Day 32: 'Fair dinkum power'
An introductory weekday newsletter from Schwartz Media. Counting the days since Australia had an energy policy.
Good morning and welcome to day 32.
Today in summary: Federal Energy Minister Angus Taylor confirmed he is mulling government investments to help prolong the life of coal-fired power stations; energy companies fessed up to cashing in on the RET; and gas caught up in the US-China trade war.
— Charis
Current policy spin level: 💨💨💨
Australia’s federal government could soon be investing in coal-fired power stations, under a plan being considered by Energy Minister Angus Taylor. The investments will reportedly focus on refurbishing stations with a life expectancy of more than 20 years, and would cover measures to improve performance, reduce emissions, and prolong their operating lives.
“We’re backing investment in reliable supply and competition and that could be an expansion of an existing facility or whatever support it needs, but it could also be a new facility next door or even a completely new investment,” Taylor said.
Meanwhile, energy companies have responded to Taylor’s accusation of “corporate greed” by admitting they are cashing in on current high RET credits, but there’s more to the story. They say the government’s mixed messaging since the Abbott government was elected has seen Large-scale Generating Certificate (LGC) prices fluctuate – they tumbled when Abbott announced a review of the RET in 2013, spiked when the RET was re-legislated, and are now settling lower as more renewable supply comes online.
"The industry is now at a point where it needs to stand on its own two feet without a subsidy. I don't think anyone in the clean energy industry is calling for a subsidy. We just want some sort of policy stability," Meridian Energy CEO Ed McManus said.
US LNG shipments to China will be hit with a 10% tariff as the Trump-led trade war between the US and China heats up. The tension has cast a shadow over US export terminal projects, and the implications for Australia are interesting. China is one of Australia’s largest LNG customers. The tariffs could benefit both Australia and PNG in our region, and China is also a potential customer for planned new export projects, including Woodside's Browse and Scarborough projects. The tariff war has implications for renewables too. The second phase of tariffs on China announced by the US this week will apply to inverters used in solar panels throughout the US.
Geopolitics
Australia is set to sign a treaty with the Netherlands to get its oil stocks back in line with International Energy Agency requirements. Australia is meant to have sufficient oil reserves to last 90 days, but at present it’s more like 53 days’ worth. The Joint Standing Committee on Treaties yesterday tabled a report supporting the agreement. Australia is expected to purchase contracts for 800 kilotonnes of oil from the Netherlands by 2020.
ABC
Coming up
Federal Labor is holding a forum on the future of energy policy in Parliament today to consider the impact of policy on investment in new generation. “The single biggest driver of energy prices in Australia is a lack of policy certainty. How can you invest in new generation if you don't know what the rules are?” Opposition leader Bill Shorten told reporters yesterday.
Three more things
Telecommunications giant Telstra saw its energy costs balloon by $100 million last year and it sees investments in sustainable energy as one way to get the costs down.
“One of the things we’ve been looking at doing is putting solar power into some of our exchanges, tying that in with our batteries so we’re actually generating power, and then what can happen in busier or more expensive times of energy we can go off grid, we can actually supply our own and in fact we’ve been doing some trials of feeding energy back into the grid,” Telstra CEO Andy Penn said.
Nuclear energy is critical for the world to meet climate change commitments, argues a new report from the International Atomic Energy Agency. The report found electricity generation from low-carbon sources, such as nuclear power, hydroelectricity and other renewables, grew by 80% between 1990 and 2014. It says nuclear energy helped the world avoid about 68 gigatonnes of carbon dioxide emissions between 1970 and 2015, equal to the entire actual emissions from the power sector between 2010 and 2015.
Meanwhile, Malaysia has ruled out nuclear power, and will instead focus on hydropower and coal and gas-fired power plants. Prime Minister Mahathir cited concerns over the need to dispose of radioactive waste and earthquakes that could result in a Fukushima-style disaster.
Channel NewsAsia
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