45,000 renewables jobs are Australia’s for the taking – but how many will go to coal workers?



Dan Himbrechts/AAP

Chris Briggs, University of Technology Sydney; Elsa Dominish, University of Technology Sydney, and Jay Rutovitz, University of Technology Sydney

As the global renewables transition accelerates, the future for coal regions has become a big worry. This raises an important question: can renewables create the right jobs in the right places to employ former coal workers?

According to our new research, the answer in many cases is “yes”. Renewable energy jobs provide a good match for existing coal jobs across a range of blue and white-collar occupations, including construction and project managers, engineers, electricians, site administrators and mechanical technicians.

But about one-third of coal workers, such as drillers and machine operators, cannot simply switch over to renewables jobs. So as our economy pivots to renewables, planning and investment is needed to help coal regions survive.

Some renewables jobs could be filled by coal workers.
Tim Wimbourne/AAP

Renewables jobs: a snapshot

Our research, commissioned by the Clean Energy Council, is the first large-scale survey of renewable energy employment in Australia.

We surveyed more than 450 Australian renewable energy businesses, covering large scale wind, solar and hydro, rooftop solar and batteries. We wanted to find out how many people were employed, and in what jobs.




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We then projected employment until 2035 using three scenarios for the future of the electricity market, developed by the Australian Energy Market Operator (AEMO).

Our results suggest renewable energy can be a major source of jobs in the next 15 years. But the trajectories are very different depending on government COVID-19 stimulus measures and wider energy policy.

Policy crossroads

We found the renewable energy sector currently employs about 26,000 people. Temporary construction and installation jobs now comprise 75% of the renewable energy labour market, but as the sector grows, this will change (more on that later).

Australia’s renewable energy target was reached last year, and has not been replaced. According to the Reserve Bank of Australia this caused renewables investment to fall by 50% last year compared to 2018. Under a “central” scenario where these policies continued, 11,000 renewable jobs would be lost by 2022.

Under the right policies, there could be an average of 35,000 renewables jobs annually in Australia until 2035.
Michael Buholzer/Reuters

We then examined a “step change” scenario where Australian policy settings were in line with meeting the Paris climate agreement. This would create a jobs boom: renewable energy employment would grow to 45,000 by 2025 and average around 35,000 jobs each year to 2035. Up to two-thirds are in regional areas.

Under all scenarios, job growth is strongest in rooftop solar and wind. Most are in the construction and installation phase, comprising both ongoing and project-based jobs in trades, as well as technicians and labourers. But by 2035, as many as half of renewable energy jobs could be ongoing jobs in operation and maintenance.




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Renewable energy jobs will be higher than our projections. We excluded employment areas such as building electricity transmission networks, bioenergy, professional services, renewable hydrogen, growth in minerals needed for renewable energy, and jobs in heavy industry such as “green” steel.

Renewables vs coal jobs

All up, coal mining in Australia employs about 40,000 people. As mentioned above, renewable energy jobs could grow to 45,000 by 2025 – and more once other sectors are included.

Australia’s renewable energy industry already employs considerably more people than the 10,500 working in the domestic coal sector – mostly thermal coal mining and power generation.

About 75% of coal mined in Australia is exported. About 24,000 people work in thermal coal mining for both domestic use and export – slightly fewer than the current renewable energy workforce.

Employment in renewable energy and coal.
Author supplied

New renewables jobs in coal regions

Around two-thirds of renewable energy jobs could be created in regional areas. These would be distributed more widely than coal sector jobs.

The leading coal mining states, NSW and Queensland, have the biggest share of renewable energy jobs under all scenarios.

AEMO has identified “renewable energy zones” where most large-scale renewable energy is expected to be located. In both NSW and Queensland, some of these zones overlap with the coal workforce. In NSW, the Central West zone could also create employment in the Hunter region. In general, though, many renewable energy jobs will be located in other regions and the capital cities.




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In terms of occupations, there is overlap between coal and renewable energy. These include construction and project managers, engineers, electricians, mechanical trades, office managers and contract administrators and drivers.

The timing and location of these renewables jobs will influence whether they can be a source of alternative jobs for coal workers. Re-training of coal workers would also be required.

But there is no direct job overlap for the semi-skilled machine operators such as drillers, which account for more than one-third of the coal workforce.

Renewable Energy Zones and coal mining employment in Queensland.
Author supplied
Renewable energy zones and coal mining employment in NSW.
Author supplied

Planning for the decline

Renewable energy can meaningfully help in the transition for coal regions. But it won’t replace all lost coal jobs, and planning and investment is needed to avoid social and economic harm.

Coal regions need industry development plans and investment to diversify their economies to other industries, including renewables. Almost half our coal workers are aged under 40, so Australia will not be able to follow Germany and Spain’s lead by relying on early retirement schemes.

