tag:theconversation.com,2011:/au/topics/arena-11469/articlesARENA – The Conversation2021-06-22T13:38:26Ztag:theconversation.com,2011:article/1632002021-06-22T13:38:26Z2021-06-22T13:38:26ZSenate knocks out regulation allowing ARENA to fund carbon capture and blue hydrogen<p>The Senate on Tuesday night disallowed a government regulation that would have allowed the Australian Renewable Energy Agency (ARENA) to invest in technologies such as carbon capture and storage and blue hydrogen using fossil fuel.</p>
<p>Labor, Greens and crossbench votes defeated the regulation, so preventing the expansion of ARENA’s remit beyond its present area of solar and wind renewable energy.</p>
<p>The regulation would have enabled ARENA to support a wide range of technologies.</p>
<p>They would have included energy efficiency projects, carbon capture technologies, blue hydrogen from gas using CCS, energy storage technologies to back up renewable energy, technologies that reduce emissions from aluminium and steel, and soil carbon.</p>
<p>The $192.5 million new funding involved included money for electric vehicle charging infrastructure, microgrids in rural and regional areas, and technologies to make heavy trucks more fuel efficient and to reduce the energy consumption of heavy industry.</p>
<p>Energy minister Angus Taylor tweeted after the vote: “Labor have shown their true colours - opposing investment in new clean technologies which will create jobs and economic opportunities”. </p>
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<p>Greens leader Adam Bandt said the disallowance was “a massive blow to this coal and gas-fired government”.</p>
<p>“First the Liberals tried to abolish ARENA and then redirect its funds to coal and gas, but by backing the Greens motion, the Senate has just saved ARENA,” Bandt said. </p>
<p>Labor’s energy spokesman Chris Bowen tweeted: “The LNP keeps attacking ARENA and the CEFC [Clean Energy Finance Corporation] and Labor will continue to defend them”.</p>
<h2>Mark Vaile declines chancellor position after campaign over coal connection</h2>
<p>Education Minister Alan Tudge and outspoken Labor MP Joel Fitzgibbon have condemned the campaign that led former deputy prime minister Mark Vaile to withdrew from becoming University of Newcastle chancellor because of his association with the coal industry.</p>
<p>University staff, alumni and a group of donors to the university reacted strongly at the prospect of Vaile, who is chairman of Whitehaven Coal, taking the position.</p>
<p>The university is committed to becoming carbon neutral by 2025, a policy Vaile had said he supported.</p>
<p>But after the backlash he said, “I’ve just taken the view that it’s in the best interests of the university and the community that it serves if I decline the invitation and withdraw from the process.”</p>
<p>Tudge said it was very concerning Vaile had “been forced to turn down this role because of ideological pressure”.</p>
<p>“At a time when we are trying to promote and enforce free speech and academic freedom on campus, we should not have a very competent person forced out of an important job because of this cancel culture,” Tudge said.</p>
<p>Fitzgibbon, who represents the seat of Hunter, went further. “A new form of McCarthyism has crept into Australian culture and it’s alive and well in the Hunter region, deep in coal economy heartland”, he told parliament on Tuesday night.. </p>
<p>He said “this 21st Century version of the Cold War doctrine has been on display at our local university where a quite extraordinary, misleading, ideological, and shrill campaign” resulted in Vaile declining the offer to be chancellor. </p>
<p>Fitzgibbon said “the crime” Vaile had been “publicly shamed for” was his association with the coal industry.</p>
<p>“It’s a slippery slope. Today the excessive progressives target those associated with the coal industry. No doubt tomorrow it will be anyone associated with the oil, gas, and fuel refining industries. What’s next? The meat processing industry? The steel manufacturing sector?” </p>
<p>Fitzgibbon pointed out that while chairing Whitehaven Coal, Vaile also chaired an investment fund which had $1 billion worth of wind and solar technologies under management. </p>
<p>Vaile was deputy prime minister from 2005 to 2007.</p><img src="https://counter.theconversation.com/content/163200/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Senate has disallowed a government regulation that would have allowed the ARENA to invest in technologies such as carbon capture and storage and “blue hydrogen” using fossil fuel.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1544782021-02-03T18:59:16Z2021-02-03T18:59:16ZMorrison has embraced net-zero emissions – it’s time to walk the talk<figure><img src="https://images.theconversation.com/files/382122/original/file-20210203-21-1deumv4.jpg?ixlib=rb-1.1.0&rect=0%2C20%2C4506%2C2974&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Mick Tsikas/AAP</span></span></figcaption></figure><p>Prime Minister Scott Morrison on Monday <a href="https://www.pm.gov.au/media/address-national-press-club-barton-act">acknowledged</a> what many Australian businesses, investors and others have long known: the global economy is transitioning to net-zero emissions, and so too must Australia.</p>
<p>Morrison said the nation should get to net-zero “as soon as possible”, and preferably by 2050. We welcome this move – a net-zero goal will provide clarity, lift ambition and create focus. But Morrison must back the rhetoric with investment and policy commensurate with the task.</p>
<p>We are researchers at ClimateWorks, an independent advisory body based at Monash University. For much of the past decade, we have investigated how Australia can reach net-zero emissions. </p>
<p>The transition will require targeted government spending and specific, forward-thinking policies for each sector. Without this, Australia risks missing the opportunities being seized by our international peers.</p>
<figure class="align-center ">
<img alt="A wind farm" src="https://images.theconversation.com/files/382125/original/file-20210203-13-kh0ynr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/382125/original/file-20210203-13-kh0ynr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/382125/original/file-20210203-13-kh0ynr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/382125/original/file-20210203-13-kh0ynr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/382125/original/file-20210203-13-kh0ynr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/382125/original/file-20210203-13-kh0ynr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/382125/original/file-20210203-13-kh0ynr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Australia is well-placed to seize the opportunities of the clean transition.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Australia needs a game plan</h2>
<p>Experts <a href="https://www.un.org/press/en/2020/sgsm20411.doc.htm">say</a> developed economies such as Australia should aim to achieve net-zero emissions by 2050 to meet their commitments under the Paris climate deal. The target must be achieved <a href="https://www.ipcc.ch/sr15/%20https://www.ipcc.ch/sr15/">earlier</a> if the world is to limit global warming to 1.5°C, beyond which catastrophic climate change is predicted. </p>
<p>Our <a href="https://www.climateworksaustralia.org/resource/decarbonisation-futures-solutions-actions-and-benchmarks-for-a-net-zero-emissions-australia/">research last year</a> examined mature and emerging technologies, and found Australia could reach net-zero by 2035. Here, we set out a possible course.</p>
<p>Australia boasts world-beating wind and solar energy and plentiful mineral resources. That means we could produce green steel, aluminium and hydrogen and export it to the world.</p>
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<em>
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Read more:
<a href="https://theconversation.com/view-from-the-hill-now-scott-morrisons-preference-is-for-net-zero-emissions-by-2050-154394">View from The Hill: Now Scott Morrison's 'preference' is for net zero emissions by 2050</a>
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<p>The Morrison government has good foundations on which to continue the clean transition. For example, the Australian Renewable Energy Agency (<a href="https://arena.gov.au">ARENA</a>) and Clean Energy Finance Corporation (<a href="https://www.cefc.com.au">CEFC</a>) have proven effective vehicles for government investment. And the <a href="http://www.cleanenergyregulator.gov.au/ERF">Emissions Reduction Fund</a>, while far from perfect, creates a framework that could be scaled up. </p>
<p>The government also has state government partners and businesses willing to cooperate on climate action. And current low interest rates are good news for governments wanting to borrow to invest. </p>
<p>The Morrison government must now develop a more comprehensive approach to emissions reduction across all sectors of the economy. This should include:</p>
<ul>
<li><p>using its purchasing power to stimulate demand for clean technologies. This might mean transitioning to all-electric government fleet cars and net-zero energy offices, and requesting net-zero options in government tenders</p></li>
<li><p>ensuring all federal government spending is assessed for its contribution to the net-zero transition</p></li>
<li><p>designing “decarbonisation roadmaps” for each sector of the economy in partnership with industry</p></li>
<li><p>setting higher energy efficiency standards in buildings, industry and transport.</p></li>
</ul>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/371692/original/file-20201127-21-5zp0l4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Tall buildings covered in green plants" src="https://images.theconversation.com/files/371692/original/file-20201127-21-5zp0l4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/371692/original/file-20201127-21-5zp0l4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/371692/original/file-20201127-21-5zp0l4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/371692/original/file-20201127-21-5zp0l4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/371692/original/file-20201127-21-5zp0l4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=425&fit=crop&dpr=1 754w, https://images.theconversation.com/files/371692/original/file-20201127-21-5zp0l4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=425&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/371692/original/file-20201127-21-5zp0l4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=425&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Australia’s building sector is ripe for emissions reduction technologies.</span>
<span class="attribution"><span class="source">Shutterstock/SAKARET</span></span>
</figcaption>
</figure>
<h2>Time to hit the accelerator</h2>
<p>Economically feasible technologies for zero-emissions already exist across the economy. Now the task is to dramatically scale up.</p>
<p>In Australia’s electricity sector, renewable energy generation is being installed at <a href="https://www.minister.industry.gov.au/ministers/taylor/media-releases/australia-sets-new-renewables-records-2020">record rates</a>. Yet as Australia’s ageing coal-fired generation retires, more investment and national policy is needed to ensure reliability and a smart, flexible grid.</p>
<p>This includes incentives for better energy management, storage and transmission. The transition to a fully renewable electricity sector would unlock emissions reductions in other sectors that are big electricity users - especially buildings, transport and industry.</p>
<p>Buildings can be more <a href="https://www.climateworksaustralia.org/resource/built-to-perform/">energy efficient</a> and fully electrified, producing lower energy bills and more comfort for users. Doing this in existing buildings can be complex, but state energy efficiency schemes are a start.</p>
<p>For transport, the solutions are well-established <a href="https://www.climateworksaustralia.org/project/transport/">overseas</a>. In Norway, for example, electric vehicles comprise <a href="https://www.weforum.org/agenda/2020/10/norway-electric-cars-majority-sales/">60% of new car sales</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/345953/original/file-20200707-18-1an5t76.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/345953/original/file-20200707-18-1an5t76.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/345953/original/file-20200707-18-1an5t76.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/345953/original/file-20200707-18-1an5t76.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/345953/original/file-20200707-18-1an5t76.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/345953/original/file-20200707-18-1an5t76.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/345953/original/file-20200707-18-1an5t76.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/345953/original/file-20200707-18-1an5t76.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Electric vehicles are the answer to road transport emissions.</span>
<span class="attribution"><span class="source">Shutterstock/mastersky</span></span>
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</figure>
<h2>Where the challenges lie</h2>
<p>For industry, challenges exist in transitioning from old technologies and scaling up new ones. However clean technologies are emerging and some businesses are looking to invest. For example, Andrew “Twiggy” Forrest wants his Fortescue Metals Group to <a href="https://www.abc.net.au/news/2021-01-22/boyer-lecture-andrew-twiggy-forrest-green-hydrogen-climate/13077070">pilot renewable hydrogen</a> to produce green steel.</p>
<p>The federal government’s Technology Investment <a href="https://www.industry.gov.au/data-and-publications/technology-investment-roadmap-first-low-emissions-technology-statement-2020">Roadmap</a> and $A1.3 billion <a href="https://www.industry.gov.au/news/modern-manufacturing-initiative-and-national-manufacturing-priorities-announced">Modern Manufacturing Initiative</a> are a useful start, but don’t go far enough. The roadmap, for example, sets “stretch goals” for low-emissions steel and aluminium, but no timeframes or comprehensive plans. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/forget-about-the-trade-spat-coal-is-passe-in-much-of-china-and-thats-a-bigger-problem-for-australia-153300">Forget about the trade spat – coal is passé in much of China, and that's a bigger problem for Australia</a>
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<p>The government should implement policies tailored to each sector. It could follow the lead of the British government, which is <a href="https://www.argusmedia.com/en/news/2161948-uk-mulls-biojet-mandate-by-2025">considering</a> a sustainable aviation fuel mandate by 2025.</p>
<p>In Australia, major businesses are <a href="https://energytransitionsinitiative.org">partnering</a> with each other and research organisations to investigate net-zero pathways for industries such as steel, aluminium and chemicals. But other national governments are investing in these measures far more heavily than Australia’s. </p>
<p>If Australia wants to be globally competitive, it must match the net-zero ambition and technology investment of our international peers. The United Kingdom, for example, has laid out <a href="https://www.gov.uk/government/publications/the-ten-point-plan-for-a-green-industrial-revolution/title">sector strategies</a> for a green industrial revolution. And South Korea’s <a href="https://theconversation.com/south-koreas-green-new-deal-shows-the-world-what-a-smart-economic-recovery-looks-like-145032">Green New Deal</a> involves a US$61.9 billion (A$81.3 billion) investment targeting the creation of 659,000 by 2025.</p>
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<img alt="South Korean President Moon Jae-in, centre" src="https://images.theconversation.com/files/357090/original/file-20200909-17-1rqapmw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/357090/original/file-20200909-17-1rqapmw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/357090/original/file-20200909-17-1rqapmw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/357090/original/file-20200909-17-1rqapmw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/357090/original/file-20200909-17-1rqapmw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/357090/original/file-20200909-17-1rqapmw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/357090/original/file-20200909-17-1rqapmw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">South Korean President Moon Jae-in, centre, has backed a huge investment in green technology.</span>
<span class="attribution"><span class="source">Yonhap/EPA</span></span>
</figcaption>
</figure>
<h2>The art of the possible</h2>
<p>In the post-pandemic economy, stimulus measures for zero-emissions technologies could provide a “triple dividend” - address climate change, strengthen the economy and create jobs. </p>
<p>In his first few weeks on the job, US President Joe Biden <a href="https://www.bbc.com/news/world-us-canada-55829189">has shown</a> the breadth of action possible to shift to a net-zero economy. Australia, if it dramatically scales up action, can get there too. </p>
<p>As Morrison <a href="https://www.afr.com/politics/federal/nationals-wary-about-pm-s-net-zero-plans-20210202-p56yn1">said</a> this week, the central question about achieving net-zero was “not when, it’s how”. Most parts of the economy already know how. Now it’s time to put the theory into action.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/bidens-senate-majority-doesnt-just-super-charge-us-climate-action-it-blazes-a-trail-for-australia-153090">Biden’s Senate majority doesn't just super-charge US climate action, it blazes a trail for Australia</a>
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<img src="https://counter.theconversation.com/content/154478/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anna Malos is part of ClimateWorks Australia which receives funding from philanthropy and project-based income from federal, state and local government and private sector organisations.
