Day 25: Supply at competitive prices
An introductory weekday newsletter from Schwartz Media. Counting the days since Australia had an energy policy.
Good morning and welcome to day 25.
Today in summary: Energy users including manufacturing giant Brickworks are taking power cost challenges into their own hands in the absence of federal energy policy; Victorians facing the power price squeeze are feeling some relief; and a new report suggests China’s emissions policy is working so well, the country’s emissions may have already peaked.
— Charis
Today’s energy policy spin level: 💨
Building manufacturer and industrial gas user Brickworks has struck a deal with oil and gas giant Santos for a 6-year stable supply of gas to its east coast operations. Brickworks said the deal would give it “flexibility and certainty of gas supply at competitive prices”. The announcement came as Resource Minister Matt Canavan met with gas company leaders as the government considers whether to levy more export controls in 2019. Industry remains strongly against this and says east coast LNG projects are offering all their uncontracted gas to domestic suppliers first.
Meanwhile, the GetUp!-backed solar energy company Shinehub is pushing ahead with its virtual power plant, with hundreds of customers signing on for its pilot programs that take energy retailers out of the equation.
News.comThe number of Victorians finding it hard to pay their power bill is trending down, according to the latest quarterly affordability report from the Energy and Water Ombudsman. Payment difficulties cases are down 14% on the same quarter last year, and disconnections down 21%.
China’s strategy on energy production, put in place in 2016 after it signed on to the Paris climate accord, appears to be paying off. China’s emissions entered a decade-long plateau in 2014, and could eventually enter a phase of steady decline as early as 2025, according to a new paper from US public policy think tank Brookings. That would mean its emissions have already effectively peaked.
Geopolitics
Spain is looking for investors to help reform its energy sector while it continues to pay the price for inconsistent policy on renewable energy subsidies. The country’s 2008 solar boom came to a halt when subsidies were cut, leaving many renewable energy power companies unable to cover their debts.
Bloomberg
The Commentariat
State governments are distorting the national energy market with their renewable energy targets, the Australian Financial Review argues in its editorial today.
“Because there is a big subsidy for the renewable generators, and little certainty for anybody else, it is unsurprising that Victoria and Queensland… will most probably hoover up most of Australia's new energy construction over the coming year: regardless of whether these are the most rational or cost-effective places to build new generating capacity.”
The Australian’s John Durie is unhappy ACCC chair Rod Sims has approved Chinese company CK Infrastructure’s takeover of APA. The ACCC’s view was that the deal amounted to a bare transfer of APA’s monopoly power over Australia’s energy infrastructure to CK Infrastructure, and as such consumers would not be affected.
“Critical energy supply infrastructure,” writes Durie, “is now held by two players, one 100% controlled by the Chinese government and another based in Hong Kong with ties to the government entity”.
Three more things
China is planning to beef up its domestic gas output as it transitions away from coal.
Interfax
New York Mayor Michael Bloomberg’s philanthropic organisation is releasing a documentary that takes on the Trump administration’s decision to withdraw from the Paris climate agreement.
Several nuclear power plants are bracing for the impact of hurricane Florence. Local news reporters say safeguards put in place after the Fukushima disaster mean they’re well placed to cope with the expected winds and storm surge.
This is an introductory service while we’re building a comprehensive daily paid online publication, coming in early 2019.
We’re not here to take sides, simply to cut through the noise, and help you make sense of the emerging policy and market trends you need to be across. We call it pure intel. You can read more about us here.