At some point, demand for our coal exports will collapse – be it due to the falling cost of renewables, or policies to address climate change. If we don’t start preparing now, the consequences for coal communities will be dire.The Conversation

Some coal workers can be retrained to work in renewables, but others cannot.
Dan Himbrechts/AAP

Chris Briggs, Research Principal, Institute for Sustainable Futures, University of Technology Sydney; Elsa Dominish, Senior Research Consultant, Institute for Sustainable Futures, University of Technology Sydney, and Jay Rutovitz, Research Director, Institute for Sustainable Futures, University of Technology Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Energy giants want to thwart reforms that would help renewables and lower power bills



Darren England/AAP

Daniel J Cass, University of Sydney

Australia’s energy market is outdated. It doesn’t encourage competition and that’s holding back the transition to renewable energy. Important reforms to modernise the market are on the way, but big energy companies are seeking to use the cover of COVID-19 to prevent the change.

This is bad for consumers, and for climate action. Reform would help create a modern grid designed around clean energy, pushing coal-fired generators to retire earlier. Over time, it would also bring down power costs for households and business.

Renewable energy is the cheapest form of new electricity. It’s far better for the environment than coal and gas, and can deliver reliable supplies when backed by batteries and other energy storage.

Instead of delaying reform, Australia should be advancing it.

Wind and solar energy is better for the environment, and consumers.
Tim Wimborne/Reuters

What’s this all about?

Regulators and governments recognise the need to modernise the rules governing the National Electricity Market. That market, established in 1998, supplies all Australian jurisdictions except Western Australia and the Northern Territory.

Reliable electricity requires that supply and demand be kept in balance. This balance is primarily provided by a system known as the wholesale spot market. Every five minutes, electricity generators bid into the spot market, specifying how much energy they will provide at a certain price.

An entire redesign of the market rules is scheduled for 2025. This should make the market work efficiently and reliably as coal retires and is replaced by renewable energy.

In the meantime, one important rule change is due to start in July next year, known as “5-minute settlement”.




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Currently, electricity is sold and sent out from generators in 5-minute blocks. But the actual price paid for this electricity in the wholesale market is averaged every 30 minutes. This means there are six dispatch periods, each with their own price, which are then averaged out when the market is settled.

This strange design has enabled big electricity generators to game the market. One method involves placing high bids in the first interval, then placing low or even negative bids in the remaining five intervals. This ensures that electricity from the big generators is purchased, but that they and all other generators receive an artificially high average price for the whole 30-minute period.

In 2017, the Australian Energy Market Commission (AEMC) decided to replace 30-minute settlement with 5-minute settlement.

The commission says the current system was adopted more than 20 years ago due to technological barriers which have since been overcome. It argues moving to 5-minute settlement would better reflect the value to consumers of fast-response technologies, such as batteries storing renewable energy and so-called “demand response” (a concept we’ll explain later).

The rule change would reduce power costs for consumers.
Brendan Esposito/AAP

According to the AEMC, the rule change would lead to lower wholesale costs, cutting electricity prices for consumers.

But on March 19 this year, the Australian Energy Council, which represents most coal-fired power stations and the big three electricity retailers, sought to delay the reform. It wrote to federal energy minister Angus Taylor and his state counterparts, arguing the pandemic means energy companies must focus on “critical supply and reliabilty” issues, rather than implementing the rule change.

But energy consumption has barely changed during the pandemic, the Australia Institute’s national energy emissions audit shows. So delaying the reform to deal with supply and reliability issues appears unjustified.

Despite this, the Australian Energy Market Operator has proposed delaying the change for a year. Our submission, endorsed by energy and technology leaders, opposes the delay.

Moves by regulators to delay another 16 market reforms due to COVID-19 also seem to be afoot.

Change is possible

Last week, one big rule change to the National Electricity Market did proceed as planned. It allows “demand response” energy trading from 2021.

Demand response involves reducing energy consumption during peaks in demand, such as during heatwaves. Basically, the rule means big energy users, such as smelters and manufacturing plants, could power down in these periods, and be paid for doing so.

Technology pioneers such as battery entrepreneur Simon Hackett and Atlassian chief Mike Cannon-Brookes have backed this change.

Australia has successfully used demand response to provide emergency electricity capacity and other benefits. But it’s never been unleashed in the wholesale energy market.

The rule change doesn’t involve smaller users such as households. But it’s a promising start that creates new competition for fossil fuel generators and allows energy users to help make the grid more reliable.




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Political warfare over climate policy has held back Australia, and the electricity market, for more than a decade. But energy reform that encourages greater market competition can readily be supported by political conservatives.

The demand-response rule change is a clear example: it has been championed by Taylor and his predecessors Josh Frydenberg and Greg Hunt.

Newly built renewable electricity is cheaper than new coal-fired power.
Petr Josek/Reuters

Getting future-ready

Once the health crisis is over and economic recovery has begun, Australia will need the economic and social benefits of electricity market reform even more than before.

Such reform “stimulus” would help ready the grid for the inevitable retirement of coal-fired power stations, such as Liddell in 2023.

It would also align with state government investments in renewable energy, and boost private investment in new generation (which has recently slumped) and large-scale batteries.

Electricity remains Australia’s highest-polluting sector. Around the world, electricity markets are planning the transition from high to low emissions.

Delaying reform in Australia would be a major setback on the path to our essential energy transition.

Richie Merzian, Climate & Energy Program Director at The Australia Institute, contributed to this piece.