ClimateWorks Australia receives funding from several philanthropic foundations, and project-specific financial support from a range of private and public entities.</span></em></p><p class="fine-print"><em><span>Anna Skarbek is CEO of ClimateWorks Australia which works within the Monash Sustainable Development Institute. ClimateWorks Australia receives its core funding from philanthropic foundations and also undertakes projects which attract funding from industry and government departments and agencies. Anna holds also non-executive director roles with Impact Investment Group, Sustainable Australia Fund, the Green Building Council of Australia and of the Centre for New Energy Technologies.</span></em></p>A net-zero goal will provide clarity, ambition and focus. But Morrison must back the rhetoric with investment and policy commensurate with the task.Anna Malos, Australia - Country Lead, Climateworks CentreAnna Skarbek, CEO at ClimateWorks Australia, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1506722020-11-26T04:34:21Z2020-11-26T04:34:21ZNot just hot air: turning Sydney’s wastewater into green gas could be a climate boon<figure><img src="https://images.theconversation.com/files/371428/original/file-20201126-23-cyrlfw.jpg?ixlib=rb-1.1.0&rect=16%2C0%2C5624%2C3763&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Biomethane technology is no longer on the backburner in Australia after an <a href="https://arena.gov.au/news/australian-first-biomethane-trial-for-nsw-gas-network/">announcement</a> this week that gas from Sydney’s Malabar wastewater plant will be used to power up to 24,000 homes.</p>
<p>Biomethane, also known as renewable natural gas, is produced when bacteria break down organic material such as human waste. </p>
<p>The demonstration project is the first of its kind in Australia. But many may soon follow: New South Wales’ gas pipelines are <a href="https://arena.gov.au/news/australian-first-biomethane-trial-for-nsw-gas-network/">reportedly close</a> to more than 30,000 terajoules (TJs) of potential biogas, enough to supply 1.4 million homes.</p>
<p><a href="https://www.smh.com.au/politics/nsw/green-gas-to-be-produced-at-sydney-water-plant-in-an-australian-first-20201122-p56gre.html">Critics</a> say the project will do little to dent Australia’s greenhouse emissions. But if deployed at scale, gas captured from wastewater can help decarbonise our gas grid and bolster energy supplies. The trial represents the chance to demonstrate an internationally proven technology on Australian soil. </p>
<figure class="align-center ">
<img alt="pipeline at beach" src="https://images.theconversation.com/files/371430/original/file-20201126-27-18trni1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/371430/original/file-20201126-27-18trni1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/371430/original/file-20201126-27-18trni1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/371430/original/file-20201126-27-18trni1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/371430/original/file-20201126-27-18trni1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/371430/original/file-20201126-27-18trni1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/371430/original/file-20201126-27-18trni1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The project would turn Sydney’s sewage into a renewable gas.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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</figure>
<h2>What’s the project all about?</h2>
<p>Biomethane is a clean form of biogas. Biogas is about 60% methane and 40% carbon dioxide (CO₂) and other contaminants. Turning biogas into biomethane requires technology that scrubs out the contaminants – a process called <a href="http://task37.ieabioenergy.com/files/daten-redaktion/download/publi-task37/upgrading_rz_low_final.pdf">upgrading</a>. </p>
<p>The resulting biomethane is 98% methane. While methane produces CO₂ when burned at the point of use, biomethane is considered “zero emissions” – it does not add to greenhouse gas emissions. This is because:</p>
<ul>
<li><p>it captures methane produced from anaerobic digestion, in which microorganisms break down organic material. This methane would otherwise have been released to the atmosphere</p></li>
<li><p>it is used in place of fossil fuels, displacing those CO₂ emissions.</p></li>
</ul>
<p>Biomethane can also produce <a href="https://www.europeanbiogas.eu/wp-content/uploads/2020/04/20200419-Background-paper_final.pdf">negative emissions</a> if the CO₂ produced from upgrading it is used in other processes, such as industry and manufacturing.</p>
<p>Biomethane is indistinguishable from natural gas, so can be used in existing gas infrastructure.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/biogas-smells-like-a-solution-to-our-energy-and-waste-problems-36136">Biogas: smells like a solution to our energy and waste problems</a>
</strong>
</em>
</p>
<hr>
<p>The Malabar project, in southeast Sydney, is a joint venture between gas infrastructure giant Jemena and utility company Sydney Water. The A$13.8 million trial is partly funded by the federal government’s Australian Renewable Energy Agency (ARENA).</p>
<p>Sydney Water, which runs the Malabar wastewater plant, will install gas-purifying equipment at the site. Biogas produced from sewage sludge will be cleaned and upgraded – removing contaminants such as CO₂ – then injected into Jemena’s gas pipelines.</p>
<p>Sydney Water will initially supply 95TJ of biomethane a year from early 2022, equivalent to the gas demand of about 13,300 homes. Production is expected to scale up to 200TJ a year.</p>
<figure class="align-center ">
<img alt="Two women look over the Malabar plant" src="https://images.theconversation.com/files/371427/original/file-20201126-13-1b0890.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/371427/original/file-20201126-13-1b0890.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=365&fit=crop&dpr=1 600w, https://images.theconversation.com/files/371427/original/file-20201126-13-1b0890.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=365&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/371427/original/file-20201126-13-1b0890.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=365&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/371427/original/file-20201126-13-1b0890.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=459&fit=crop&dpr=1 754w, https://images.theconversation.com/files/371427/original/file-20201126-13-1b0890.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=459&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/371427/original/file-20201126-13-1b0890.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=459&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The project involves cleaning and upgrading biogas from the Malabar Wastewater Treatment Plant.</span>
<span class="attribution"><span class="source">Sydney Water</span></span>
</figcaption>
</figure>
<h2>Biomethane: the benefits and challenges for Australia</h2>
<p>A <a href="https://www.iea.org/reports/outlook-for-biogas-and-biomethane-prospects-for-organic-growth">report</a> by the International Energy Agency earlier this year said biogas and biomethane could cover 20% of global natural gas demand while reducing greenhouse emissions.</p>
<p>As well as creating zero-emissions energy from wastewater, biomethane can be produced from waste created by agriculture and food production, and from methane released at landfill sites.</p>
<p>The industry is a potential economic opportunity for regional areas, and would generate skilled jobs in planning, engineering, operating and maintenance of biogas and biomethane plants.</p>
<p>Methane emitted from organic waste at facilities such as Malabar is <a href="https://www.ipcc.ch/report/ar5/syr/">28 times</a> more potent than CO₂. So using it to replace fossil-fuel natural gas is a win for the environment.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/emissions-of-methane-a-greenhouse-gas-far-more-potent-than-carbon-dioxide-are-rising-dangerously-142522">Emissions of methane – a greenhouse gas far more potent than carbon dioxide – are rising dangerously</a>
</strong>
</em>
</p>
<hr>
<p>It’s also a win for Jemena, and all energy users. Many of Jemena’s gas customers, such as the City of Sydney, want to decarbonise their existing energy supplies. Some say they will stop using gas if renewable alternatives are not found. Jemena <a href="https://www.aer.gov.au/system/files/JGN%20-%20Attachment%204.8b%20-%20Augmentation%20capex%20source%20info%20-%20Malabar%20Biomethane%20Project%20-%20Options%20analysis%20-%20January%202020.pdf">calculates</a> losing these customers would lose it A$2.1 million each year by 2050, and ultimately, lead to higher costs for remaining customers.</p>
<p>The challenge for Australia will be the large scale roll out of biomethane. Historically, this phase has been a costly exercise for renewable technologies entering the market.</p>
<figure class="align-center ">
<img alt="A woman cooking with gas" src="https://images.theconversation.com/files/371431/original/file-20201126-25-ljiqfe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/371431/original/file-20201126-25-ljiqfe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=402&fit=crop&dpr=1 600w, https://images.theconversation.com/files/371431/original/file-20201126-25-ljiqfe.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=402&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/371431/original/file-20201126-25-ljiqfe.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=402&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/371431/original/file-20201126-25-ljiqfe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=506&fit=crop&dpr=1 754w, https://images.theconversation.com/files/371431/original/file-20201126-25-ljiqfe.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=506&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/371431/original/file-20201126-25-ljiqfe.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=506&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Biomethane will be injected into the existing gas network and delivered to homes.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>The global picture</h2>
<p>Worldwide, the <a href="http://task37.ieabioenergy.com/plant-list.html">top</a> biomethane-producers include Germany, the United Kingdom, Sweden, France and the United States.</p>
<p>The international market for biomethane is growing. Global clean energy policies, such as the European <a href="https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en">Green Deal</a>, will help create <a href="https://www.europeanbiogas.eu/the-european-green-deal-in-the-fast-lane-with-biomethane-in-transport-2/">extra demand</a> for biomethane. The largest opportunities lie in the <a href="https://www.iea.org/reports/outlook-for-biogas-and-biomethane-prospects-for-organic-growth">Asia-Pacific</a> region, where natural gas consumption and imports have grown rapidly in recent years.</p>
<p>Australia is lagging behind the rest of the world on biomethane use. But more broadly, it does have a <a href="https://www.ieabioenergy.com/blog/publications/new-publication-iea-bioenergy-task-37-energy-from-biogas-country-report-summaries-2019/">biogas sector</a>, comprising more than 240 plants associated with landfill gas power units and wastewater treatment. </p>
<p>In Australia, biogas is <a href="https://biogas.usq.edu.au/#/home">already used</a> to produce electricity and heat. The step to grid injection is sensible, given the <a href="http://task37.ieabioenergy.com/files/daten-redaktion/download/Technical%20Brochures/green_gas_web_end.pdf">logistics</a> of injecting biomethane into existing gas infrastructure works well overseas. But the industry needs government support.</p>
<p>Last year, a <a href="https://cdn.revolutionise.com.au/cups/bioenergy/files/2za1rgxbisjqxcme.pdf">landmark report</a> into biogas opportunities for Australia put potential production at 103 terawatt hours. This is equivalent to almost 9% of Australia’s total energy consumption, and comparable to current biogas production in Germany. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/371175/original/file-20201124-21-9eyat8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/371175/original/file-20201124-21-9eyat8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=380&fit=crop&dpr=1 600w, https://images.theconversation.com/files/371175/original/file-20201124-21-9eyat8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=380&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/371175/original/file-20201124-21-9eyat8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=380&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/371175/original/file-20201124-21-9eyat8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=477&fit=crop&dpr=1 754w, https://images.theconversation.com/files/371175/original/file-20201124-21-9eyat8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=477&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/371175/original/file-20201124-21-9eyat8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=477&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The distribution of reported operational biogas upgrading units in the IEA Bioenergy Task 37-member countries.</span>
</figcaption>
</figure>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/371174/original/file-20201124-17-c04fvn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/371174/original/file-20201124-17-c04fvn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/371174/original/file-20201124-17-c04fvn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=403&fit=crop&dpr=1 600w, https://images.theconversation.com/files/371174/original/file-20201124-17-c04fvn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=403&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/371174/original/file-20201124-17-c04fvn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=403&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/371174/original/file-20201124-17-c04fvn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=506&fit=crop&dpr=1 754w, https://images.theconversation.com/files/371174/original/file-20201124-17-c04fvn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=506&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/371174/original/file-20201124-17-c04fvn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=506&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Current use of biogas in Australia.</span>
</figcaption>
</figure>
<h2>A clean way to a gas-led recovery</h2>
<p>While the scale of the Malabar project will only reduce emissions in a small way initially, the trial will bring renewable gas into the Australia’s renewable energy family. Industry group <a href="https://www.bioenergyaustralia.org.au/home/">Bioenergy Australia</a> is now working to ensure gas standards and specifications are understood, to safeguard its smooth and safe introduction into the energy mix.</p>
<p>The Morrison government has been spruiking a gas-led recovery from the COVID-19 recession, which it says would make energy more affordable for families and businesses and support jobs. Using greenhouse gases produced by wastewater in Australia’s biggest city is an important – and green – first step. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/a-dose-of-reality-morrison-governments-new-1-9-billion-techno-fix-for-climate-change-is-a-small-step-146341">'A dose of reality': Morrison government's new $1.9 billion techno-fix for climate change is a small step</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/150672/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bernadette McCabe receives funding from the Rural R & D for Profit program, the Fight Food Waste CRC and the Queensland Government. She is Australia's National Team Leader for the International Energy Agency Task 37 Energy from Biogas and is a member of Bioenergy Australia</span></em></p>The trial represents the chance to demonstrate an internationally proven technology on Australian soil - turning human waste into a carbon neutral energy source.Bernadette McCabe, Professor and Principal Scientist, University of Southern QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1463412020-09-17T01:01:30Z2020-09-17T01:01:30Z‘A dose of reality’: Morrison government’s new $1.9 billion techno-fix for climate change is a small step<figure><img src="https://images.theconversation.com/files/358417/original/file-20200916-16-b338h5.jpeg?ixlib=rb-1.1.0&rect=26%2C0%2C4466%2C2991&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Dean Lewins/AAP</span></span></figcaption></figure><p>The Morrison government <a href="https://www.minister.industry.gov.au/ministers/taylor/media-releases/investment-new-energy-technologies">today announced</a> A$1.9 billion over ten years to develop clean technology in industry, agriculture and transport. In some ways it’s a step in the right direction, but a far cry from what’s needed to drive Australia’s shift to a low emissions economy. </p>
<p>The big change involves what the money is for. The new funding will enable the Australian Renewable Energy Agency (ARENA) to support technologies such as green steel production, industrial processes to reduce energy consumption and somewhat controversially, carbon-capture and storage and soil-carbon sequestration. </p>
<p>This is a big move away from ARENA’s current <a href="https://arena.gov.au/about/investment-priorities/">investment priorities</a>. Importantly it means ARENA will continue to operate, as it is running out of money now. </p>
<p>However technology development alone is not enough to cut Australia’s emissions deeply and quickly – which is what’s needed to address the climate threat. Other policies and more money will be needed. </p>
<figure class="align-center ">
<img alt="Interior of steelworks" src="https://images.theconversation.com/files/358488/original/file-20200916-16-rnuh2e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/358488/original/file-20200916-16-rnuh2e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/358488/original/file-20200916-16-rnuh2e.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/358488/original/file-20200916-16-rnuh2e.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/358488/original/file-20200916-16-rnuh2e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/358488/original/file-20200916-16-rnuh2e.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/358488/original/file-20200916-16-rnuh2e.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Cutting emissions from industry will be a focus of the new spending.</span>
<span class="attribution"><span class="source">Dean Lewins/AAP</span></span>
</figcaption>
</figure>
<h2>New role for ARENA</h2>
