calculation, see here.)
These numbers were formulated in 2011. Since then global greenhouse emissions have continued to increase, so these emissions-reduction targets should be regarded as a bare minimum.
The economics of cutting carbon
We can’t make such deep emissions cuts while still growing the economy. In his landmark 2006 review, UK economist Nicholas Stern calculated that decarbonisation of more than 3-4% is incompatible with economic growth. He noted that emissions reductions of more than 1% per year have historically been “associated with economic recession or upheaval”.
We can decarbonise our economic activity progressively by moving to renewable or low-carbon energy systems, and by producing goods and services in more energy-efficient ways. But this takes time – probably decades. Also, don’t forget that renewable energy systems themselves require energy to build.
We can’t cut emissions by 8-10% per year – as the carbon budget says we must – purely through energy efficiency and renewable power, especially if we expect to keep growing the economy while we do it. Significant emissions reductions will require us to use considerably less energy. And because energy use and economic activity are intimately related, less energy means less production and less consumption.
Beyond economic growth
It therefore follows that developed nations should immediately begin a strategy of planned economic contraction, with less energy and resource use. This “radical” conclusion follows logically from the moderate assumptions stated above, and it contradicts the widespread assurances that maintaining a safe climate is compatible with continued economic growth.
It is even harder to reconcile climate action with economic growth when you consider that the assumptions above are too moderate anyway. If we were to decide on limiting warming to 1.5C instead of 2C, with a higher chance of avoiding that threshold (say 80% or 90% instead of 50%), then that would render our carbon budget even smaller – or already used up.
Climate stability demands nothing less than a wholesale economic shift – moving beyond growth and into a culture of consumption based on sufficiency.
The conclusions drawn by the Better Growth, Better Climate report seem to suggest, however, that disciples of growth are still not ready to let go of their god. They will continue to insist blindly that we can “green” capitalism and grow ourselves out of our ecological crises.
Moving to a stable, post-growth economy is a complex, challenging and confronting prospect for many people. Success is unlikely, admittedly, but it is even more unlikely if we don’t have the courage to face the facts.
The world as a whole has already exceeded Australia’s Renewable Energy Target of 20% of the country’s electricity coming from renewable energy by 2020. The rest of the world is ahead of us and increasing its proportion of electricity coming from renewables, but Abbott and Co. [Australia’s Prime Minister and his Conservative government] would have us believe that the move toward renewable energy is a bad thing, and are going all out to dump the Renewable Energy Target.
Wind, solar and other renewable power capacity grew at its strongest ever pace last year and now produces 22% of the world’s electricity, the International Energy Agency said on Thursday in a new report.
More than $250bn (£150bn) was invested in “green” generating systems in 2013, although the speed of growth is expected to slacken, partly because politicians are becoming nervous about the cost of subsidies.
Maria van der Hoeven, the executive director of the IEA, said governments should hold their nerve: “Renewables are a necessary part of energy security. However, just when they are becoming a cost-competitive option in an increasing number of cases, policy and regulatory uncertainty is rising in some key markets. This stems from concerns about the costs of deploying renewables.”
She added: “Governments must distinguish more clearly between the past, present and future, as costs are falling over time. Many renewables no longer need high incentive levels. Rather, given their capital-intensive nature, renewables require a market context that assures a reasonable and predictable return for investors.”
Hydro and other green technologies could be producing 26% of the world’s electricity by 2020, the IEA said in its third annual Medium-Term Renewable Energy Market Report. They are already used as much as gas for generating electrical power, it points out.
But the total level of investment in renewables is lower now than a peak of $280bn in 2011 and is expected to average only $230bn annually to the end of the decade unless governments make increasing policy commitments to keep spending higher.
The current growth rate for installing new windfarms and solar arrays is impressive but the IEA believes it is not enough to meet climate change targets, triggering calls in Brussels from green power lobby groups for Europe to adopt tougher, binding targets.
I just had to share this. It is so positive and encouraging. Nice to be reminded that in other parts of the world they encourage the growth of renewable energy.