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The Conversation


Daniel J Cass, Research Affiliate, Sydney Business School, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Putting stimulus spending to the test: 4 ways a smart government can create jobs and cut emissions



Flickr/Greenfleet Australia

Thomas Longden, Australian National University; Frank Jotzo, Australian National University, and Zeba Anjum, Australian National University

The COVID-19 recession is coming, and federal and state governments are expected to spend more money to stimulate economic growth. Done well, this can make Australia’s economy more productive, improve quality of life and help the low-carbon transition.

In a paper released today, we’ve developed criteria to help get this investment right. The idea is to stimulate the economy in a way that creates lasting economic value, reduces greenhouse gas emissions and brings broader social benefits.

An Organisation for Economic Cooperation and Development (OECD) outlook report released this week predicts an economic slump this year in Australia and globally.

Governments will be called on to invest. In this article, we investigate how stimulus spending on infrastructure can simultaneously achieve environmental, economic and social goals.

Stimulus spending can help the economy, the environment and the community.
Dean Lewins/AAP

Best practice

Europe has already embraced a “green stimulus”. For example, Germany plans to spend almost one-third of its €130 billion stimulus package on renewable power, public transport, building renovations and developing the hydrogen and electric car industries.

In response to the pandemic, New South Wales and Victoria produced criteria for priority stimulus projects which include environmental considerations.

Whether the federal government will follow suit is unclear.




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Most federal stimulus spending has been on short-term JobKeeper and JobSeeker payments, plus the HomeBuilder scheme that will largely benefit the construction industry and those who can afford home improvements.

So how should governments decide what to prioritise in a COVID-19 stimulus package?

Our criteria

We developed a set of criteria to guide stimulus spending. We did this by comparing ten proposals and studies, including current proposals by international organisations and think tanks, and research papers on fiscal stimulus spending after the 2008 global financial crisis. Synthesising this work, we identified nine criteria and assessment factors, shown below.

Before the pandemic hit, Infrastructure Australia and other organisations had already identified projects and programs that were strong candidates for further funding.

We applied our criteria to a range of program/project categories to compare how well they perform in terms of achieving economic, social and environmental goals. We did not assess particular programs and projects.

The four most promising categories for public investment are shown in this table, and further analysed below.

1. Renewable energy and transmission

The electricity system of the future will be based on wind and solar power – now the cheapest way of producing energy from new installations. Australia’s renewables investment boom may be tailing off, and governments could step in.

The Australian Energy Market Operator, in its 2018 Integrated System Plan, assessed 34 candidate sites for Renewable Energy Zones – which are places with great wind and solar potential, suitable land and access to the grid.




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The NSW government has committed to three such zones. These could be fast-tracked, and other states could do the same.

Investment in power transmission lines is needed to better connect these zones to the grid. It’s clear where they should go. Governments could shortcut the normally lengthy approval, planning and commercial processes to get these projects started while the economy is weak.

Now is a good time for governments to invest in large-scale renewable energy.
Mick Tsikas/AAP

2. Energy efficiency in buildings

There’s a strong economic, social and environmental case for investment in retrofitting public buildings to improve their energy efficiency. Schools, hospitals and social housing are good candidates.

Building improvement programs are quick to start up, opportunities exist everywhere and they provide local jobs and business support. And better energy efficiency means lower energy bills, as well as reduced carbon emissions.




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One existing program is showing the way. Under the Queensland government’s Advancing Clean Energy Schools program, which involves solar installation and energy-saving measures, 80 state schools have been brought forward to the project’s first phase as part of COVID-19 stimulus.

A focus on public buildings will bring long-lasting benefits to the community, including low-income households. This would bring far greater public benefit than programs such as HomeBuilder.

3. Environmental improvements

Stimulus initiatives also provide an opportunity to boost our response to last summer’s bushfires. While the federal government has announced A$150 million of funding for recovery projects and conservation, more could be done.

The ACT has shown how. As part of COVID-19 stimulus, 26 people who’d recently lost their jobs were employed to help nature reserves recover after the fires. Such programs could be greatly scaled up.

In New Zealand, the government is spending NZ$1.1 billion on creating 11,000 “nature jobs” across a range of regional environmental projects.

In New Zealand, Jacinda Ardern’s government has created
Daniel Hicks/AAP

4. Transport projects

Several transport projects on the Infrastructure Australia priority list are well developed, and some could be fast-tracked.

Smaller, local projects such as building or refurbishing footpaths and cycle paths, and improving existing transport infrastructure, can be easily achieved. The NSW government is already encouraging councils to undertake such projects.

Sound analysis and transparency is needed

Our analysis is illustrative only. A full analysis needs to consider the specifics of each project or program. It must also consider the goals and needs in particular regions or sectors – including speed of implementation, ensuring employment opportunities are spread equally, and social and environmental priorities.

This is the job of governments and agencies. It should be done diligently and transparently. Australian governments should lay out which objectives their stimulus investments are pursuing, the expected benefits, and why one investment option is chosen over another.