<p>ARENA will receive the lion’s share of the money: A$1.4 billion over ten years in guaranteed baseline funding. ARENA has spent A$1.6 billion since it was established in 2012. So the new funding is lower on an annual basis. It’s also far less than what’s needed to properly meet the challenge, in a country with a large industrial sector and huge opportunities for zero carbon production. </p>
<p>To date, ARENA’s investments have focused on renewable energy supply. Prime Minister Scott Morrison today said the renewables industry was enjoying a “world-leading boom” and no longer needs government subsidies. Critics may be dismayed to see ARENA steered away from its original purpose. But it is true solar parks and wind farms are now commercially viable, and technologies to integrate large amounts of renewables into the grid are available. </p>
<p>So it makes sense to spend new research and development (R&D) funding on the next generation of low-emissions technologies. But how to choose what to spend the money on? </p>
<p>A few simple principles should inform those choices. The spending should help develop new zero- or low-emissions technologies or make them cheaper. It should also enable the shift to a net-zero emissions future, rather than locking in structures that continue to emit. The investment choices should be made by independent bodies such as ARENA’s board, based on research and expert judgement, rather than politically determined priorities.</p>
<p>For the industrial sector, the case for supporting zero-emissions technologies is clear. A sizeable share of Australia’s total emissions stem from fossil fuel use in industry.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/government-targets-emerging-technologies-with-1-9-billion-saying-renewables-can-stand-on-own-feet-146327">Government targets emerging technologies with $1.9 billion, saying renewables can stand on own feet</a>
</strong>
</em>
</p>
<hr>
<p>In some cases, government-supported R&D could help lay the foundation for zero-emissions industries of the future. But in others, what’s needed is a financial incentive for businesses to switch to clean energy or zero-emissions production methods, or regulation to require cleaner processes. </p>
<p><a href="https://theconversation.com/australians-want-industry-and-theyd-like-it-green-steel-is-the-place-to-start-137999">Green steel</a> is a perfect example of the positive change that is possible. Steel can be made using clean hydrogen and renewable electricity, and the long term possibility of a green steel industry in Australia is tantalising.</p>
<figure class="align-center ">
<img alt="Steel being made" src="https://images.theconversation.com/files/358429/original/file-20200916-16-13hjlwr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/358429/original/file-20200916-16-13hjlwr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/358429/original/file-20200916-16-13hjlwr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/358429/original/file-20200916-16-13hjlwr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/358429/original/file-20200916-16-13hjlwr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/358429/original/file-20200916-16-13hjlwr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/358429/original/file-20200916-16-13hjlwr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Steel could be made cleanly using hydrogen instead of coking coal.</span>
<span class="attribution"><span class="source">Dean Lewins/AAP</span></span>
</figcaption>
</figure>
<h2>A future for fossil fuels?</h2>
<p>The government’s support for carbon capture and storage (CCS) will be highly contested, because it’s a way to continue using fossil fuels at reduced – though not zero – emissions. This is achieved by capturing carbon dioxide before it enters the atmosphere and storing it underground, a technically feasible but costly process. </p>
<p>CCS will not perpetuate fossil fuel use in the energy sector, because renewables combined with energy storage are now much cheaper. Rather, CCS can be an option in specific processes that do not have ready alternatives, such as the production of cement, chemicals and fertiliser. </p>
<p>One step further is so-called “carbon capture and use” (CCU), where carbon dioxide is not pumped underground but turned into products, such as building materials. One program announced is for pilot projects of that kind.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/yes-carbon-emissions-fell-during-covid-19-but-its-the-shift-away-from-coal-that-really-matters-138611">Yes, carbon emissions fell during COVID-19. But it's the shift away from coal that really matters</a>
</strong>
</em>
</p>
<hr>
<p>A different proposition is the idea of hydrogen produced from coal or gas, in which some resulting emissions are captured. This method <a href="https://theconversation.com/for-hydrogen-to-be-truly-clean-it-must-be-made-with-renewables-not-coal-128053">competes</a> with “green” hydrogen produced using renewable electricity. It seems the government for now intends to support fossil fuel-derived hydrogen.</p>
<p>Reducing fossil fuel use, and using CCS/CCU where it makes sense, will not get the world to net-zero emissions. Emissions from other sources must be cut by as much as technically possible, at justifiable cost. Remaining emissions must then be negated by drawing carbon dioxide from the atmosphere. Such “negative emissions” can be achieved through technological means, and also by permanently increasing the amount of carbon stored in plants and soil.</p>
<p>The new funding includes support for increasing the amount of soil carbon. This method may hold promise in principle, but in practice its effectiveness is uncertain, and hard to measure. At the same time, the large emissions from agriculture are not yet addressed. </p>
<figure class="align-center ">
<img alt="Gas flaring from an industrial plant" src="https://images.theconversation.com/files/358431/original/file-20200916-14-13cugac.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/358431/original/file-20200916-14-13cugac.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/358431/original/file-20200916-14-13cugac.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/358431/original/file-20200916-14-13cugac.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/358431/original/file-20200916-14-13cugac.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/358431/original/file-20200916-14-13cugac.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/358431/original/file-20200916-14-13cugac.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Reducing the burning of fossil fuels is not enough to get to net-zero emissions.</span>
<span class="attribution"><span class="source">Matt Black Productions</span></span>
</figcaption>
</figure>
<h2>A piecemeal effort</h2>
<p>The spending amounts to A$140 million per year for ARENA, plus about A$500 million all up through other programs. A dose of reality is needed about what this money can achieve. It will create better understanding of options, some technological progress across the board and surely the occasional highlight. But a much greater effort is likely needed to achieve fundamental technological breakthroughs. And crucially, new technologies must be widely deployed. </p>
<p>For a sense of scale, consider that the Snowy 2.0 scheme is costed at around A$5 billion, and a single 1 gigawatt gas power plant, as mooted by the government for the Hunter Valley, would <a href="https://publications.csiro.au/publications/#publication/PIcsiro:EP201952">cost</a> in the order of A$1.5 billion to build. </p>
<p>As well as additional spending, policies will be needed to drive the uptake of low-emissions technologies. The <a href="https://energy.anu.edu.au/files/2020%2009%2003%20-%20Austalia%20the%20global%20renewable%20energy%20pathfinder%20-%20Andrew%20Blakers%2C%20Ken%20Baldwin%2C%20Matthew%20Stocks.pdf">shift to renewables</a> is now happening in the energy sector without government help, though some hurdles remain. But we cannot expect the same across the economy. </p>
<p>Governments will need to help drive uptake through policy. The most efficient way is usually to ensure producers of emissions pay for the environmental damage caused. In other words, putting a <a href="https://theconversation.com/carbon-pricing-works-the-largest-ever-study-puts-it-beyond-doubt-142034">price on carbon</a>. </p>
<p>The funding announced today is merely one piece of a national long-term strategy to deeply cut emissions – and not a particularly big piece. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/carbon-pricing-works-the-largest-ever-study-puts-it-beyond-doubt-142034">Carbon pricing works: the largest-ever study puts it beyond doubt</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/146341/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Frank Jotzo leads research projects supported respectively by the Australian government and the 2050 Pathways Platform, and occasionally consults to organisations, governments and businesses. No conflicts of interest exist in relation to this article.</span></em></p>We cannot rely on technology development alone to deeply cut Australia’s emissions. Other policies and more money will be needed.Frank Jotzo, Director, Centre for Climate and Energy Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/654342016-09-16T05:04:25Z2016-09-16T05:04:25ZAttacks on renewable energy policy are older than the climate issue itself<p>The <a href="https://theconversation.com/australian-renewable-energy-agency-saved-but-with-reduced-funding-experts-react-65334">recent battles</a> over the budget of the <a href="http://arena.gov.au/">Australian Renewable Energy Agency (ARENA)</a>, and before that over the <a href="https://theconversation.com/governments-ret-compromise-guarantees-uncertainty-for-renewables-41524">size of the Renewable Energy Target</a>, are the latest skirmishes in a long-running war over support for technologies that harvest Australia’s abundant wind and solar resources.</p>
<p>Perhaps surprisingly, the conflict even predates the popular awareness of climate change, which is generally <a href="http://www.nytimes.com/1988/06/24/us/global-warming-has-begun-expert-tells-senate.html?pagewanted=all">dated to 1988</a>.</p>
<p>UNSW Australia’s <a href="https://theconversation.com/profiles/mark-diesendorf-226">Mark Diesendorf</a> has <a href="https://www.amazon.co.uk/Greenhouse-Solutions-Sustainable-Energy-Diesendorf/dp/0868409731">described</a> how in early 1983 he and his colleagues had identified an ideal site in northern Tasmania for a wind farm. They presented their proposal to Labor’s newly appointed resources minister, Peter Walsh. </p>
<blockquote>
<p>We submitted a proposal that the federal government fund a demonstration wind farm and assist in establishing a local wind generator manufacturing industry in the region, which was suffering from high unemployment. The next day, Senator Walsh announced that a northwest Tasmanian wind energy project could be a part of a development package, if the Commonwealth was successful in the High Court challenge to the construction of the Gordon-below-Franklin dam.</p>
</blockquote>
<p>The Commonwealth won its High Court battle, but the wind industry did not get its windfall. As Diesendorf recalls:</p>
<blockquote>
<p>The federal government did not implement our proposal. It was soon obvious that the coal lobby, which was already very strong in the Department of Resources, had succeeded in turning the minister against wind power.</p>
</blockquote>
<p>At the same time, CSIRO, a world leader in several areas of renewables, closed down all of its renewable energy research. In Diesendorf’s view this was brought on by powerful coal interests within CSIRO. In the absence of deathbed confessions by those who made the decisions, Diesendorf’s suspicions can’t be proved correct, but renewables did indeed disappear from CSIRO’s research agenda and annual reports from that time.</p>
<p>Once climate change hit the headlines, things changed – a little. In 1990 the Hawke government established the <a href="http://trove.nla.gov.au/people/581368?c=people">Energy Research and Development Corporation (ERDC)</a> and launched a National Energy Efficiency Program. Meanwhile, <a href="http://catalogue.nla.gov.au/Record/2606334">research commissioned by the Victorian government</a> found that renewable energy, paired with energy-efficiency measures, could save A$3.14 billion a year by 2005, create almost 14,000 jobs, boost economic productivity by A$800 million a year, and cut greenhouse emissions into the bargain. </p>
<p>But privatisation took hold in Victoria, and the Keating government in Canberra seemed indifferent at best. In 1994, green groups including the Australian Conservation Foundation <a href="https://books.google.co.uk/books?id=gmvobC1rqycC&pg=PA170&lpg=PA170&dq=carbon+levy+1994+australian+conservation+foundation&source=bl&ots=16QYhppXNe&sig=JS1IUxZGayuK-9BwT-uG-TickLw&hl=en&sa=X&ved=0ahUKEwiovJHXlY_PAhUJCcAKHTVTBtIQ6AEIHDAA#v=onepage&q=carbon%20levy%201994%20australian%20conservation%20foundation&f=false">called</a> for a carbon levy to provide funds for renewable energy. Their request was ignored.</p>
<h2>Renewables back on target</h2>
<p>In 1996 the new Howard government disbanded Bob Hawke’s ERDC and energy efficiency program. In late 1997, in the run-up to the Kyoto climate summit, John Howard announced a new Renewable Energy Target (RET). </p>
<p>Greens leader Bob Brown was <a href="https://books.google.co.uk/books?id=frfUBwAAQBAJ&pg=PA104&lpg=PA104&dq=PM%E2%80%99s+Greenhouse+Package+%E2%80%93+18%25+Increase!+Media+Release,+Australian+Senate&source=bl&ots=tciPw-W6VR&sig=MlCCngCr_AZRz-CN3ctYime7kbg&hl=en&sa=X&ved=0ahUKEwj5xLPoko_PAhVJIMAKHd0TD_wQ6AEIHjAA#v=onepage&q=PM%E2%80%99s%20Greenhouse%20Package%20%E2%80%93%2018%25%20Increase!%20Media%20Release%2C%20Australian%20Senate&f=false">underwhelmed</a>. He pointed out that the scheme’s A$65 million over five years was less than the A$75 million that had been axed the year before, while the target of an extra 2% of electricity from renewables (making a total of 11% including existing large-scale hydro electricity generation) fell short of the ambition shown by other nations. Britain, for instance, was aiming for 20% by 2010.</p>
<p>The RET finally came into place in 2001, after the fossil fuel lobby <a href="https://www.researchgate.net/publication/223337855_Australia's_Mandatory_Renewable_Energy_Target_MRET_an_assessment">succeeded in getting it watered down</a>, and was subjected to constant reviews. </p>
<p>Infamously, at a secret meeting whose minutes were leaked, the then energy minister, Ian MacFarlane, lamented to the chief executives of companies like BHP and Rio that the RET was working too well – renewables were <a href="http://www.abc.net.au/pm/content/2004/s1194166.htm">growing too fast</a>. </p>
<p>In the run-up to the 2004 Energy White Paper, the renewables industry had hired well-connected lobby firm Crosby Textor (yes, Crosby as in Lynton Crosby) in a bid to get the RET raised to as much as 10%. </p>
<p>According to <a href="http://www.theage.com.au/news/national/burying-the-problem/2005/07/29/1122144018763.html">Age journalist Richard Baker</a>, a Liberal backbencher warned the renewables advocates that “you guys are stuffed”. And so it came to pass – the white paper spruiked carbon capture and storage, not renewables.</p>
<p>In the white paper’s aftermath, CSIRO boss Geoff Garrett announced that the organisation would be <a href="http://www.smh.com.au/news/national/csiro-to-focus-on-coalfriendly-technologies/2006/01/31/1138590483002.html">reducing its renewables research and instead focusing on “clean coal” technologies</a> such as coal gasification and carbon capture and storage.</p>
<p>Months later, a draft copy of an August 2005 CSIRO report describing solar thermal technology as “the only renewable technology that can make deep cuts in greenhouse emissions” was <a href="https://newmatilda.com/2007/11/15/old-king-coal/">leaked to The Canberra Times</a>. Before the leak, sources claimed the report had been “passed around like a political hot potato” with no date set for its release. It was eventually released to the public later that year.</p>
<h2>Bloody public battles</h2>
<p>Since 2007 the battles have been more public and even bloodier. An attempt to harmonise (and perhaps increase) different state and federal targets (all with different baselines, target years and amounts) was a dispiriting process. This was due in part, it seems, to <a href="https://ideas.repec.org/a/eee/renene/v67y2014icp128-135.html">federal bureaucratic intransigence and arrogance</a>.</p>
<p>The major changes have been an increase in the renewables target, split into large-scale (wind farms, solar farms and the like) and small-scale (mostly rooftop solar). That increased target was of course subjected to <a href="https://theconversation.com/renewable-energy-deal-gives-no-certainty-over-coming-decades-42329">significant watering down by the Abbott government</a>.</p>
<p>Meanwhile, the two agencies that were set up to support renewable energy have also come under attack. The Greens, whose support was a life-and-death issue for the Gillard government, had managed to insist on the creation of ARENA and the <a href="http://www.cleanenergyfinancecorp.com.au/">Clean Energy Finance Corporation</a>. </p>
<p>Between them, these two organisations were designed to ensure funding both for basic research and development and for commercialisation of the resulting technologies, thereby smoothing the path for renewables to enter the electricity sector. </p>
<p>The attacks on these organisations have helped <a href="https://theconversation.com/why-has-investment-in-renewable-energy-projects-stalled-34197">create investor uncertainty in renewables</a>. Efforts to close them down ultimately failed, so the Abbott government switched to changing their terms of reference. The Turnbull government has continued this, along with salami-slicing ARENA’s budget. </p>
<p>This investment uncertainty, deliberately created, is a kind of “divestment campaign” against renewables. It can also be seen as a way of provoking an “investment strike”. </p>
<p>Whereas the mining industry threatened to take its investment dollars elsewhere while fighting Kevin Rudd’s proposed Resources Super-profits Tax in 2010, in this case, the supporters of the status quo energy system are hoping to dissuade external investors from coming to Australia. Thus do incumbents defend their patch.</p>
<p>Australia is famously the “lucky country”. But of course, Donald Horne <a href="http://www.smh.com.au/articles/2005/09/08/1125772645916.html">meant it ironically</a>, believing that the country was richly endowed with resources but “run mainly by second-rate people who share its luck”.</p>
<p>Given what we know of the trajectory and probable impacts of climate change, nobody, surely, will be able to be claim surprise as the future arrives.</p>
