Day 109: 'At the earliest possible opportunity'
An introductory weekday newsletter from Schwartz Media. Counting the days since Australia had an energy policy.
Good morning and welcome to day 109.
Today in summary: The softer big stick legislation looks likely to be pushed through the lower house today, sparking complaints it’s rushed and unconstitutional; a Victorian study finds renewables drive down power prices; and global carbon emissions are set to rise further in 2018.
— Sophie
Today’s policy spin level: 💨💨💨
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The government’s weakened forced divestment legislation looks set to pass in the lower house, after being supported by Bob Katter and Andrew Wilkie in its first reading. The minority government needs two extra votes to pass the bill, though it will need eight extra in the Senate. The second - and potentially third - reading of the bill is on the House of Representatives’ agenda today.
Leader of the House Christopher Pyne said yesterday the government is “absolutely committed to passing this divestment legislation at the earliest possible opportunity” so the Senate can get a committee report and pass it into law in February. He warned if the legislation wasn’t passed within 48 hours then the Senate wouldn’t be able to pass it until the budget session next year.
The Energy Council’s chief executive Sarah McNamara said there are constitutional issues in the bill, which the group saw for the first time yesterday, and “we're looking at all legal options in relation to these laws.”
Renewable energy drives down power prices, while coal and gas push them up, according to a study from the Victoria Energy Policy Centre. The study compared the wholesale electricity market in South Australia from 2013-2018 with markets in Britain, Germany, Italy and Denmark.
Bruce Mountain, the lead author of the report and director of the centre, said:
“Maybe there was a trilemma at some point of time but it ain't there any more. There is no dilemma between a cleaner power system and cheaper power.”
A new report from the Global Carbon Project says global carbon emissions growth will be about 2.7% in 2018, up from 1.6% a year earlier, led by the US and China. In Australia, emissions from coal have dropped 1.1% per year from 2012-2017, while emissions from gas production jumped almost 10% per year in that timeframe.
The Commentariat
Danny Price, managing director of Frontier Economics, writes in the AFR that the “toxic” National Energy Guarantee is an emissions trading scheme in disguise and shouldn’t be revived - instead, the design on the National Electricity Market should change.
“A future government should take the opportunity to change the NEM market design to one based on creating competition for the supply of capacity and energy in exchange for long-term commercial contracts protected by the courts… It is a much more secure arrangement that will attract low cost investment. Unless the government adopts a complete reform of the market design and correct the rise of unaccountable, politicised market institutions, a future government will condemn Australia to a future of energy poverty.”
Three more things
South Australia’s big battery has helped add stability to the grid, cutting A$40 million of potential grid stabilisation costs, according to a report by infrastructure advisory firm Aurecon. The Hornsdale Power Reserve has a response time of less than 100 milliseconds, enabling it to respond quickly when the network needs it. Project backer Neoen continues to expand in Australia with another storage venture with Tesla underway in Victoria, due online in August.
Australia is unprepared for the health impact of climate change induced allergic reactions, according to a new review of international studies. Research has found higher temperatures and more carbon dioxide in the atmosphere will significantly boost levels of allergens in the air such as grass pollen. Study author, Associate Professor Paul Beggs, said allergen monitoring is poor in Australia, with no national, state or territory body having responsibility for the monitoring, reporting and forecasting of environmental allergens.
South Korea’s EPIK Co has joined AGL's project at Crib Point in Victoria and billionaire Andrew Forrest's pitch to build at Port Kembla in NSW, in the growing gas imports game. EPIK is proposing a A$500 million facility at the back-end of the existing gas transmission network within the Port of Newcastle. The project is still subject to regulatory approvals.