Day 241: 'Just unbearable'
An introductory weekday newsletter from Schwartz Media. Counting the days since Australia had an energy policy.
Good morning and welcome to day 241.
Today in summary: a government-appointed expert panel has found “integrity issues” with the Emissions Reduction Fund; the Energy Users Association of Australia wants gas subsidies and a government-owned gas company; and using the RERT in January cost A$34 million.
— Sophie
Today’s policy spin level: 💨💨🌪️
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The government-appointed Emissions Reduction Assurance Committee has found “integrity issues” with the Emissions Reduction Fund, the SMH reports. The review has found revegetation methods under the fund may have given carbon credits for emissions sequestration that has not and cannot occur. Environment Minister Melissa Price said the report and recent changes to the ERF “demonstrate the integrity of the Emissions Reduction Fund and its organisational and institutional arrangements”. The SMH quotes committee chair professor Andrew Macintosh of ANU as saying:
“Can I sit here and say there is no chance that existing projects will be forward-credited or over-credited? No I can't. But we will just have to see how the projects perform over the next five or ten years.”
A group of major energy users is calling on the federal government to create a public gas company and subsidise manufacturers paying high prices, the AFR reports. In a press release today, the Energy Users Association of Australia says Australia needs “a step change in policy not more incremental changes” to deal with the “gas crisis”. The AFR quotes Brickworks chief executive Lindsay Partridge as saying:
“If the politicians are relaxing thinking that there hasn't been a lot of collapses yet, they haven't seen it coming, because you just extract your value. But when it comes to reinvest they don't reinvest, they just close.
The cost of energy is not only crushing households, it's crushing business. We've seen it take a third of our profit, which is just unbearable."
Using the Reliability and Emergency Reserve Trader mechanism on two high demand days in January cost A$34 million, AEMO’s incident report shows, with the market operator spending less than it did in the previous summer as it battled to keep the lights on. AEMO is waiting on a decision from the AEMC on changes to the RERT which could allow it a larger safety net. You can read Australian Energy Daily’s story on this here.
The Commentariat
At Coolibah Consulting, Keith Orchison writes that debate on electric vehicles became polarised last week, but the issue is too important to become a political football.
“Bottom line: there is, believe it or not, a broad Australian political consensus that a stronger focus on EVs would be in the national interest with (until last week) relatively low-key major party differences of opinion on the speed of the transition.
Leaving aside all the noise of the past few days, one of the real EVs issues is integration of their large-scale promotion with NEM management reform, something that neither Labor nor the Coalition have underlined in their new Punch & Judy show.
A failure in this regard (taken with all the other market challenges) could have real and serious consequences for the community at large down the road.”
Three more things
Greens leader Richard Di Natale has been in Perth talking about the party’s climate policy, where he said the Greens will “hold [Bill Shorten] to account, push the Labor party further on climate change”, according to an AAP report in the Canberra Times. In a separate AAP report in the same paper, Greens environment spokesperson Sarah Hanson-Young discusses the party’s carbon pricing policy, A$2 billion nature fund and A$1 billion transition plan for thermal coal workers.
Mining projects in NSW are “feeling the heat” from the state’s Land and Environment Court’s decision in February to refuse the Rocky Hill coal mine, the ABC reports. A proposed project in Bylong Valley has attracted protests, and mining companies Glencore and Peabody referenced the decision in a recent submission on plans to expand the Wambo coal mine, the ABC reports. The state’s Independent Planning Commission has not said when it will make a determination on either project.
Santos has found one of the largest-ever columns of gas on the North West Shelf in Western Australia, the AFR reports. Consultancy Wood Mackenzie says the discovery could hold 2.5 trillion cubic feet of gas and 25 million barrels of condensates, it says.