<hr>
<p><em>This article was amended on September 19, 2016, to replace the phrase “powerful coal and nuclear energy interests” with “powerful coal interests” in the passage describing the cessation of CSIRO’s renewable energy research in the early 1980s.</em></p><img src="https://counter.theconversation.com/content/65434/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marc Hudson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Skirmishes over funding for renewable energy research are just the latest battle in a saga that stretches back to the early 1980s – years before the public became widely aware of the climate threat.Marc Hudson, PhD Candidate, Sustainable Consumption Institute, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/653512016-09-14T06:28:09Z2016-09-14T06:28:09ZDespite the funding cut, ARENA’s glass is still half full – here’s how to spend the money<p>The <a href="http://arena.gov.au/">Australian Renewable Energy Agency (ARENA)</a> will suffer a <a href="http://sjm.ministers.treasury.gov.au/media-release/095-2016/">A$500 million funding cut</a>, after being <a href="https://theconversation.com/australian-renewable-energy-agency-saved-but-with-reduced-funding-experts-react-65334">saved from a far worse fate</a> during negotiations over the government’s proposed budget savings package. So does this mean the ARENA funding glass is half full, or half empty? </p>
<p>The 2014 Abbott/Hockey budget aimed to <a href="http://reneweconomy.com.au/2014/australia-dumps-clean-energy-in-favour-of-asphalt-economy-60115">destroy ARENA altogether</a>. Thankfully it was blocked by Labor, the Greens and the crossbench in the Senate. In March this year the Turnbull government claimed to have saved ARENA but intended to <a href="http://www.greghunt.com.au/Media/MediaReleases/tabid/86/ID/3705/Turnbull-Government-taking-strong-new-approach-to-clean-and-renewable-energy-innovation-in-Australia.aspx">divert most of its funds and prevent it from offering grants</a>. The ALP <a href="http://reneweconomy.com.au/2016/labor-abandons-arena-blames-ngo-media-releases-38358">supported that position before the election</a>.</p>
<p>The government’s omnibus savings bill, which in its <a href="http://www.abc.net.au/news/2016-08-30/omnibus-bill-includes-welfare-cut-labor-previously-rejected/7796604">original form</a> would have chopped A$1.3 billion from ARENA, would have doomed Australian renewable energy research and development (R&D) – despite our country’s <a href="http://mission-innovation.net/participating-countries/#Australia">recent pledge</a> “to double government clean energy research and development investment by 2020”.</p>
<p>The <a href="http://www.adambandt.com/160913">Greens</a> and <a href="http://www.abc.net.au/news/2016-09-10/labor-under-pressure-amid-renewable-energy-funding-cuts/7832656">Nick Xenophon Team</a> opposed the cuts to ARENA. Labor <a href="http://markbutler.alp.org.au/news/2016/09/13/labor-secures-the-future-of-arena">compromised</a> with the government, allowing A$500 million to be diverted elsewhere and leaving ARENA with A$800 million over the next five years.</p>
<p>The axe that previously hung over ARENA’s granting process has been lifted. So to answer the earlier question, our glass is now half full, because substantial funding will still flow to renewable energy R&D, this time with bipartisan political backing which hopefully confers greater funding stability. But it is also half empty, because clean energy innovation has taken another huge cut.</p>
<h2>International support</h2>
<p>Two weeks ago, some 200 Australian solar energy researchers signed a <a href="http://theconversation.com/dear-politicians-please-dont-endanger-world-leading-solar-research-by-cutting-arena-64611">letter of support</a> for ARENA, amid a groundswell of community support for the agency – not just here but from abroad too. </p>
<p>Australian solar energy R&D is held in very high regard within the international community. Nearly 300 overseas scientists, engineers and company executives signed a <a href="https://www.dropbox.com/s/r69u096z260pobx/160906%20draft%20Int.%20petition%20text%20-%20Copy.docx?dl=0">petition</a> calling on Australia’s parliamentarians not to axe grants for renewable energy research, innovation and education. Many included complimentary comments, such as:</p>
<blockquote>
<p>The Australian renewable energy program is an international treasure. It would be a disaster worldwide for the Australian government to end the program. These are world-renowned scientists.</p>
<p>For decades Australian scientists have been world leaders in the critical area of renewable energy research and development … the legacy of Australia’s great scientific contributions must be saved and their future excellent work supported.</p>
<p>The ARENA funding program has helped Australia lead the world in photovoltaics for decades, which enabled the worldwide economic boom from manufacturing and installing solar panels.</p>
<p>The quality of the work done by Australian researchers in this field is outstanding… to cut back on funding for ARENA is to cut back on the future of Australia’s science and Australia’s economy.</p>
<p>I have been involved in solar research for 35 years in the United States. Solar technology, including advances made at UNSW and ANU in Australia, have made [a] great impact on the world’s energy infrastructure.</p>
<p>Australia has some of the finest PV research on the planet and has been an inspiration to us all.</p>
</blockquote>
<h2>Where next for ARENA?</h2>
<p>ARENA’s role is to support a rapid transition to renewable energy. So what should it do with its reduced funding of A$800 million over the coming five years?</p>
<p>Given that energy use accounts for <a href="https://www.environment.gov.au/system/files/resources/f4bdfc0e-9a05-4c0b-bb04-e628ba4b12fd/files/australias-emissions-projections-2014-15.pdf">three-quarters</a> of Australia’s greenhouse gas emissions, with the electricity sector the biggest contributor, the fastest way to make deep cuts to emissions is to accelerate the introduction of renewable energy into the electricity system. This is the route successfully pioneered by the ACT government, which will <a href="http://www.environment.act.gov.au/energy/cleaner-energy/renewable-energy-target,-legislation-and-reporting">reach 100% renewable electricity by 2020</a>.</p>
<p>Other important energy goals will be to electrify road vehicles and trains, and to encourage the use of electric heat pumps in place of natural gas for building heating and hot water systems. </p>
<p>Reducing the emissions from other sectors such as shipping, aviation and high-temperature industries will be more difficult. But these sectors are less important in terms of overall emissions, and if we can push ahead with decarbonising electricity, transport and heating, that will give us more time to devise low-cost solutions for these remaining sectors.</p>
<p>It is important for ARENA to provide strong support at the grassroots level; help universities support undergraduate, postgraduate and postdoctoral training as well as research itself. These young people are the future of research, education, engineering and start-up companies.</p>
<p>Consistent grant support for new companies allows entrepreneurship to flourish, encouraging bright people in universities to commercialise their ideas. With the right backing, these people can often cycle back and forth through universities, completing a virtuous circle.</p>
<h2>Success stories</h2>
<p>Efficient silicon cells have been by far the greatest success story of Australian renewable energy research. With silicon cells now making up <a href="http://www.itrpv.net/.cm4all/iproc.php/ITRPV%20Seventh%20Edition%20Vers%202.pdf?cdp=a">95% of the worldwide solar market</a> and likely to dominate for at least the next decade, improving their efficiency still further should be a prime research focus. </p>
<p>ARENA’s new large-scale solar energy program <a href="http://arena.gov.au/media/historic-day-australian-solar-12-new-plants-get-support/">announced last week</a> represents an outstanding success: A$92 million of ARENA funding has leveraged A$1 billion of investment to construct 0.5 gigawatts of solar farm capacity in three states. Another A$100 million to bring the total capacity to 1GW would give this nascent industry a great start.</p>
<p>Solar PV and wind now constitute virtually all new generation capacity in Australia and half of new generation capacity worldwide. They are being installed at more than 100 times the rate of the other non-hydro renewables because of their lower cost, and are <a href="http://theconversation.com/wind-and-solar-pv-have-won-the-race-its-too-late-for-other-clean-energy-technologies-61503">growing much faster</a>. </p>
<p>Soon PV and wind will constitute more than half of annual generation in many states and regions, and so attention has to be paid to managing their variability. Options include detailed integration studies, demand management, mass storage (using both the 99% market leader <a href="http://theconversation.com/how-pushing-water-uphill-can-solve-our-renewable-energy-issues-28196">pumped hydro</a> and the newcomer, batteries), and high voltage powerlines to move energy between regions – all of which will benefit from ARENA support.</p>
<p>It is time for all politicians to recognise that the faster we move to renewable energy, the cheaper it will be to cut emissions and adapt to climate change. ARENA has an important role to play in a rapid and sustained shift to renewable energy – and we look forward to a doubling of ARENA funding before the next election.</p>
<hr>
<p><em>Andrew Blakers will be online from 9.30-10am AEST on Thursday September 15. Leave him a question in the comments below.</em></p><img src="https://counter.theconversation.com/content/65351/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Blakers works for the Australian National University, which receives research grants from ARENA.</span></em></p><p class="fine-print"><em><span>Richard Corkish is the chief operating officer for the Australian Centre for Advanced Photovoltaics, which is primarily funded by ARENA. </span></em></p>The Australian Renewable Energy Agency has survived, amid a groundswell of domestic and overseas support. Its budget has been chopped, but here’s how it can still drive the renewable energy revolution.Andrew Blakers, Professor of Engineering, Australian National UniversityRichard Corkish, Solar-photovoltaic researcher, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/653342016-09-13T06:57:48Z2016-09-13T06:57:48ZAustralian Renewable Energy Agency saved but with reduced funding – experts react<figure><img src="https://images.theconversation.com/files/137516/original/image-20160913-19266-njazhu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Malcolm Turnbull and Bill Shorten have reached a compromise on the Renewable Energy Agency: it will see survive, but with reduced funding.</span> <span class="attribution"><span class="source">AAP Image/Lukas Coch</span></span></figcaption></figure><p>The Australian Renewable Energy Agency (ARENA) has been granted a funding lifeline of A$800 million over the next five years, after the federal government and opposition came to an agreement that will save the agency.</p>
<p>ARENA had faced being wound down as a result of the government’s <a href="http://www.abc.net.au/news/2016-08-29/debates-on-both-sides-as-parliamentarians-return-to-canberra/7793088">earlier proposal to strip A$1.3 billion from the agency</a>. This was part of a wider package of measures designed to <a href="https://theconversation.com/turnbull-to-labor-pass-our-6-billion-savings-bill-64025">save the federal budget more than A$6 billion</a>.</p>
<p>Renewable energy researchers had <a href="https://theconversation.com/cutting-arena-would-devastate-clean-energy-research-64586">reacted with dismay</a> to that proposal. An <a href="https://theconversation.com/dear-politicians-please-dont-endanger-world-leading-solar-research-by-cutting-arena-64611">open letter</a> to the government in defence of the agency attracted 190 signatures.</p>
<p>Below, our experts react to the news.</p>
<hr>
<p><strong>Nicky Ison, Senior Research Consultant, Institute for Sustainable Futures, University of Technology Sydney</strong></p>
<p>Today the Coalition government and the Labor Party struck a deal to:</p>
<ul>
<li><p>slash half-a-billion dollars from the Australian Renewable Energy Agency; and</p></li>
<li><p>save the Australian Renewable Energy Agency (ARENA).</p></li>
</ul>
<p>These statements seem like a contradiction, but both are true. However, it is also true that the need to save ARENA exists because of the Coalition government’s efforts over the past three years to dismantle Australia’s renewable energy policy. </p>
<p>If the benchmark is that we keep our existing renewable energy institutions, today was a win. However, if the benchmark is that we have institutions and policies that have sufficient funding and scope to tackle the policy challenges of climate change, our changing energy system and driving innovation, then today was a loss.</p>
<hr>
<p><strong>Andrew Blakers, Professor of Engineering, Australian National University</strong></p>
<p>The Australian research community is pleased that the government’s proposal to debilitate ARENA by removing A$1.3 billion and ending its granting function will not go ahead. At the same time, we are disappointed that yet again ARENA is subject to huge funding cuts. </p>
<p>The fastest and surest way to reduce greenhouse gas emissions is to accelerate the introduction of renewable energy into the electricity system. ARENA has focused heavily in this area (among others), covering the full gamut from support for early-stage research, through grants to young renewable energy companies, to acceleration of deployment of large-scale solar photovoltaic systems. </p>
<p>ARENA will need to heavily prune its activities to cope with a A$500 million budget cut. We look forward to restoration of ARENA funding, and to a concerted effort at the national level to move rapidly to 50-100% renewable electricity.</p>
<hr>
<p><strong>Tony Wood, Energy Program Director, Grattan Institute</strong></p>
<p>The silver lining amid the cloud of the political compromise on ARENA funding represents a welcome return to the art of the possible. Of course it is a pity that ARENA has been cut again, given that among Kevin Rudd’s climate change children this one had bipartisan support, at least until the 2014 budget.</p>
<p>Grant funding to drive down the costs of renewable technologies with real potential has been ARENA’s model and the funds now secured will allow this to continue. The next challenge is to create an integrated model that connects grant funding with the recently announced Clean Energy Innovation Fund, which will provide debt and equity funding to emerging renewable technologies, and the Clean Energy Finance Corporation’s role of developing innovative financial models to
commercialise clean energy. </p>
<p>Living for another day is never a bad outcome.</p><img src="https://counter.theconversation.com/content/65334/count.gif" alt="The Conversation" width="1" height="1" />
The Australian Renewable Energy Agency is saved - albeit with less money.Michael Hopkin, Deputy Chief of Staff, The ConversationLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/648112016-09-05T04:24:36Z2016-09-05T04:24:36ZCan, or should, we save ARENA?<p>Once again the essential development of the renewable energy sector has been stymied by short-term, opportunistic politics.</p>
<p>Included in the Turnbull government’s “omnibus” savings bill is a <a href="https://theconversation.com/cutting-arena-would-devastate-clean-energy-research-64586">A$1.3 billion cut in the funding of ARENA</a>, the Australian Renewable Energy Agency, a cut, coming on the heels of a couple of previous cuts, that basically wipes out any future role for ARENA. The proposed cut is part of the Abbott legacy that sought to effectively close down the renewable energy sector.</p>
<p>Although the government has presented the bill in the name of budget repair, it is also very much a political manoeuvre designed to wedge opposition leader Bill Shorten, by claiming that he had <a href="http://www.afr.com/news/politics/coalitions-urgent-spending-cuts-will-have-to-wait-20160828-gr39xg">committed to these cuts during the election campaign</a>, and recognising that a couple of the proposed cuts are either inconsistent with “traditional Labor values”, or with declared Labor policy, such as their commitment to a <a href="http://www.afr.com/news/politics/coalitions-urgent-spending-cuts-will-have-to-wait-20160828-gr39xg">50% renewable energy target for 2030</a>.</p>
<p>Shorten is under considerable pressure to demonstrate his bona fides on budget repair, and especially as he has expressed a willingness to “reach across the aisle”, to work with the government on this urgent policy challenge.</p>
<p>However, both sides seem to still be stuck in campaign mode, moving from one stunt to the next. It is all about short-term politics, not good policy and good government.</p>
<p>Much attention has been focused on the savings bill as fundamental to the budget repair task. But it is important to recognise that, even using the very optimistic budget assumptions, the forecast/projected budget deficits for the 4-year budget period total nearly A$70 billion. The savings bill offers savings of just A$6 billion over the period.</p>
<p>It is also worth noting that if all the expenditure cuts and tax increases proposed by both sides in recent years were aggregated (but of course they won’t be) they would still fall well short of the budget repair task.</p>
<p>One view expressed to me recently was that Shorten may punt on the Turnbull government only lasting a year or so, so he could just essentially roll over on the omnibus bill now, including the cuts to ARENA, in support of budget repair, but with the intention of committing to refund ARENA in the run up to an early election.</p>
<p>Whatever. All this short-term politics simply burns the limited time we have to start to respond significantly to the urgent climate change challenge, and burns the considerable business and employment opportunities that such a response carries with it.</p>
<p>Few recognise the little progress that has been made so far, nor the magnitude of the task to base our electricity generation on renewables, moving forward.</p>
<p>For example, only about <a href="http://www.industry.gov.au/Office-of-the-Chief-Economist/Publications/Documents/aes/2015-australian-energy-statistics.pdf">15% of our electricity is generated by renewables</a>, still 85% from fossil fuels, and more than 60% from coal. Despite having achieved one of the <a href="http://newsroom.unsw.edu.au/news/science-tech/fact-check-australia-world-leader-household-solar-power">world’s highest rates of solar PV installation</a> on household roof tops etc., solar PV still only accounts for a mere 2% of our electricity generation, and wind about 4%.</p>