This should improve public confidence, and taxpayers’ acceptance of stimulus measures. This is good practice for governments to follow at any time. It’s even more important when they’re spending billions at the drop of a hat.The Conversation

Thomas Longden, Research Fellow, Crawford School, Australian National University; Frank Jotzo, Director, Centre for Climate and Energy Policy, Australian National University, and Zeba Anjum, PhD student, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Really Australia, it’s not that hard: 10 reasons why renewable energy is the future


Lucy Nicholson/Reuters

Andrew Blakers, Australian National University

Australia’s latest greenhouse gas figures released today show national emissions fell slightly last year. This was by no means an economy-wide effort – solar and wind energy did most of the heavy lifting.

Emissions fell 0.9% last year compared to 2018. The rapid deployment of solar and wind is slashing emissions in the electricity sector, offsetting increases from all other sectors combined.




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Renewables (solar, wind and hydro) now comprise 26% of the mix in the National Electricity Market. In 2023, renewables will likely pass black coal to become the largest electricity source.

In an ideal world, all sectors of the economy – transport, agriculture, manufacturing and others – would pull in the same direction to cut emissions. But hearteningly, these figures show the huge potential for renewables.

Here are 10 reasons why renewable energy makes perfect sense for Australia.

Australia leads the world in rooftop solar installations.
David Mariuz/AAP

1. It can readily eliminate fossil fuels

About 15 gigawatts of solar and wind farms will probably start operating over 2018-2021. That’s on top of more than 2 gigawatts of rooftop solar to be added each year.

It averages out at about 6 gigawatts of additional solar and wind power annually. Research from the Australian National University, which is under review, shows the rate only has to double to about 12 gigawatts to eliminate fossil fuels by 2050, including from electricity, transport, heating and industry.

Fossil fuel mining and use causes 85% of total national emissions – and doubling the renewables deployment rate would eliminate this.

The task becomes more than achievable when you consider the continual fall in renewables prices, which helped treble solar and wind deployment between 2017 and 2020.

2. Solar is already king

Solar is the top global energy technology in terms of new generation capacity added each year, with wind energy in second spot. Solar and wind energy are already huge industries globally, and employ 27,000 people in Australia – a doubling in just three years.

3. Solar and wind are getting cheaper

Solar and wind electricity in Australia already costs less than it would from new coal and gas plants.

The price is headed for A$30 per megawatt hour in 2030. This undercuts most existing gas and coal stations and competes with gas for industrial heating.

Renewable electricity is becoming cheaper than coal-fired power.
Petr Josek/Reuters

4. Stable renewable electricity is not hard

Balancing renewables is a straightforward exercise using existing technology. The current high voltage transmission network must be strengthened so projects in regional areas can deliver renewable electricity into cities. And if wind and sun is not plentiful in one region, a stronger transmission network can deliver electricity from elsewhere. Electricity storage such as pumped hydro and batteries can also smooth out supplies.

5. There’s enough land

To eliminate all fossil fuel use, Australia would need about 60 square metres of solar panel per person, and one wind turbine per 2,000 people. Panels on rooftops take up no land, and wind turbines use very little. If global energy consumption per person increased drastically to reach Australian levels, solar farms on just 0.1% of Earth’s surface could meet this demand.

6. Raw materials won’t run out

A solar panel needs silicon, a glass cover, plastic, an aluminium panel frame, copper and aluminium electrical conductors and small amounts of other common materials. These materials are what our world is made of. Recycling panel materials at the end of their life adds only slightly to larger existing recycling streams.

Solar panel materials are relatively easy to obtain.
Tim Winbourne/Reuters

7. Nearly every country has good sun or wind

Three-quarters of the global population lives in the planet’s sunbelt (lower than 35 degrees of latitude). This includes most developing countries, where most of the growth in energy consumption and greenhouse emissions is occurring.

8. We will never go to war over sunshine

Solar and wind power make energy systems much more robust in the face of a pandemic, disasters or war. They are difficult to misuse in any significant way for military, terrorist or criminal activities. And it is hard to destroy billions of solar panels spread over millions of square kilometres.




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9. Solar accidents and pollution are small

Solar panel accidents pale in comparison to spilled radioactive material (like Fukushima or Chernobyl), an oil disaster (like BP’s Deepwater Horizon), or a coal mine fire (like Hazelwood in Victoria). Wind and solar electricity eliminates oil imports, oil-related warfare, fracking for gas, strip mining for coal, smokestacks, car exhausts and smog.

10. Payback time is short

For a sunny country like Australia, the time required to recover the energy invested in panel manufacture is less than two years, compared with a panel lifetime of 30 years. And when the world is solar powered, the energy required to produce more panels is non-polluting.

Renewable energy can do they heavy lifting on emissions reduction.
Vincent West/Reuters

The future is bright

While COVID-19 triggered a significant fall in global emissions so far this year, they may bounce back. But if solar and wind deployment stay at current levels, Australia is tracking towards meeting its Paris target.

The Reserve Bank of Australia says investment in renewables may moderate in the near term, but “over the longer term, the transition towards renewable energy generation is expected to continue”.

But there are hurdles. In the short term, more transmission infrastructure is needed. Electrifying transport (with electric vehicles) and urban heating (with electric heat pumps) is straightforward. More difficult is eliminating fossil fuels from industries such as steel and fertilisers. This is a task for the 2030s.

