Day 73: 'With or without the government'

An introductory weekday newsletter from Schwartz Media. Counting the days since Australia had an energy policy.

Good morning and welcome to day 73.

Today in summary: Unions have joined The Greens in calling for an independent authority to manage the energy transition away from coal; Titans of industry continue to speak out against Australia’s piecemeal energy policy; and Queensland says falling electricity prices in the state are proof it doesn’t need a default energy price.

— Charis

Today’s policy spin level: 💨💨💨

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  1. Workers who depend on the coal-fired power industry face a bleak and uncertain future unless there is a managed energy transition, according to a new report from the Industrial Relations Research Centre at UNSW Business School. The report, commissioned by mining and energy union the CFMMEU recommends the government establish an independent statutory Energy Transition Authority to oversee closures and support workers into new jobs and industries. It compares Germany’s Ruhr region, where the transition from coal and steel-making saw no forced redundancies, to Appalachia in the US where the result was entrenched poverty and social dysfunction. 

  2. The Australian-born chief of London-based mining giant Anglo American has joined other titans of industry in expressing growing concern about energy policy being derailed by politics. Mark Cutifani told the AFR the NEG was a “good start” and it was now time for the country to align on energy policy.

    Meanwhile, Graham Kerr of Australian mining giant South32 is worried about the world’s ability to integrate climate policy with affordable and reliable energy supply.

    "We think the government needs to put in place regulation that drives the right behaviours.

    “We do believe in climate change, the recent IPCC (Intergovernmental Panel on Climate Change) report tells you the world needs to start to shift, we are fully committed to what was agreed at Paris.

    "We have got a number of targets in place today that we continue to work towards with or without the government."

  3. Queensland’s electricity prices have fallen or remained stable for the fourth quarter in a row, according to the latest report from the Queensland Competition Authority.

    Queensland Energy Minister Anthony Lynham told State Parliament:

    “There is a policy vacuum federally. With regard to the federal government's thought bubble of establishing a default energy price, they have even admitted under pressure from Queensland that it needs more work."

The Commentariat

Joining the chorus of voices calling for clear government climate policy is Colonial First State Global Asset Management. The company’s head of responsible investment for Asia Pacific Pablo Berrutti is speaking at the Responsible Investment Association's conference in Melbourne today, and told the Sydney Morning Herald that he believes "we are starting to see a real tipping point" on the issue.

“We believe climate breakdown has diverse, urgent and complex implications for investors and the companies we invest in," Berrutti will say at the conference today. "However, the current approach to assessing climate risk is not comprehensive enough."

Reports Australia is heading towards a situation where it has too much solar energy are untrue, writes Green Energy Markets analyst Tristan Edis. He says while rooftop solar is expected to generate 85% more electricity than it did over the 2017-18 financial year, we’re not at risk of generating so much power from solar we’d have to spill and waste much of it.

“Rather it has done something very interesting. It creates a second off-peak period for power supply in the middle of the day, which replicates the kind of conditions power generators typically experience at about 2am to 5am.”

Three more things

  • From July 2019, power companies in Victoria will have to clearly tell customers, via their bills, whether they’re getting the cheapest deal available, at least four times a year. That’s one of the 11 recommendations from a state government-commissioned review, all of which will be implemented. Power companies only have to compare amongst their own offers, not competitors, and the state’s Essential Services Commission says it will be monitoring closely.

  • Frasers Property Australia, which owns apartment buildings, commercial, retail and industrial property, is starting its own energy retailer to sell power to its customers at below-market rates. Its customers are concerned about the price of power, the company said, and it will sell energy at 28% less than the average charged by large retailers.

  • Will bitcoin accelerate global warming? A new study in scientific journal Nature says that CO2 emissions from bitcoin mining and use alone could push warming above 2°C in less than three decades. However, other researchers have been quick to cast doubt on the study’s methodology and conclusions.

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.