<p>The renewables industry doesn’t help itself politically in this respect by exaggerating the emissions reduction benefits. As the sun doesn’t shine all day, nor the wind blow all day, these renewables need to be backed up by open cycle gas turbines, or by drawing from coal-fired power stations, to satisfy the demand for 24/7 power. The emissions from these negate many of the benefits from sun and wind.</p>
<p>Also, the intermittent nature of solar and wind creates significant morning and afternoon/early evening peaks, forcing consumers to pay. As in South Australia recently, intermittent wind left <a href="https://theconversation.com/south-australias-electricity-price-woes-are-more-due-to-gas-than-wind-62824">some consumers exposed to very high gas prices</a>.</p>
<p>Until the renewables sector can develop cost-effective storage, renewable energy will never go anywhere near reaching its full potential to be able to provide 24/7 base-load power, or cost effective peak power, at prices competitive with coal, such that we can hope to make the essential transition from coal-fired to renewables-based electricity generation. </p>
<p>This situation is also not helped by the dishonesty and basic hypocrisy of some of our major power companies that spent a lot of time and money working with the Abbott government to try to close down the renewable energy sector, while at the same time running PR campaigns about how green they were, and how much they supported renewables, as well as exploiting the remaining life out of dirty coal-fired power stations they acquired cheaply.</p>
<p>I now spend considerable time developing working to develop cost-effective heat and battery storage, as well as base-load solar, and the development of natural graphite to enhance the efficiency and reduce the cost of storage. This will, I believe, be the essence of the renewables revolution.</p>
<p>Against this background, it is important to consider why we need an institution such as ARENA.</p>
<p>It is important to recognise that, as shown in the recent UNESCO Science Report, in 2014 Australia produced 3.7% of the world’s scientific publication output, well above what you would expect given the size of our population. But, in 2012, we produced less than 1% of the world’s share of triadic patents – those filed concurrently in Europe, the US and Japan – about a 40% decline over a decade.</p>
<p>So, we clearly “punch above our weight” in research excellence and in the generation of new technologies, but we fall down in commercialising those innovations, in driving significant and appropriate policy development, and creating new industries and new jobs.</p>
<p>This also clearly emphasises the hollowness of mere slogans such as “jobs and growth”!</p>
<p>Renewable energy is one of our most “shovel ready” business opportunities, especially given our natural endowments of sun and wind, and the range of technologies still basically sitting on the shelf in this country. The commercial development of these could easily and quickly establish us as world leaders in this space. </p>
<p>To capitalise on this competitive edge, much needs to change, everything ranging from basic attitudes to science and education and their funding, through approval processes, finance, and a host of government policies.</p>
<p>In this context, institutions such as ARENA can and should play a very significant role in kick starting the development and commercialisation of essential technologies, in a sense laying the basis for the full funding of viable renewables projects.</p>
<p>Given the reluctance of our financial/investor community to fund early stage technology, there is a clear role for ARENA, but the realization of a complete renewables revolution will also require reform of government (at all levels) project approval processes, and a significant shift in attitudes. It will require new funding structures, by our banks and major institutional investors.</p>
<p>I have been involved with several approaches to ARENA for early stage funding on a range of projects - none successful as yet. I can therefore comment, from personal experience, on the role ARENA has played to date. </p>
<p>It is fair to say that some of ARENA’s past grants have been misdirected, on research and projects that will never be commercially viable, or where the benefits have been exaggerated.</p>
<p>One of the most excessive was a grant to AGL of some A$166 million (together with some A$65 million from the New South Wales government) to build a paddock full of solar PV panels in Nyngan, which they claim is enough to <a href="https://www.agl.com.au/about-agl/how-we-source-energy/renewable-energy/nyngan-solar-plant">power some 17,000 houses</a>. But without storage, no matter how much the plant generates it will not do so at all times of the day. </p>
<p>So, any commitment to fund ARENA moving forward should consider carefully focusing their mandate – for example, no more solar or wind projects should be supported unless they include cost effective storage. ARENA should also not just make cash grants, but also consider loans/convertible note structures as well.</p>
<p>The policy challenges of budget repair, and climate change, are probably the two most significant and urgent confronting government today. An effective response to both necessitates genuine bi-partisanship that, unfortunately, seems inconceivable given the state of our politics today.</p>
<p>On climate, if we are to meet our Paris commitments on emissions reductions (that are about half what they should be to make our national contribution to the global objective of net zero emissions by 2050), there is an urgent need for a genuine National Energy Policy, a centrepiece of which must be innovation and renewable energy. </p>
<p>The renewable energy sector desperately needs a stable, long-term policy framework against which to invest. The proposed cut to ARENA funding, reflecting as it does just more short-term, opportunistic politics, simply compounds the uncertainties of the Abbott years that sought to close the industry down.</p><img src="https://counter.theconversation.com/content/64811/count.gif" alt="The Conversation" width="1" height="1" />
<h4 class="border">Disclosure</h4><p class="fine-print"><em><span>John Hewson has been involved with several approaches to ARENA for early stage funding on a range of projects - none successful as yet. He is chair of the Asset Owners Disclosure Project, and was federal leader of the Liberal Party from 1990 to 1994.</span></em></p>Cuts to ARENA as part of the government’s savings bill are short-term politics at its worst.John Hewson, Professor and Chair, Tax and Transfer Policy Institute, Crawford School, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/645862016-08-30T05:18:44Z2016-08-30T05:18:44ZCutting ARENA would devastate clean energy research<p>This week’s first sitting of the 45th Parliament of Australia is considering a A$6.5 billion “omnibus savings bill”, including a <a href="http://www.abc.net.au/news/2016-08-29/debates-on-both-sides-as-parliamentarians-return-to-canberra/7793088">proposed cut of A$1.3 billion</a> to the <a href="http://arena.gov.au/">Australian Renewable Energy Agency (ARENA)</a>. If adopted, it would effectively mean the end of ARENA and would devastate clean energy research in Australia. </p>
<p>From driving innovation and economic growth, to creating jobs, to addressing climate change and ensuring a reliable and affordable energy system for the future, ARENA plays a critical role. Most perversely, by reducing Australia’s role in the booming global clean energy industry, closing ARENA would likely reduce Australia’s capacity to balance its budget in years to come. </p>
<h2>What is ARENA?</h2>
<p>ARENA, an independent Commonwealth agency, has driven most of Australia’s innovative renewable energy projects in recent years. This includes Australia’s <a href="http://newsroom.unsw.edu.au/news/science-technology/unsw-researchers-set-world-record-solar-energy-efficiency">world-leading solar photovaltaics research centre</a> at UNSW, the <a href="http://inhabitat.com/australian-wave-energy-project-sets-world-record-with-14000-operating-hours/">Carnegie wave energy pilot</a> in Perth, AGL’s <a href="https://www.agl.com.au/about-agl/media-centre/article-list/2016/august/agl-launches-world-largest-solar-virtual-power-plant">virtual power station trial</a> and UTS’s own research into <a href="https://www.uts.edu.au/research-and-teaching/our-research/institute-sustainable-futures/our-research/energy-and-climate-2">local electricity trading and network opportunity mapping</a>. </p>
<p>ARENA has funded <a href="http://arena.gov.au/projects/completed-projects/">60 completed projects</a> and is managing a further 200. Many more are in the pipeline. It has also leveraged A$1.30 in private-sector R&D funding for every dollar of government funding – a fact that is often overlooked amid talk of budget savings. </p>
<p>Without ARENA’s grants and leveraged co-funding, very few of these projects would have happened. While its sister organisation, the <a href="http://www.cleanenergyfinancecorp.com.au/">Clean Energy Finance Corporation</a>, plays an important role in helping to finance established renewable projects and technologies, only ARENA can provide the research grant co-funding to develop these technologies in the first place. </p>
<p>ARENA was formed in 2012 as part of the Gillard government’s Clean Energy Future package. It drew together a range of clean energy programs and funds such as the Solar Flagships, the Australian Solar Institute and some, such as the Low Emissions Technology Demonstration Fund, which the Howard government established. ARENA was given the twin goals of:</p>
<ol>
<li><p>Improving the competitiveness of renewable energy technologies</p></li>
<li><p>Increasing the supply of renewable energy in Australia.</p></li>
</ol>
<p>ARENA was one of five key elements of the Clean Energy Future package <a href="http://www.governmentnews.com.au/2014/12/cormann-cant-kill-arena/">slated for abolition by the Abbott government</a>. While the <a href="https://theconversation.com/carbon-tax-axed-how-it-affects-you-australia-and-our-emissions-28895">carbon price</a> and Climate Commission were cut, ARENA, the CEFC and the <a href="http://climatechangeauthority.gov.au/">Climate Change Authority</a> were saved by opposition and crossbench support, albeit with a A$435 million cut to ARENA’s original budget. </p>
<p>Now, three years on, the Turnbull government has chosen to keep the CEFC but its plan to slash ARENA’s budget remains. The Labor opposition has yet to announce its position on the proposed cut. Meanwhile, clean energy researchers across Australia have written an <a href="https://theconversation.com/dear-politicians-please-dont-endanger-world-leading-solar-research-by-cutting-arena-64611">open letter</a> calling on all parties to support the agency.</p>
<h2>ARENA’s innovation role</h2>
<p>The process of energy technology innovation can be thought of as having a series of phases, which have different funding needs (see below). </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/135852/original/image-20160830-17884-h6tvam.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/135852/original/image-20160830-17884-h6tvam.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/135852/original/image-20160830-17884-h6tvam.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=288&fit=crop&dpr=1 600w, https://images.theconversation.com/files/135852/original/image-20160830-17884-h6tvam.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=288&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/135852/original/image-20160830-17884-h6tvam.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=288&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/135852/original/image-20160830-17884-h6tvam.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=362&fit=crop&dpr=1 754w, https://images.theconversation.com/files/135852/original/image-20160830-17884-h6tvam.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=362&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/135852/original/image-20160830-17884-h6tvam.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=362&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The innovation chain for renewable energy technologies.</span>
<span class="attribution"><a class="source" href="http://arena.gov.au/files/2014/02/Commercial-Readiness-Index.pdf">ISF, based on ARENA's Commercial Readiness Index</a>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The first phase is typically fundamental research and development. Two examples are the world-leading research programs at UNSW Australia and ANU, which have developed the world’s most efficient <a href="http://newsroom.unsw.edu.au/news/science-technology/unsw-researchers-set-world-record-solar-energy-efficiency">solar photovoltaic</a> and <a href="http://www.anu.edu.au/news/all-news/anu-scientists-set-solar-thermal-record">solar thermal</a> technologies. Both are ARENA-funded; neither could have been effectively funded by loans.</p>
<p>Technologies then need to be piloted in the real world – as in the case of the Carnegie Wave Energy project in Perth. This stage is often still too risky for most commercial lenders, so some public grant funding remains critical. </p>
<p>Next comes the large-scale demonstration phase – bringing technologies down the cost curve by developing viable business models and supply chains, with the aim of making them cost-competitive. Here, a mix of loan and grant funding is needed. </p>
<p>Australia’s large-scale solar industry is an example of a sector in this stage of development. In 2015, ARENA realised that despite having 1.5 million solar roofs and plenty of sunshine, Australia had a dearth of large-scale solar projects (only four operating and four in development). As such, it has committed A$100 million to help build more solar farms.</p>
<p>Finally, there are commercial renewable technologies that are already cost-competitive with other energy sources. Wind energy is the prime example of this, which is precisely why ARENA has not funded wind projects. </p>
<h2>Our changing energy system</h2>
<p>Innovation is not purely about technology development; it is also about addressing complex challenges such as how to manage the <a href="https://theconversation.com/australias-energy-sector-is-in-critical-need-of-reform-61802">changing nature of our energy system</a>. On a cents per kilowatt-hour basis, wind energy is now <a href="http://about.bnef.com/press-releases/renewable-energy-now-cheaper-than-new-fossil-fuels-in-australia/">cheaper than new-build coal</a> and <a href="http://reneweconomy.com.au/2015/solar-and-battery-storage-already-cheaper-than-grid-power-in-australia-66169">solar power is cheaper than grid electricity</a>. These two trends will continue, but our energy market is struggling to adapt to the new technology mix. </p>
<p>ARENA has a crucial role to play here. For example, it has funded the Institute of Sustainable Futures (ISF) at UTS to develop a set of <a href="https://www.uts.edu.au/research-and-teaching/our-research/institute-sustainable-futures/our-research/energy-and-climate-1">Network Opportunity Maps</a>. These show locations in the grid where demand management and decentralised generation (solar, storage etc) can help avoid costly grid upgrades. </p>
<p>ARENA has also funded ISF’s research into local energy trading (also known as peer-to-peer energy or virtual net metering). This is aimed at avoiding the predicted “energy death spiral”, by encouraging consumers and power companies to compromise in making the most of existing infrastructure, reducing consumers’ bills and supporting local power generation.</p>
<h2>Meeting our climate targets</h2>
<p>Finally, and perhaps most importantly, ARENA is helping to meet Australia’s greenhouse gas emissions target, which calls for a 26-28% cut relative to 2005 levels by 2030. </p>
<p>The electricity sector is Australia’s largest carbon emissions source. ARENA has a vital role in delivering cost-effective emissions reductions. There are two main mechanisms to decarbonise the sector: increasing energy productivity and efficiency, and switching from fossil fuels to renewables. As outlined above, ARENA is a key player in the latter process and is primed to play a leading role in the former.</p>
<p>It would be a tragic error to cut funding to an agency that is making such an important and successful contribution to fulfilling Australia’s obligations under the <a href="https://theconversation.com/the-paris-climate-agreement-at-a-glance-50465">Paris climate agreement</a>, as well as driving innovation and energy affordability. No other agency combines all of these facets.</p>
<h2>More renewable policy instability?</h2>
<p>In a <a href="https://www.youtube.com/watch?v=68tJXvn7cjk">2010 speech on low-carbon energy</a>, Prime Minister Malcolm Turnbull acknowledged the role of government in supporting clean energy innovation, saying: </p>
<blockquote>
<p>Government support for innovation and investment in clean stationary energy is important, particularly at the early stages. </p>
</blockquote>
<p>The need for this support is not going to go away. If ARENA and its research grant funding is abolished, a similar organisation will doubtless soon need to be re-established. In the meantime, millions of dollars in opportunities would have been wasted and irreplaceable industry and research expertise lost. </p>
<p>After years of policy instability around renewable energy, which has held back the domestic development of one of the world’s fastest-growing industries, do we really want to embrace even more uncertainty?</p>
<p>To paraphrase former Harvard University president <a href="http://quoteinvestigator.com/2016/05/03/expense/">Derek Bok</a>, if you think research is expensive, try ignorance.</p><img src="https://counter.theconversation.com/content/64586/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nicky Ison is a Senior Research Consultant at the Institute for Sustainable Futures (ISF) at the University of Technology Sydney and a Founding Director of Community Power Agency. ISF undertakes paid sustainability research for a wide range of government, corporate and NGO clients. ISF has received several grants from ARENA which have helped to co-fund projects in clean energy research. Without ARENA co-funding, these projects would have been unlikely to proceed. For more information about these projects, please see: <a href="http://www.isf.uts.edu.au">www.isf.uts.edu.au</a>.