But it’s clear that to get to net-zero carbon emissions by mid century, solar and wind are far and away Australia’s best option.




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The Conversation


Andrew Blakers, Professor of Engineering, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

NSW has approved Snowy 2.0. Here are six reasons why that’s a bad move



Lucas Coch/AAP

Bruce Mountain, Victoria University and Mark Lintermans, University of Canberra

The controversial Snowy 2.0 project has mounted a major hurdle after the New South Wales government today announced approval for its main works.

The pumped hydro venture in southern NSW will pump water uphill into dams and release it when electricity demand is high. The federal government says it will act as a giant battery, backing up intermittent energy from by wind and solar.

We and others have criticised the project on several grounds. Here are six reasons we think Snowy 2.0 should be shelved.

1. It’s really expensive

The federal government announced the Snowy 2.0 project without a market assessment, cost-benefit analysis or indeed even a feasibility study.

When former Prime Minister Malcolm Turnbull unveiled the Snowy expansion in March 2017, he said it would cost A$2 billion and be commissioned by 2021. This was revised upwards several times and in April last year, Snowy Hydro awarded a A$5.1 billion contract for partial construction.

Snowy Hydro has not costed the transmission upgrades on which the project depends. TransGrid, owner of the grid in NSW, has identified options including extensions to Sydney with indicative costs up to A$1.9 billion. Massive extensions south, to Melbourne, will also be required but this has not been costed.

The Tumut 3 scheme, with which Snowy 2.0 will share a dam.
Snowy Hydro Ltd

2. It will increase greenhouse gas emissions

Both Snowy Hydro Ltd and its owner, the federal government, say the project will help expand renewable electricity generation. But it won’t work that way. For at least the next couple of decades, analysis suggests Snowy 2.0 will store coal-fired electricity, not renewable electricity.

Snowy Hydro says it will pump the water when a lot of wind and solar energy is being produced (and therefore when wholesale electricity prices are low).




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But wind and solar farms produce electricity whenever the resource is available. This will happen irrespective of whether Snowy 2.0 is producing or consuming energy.

When Snowy 2.0 pumps water uphill to its upper reservoir, it adds to demand on the electricity system. For the next couple of decades at least, coal-fired electricity generators – the next cheapest form of electricity after renewables – will provide Snowy 2.0’s power. Snowy Hydro has denied these claims.

Khancoban Dam, part of the soon-to-be expanded Snowy Hydro scheme.
Snowy Hydro Ltd

3. It will deliver a fraction of the energy benefits promised

Snowy 2.0 is supposed to store renewable energy for when it is needed. Snowy Hydro says the project could generate electricity at its full 2,000 megawatt capacity for 175 hours – or about a week.

But the maximum additional pumped hydro capacity Snowy 2.0 can create, in theory, is less than half this. The reasons are technical, and you can read more here.

It comes down to a) the amount of time and electricity required to replenish the dam at the top of the system, and b) the fact that for Snowy 2.0 to operate at full capacity, dams used by the existing hydro project will have to be emptied. This will result in “lost” water and by extension, lost electricity production.



The Conversation, CC BY-ND

4. Native fish may be pushed to extinction

Snowy 2.0 involves building a giant tunnel to connect two water storages – the Tantangara and Talbingo reservoirs. By extension, the project will also connect the rivers and creeks connected to these reservoirs.

A small, critically endangered native fish, the stocky galaxias, lives in a creek upstream of Tantangara. This is the last known population of the species.

The stocky galaxias.
Hugh Allan

An invasive native fish, the climbing galaxias, lives in the Talbingo reservoir. Water pumped from Talbingo will likely transfer this fish to Tantangara.

From here, the climbing galaxias’ capacity to climb wet vertical surfaces would enable it to reach upstream creeks and compete for food with, and prey on, stocky galaxias – probably pushing it into extinction.

Snowy 2.0 is also likely to spread two other problematic species – redfin perch and eastern gambusia – through the headwaters of the Murrumbidgee, Snowy and Murray rivers.




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5. It’s a pollution risk

Snowy Hydro says its environmental impact statement addresses fish transfer impacts, and potentially serious water quality issues.

Four million tonnes of rock excavated to build Snowy 2.0 would be dumped into the two reservoirs. The rock will contain potential acid-forming minerals and other harmful substances, which threaten to pollute water storages and rivers downstream.

When the first stage of the Snowy Hydro project was built, comparable rocks were dumped in the Tooma River catchment. Research in 2006 suggested the dump was associated with eradication of almost all fish from the Tooma River downstream after rainfall.

Snowy 2.0 threatens to pollute pristine Snowy Mountains rivers.
Schopier/Wikimedia

6. Other options were not explored

Many competing alternatives can provide storage far more flexibly for a fraction of Snowy 2.0’s price tag. These alternatives would also have far fewer environmental impacts or development risks, in most cases none of the transmission costs and all could be built much more quickly.

Expert analysis in 2017 identified 22,000 potential pumped hydro energy storage sites across Australia.