Here’s a shot of the renewable energy tracking on the website of the following group of companies:
The image is updated on the company’s Renewable Watch page, and you can click on the image there to enlarge it.
If only our governments and power companies were so proud of the level of generation of renewable energy in Australia.
I found the link to the graphic in a story on Mother Jones on the way in which electricity demand in the USA is dropping year after year. The total demand in 2013 was two percent below the 2008 level. The reasons for the drop are pretty much the same as in Australia: higher prices pushing people to cut usage; more people and companies generating their own power, mostly via solar PV; and increasing efficiency (of buildings and appliances).
An article by Giles Parkinson in The Guardian on 7 July reported that the wholesale price of electricity in Queensland fell into negative territory – in the middle of the day. Apparently this has never happened in the middle of the day before. Here’s part of what the article reported:
For several days the price, normally around $40-$50 a megawatt hour, hovered in and around zero. Prices were deflated throughout the week, largely because of the influence of one of the newest, biggest power stations in the state – rooftop solar.
“Negative pricing” moves, as they are known, are not uncommon. But they are only supposed to happen at night, when most of the population is mostly asleep, demand is down, and operators of coal fired generators are reluctant to switch off. So they pay others to pick up their output.
That’s not supposed to happen at lunchtime. Daytime prices are supposed to reflect higher demand, when people are awake, office building are in use, factories are in production. That’s when fossil fuel generators would normally be making most of their money.
The influx of rooftop solar has turned this model on its head. There is 1,100MW of it on more than 350,000 buildings in Queensland alone (3,400MW on 1.2m buildings across the country). It is producing electricity just at the time that coal generators used to make hay (while the sun shines).
Yes, the wholesale price level around zero was due to the level of installation of rooftop solar PV systems by homeowners and businesses in Queensland. But in reality it seems to me that the near zero pricecould more accurately be said to be due to the removal by the Queensland government of most of the feed-in tariff paid to solar PV producers – BUT … there are still lots of solar PV owners on fixed term contracts and receiving reasonably high feed-in tariffs – so shouldn’t these tariffs have been reflected in the wholesale price when solar PV was dominating the market? Or are there now so many recent solar PV installations that their low feed-in tariffs are dominating the market around the middle of the day?
Can anyone enlighten me as to how the near zero wholesale electricity price really came about?
Regardless of the confusion, it seems that solar PV is making its mark as a component of the State’s energy generation industry. Are these low wholesale prices eventually going to be reflected in our electricity bills?
You can read the whole Guardian online article here.
Mark Diesendorf, Associate Professor and Deputy Director of the Institute of Environmental Studies at the University of New South Wales, has posted a detailed and convincing article in The Conversation this morning about the potential for a 100% renewable electricity supply in Australia.
His conclusion (with my underlining):
The renewable scenarios would be economically competitive with the fossil system either with a carbon price of A$50 per tonne of CO2 (reflecting part of the environmental and health damage from fossil fuels) or, in the absence of a carbon price, by removing the existing subsidies to the production and use of fossil fuels and transferring them temporarily to renewable energy.
That’s right: we could start implementing 100% renewable electricity generation RIGHT NOW, and with no financial burden on the economy, just a temporary shift of the political sacred cow of hydrocarbon fuel subsidies to the renewable energy sector. In fact Diesendorf doesn’t say it, but there would be a significant positive impact on the economy from very significant increases in both temporary and long-term employment in the renewables sector. And, you never know, when the renewable sector no longer needs the subsidy the government of the day may decide not to reinstate it for the hydrocarbon fuel sector. Very big win for the economy and possibly the climate if that happened.
Could we do this with current renewable technologies, or would we have to wait for the development of some currently unproven approach? It’s can all be done with today’s technology. Here’s Diesendorf again:
“Using conservative projections to 2030 for the costs of renewable energy by the federal government’s Bureau of Resources and Energy Economics (BREE), we found an optimal mix of renewable electricity sources. The mix looks like this:
So two-thirds of annual energy can be supplied by wind and solar photovoltaic — energy sources that vary depending on the weather — while maintaining reliability of the generating system at the required level. How is this possible?