Community Power Agency is a not-for-profit organisation working to grow a vibrant community energy sector. Community Power Agency is in regular contact with ARENA about how to best support the emerging Australian community energy sector. </span></em></p><p class="fine-print"><em><span>Chris Dunstan is a Research Director at the Institute for Sustainable Futures (ISF) at the University of Technology Sydney. ISF undertakes paid sustainability research for a wide range of government, corporate and NGO clients. ISF has received several grants from ARENA which have helped to co-fund projects in clean energy research. Without ARENA co-funding, these projects would have been unlikely to proceed. For more information about these projects, please see: <a href="http://www.isf.uts.edu.au">www.isf.uts.edu.au</a></span></em></p>The Australian Renewable Energy Agency is facing a $1.3 billion budget chop as part of the federal government’s savings measures. But sacrifice the lead agency for green energy developmentNicky Ison, Senior Research Consultant, Institute for Sustainable Futures, University of Technology SydneyChris Dunstan, Research Director, Institute for Sustainable Futures, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/598842016-05-25T20:12:09Z2016-05-25T20:12:09ZWithout extra money, the Coalition’s low-emissions roadmap is a trip to nowhere<figure><img src="https://images.theconversation.com/files/123888/original/image-20160525-25205-1drmyql.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">CSIRO has the know-how to develop commercial-scale green energy, with a clear plan and enough money.</span> <span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File%3ACSIRO_ScienceImage_2141_Solar_Array_at_the_CSIRO_Energy_Centre.jpg">CSIRO</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>On Friday, the Coalition made a low-key announcement of its new <a href="http://www.joshfrydenberg.com.au/guest/mediaReleasesDetails.aspx?id=223">Low Emissions Technology Roadmap</a>. To be developed by the CSIRO, it will aim to “highlight areas of growth in Australia’s clean technology sector”.</p>
<p>Unveiled jointly by the industry and science minister, Christopher Pyne, the environment minister, Greg Hunt, and the energy minister, Josh Frydenberg, the plan asks the CSIRO to identify the most promising ways to reduce emissions and to come up with plans to accelerate the development and commercialisation of Australian technologies such as solar panel components.</p>
<p>With the election campaign in full swing and announcements coming thick and fast, some will obviously get more airtime than others. Still, it was surprising to see this one quietly released on a Friday afternoon, given the seniority of the ministers involved, not to mention the importance of both renewable energy and greenhouse emission reductions as issues in this election.</p>
<p>It’s also not immediately clear what is actually involved in developing a “technology roadmap” like this. It might conceivably follow a model <a href="http://prod.sandia.gov/techlib/access-control.cgi/1997/970665.pdf">previously developed at the US Sandia National Laboratories</a>, which identified three key elements: </p>
<ul>
<li><p>preliminary activity, which involves defining the project’s precise scope</p></li>
<li><p>developing the roadmap, by deciding which technologies to include and defining specific targets for their development</p></li>
<li><p>follow-up, by working out how the plan is actually going to be implemented.</p></li>
</ul>
<p>The announcement in itself has kick-started the first of these three stages. CSIRO has been given the lead for the second element. But it is the third stage – the actual implementation – where roadmaps typically lose their way. Many governments have set roadmaps in the past, only for successive ones to choose different objectives and therefore move down a different path.</p>
<p>The key for any roadmap to deliver its intended outcome is the successful implementation of its proposals. The policy and, crucially, the funding committed to the project will determine whether the ultimate objectives are met. </p>
<h2>Pay to play</h2>
<p>In the announcement’s <a href="http://www.joshfrydenberg.com.au/guest/mediaReleasesDetails.aspx?id=223">press release</a>, Pyne said the roadmap would “achieve a large-scale technology transformation”. But looking at the steps above, this will require policy and investment in those technologies that are to drive the transformation process. </p>
<p>While this announcement supports previous policy pledges, notably the <a href="https://www.environment.gov.au/news/2016/03/23/clean-energy-innovation-fund">A$1 billion Clean Energy Innovation Fund</a> uneviled two months ago, will this be enough to drive the crucial third stage of the roadmap: developing commercial-scale clean energy generation to the level required to make serious inroads into emissions reduction?</p>
<p>In the past Australia has tended to adopt the cheapest available energy technologies, particularly given that much of the electricity sector is moving from <a href="http://www.abc.net.au/news/2015-06-03/electricity-privatisation-legislation-passes-nsw-parliament/6519708">public to private-sector ownership</a>. </p>
<p>Will this change now? Frydenberg’s statement that “the Coalition is committed to a technology-neutral approach to energy policy” would suggest that it may not.</p>
<p>With the <a href="https://theconversation.com/rising-electricity-demand-could-be-here-to-stay-44190">minimal growth in electricity demand</a> over recent years, new generation on a large scale will need to be more economical than existing assets, or else policy measures should be put in place to make the new technologies competitive.</p>
<p>Part of the Coalition’s plan, as also stated by Frydenberg, is to “help identify opportunities for Australian businesses to be involved in the global energy supply chain, with the potential of creating new industries that create new jobs and growth in Australia”. History has shown that while Australia has been a very innovative nation, much of the technology developed here tends to move offshore. </p>
<p>Pyne added that “by 2018 Australian solar technology will be embedded in over 60% of the world’s [photovoltaic] panels”. But how much of this global supply chain has created jobs and growth in Australia?</p>
<p>Hunt also stated that the roadmap will help Australia meet its greenhouse emissions target, which calls for a 26-28% reduction on 2005 levels by 2030. But 2030 is not that far away, and the process of drawing up roadmaps, developing technologies and then commercially deploying them takes time. Support for existing mature technologies, such as solar and wind energy, must be continued in the meantime.</p>
<p>While existing agencies such as the <a href="http://arena.gov.au/">Australian Renewable Energy Agency (ARENA)</a> and the <a href="http://www.cleanenergyfinancecorp.com.au/">Clean Energy Finance Corporation</a> support these technologies, ongoing funding is a constant subject of debate within the government. These bodies will jointly administer the new Clean Energy Innovation Fund, but if this new roadmap is to be a success, ARENA’s funding must continue beyond its currently planned expiry date of 2022, and the CEFC needs a longer business plan than the current one which runs to 2019.</p>
<p>In the meantime, it pays to think carefully about the initial phase for the roadmap: defining its precise scope. According to the announcement, the areas to be considered include “renewable energy, smart grids, carbon capture and storage, electric vehicles and energy efficiency” – all areas in which CSIRO has existing research programs. As such, it is well placed to understand the challenges, the investment needed, and realistic time frames for implementation. All of these need to be identified and quantified precisely, given that the plan only spans a few years. </p>
<p>Introducing innovative technology into an existing sector, which is already working, will always draw resistance, particularly from the operators (as well as equipment manufacturers, maintenance companies and fuel suppliers) of existing generation assets. But, of course, decisions about electricity generation have much wider effects than just the provision of energy. </p>
<p>The need to reduce emissions affects every aspect of how we will live our lives in the future. No major political party disputes the need to move from existing technology to a clean energy future. But policy, with sufficient financial backing, needs to be put in place now and supported by successive governments to have any chance of hitting the deadlines we face.</p><img src="https://counter.theconversation.com/content/59884/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Craig Froome does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Coalition has asked CSIRO to develop a “roadmap” towards commercialised clean energy. It’s a good idea as long as the plan is clear, and there’s enough money behind it.Craig Froome, Global Change Institute – Clean Energy Program Manager, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/567322016-03-23T06:45:23Z2016-03-23T06:45:23ZTurnbull’s renewable fund could drive much-needed investment, but…<figure><img src="https://images.theconversation.com/files/116161/original/image-20160323-28206-1glip0s.jpg?ixlib=rb-1.1.0&rect=1083%2C269%2C2520%2C2401&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Large-scale solar projects have been highlighted for investment in the new fund</span> <span class="attribution"><span class="source">Solar image from www.shutterstock.com</span></span></figcaption></figure><p>Prime Minister Malcolm Turnbull has announced the creation of a <a href="http://www.malcolmturnbull.com.au/media/turnbull-government-taking-strong-new-approach-to-clean-and-renewable-energ">A$1 billion Clean Energy Innovation Fund</a>, to be jointly managed by the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA). </p>
<p><a href="http://arena.gov.au/">ARENA</a> is designed to research and develop new clean energy technologies, while the <a href="http://www.cleanenergyfinancecorp.com.au/">CEFC</a> is meant to finance projects and earn a return on investment. Both were created under the previous Labor government. </p>
<p>ARENA has enjoyed consistent bipartisan support (although it had some future funding cancelled under the previous budget), while the the current coalition government has always previously vowed to axe the CEFC. </p>
<p>So what could the new fund mean for the renewables sector?</p>
<h2>What will the new fund do?</h2>
<p>This announcement does three things:</p>
<ul>
<li><p>It saves money by scrapping any extra funding originally allocated to ARENA. There will be screams of protest, but it just confirms actions that the government had already taken. It also means a move away from high risk areas where there was no requirement to get a direct return on funds.</p></li>
<li><p>It preserves the CEFC, not just the A$1 billion allocated to this new fund, but the remainder of the CEFC’s original A$10 billion.</p></li>
<li><p>It creates a fund to do research and development that sits between the existing roles of the CEFC and ARENA. It is not yet clear how investment decisions will be made, nor how exactly the projects will be financed. </p></li>
</ul>
<p>The fund will accept lower returns on investment, which implies higher risk than the government currently expects of the CEFC.</p>
<h2>Carbon pricing should drive clean energy</h2>
<p>ARENA’s mandate was to provide grants to clean energy projects at the research and early development stage of new technologies. These are high-risk decisions, but if effective, should drive down the costs of low-emission technologies. </p>
<p>There are barriers to early movers, and so far the carbon market has failed to provide a clear, long-term signal for investors. Therefore, government funding is justified here. </p>
<p>The CEFC was born out of a political compromise to secure the previous Labor government’s climate change legislation, and the model was Britain’s <a href="http://www.greeninvestmentbank.com/">Green Investment Bank</a>. There was no obvious consideration of the countries’ different circumstances, and whether Australia needed such a body. </p>
<p>There was always the risk that the CEFC would be intervening in the market without adequate assessment of whether the benefits outweighed the costs. It was effectively a solution looking for a problem.</p>
<p>The CEFC might have a role but only if we first define the problem it seeks to solve. It is not the reduction of carbon emissions: this is the territory for climate policy. </p>
<p>It is not a lack of R&D funding for new clean energy technologies: ARENA was designed for that. </p>
<p>It is not a shortage of capital: clean energy projects are being financed in Australia by the private sector. </p>
<p>The problem is a shortage of projects that offer investors the necessary financial return.</p>
<p>The financial returns for low-emission and renewable energy investments should be driven by the emissions price that comes directly or indirectly from credible climate change policy. We had a poor version of this between 2012 and 2014 and the government’s current Emissions Reduction Fund has yet to fill the void. </p>
<p><a href="https://theconversation.com/how-will-the-reduced-renewable-energy-target-affect-investment-41505">Political uncertainty</a> and poor design have led to real challenges to the Renewable Energy Target delivering its intended investment in renewable energy. Policy instruments such as state-based feed-in tariffs for household rooftop solar have provided very expensive, lesser supports.</p>
<p>The CEFC has a mixed record. On the one hand just deploying more of the same, such as refinancing an existing wind farm, is a poor use of public funds. However, underwriting green investment bonds such as that issued by NAB did successfully address a <a href="http://medianet.com.au/releases/release-details?id=816967">clear market failure</a>. </p>
<h2>We need low-cost technologies</h2>
<p>The creation of the Clean Energy Innovation Fund seems intended to provide a new mandate that will target higher-risk, more innovative investments than currently supported by the CEFC. The fund will also be encouraged to look at storage and non-renewables, outside ARENA’s current remit, and that is a good thing. </p>
<p>However, it will be a great pity if higher risk technologies, currently funded by ARENA, are lost due to the requirement to earn a return on investment. It would be ironic if the new fund retains the mandate of the CEFC that the government had targeted for termination, while weakening ARENA which enjoyed consistent bipartisan support. </p>
<p>The government has indicated that the new fund will target technologies such as large-scale solar with storage, off-shore energy, biofuels and smart grids.</p>
<p>Despite the emphasis on large-scale solar with storage, the technology was unsuccessful under the Labor government’s <a href="http://www.businessspectator.com.au/article/2012/7/2/policy-politics/labor%E2%80%99s-solar-flagships-mirage">Solar Flagship Program</a>. It is making slow progress around the world and the new fund will be seeking a return on its investments.</p>
<p>So, it remains to be seen whether today’s announcement becomes a sound use of public funding to drive innovation in low-emission technologies through addressing real market failures, or whether the need to save money will lead to an ugly combination of lost opportunity and wasted money.</p><img src="https://counter.theconversation.com/content/56732/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Through his superannuation fund, Tony Wood owns shares in several energy and resources companies that would have an interest in the topic covered by this article.</span></em></p>Prime Minister Malcolm Turnbull has announced a new “Clean Energy Innovation Fund”. But will it generate much-needed investment in the sector?Tony Wood, Program Director, Energy, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/341972014-11-23T19:12:40Z2014-11-23T19:12:40ZWhy has investment in renewable energy projects stalled?<figure><img src="https://images.theconversation.com/files/65044/original/image-20141120-29250-1943tki.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The renewable energy sector is looking a little gloomy thanks to record low investment. Is RET uncertainty to blame?</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/moe/2584921/in/photolist-efpB-9jbLzM-f1aajT-oy6vwb-nSGYT5-7xCgSQ-4XYHYP-e2Jh7t-kGnsa6-nMwyBS-fcyCYd-c19yny-kGoA2p-p8cfvX-879bqL-f1aaoF-dWCBmx-5f9amJ-gcjfvf-hBirF1-c5jgLq-9AvPLb-891fXo-b2W2ht-dYroHX-8XXf7u-8XUceM-8XXeYW-fcyCTC-eD2caT-mUj8NF-9AvQ1J-8x9WJn-SJCaw-3xU14-877AKs-8bdFk7-8wp5aw-fruCW9-mvq8rB-f1aan6-f1puQy-pkRusa-f1puMh-f1puF5-dApvXw-daEnaa-ftjEpR-frtPEW-iqNkri">Stephan Mosel</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>You may have seen recent reports that Australia’s renewable energy sector is suffering. According to a <a href="http://about.bnef.com/landing-pages/investment-freeze-australia-continues/">Bloomberg analysis</a>, investment in the sector in the year to September 2014 was down 70% on investment during the 12 months previous.</p>