Other alternatives include chemical batteries, encouraging demand to follow supply, gas or diesel generators, and re-orienting more solar capacity to capture the sun from the east or west, not just mainly the north.

Where to now?

The federal government, which owns Snowy Hydro, is yet to approve the main works.

Given the many objections to the project and how much has changed since it was proposed, we strongly believe it should be put on hold, and scrutinised by independent experts. There’s too much at stake to get this wrong.




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The Conversation


Bruce Mountain, Director, Victoria Energy Policy Centre, Victoria University and Mark Lintermans, Associate professor, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Australians want industry, and they’d like it green. Steel is the place to start



Shutterstock

Tony Wood, Grattan Institute; Guy Dundas, Grattan Institute, and James Ha, Grattan Institute

Australia has an historic opportunity to build a new, export-focused manufacturing sector based on renewable energy.

As a bonus, it could enable a less politically fraught conversation about climate change. Global action on climate change is in Australia’s national interest.

The changing climate is already reducing profits for Australian farmers. Tens of thousands of jobs depend on the again-bleached Great Barrier Reef.

But for too long, political leaders have struggled to balance the national interest with the legitimate concerns of Australians who live and work in regions that host coal mining and other carbon-intensive industries – most notably central Queensland and the Hunter Valley in NSW.



Source: Grattan Institute (2020)’Start with steel: A practical plan to support carbon workers and Out emissions.

This climate conundrum has greatly complicated the national debate about climate change: neither commitments to a “just transition” to a low-emissions future, nor promises of coal exports in perpetuity, have proven convincing, leaving regional jobs in the lurch.

Australians want industry

In the 2019 federal election, voters in these carbon regions, perhaps fearing for their livelihoods, seemingly rejected Labor’s more ambitious climate policies.

But with 85% of our black coal exported each year, decisions made in Beijing and New Delhi matter more to these communities than decisions made in Canberra.

Australia needs a credible plan to replace carbon jobs as the world decarbonises, and ideally the new jobs will offer similar salaries, need similar skills, and be located in similar places.




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This is the key to cracking the climate conundrum: a plan based on sound economics that can offer hope to communities that currently depend on carbon-intensive activities.

A new Grattan Institute report, Start with steel, finds that manufacturing green steel for export is the largest job opportunity for these regions of Australia.

We can start with steel

Green steel can be made by using renewable energy to produce hydrogen, and then using that hydrogen in place of metallurgical coal in the steelmaking process.

The byproduct is water, rather than carbon dioxide.

Winding back the 7% of global emissions that come from steel production will require creating demand for low-emissions steel.

Australia has far better renewable resources than many of our major Asian trading partners, allowing us to make low-emissions hydrogen more cheaply, and therefore to make cheaper green steel.

And because hydrogen is expensive to transport, it makes sense to use it to make green steel here rather than exporting it to make green steel somewhere else.


Notes: Land higher than 3,000 metres is excluded because renewable energy resources are harder to use when they are in mountainous terrain. High-quality resources are defined to be areas with average wind power-density of at least 450 W/m2 and average daily solar photovoltaic potential of at least 4.5 kWh/kWp. North Africa includes the Horn of Africa.
Sources: Grattan analysis of Global Wind Atlas (2020), Global Solar Atlas (2020) and U.S. Geological Survey and National Geospatial-Intelligence Agency (2010)

The Pilbara in Western Australia is the world’s largest iron ore province, which makes it look like the natural place to make green steel.

But it is difficult to attract workers to remote Western Australia. Making green steel for export would require large industrial workforces like those in central Queensland and the Hunter Valley.

Our calculations suggest that the availability of reasonably-priced labour on the east coast of Australia more than outweighs the cost of shipping iron ore from Western Australia to turn it into green steel there.




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Enough ambition (and hydrogen) could get Australia to 200% renewable energy


If Australia captured just 7% of the global steel market, it could create 25,000 ongoing manufacturing jobs.

Seven per cent is much higher than the 0.3% of globally-traded steel that Australia produces today – but it is much less than our share of iron ore production, which is 38%.

Crucially, the opportunity does not rely on leaps of faith or endless subsidies – it is one of the few economically-credible ways to make the low-emissions steel the world will need if it gets serious about tackling climate change.

We should act quickly

There are also opportunities for Australia’s regions to manufacture biofuels for aviation and use renewable hydrogen to make ammonia.

The markets for these products are less certain, but if the world moves decisively to limit emissions, the projects that respond will deliver thousands of jobs.

Governments cannot single-handedly create these industries, and nor should they.

Instead, they should focus on bringing down the cost of the key intermediate product – hydrogen – by funding pre-commercial studies of geological structures suitable for storing hydrogen cheaply.

And they should invest in Australia’s low-emissions steel making capabilities by partly funding a flagship project that uses the direct reduction technology needed to use hydrogen to make steel.




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For hydrogen to be truly ‘clean’ it must be made with renewables, not coal


The politics of climate change skewered a decade’s worth of prime ministers. And an inability to communicate the costs of action – and why they’re justified – contributed to a would-be prime minister losing an unlosable election.

Green steel offers Australia a reset button: a chance to get bipartisan cooperation to tackle a wicked problem that threatens our national interest.