It turns out that wind and solar photovoltaic are only unable to meet electricity demand a few times a year. These periods occur during peak demand on winter evenings following overcast days that also happen to have low wind speeds across the region.
Since the gaps are few in number and none exceeds two hours in duration, there only needs to be a small amount of generation from the so-called flexible renewables (those that don’t depend on the vagaries of weather): hydro and biofuelled gas turbines. Concentrated solar thermal is also flexible while it has energy in its thermal storage.
The gas turbines have low capital cost and, when operated infrequently and briefly, low fuel costs, so they play the role of reliability insurance with a low premium.”
“BASELOAD POWER! You’ll need baseload power!”, I hear the coal and gas industries shouting. Well, clearly such a system would NOT require baseload power in the form that they understand.
I like it too that he has addressed the bogie inherent in the use of biofuel powered gas turbines: the possibility that they will require unacceptable volumes of timber from forests or the allocation of unacceptable areas of food-producing farmland to grow the fuel to run them. Keeping the gas turbines in reserve, to be used only for periods of a few hours a few times per year would mean that not only would fuel demand be low, but the fuel could be sourced from wastes over a longer period and stockpiled for later use.
Do we know whether it would work in reality? How about on hot summer evenings, or on those cold, windless winter nights? Diesendorf’s team used real figures from the National Energy Market (presumably the ones published daily by the Australian Energy Market Operator), to model many different mixes of current renewable energy technologies to come up with the proportions set out above.
“Ben Elliston, Iain MacGill and I at UNSW have performed thousands of computer simulations of the hour-by-hour operation of the NEM with different mixes of 100% commercially available renewable energy technologies scaled up to meet demand reliably.
We use actual hourly electricity demand and actual hourly solar and wind power data for 2010 and balance supply and demand for almost every hour, while maintaining the required reliability of supply. The relevant papers, published in peer-reviewed international journals, can be downloaded from my UNSW website.”
I love The Conversation. There isn’t a morning goes by that I don’t find at least one enlightening, fascinating, or just plain interesting article in their daily serve of articles – though I do suspect that it could be bad for my health. Sitting with the laptop on my knees over breakfast for two hours can’t be good. Memo to self: get up more often; and spread reading of The Conversation over the day.
Today’s “must share” story is about the three myths that the coal seam gas industry wants to have us believe as part of their campaign to sell the idea that it’s in Australia’s national interest to allow a massive expansion of coal seam gas activities. These are:
Myth 1: The gas industry is a big employer
Rather than the 100,000 jobs that they claim were created in their industry last year, CSG employment is too small for the Australian Bureau of Statistics to measure as a separate category. Even the combined employment in the whole oil and gas industry as at November 2013 was only 23,200 – whereas Bunnings employs around 36,000 people Australia-wide.
Myth 2: More CSG will stop the gas price rises
There is a considerable difference between the Australian domestic gas price and the price in international trade. The domestic market will be competing more and more with that international price as export volumes increase. Any of you who use gas in your home will have seen very significant rises in gas prices over the last five years – well, the impact of international trade contract prices hasn’t really begun to bite yet. CSG will only bring down domestic gas prices if there is such a glut of gas in the international market that prices crash, leading to flow-on effects in the domestic market. This might happen eventually, but not any time soon.
Myth 3: CSG can act as a low-emission “bridge” from coal to renewables
This is a longstanding argument from the CSG industry, along the lines of “Don’t worry, it’s just a transition phase, and luckily it has a lot less emissions than burning coal”.
But is it just a transition fuel – what would the lifetimes of CSG-burning power plants be, and would they be likely to be abandoned before that lifetime expired (or while there are still supplies of CSG available)? Wouldn’t the resistance from industry and government to moving to renewables be just as great in relation to CSG resources and infrastructure as it is to the transition from coal?
As for the lower emissions from burning CSG – yes, natural gas, including CSG, does have lower emissions when it is burned to produce electricity. However the process of extracting CSG turns out to substantially reduce its emission reduction benefits. Fugitive emissions, including those resulting from leaks out of the ground associated with hydraulic fracking, have not been properly assessed in the approval of Australian CSG operations. In the United States, studies on shale gas have found that fugitive emissions rates are substantially higher than from extraction of conventional natural gas.