<p>The report attributed this decline to the ongoing uncertainty over the future of the Renewable Energy Target (RET). The <a href="http://www.greghunt.com.au/Media/MediaReleases/tabid/86/articleType/ArticleView/articleId/3026/Renewable-Energy-Target.aspx">coalition’s position</a> is currently to cut the 41,000-gigawatt-hour target to a “real 20%”, and is negotiating to pass the changes through government. </p>
<p>But there are a number of other policy uncertainties affecting the sector.</p>
<h2>An uncertain future</h2>
<p>The RET has come under <a href="https://theconversation.com/review-calls-for-renewable-energy-target-cuts-what-it-means-29787">much scrutiny</a> in recent months as the federal government attempts to <a href="http://www.greghunt.com.au/Media/MediaReleases/tabid/86/articleType/ArticleView/articleId/3026/Renewable-Energy-Target.aspx">wind it back</a>. This has also seen the government — both federal and state — take a negative approach to policy measures that promote more renewable energy in the energy system. </p>
<p>The result is that many proposed projects that factored in income from the RET have been put on hold, due to the uncertainty of their future income. In the shadow of this uncertainty, finding finance for projects is also a major issue as financiers become more wary. </p>
<p>As stated in the <a href="https://retreview.dpmc.gov.au/sites/default/files/files/RET_Review_Report.pdf">RET review</a>, its objectives are to “encourage the additional generation of electricity from renewable sources; reduce greenhouse gas emissions in the electricity sector; and ensure that renewable energy sources are ecologically sustainable”. </p>
<p>Still, the government’s opinion is that with <a href="https://theconversation.com/factcheck-does-australia-have-too-much-electricity-31505">surplus electricity generation</a> (and decreasing demand) the only future value of the target is to help Australia meet its emissions reduction target of 5% below 2000 levels by 2020.</p>
<p>Therefore, the financial incentives that could drive investment in renewable energy infrastructure are instead being utilised for other key government initiatives.</p>
<p>While the legislation to repeal the RET has failed to pass through the Senate, it still isn’t clear what funding will be available for future projects.</p>
<h2>The federal vs state policy divide</h2>
<p>While the RET and Emission Reduction Fund are federal, other incentives to promote deployment – such as feed-in tariffs for solar rooftops – have been left to the states. </p>
<p>This is further complicated as legislation is divided between departments. For example on a federal level legislation is divided between the industry and environment departments, so nobody has outright responsibility. </p>
<p>While the federal government has completed its review of the RET, no decision has yet been made in relation to what action should be taken moving forward. It is unlikely that anything will happen soon with the current difficulties getting legislation through the senate, and the public outcry opposing change to the RET from those that control the votes.</p>
<p>It is here that the <a href="http://arena.gov.au/">Australian Renewable Energy Agency </a>(ARENA) and <a href="http://www.cleanenergyfinancecorp.com.au/">Clean Energy Finance Corporation</a> (CEFC) have filled the void. Similar to the RET, the federal government has tried to wind back their operations. </p>
<p>The CEFC seems to have a more certain future, as they <a href="http://www.cleanenergyfinancecorp.com.au/media/releases-and-announcements/files/cefc-reports-on-successful-first-full-year-of-investing.aspx">recently announced</a> that they would look closely at energy efficiency projects that support the Emissions Reduction Fund. </p>
<p>This may result in less funding available for renewable energy projects, although under the <a href="http://www.comlaw.gov.au/Series/C2012A00104">CEFC Act</a> funding “is designated for investment in renewable energy technologies”. To date 56% of funding has been for renewable energy projects, primarily wind and solar panels.</p>
<h2>Not just a funding issue</h2>
<p>Most renewable technologies (particularly those considered commercially mature) are intermittent by nature. As renewables increase their penetration into the grid, service providers are becoming more and more cautious when they negotiate connection agreements because it introduces a less reliable supply of electricity. This caution could add costs to renewable projects, as well as create delays when trying to obtain approval.</p>
<p>For independent renewable project developers, as opposed to companies such as AGL which generate and distribute renewable energy, there is the added problem of selling the electricity generated with financiers in a long-term Power Purchase Agreement. The requirement for retailers to purchase renewable energy is a requirement under the RET. </p>
<p>The uncertainty that surrounds the future of the RET has also made it difficult to obtain a Power Purchase Agreement, particularly at the speed required for many projects to be financially viable.</p>
<h2>Growing renewable consumption</h2>
<p>Although electricity demand continues to fall, the consumption of renewable energy has increased by 11.5%. This is primarily driven by solar panels where consumption increased by 49.2%. </p>
<p>The majority of solar panels are domestic roof-top systems, with Australia still well behind most developed countries for utility, commercial and industrial size projects.</p>
<p>Commercial and industrial size solar panel systems are fast approaching the point of being cost competitive when compared to traditional forms of generation (particularly when replacing diesel). This means traditional sources of finance are now more comfortable funding projects. </p>
<p>The same is true for wind farms, where the technology is now mature. However, the same cannot be said for emerging and hybrid technologies as these aren’t competitive yet. </p>
<p>The uncertain future of new renewable energy projects will continue until there is greater assurance in relation to the policy measures currently in place. A more robust emissions policy could strengthen the sector, and allow us to strive for more clean energy generation. </p>
<p>At the end of the day, developers need surety that policy decisions will not affect the future financial viability of their projects. Until then they will continue to sit on the fence and wait – to the detriment of the renewable energy sector as a whole.</p><img src="https://counter.theconversation.com/content/34197/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Craig Froome does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>You may have seen recent reports that Australia’s renewable energy sector is suffering. According to a Bloomberg analysis, investment in the sector in the year to September 2014 was down 70% on investment…Craig Froome, Global Change Institute – Clean Energy Program Manager , The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/310942014-09-01T20:29:34Z2014-09-01T20:29:34ZRenewable Energy Target review confirms influence of coal and climate sceptics<figure><img src="https://images.theconversation.com/files/57853/original/36gg7cz4-1409558738.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Renewable Energy Target represents another shift towards fossil fuel power.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/yewenyi/2534899116">Brian Yap (葉)/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>The release of the <a href="https://theconversation.com/review-calls-for-renewable-energy-target-cuts-what-it-means-29787">Renewable Energy Target review</a> last week is yet another indication of the disproportionate influence of the fossil fuel industry and climate sceptics on governments in Australia. </p>
<p>Many <a href="https://theconversation.com/renewable-energy-target-review-experts-respond-31050">experts have said</a> that, if the recommendations are implemented, they would have a serious impact on the renewable energy sector. </p>
<p>The review follows the repeal of Australia’s carbon “tax” (read: fixed price period of an emissions trading scheme) with government bills to abolish the independent Climate Change Authority, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency put before the Parliament.</p>
<h2>Review process was not consistent with legislation</h2>
<p>The legislation which established the Renewable Energy Target states that the independent <a href="http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r5136">Climate Change Authority</a>, now facing abolition, must review the <a href="http://www.austlii.edu.au/au/legis/cth/consol_act/rea2000283/s162.html">operation of the Act</a>. Yet this statutory task was given to a “panel of experts” chaired by Dick Warburton, a well-known sceptic of human-induced <a href="http://www.abc.net.au/am/content/2013/s3946806.htm">climate change</a>.</p>
<p>Not only that, but the panel’s terms of reference were not consistent with the legislation and were skewed to require consideration of the government’s agenda of “reducing business costs, cost of living pressures, cutting red and green tape, and the Direct Action plan”. </p>
<p>It seems that not even those wealthy people who the government is levying 2% for budget recovery can afford any climate change impost on their electricity prices. Certainly not AUD$550 a year for the carbon price and probably not any short-term increases to electricity prices resulting from the Renewable Energy Target. What’s more, the Direct Action plan has not even been approved by the Parliament. </p>
<p>And now the recommendations weaken the target in favour of coal-fired power. Although Warburton <a href="http://www.smh.com.au/federal-politics/political-news/dick-warburton-says-climate-sceptic-views-did-not-influence-report-recommending-slashing-of-renewable-energy-target-20140829-109tgd.html">states publicly</a> that he brought an open mind to the review, in a democracy we expect those who exercise public functions to “be seen to be” impartial.</p>
<p>We have already witnessed the Prime Minister and Treasurer ordering the Clean Energy Finance Corporation to <a href="http://www.afr.com/p/national/coalition_promise_hits_hurdle_wzxElSPPbkKEEpQ56lXIvO">stop disbursing funds</a> contrary to its statutory mandate. Again, our democracy requires the repeal of the legislation by the Parliament to achieve this, not orders barked from the executive. </p>
<h2>Coal lobbying in NSW</h2>
<p>In New South Wales, the Independent Commission against Corruption has been <a href="http://www.icac.nsw.gov.au/investigations/current-investigations/investigationdetail/192">investigating corruption</a> associated with the opening up of land for coal mining, the granting of coal licences, the <a href="http://www.dailytelegraph.com.au/news/nsw/nathan-tinkler-tells-icac-that-53000-donation-was-for-federal-liberal-party/story-fni0cx12-1227041321571?nk=cb539972dfacb6de660d1b9b3474fc64">construction of coal terminals</a>, and the taking of illegal developer donations. </p>
<p>What is also of great concern is the political influence of the coal mining lobby. In October 2012 the NSW Minerals Council lobbied the NSW government to cut funds to the Environmental Defender’s Office of NSW. The council objected to the EDO bringing applications, on behalf of communities, for judicial review and merits appeals against mining approvals granted by the government. </p>
<p>Yet these remedies are essential to a functioning democracy and are indeed protected legal rights in Australia. That month, the O’Farrell government cut the Environmental Defender’s Office’s funding by 25%. The Federal government has since <a href="http://www.edonsw.org.au/edo_offices_face_closure_after_government_funding_cuts">cut funding</a> of A$10 million to EDO offices around Australia.</p>
<p>Last year when a NSW court <a href="http://www.caselaw.nsw.gov.au/action/PJUDG?jgmtid=164038">refused consent</a> for a coal mine on the grounds of ecological sustainability, the O’Farrell government amended a NSW mining environmental planning policy to make the <a href="http://planspolicies.planning.nsw.gov.au/index.pl?action=view_job&job_id=6065">economic significance of coal</a> the principal factor in assessment.</p>
<p>Environmental and social factors must now only be considered proportionately to the economic significance of coal. This was ostensibly to give “certainty” to the coal miners and the community. </p>
<p>Yet public submissions on the changes showed that over 84% of individuals and over 66% of organisations were opposed to the amendment. </p>
<h2>Climate change off the agenda</h2>
<p>Meanwhile the Federal Government has said that climate change will not be on the agenda when the G20 meets this November in Brisbane. The Prime Minister only wants to <a href="http://www.smh.com.au/federal-politics/political-news/climate-change-off-g20-agenda-20140604-39jdx.html">talk about</a> “economic security and private sector-led growth for a strong prosperous future” — and does not consider climate change part of that agenda, despite evidence to the contrary. </p>
<p>Instead, the Abbott government enthusiastically celebrates the repeal of the carbon price mechanism, for which it claims it had a democratic mandate, as a win for the economy. But a question remains whether those who voted for the Abbott government really understood that the government intended to abolish the emissions trading scheme as well, leaving the fossil fuel industry free to emit greenhouse gas emissions.</p>
<p>Also, instead of building a scientific citizenry to fully engage with climate change, the Climate Change Commission was axed on the Abbott government’s second day in office. There’s also now no longer a Minister for Science. Funds to the CSIRO have been slashed, impacting their climate change programs. Yet an informed and engaged public discussion is essential to democratic participation in decision-making around climate change. </p>
<h2>Australia going against the grain</h2>
<p>The Intergovernmental Panel on Climate Change’s Fifth Assessment Report tells us with high confidence that from 2000-2010 greenhouse gases in the atmosphere were the highest in human history with CO<sub>2</sub> accounting for 78% of the total. </p>
<p>Energy supply contributed 47% of total increases in emissions during this decade. According to the Intergovernmental Panel on Climate Change, the energy supply sector must reduce its emissions by 90% below 2010 levels between 2040 and 2070 if we are to have a reasonable chance of avoiding dangerous global warming.</p>
<p>The EU’s <a href="http://ec.europa.eu/europe2020/index_en.htm">growth strategy</a> Europe 2020 aims to “absolutely decouple” economic growth from the environmental impacts of energy use, while reducing greenhouse gases by 20% below 1990 levels, enhancing competitiveness, and promoting energy security. </p>
<p>Jobs growth is key to the “green economy” with the renewable energy sector alone expected to generate more than 400,000 new jobs by 2020 .</p>
<p>Yet the Abbott government keeps attempting, sometimes successfully, to deliver knock-out punches to controls on fossil fuel energy sector emissions and Australia’s potential to move towards smart, sustainable and inclusive growth. </p>
<p>Governments in Australia should govern to protect the interests of all sectors of society — not just a business sector that wants to free itself from the tangles of “green” and “red” tape. What’s more, Australian governments should stick to the rules and democratic conventions which protect all of our rights and interests. There are too many instances which suggest that many of those who govern don’t even know, or care, that the rules exist. </p>
<p>Something is rotten in the state of Australia and that something is the disproportionate influence of the fossil fuel industry and climate change sceptics over government in Australia.</p><img src="https://counter.theconversation.com/content/31094/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rosemary Lyster has received funding from the Australian Research Council (2009-2013) to investigate, with others, Indonesia's efforts to establish legal and policy frameworks for Reducing Emissions from Deforestation and Degradation (REDD+) </span></em></p>The release of the Renewable Energy Target review last week is yet another indication of the disproportionate influence of the fossil fuel industry and climate sceptics on governments in Australia. Many…Rosemary Lyster, Professor of Climate and Environmental Law, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/291062014-07-13T00:03:34Z2014-07-13T00:03:34ZHow much will Tasmania pay for shorting the carbon price?<p>The carbon price is finally set to go this week (14th July) with both the Coalition and PUP committed to deliver on their election promises. After all, a promise is a promise. And you can’t go back on a promise unless, that is, if it happens to be about the R-word. Any Coalition promise to do with those <a href="https://theconversation.com/sorry-joe-hockey-canberra-is-australias-home-of-wind-farms-26243">“utterly offensive”</a> (to quote from Treasurer Joe Hockey) Renewables, seems to be somehow exempt from the promise that a promise is a promise … </p>