We’ve heard plenty about the climate crisis. It’s time to talk about the opportunities.The Conversation

Tony Wood, Program Director, Energy, Grattan Institute; Guy Dundas, Energy Fellow, Grattan Institute, and James Ha, Associate, Grattan Institute

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Yes, carbon emissions fell during COVID-19. But it’s the shift away from coal that really matters



Flickr/David Clarke

Frank Jotzo, Australian National University and Mousami Prasad, Australian National University

Much has been made of the COVID-19 lockdown cutting global carbon emissions. Energy use has fallen over recent months as the pandemic keeps millions of people confined to their homes, and businesses closed in many countries. Projections suggest global emissions could be around 5% lower in 2020 than last year.

What about Australia? Here we’ve seen sizeable reductions in electricity sector emissions, but mostly from the sustained expansion in solar and wind power rather than the lockdown.

That is good news. It means our electricity sector emissions will not bounce back once COVID-19 restrictions are lifted, as they might in other parts of the world.

But on the other hand, a prolonged recession could cloud the outlook for new investments in the power sector, including renewables.

What’s clear right now is this: COVID-19 restrictions matter far less to Australia’s power sector emissions this year than the shift away from coal and towards renewables.

A recession would dampen investment in new power projects, including renewables.
AAP

Small fall in electricity demand

We examined Australia’s National Electricity Market (NEM) in the seven weeks from March 16 (when national restrictions came into force) to May 4 this year. We compared the results to the same period in 2019.

The NEM covers all states and territories except Western Australia and the Northern Territory.

Total electricity demand was 3% lower during the first seven weeks of the lockdown, compared with the same period in 2019. About 2% of this was due to an actual fall in electricity use. The rest was due to extra rooftop solar panels installed since May 2019 which lowered demand on the grid.




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Want an economic tonic, Mr Morrison? Use that stimulus money to turbocharge renewables


Some of the 2% reduction may be due to cooler weather this autumn, leading to lower air conditioning use.

So while COVID-19 restrictions have hammered the economy in recent weeks, they haven’t had a big effect on electricity use. Most industrial and business power use has continued uninterrupted. Most office buildings have not fully shut down, although many people are working from home and use more electricity there.

A hefty drop in emissions

Despite the modest fall in electricity demand in the first seven weeks of lockdown, emissions fell substantially – by 8.5%. Comparing the first quarter of 2020 and 2019, emissions fell by 7%.

This is primarily because more renewable energy is now supplying the grid. Output from solar farms increased by 55% and from wind parks by 19% compared with the first quarter of 2019, reflecting massive amounts of new installed capacity coming online. Output from hydroelectricity increased by 18%, likely reflecting higher rainfall.

More renewables supply combined with falling demand means less output from fossil fuel power plants. Coal plant output fell 9% compared to the same period in 2019, entirely due to lower output by black coal plants in New South Wales and Queensland. Gas fired power output fell by 8%.

Electricity prices plunge

Meanwhile, wholesale prices in the NEM have fallen dramatically. The average price was 60% lower in the seven weeks since March 16 compared with the same period in 2019. A marked reduction in prices was evident from November 2019.

Why? One reason is that prices for natural gas are much lower and hence gas-fired power stations can make lower bids for electricity. Gas prices fell through much of 2019, and dropped further in the first quarter of 2020, associated with the pandemic-induced economic downturn. Gas plants often set the prices for everyone in the market, so this has a big effect on the market overall.




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Don’t worry: staying at home for months is unlikely to lead to an eye-watering electricity bill


Also, coal and hydropower plants lowered their bids in this more competitive environment.

The outlook for wholesale prices remains flat. Gas prices seem unlikely to rebound soon. More wind and solar power will come into the market and there is no underlying growth trend in electricity demand.

Relaxation of COVID-19 restrictions is unlikely to make a big difference. What may drive prices up once again is the next large coal plant closure. The last one to close was Victoria’s Hazelwood plant in 2017.

What does this mean for coal and renewables?

Low wholesale electricity prices are good for consumers – in particular industry, where the wholesale price is a bigger proportion of the total charges for electricity supply. On the flip side, they mean less money for power generators.

Across the National Electricity Market, revenue for generators was about A$160 million per week lower during the first seven weeks of lockdown compared to the same period in 2019.

This revenue fall makes coal plants less profitable, and makes life uncomfortable for plants with relatively high costs for fuel and maintenance. It’s likely to push older plants closer to closure.




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Don’t worry: staying at home for months is unlikely to lead to an eye-watering electricity bill


Lower prices also make investment in new renewable power less attractive. In recent years, average wholesale prices were well above the typical lifetime average costs of producing electricity from newly built solar and wind parks. There is also uncertainty around how prices will be set in power markets in the future, and how congestion of power transmission lines will be managed.

Nevertheless, the longer term prospects for renewables in Australia remain very good. Solar and wind power are the cheapest of all new generation technologies producing power, and solar power is expected to become even cheaper. A new coal-fired power plant, if one was ever built, would have far higher costs per megawatt hour. Costs for a nuclear plant would be higher still.