Anyway, this is a rather long-winded introduction to the article in The Conversation, where you’ll find a whole lot more information, as well as links to further sources, including a just-published report, Fracking the Future, which sets out a lot of background information on this issue.
If you are at all concerned about sustainable energy supplies and the need to get off the fossil fuel powered electricity path you can’t have missed what some solar PV groups are calling a proposal to “tax the sun”.
What it comes down to is that the Australian Energy Market Commission has issued a report highlighting what they see as the need for new tariffs for every solar home connected to the grid because, they seem to be saying, grid connected solar homes are “free-riding” on those electricity consumers who don’t input solar-generated electricity into the grid.
In a longish article on the issue published in REneweconomy, Giles Parkinson said:
AEMC chairman John Pierce on Wednesday [October 9] unveiled a “strageic priorities” document that highlights solar PV as one of the most pressing issues for the electricity industry – both for providers and consumers – and suggests that network tariffs in particular do not reflect the reduced use of the grid caused by solar households.
“Distributed generation is blurring the traditional delineation between consumers and producers of electricity,” Pierce said in a speech to the East Coast Energy Outlook conference in Sydney
“One source of stakeholder concern is that network costs of consumers with rooftop solar PV are subsidised by other consumers because the full costs and benefits of distributed generation (such as solar PV) are not reflected in the prices consumers pay for electricity.”
The solar industry is outraged by the singling out of solar, because they say it is clear that the greatest cross subsidy in the electricity industry goes to users of air-conditioners: The government white paper conceded that each $1,500 air con system imposes five times that amount in network costs on other users.
Now is starts to seem like AMEC has got their strategy out of the playbook of the American Legislative Exchange Council (ALEC), which Wikipedia describes as a US forum for politically conservative state legislators and private sector members [read organisations] to collaborate on model bills, i.e. draft legislation, often serving the interests of the private sector members, that members can customize and introduce for debate in their own state legislatures. The website ALEC Exposed is dedicated to uncovering the doings of ALEC, its corporate connections, and its funding sources.
In what a recent article in The Guardian calls “a sweeping new offensive against renewable energy”, ALEC proposes that governments penalize homeowners who install their own solar panels—casting them as “freeriders” who are not paying for the infrastructure they are using. In effect, they say, all the other non-direct generation customers are being penalised, and instead homes with grid-connected solar PV should be paying to distribute their surplus electricity on the grid.
The article reports that this is a part of a larger anti-renewable energy strategy which will promote a suite of model bills and resolutions aimed at blocking Barack Obama from cutting greenhouse gas emissions, and blocking state governments from promoting the expansion of wind and solar power.
If the AEMC is copying the ALEC strategy, stand by for more or the same here in Australia.
The Australian Energy Market Commission (AEMC) was set up by the Council of Australian Governments through the Ministerial Council on Energy in 2005. It is is the rule maker and developer for Australian energy markets, and also provides advice to Ministers on how best to develop energy markets over time.
I can’t help wondering whether the AEMC is as independent as it should be as a statutory commission set up by government, given the similarity of its stance on grid-connected PV generation to that of the ALEC. Or, if it really is acting independently in this regard and the similarity to the ALEC stance is coincidental, whether its terms of reference might not be too much focused on maintaining a stable market for the large energy generators and distributors, and not enough on the best outcomes for the country in the long term. There is also the question of whether the AEMC regards the totality of the multitude of grid-connected electricity generators as a valid player in the market – or are they seen as “collateral damage” in moves to maintain profitability for the traditional players?
“This report highlights the true cost of Europe’s dependence on fossil fuels,” said Justin Wilkes, the deputy CEO of the European Wind Energy Association (EWEA). “Renewables are regularly denigrated for being too expensive and a drain on the taxpayer. Not only does the commission’s report show the alarming cost of coal but it also presents onshore wind as both cheaper and more environmentally-friendly.”
Sustainable @ Lockyer Valley 