<p>The Coalition government has already introduced a bill to repeal ARENA (Australian Renewable Energy Agency) and everyone in the game suspects it is doing all it can to can the RET (Renewable Energy Target). Both would break election promises, making one wonder about the third “R” to be sacrificed. </p>
<p>In the current discourse, it seems easy to forget that the carbon price is an environmental measure motivated by the need to reduce growth in atmospheric CO2 levels, not specifically to wreck the economy. Contrary to the <a href="https://theconversation.com/will-the-real-greg-hunt-please-stand-up-28834">Coalition’s protestations</a>, there has been a strong decline in electricity emissions over the period of the carbon price, by about 18 million tonnes per year. While the details of cause and effect can be debated, we are about to see a dramatic demonstration of just how effective carbon pricing has been on electricity emissions, and that could have consequences for Tasmanian wholesale electricity prices in the medium term if rainfall declines to below average [1].</p>
<p>With repeal of the carbon price, the emission intensity of electricity system is set to rise by 1.5-3.5%. And that makes it a reasonable bet that emissions on the National Electricity Market will increase this financial year for only the second time in six years, even if absolute demand for electricity continues to decline.</p>
<p>Why so?</p>
<p><a href="http://www.pittsh.com.au/assets/files/Cedex/CEDEX%20Electricity%20Update%20July%202014.pdf">In the words of respected analyst Hugh Saddler</a> it seems likely “that emissions reductions over the past year may have been "borrowed” from the future". The suggestion is that by selling down power reserves, hydro operators may have been shorting the emissions market. </p>
<p>And why wouldn’t they? As pointed out <a href="https://theconversation.com/jacqui-lambies-carbon-tax-dilemma-what-is-good-for-tasmania-28807">in a previous post</a>, hydro benefits from carbon pricing. With the uncertainty in carbon pricing hydro operators have had every incentive to sell as much power as soon as possible.</p>
<p>Two sets of figures tell the story.</p>
<p>The first compares of electricity sent out from Tasmanian hydro generators with the local demand for electricity in Tasmania. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/53616/original/fyczwywk-1405066980.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/53616/original/fyczwywk-1405066980.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/53616/original/fyczwywk-1405066980.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=462&fit=crop&dpr=1 600w, https://images.theconversation.com/files/53616/original/fyczwywk-1405066980.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=462&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/53616/original/fyczwywk-1405066980.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=462&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/53616/original/fyczwywk-1405066980.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=580&fit=crop&dpr=1 754w, https://images.theconversation.com/files/53616/original/fyczwywk-1405066980.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=580&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/53616/original/fyczwywk-1405066980.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=580&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Sent out energy from Tasmanian generators (black) and total demand for electricity in Tasmania. When sent out energy greatly exceed demands, Tasmanian exports to the mainland via Basslink and vice versa, reflecting a persistent difference in wholesale prices in the two states. When they are in balance, Basslink operates in arbitrage mode sending electricity either way depending on daily fluctuation in prices on the Victoria, effectively tying Tasmanian prices to Victoria.</span>
<span class="attribution"><span class="source">Data from AEMO's [emission intensity](http://www.aemo.com.au/Electricity/Settlements/Carbon-Dioxide-Equivalent-Intensity-Index) and [aggregated price and demand](http://www.aemo.com.au/Electricity/Data/Price-and-Demand/Aggregated-Price-and-Demand-Data-Files) datasets, image by Mike Sandiford.</span></span>
</figcaption>
</figure>
<p>The second shows the level of <a href="http://www.hydro.com.au/water/energy-data">Tasmanian reservoir storage</a> supporting hydro generation.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/53617/original/4w86j4b6-1405067003.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/53617/original/4w86j4b6-1405067003.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/53617/original/4w86j4b6-1405067003.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=462&fit=crop&dpr=1 600w, https://images.theconversation.com/files/53617/original/4w86j4b6-1405067003.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=462&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/53617/original/4w86j4b6-1405067003.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=462&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/53617/original/4w86j4b6-1405067003.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=580&fit=crop&dpr=1 754w, https://images.theconversation.com/files/53617/original/4w86j4b6-1405067003.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=580&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/53617/original/4w86j4b6-1405067003.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=580&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Tasmanian reservoir storage levels as a percentage of total capacity. Black dots shows the annual average by financial year, while red triangles show the level in the week of the 1st July.</span>
<span class="attribution"><span class="source">Data from Hydro Tasmania, image by Mike Sandiford</span></span>
</figcaption>
</figure>
<p>The figures show that Tasmanian hydro generators have been selling electricity into the mainland market at unprecedented rates, drawing down storage levels dramatically since the carbon price was implemented in July 2012. </p>
<p>Levels in the Gordon, which has almost 1/3 the total storage capacity, are down to near 20% - levels not seen since the Millennium drought despite significantly above average catchment rainfalls over the last year.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/53653/original/drx5q3tm-1405202602.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/53653/original/drx5q3tm-1405202602.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/53653/original/drx5q3tm-1405202602.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=462&fit=crop&dpr=1 600w, https://images.theconversation.com/files/53653/original/drx5q3tm-1405202602.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=462&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/53653/original/drx5q3tm-1405202602.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=462&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/53653/original/drx5q3tm-1405202602.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=580&fit=crop&dpr=1 754w, https://images.theconversation.com/files/53653/original/drx5q3tm-1405202602.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=580&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/53653/original/drx5q3tm-1405202602.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=580&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Gordon storage levels as a percentage of total capacity. Black dots shows the annual average by financial year, while red triangles show the level in the week of the 1st July. Hydro Tasmania reports the Gordon storage is currently at 22% capacity and falling (13th July - http://www.hydro.com.au/water/energy-data).</span>
<span class="attribution"><span class="source">Data from Hydro Tasmania, image by Mike Sandiford</span></span>
</figcaption>
</figure>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/53652/original/t4jkg5jp-1405200832.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/53652/original/t4jkg5jp-1405200832.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/53652/original/t4jkg5jp-1405200832.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=572&fit=crop&dpr=1 600w, https://images.theconversation.com/files/53652/original/t4jkg5jp-1405200832.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=572&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/53652/original/t4jkg5jp-1405200832.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=572&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/53652/original/t4jkg5jp-1405200832.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=719&fit=crop&dpr=1 754w, https://images.theconversation.com/files/53652/original/t4jkg5jp-1405200832.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=719&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/53652/original/t4jkg5jp-1405200832.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=719&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Rainfall records for Strathgordon in the Gordon catchment showing above average rainfall over the last 12 months.</span>
<span class="attribution"><span class="source">Bureau of Meterology</span></span>
</figcaption>
</figure>
<p>A bit of technical detail is needed to provide the context.</p>
<p>Less the local distribution losses, any imbalance in supply (or sent out energy) and demand in Tasmania is accounted for by exchange with the mainland via the Basslink interconnect. In the last years of the <a href="http://en.wikipedia.org/wiki/2000s_Australian_drought">Millennium drought</a> up until late 2009, hydro supply in Tasmania was so limited that it could not supply Tasmanian demand, so Basslink flowed mainly south with the extra import of mostly Latrobe valley supplied electricity. Then reservoir levels were at less than 30% capacity. </p>
<p><a href="http://www.aemo.com.au/Electricity/Planning/Related-Information/Historical-Market-Information-Report">According to data from the market operator AEMO</a>, in financial year 2008-09, Basslink flow was 90% of the time southwards supplying Tasmania with an additional 2570 gigawatt hours of electricity at an average rate of 280 megawatts. </p>
<p>Basslink has to make a buck, and so there is a price signal attached to such a concerted asymmetric flow. In that year, <a href="http://www.aemo.com.au/Electricity/Planning/Related-Information/Historical-Market-Information-Report">Tasmanian wholesale prices were around 25% higher than Victoria</a>.</p>
<p>With the breaking of the drought, Tasmanian hydro generation levels increased sufficiently to supply the local demand. With wholesale prices in Victoria at record lows, partly due an unexpected downturn in demand, there was no driver for persistent flow one way or the other across Basslink. Rather, by using the inherent flexibility of hydro generation, Basslink provided Tasmanian generators with the opportunity to send power northwards when prices rose in Victoria, and buy back as prices lowered, making money on the arbitrage. With the two way flows in balance, wholesale prices averaged out at about $30 per megawatt hour in both states. With good rains, reservoir storage levels improved almost 30% between 2009 and 2012, despite the greater generation.</p>
<p>The situation changed with the start of carbon pricing. With storage averaging above 50%, and a doubling of Victorian prices to almost $60 per megawatt hour to accommodate the carbon price (Victorian brown coal electricity produces up to 1.3 tonnes CO2 per megawatt hour incurring a carbon price of $30 per megawatt hour) hydro power was sent northwards across Basslink at unprecedented rates. According to AEMO, in 2012-13 the flow direction was 90% of the time northwards sending a net 2041 gigawatt hours into Victoria. July storage levels have fallen around 25%.</p>
<p>Since the price differential of around $10 per megawatt hour is needed to sustain the flow, and the extra demand for Tasmanian hydro power pushed prices to around $48 per megawatt hour. With no significant extra cost on the generation side, Hydro Tasmania’s before tax profit doubled to <a href="http://www.themercury.com.au/news/tasmania/hydro-tasmania-records-historic-before-tax-profit-of-238-million/story-fnj4f7k1-1226736841134">$238 million in 20012-13</a> on the back of a revenue rise from $1 billion to $1.57 billion. Of course, with the majority of that hydro generation still being served into Tasmania, the large part of that profit will have been borne by Tasmanian consumers.</p>
<p>What does it mean for future emissions and prices.</p>
<p>It is inevitable that hydro generation will be scaled back significantly. Firstly, Victorian wholesale prices will drop back to pre-carbon prices of around $30 megawatt hour so there will be no price signal for net export. The more than 2000 gigawatt hours supplied into Victoria by hydro in each of the last 2 years will be picked up by brown coal generation adding an extra 2.5 million tonnes CO2 emissions to the NEM. </p>
<p>Secondly, the drawdown in Tasmanian storage capacity means current rates of generation are unsustainable. With good rains expected to continue in the near term, Hydro Tasmania would appear to have sufficient capacity to meet Tasmanian demand. If so Tasmanian wholesale prices should drop, maintaining parity with Victoria at around $30 per megawatt hour [2].</p>
<p>But the worry is that the draw down of storage to capitalise on the demise of carbon pricing has risked future supply in the event of a return to below average rainfall conditions. </p>
<p>If reserves prove insufficient, and Tasmania again needs to import, Tasmanian wholesale prices will hold above $40+ per megawatt hour. Further, a return to 2008-09 conditions, when the net flow into Tasmania was some 2600 gigawatt hours, would add a further 3.5 million tonnes to NEM CO2 emissions.</p>
<p>If such a scenario were to eventuate, it would be a consequence of policy uncertainty. The uncertainty around carbon pricing has narrowed the window of opportunity for hydro generators and they have used it to effect. Had there been bipartisan support for the carbon price, hydro generators would likely have scaled back output to more sustainable levels, benefiting <a href="https://theconversation.com/jacqui-lambies-carbon-tax-dilemma-what-is-good-for-tasmania-28807">Tasmania for the long-term.</a></p>
<p>That all makes the politics of Tasmanian electricity once again front and centre especially with Tasmanian PUP senator Jacqui Lambie and her “kennel mates” quite unashamed in imposing their interests on the national agenda. </p>
<p>With how it pans out in the hands of Hughie, the Coalition must be praying it rains cats and dogs, not just PUPS.</p>
<hr>
<p>Notes added July 18th</p>
<p>[1] Wholesale (or pool) prices in Tasmania have had no direct relation to the way regulated electricity tariffs are set for residential customers and small business customers on standing offer prices, the energy supply component of which in recent years has been set “as the average of the long-run marginal cost of electricity generation by a notional electricity generator to supply electricity to non-contestable customers on mainland Tasmania and the price Aurora Energy would pay to purchase electricity in Victoria and transport the electricity to mainland Tasmania for supply to non contestable customers on mainland Tasmania”, <a href="http://www.economicregulator.tas.gov.au/domino/otter.nsf/LookupFiles/Statement_of_Reasons-Retail_tariff_approval_1_July_2012.pdf/$file/Statement_of_Reasons-Retail_tariff_approval_1_July_2012.pdf">as outlined in footnote 3 here.</a> </p>
<p>[2] For the short term, in its media release of the June 19, the Office of the Tasmanian Economic Regulator has already approved “a 7.80 per cent decrease compared to the prices applying for the period 1 January 2014 to 30 June 2014” for residential customers and small business customers who are on standing offer prices for 12 months from July 1, 2014, reflecting “the change in market conditions” presumably on the expectation of lowered Victorian wholesale prices. </p><img src="https://counter.theconversation.com/content/29106/count.gif" alt="The Conversation" width="1" height="1" />
The carbon price is finally set to go this week (14th July) with both the Coalition and PUP committed to deliver on their election promises. After all, a promise is a promise. And you can’t go back on…Mike Sandiford, Professor of Geology and Director of Melbourne Energy Institute, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.