A drop in revenue during COVID-19 is bad news for coal-fired power generators.
Wikimedia

The way forward

The numbers show Australia does not need a painful recession to drive carbon emissions down. It needs sustained investment in new, clean technology.

The better the Australian economy recovers, the more private businesses will invest in new energy supply. But if the world falls into a deep and lasting recession, and the Australian economy with it, then the prospects for private investment in new power plants will suffer.

In that case, governments may be well advised to invest public funds in clean energy, more so than they have in the past.The Conversation

Frank Jotzo, Director, Centre for Climate and Energy Policy, Australian National University and Mousami Prasad, Research Fellow, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Want an economic tonic, Mr Morrison? Use that stimulus money to turbocharge renewables



Chris Fithall/Flickr

Elizabeth Thurbon, UNSW; Hao Tan, University of Newcastle; John Mathews, Macquarie University, and Sung-Young Kim, Macquarie University

The chaos of COVID-19 has now hit global energy markets, creating an outcome unheard of in industrial history: negative oil prices. With the world’s largest economies largely in lockdown, demand for oil has stagnated.

Essentially, the negative prices mean oil producers are willing to pay for the oil to be taken off their hands because soon, they will have nowhere to store it.

Federal energy minister Angus Taylor has proposed a partial solution: Australia will spend A$94 million buying up oil, to bolster domestic supplies and help stabilise global prices.

That strategy is a fool’s path to energy security. Right now, the best way to shore up Australia’s future energy supplies is to invest economic stimulus money in renewables – essentially to manufacture our own energy security.

Prime Minister Scott Morrison with Angus Taylor, right, who wants Australia to buy surplus oil.
Mick Tsikas/AAP

A flawed plan

Australia’s oil reserves have for years languished well below the International Energy Agency’s recommended 90 days. Taylor says his plan would address this, and help stabilise (read: push up) oil prices and restore faith in the global oil market on which Australia depends.

But the plan is undermined by a simple fact: unstable global oil prices have been a recurring problem for decades, largely for political reasons well beyond Australia’s control. We need look only to the price shocks triggered by the Yom-Kippur war of 1973, the Iraq war of 2003, and the Saudi drone attack of 2019 – to name just a few.




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Making Australia a renewable energy exporting superpower


Price instability is all but guaranteed to increase in future, as climate change concerns drive insurers and investors away from fossil fuels and towards green energy.

The current chaos actually creates a much better opportunity for Australia: use the massive COVID-19 economic stimulus to manufacture real energy security in the form of renewables.

Buying large volumes of surplus oil will not ensure stable prices.
Flickr

Renewables: a win-win

The price and supply of energy from fossil fuels is vulnerable to natural resource depletion, geopolitical tensions and climate change concerns. This is true not just for oil, but coal and gas too.

The only real path to energy security is manufactured energy such as solar panels, wind turbines, electrolysers, batteries and smart grids.

These technologies can turn infinite natural resources into energy, then store and distribute it to ensure stable supply.

Victoria and South Australia now enjoy higher levels of energy security thanks to large-scale stationary batteries that even out electricity peaks and troughs.




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For example, a large-scale battery in Victoria stores energy produced by the Gannawarra solar farm. The battery provides energy during peak times when there is no sun.

Manufacturing energy is also important from an economic security perspective, promoting the creation of high-tech, high-wage industries.

These industries can create thousands of skilled jobs and open up massive new export markets – all while helping to mitigate climate change. This reality has been accepted by major East Asian economies, from China to South Korea, for more than a decade.

The Australian government must use its enormous stimulus to help local companies dramatically expand their wind, solar, hydrogen and energy storage investments.
This would satisfy domestic energy needs and grow the new green export markets ready and waiting in Asia.

Asia presents huge export potential for Australia’s renewable energy.
DAN HIMBRECHTS/AAP

A jobs boon

There is no shortage of projects waiting to be turbocharged. The government could start with Sun Cable, linking Australia’s and Singapore’s clean energy markets via an undersea cable.

It could also kickstart Australia’s clean hydrogen industry. According to the government’s own National Hydrogen Strategy, developing hydrogen would dramatically reduce Australia’s oil import reliance and energy costs and vastly expand its clean energy exports.

By simply following its own strategy, the government could create about 7,600 skilled and semi-skilled jobs and add about A$11 billion each year to Australia’s gross domestic product to 2050.




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The cheaper energy prices that follow could help Australia revive its techno-industrial base by making energy-intensive manufacturing a viable proposition once again.

According to leading economist Ross Garnaut, Australia could then bring home its long-lost materials-processing industries and re-emerge as a world-leading exporter of (clean) steel and aluminium.

Geopolitical benefits would also flow from Australia becoming a green hydrogen superpower, such as reducing our worrying export dependence on China.

An investment injection in renewables would be a huge jobs boost.
Flickr

Seize the moment

The idea of using the COVID-19 stimulus to turbocharge Australia’s clean energy shift is not pie in the sky. Indeed, doing so is the explicit recommendation of the International Energy Agency, which this week noted:

These huge spending programmes are likely to be once-in-a-generation in scale and will shape countries’ infrastructure for decades to come… Governments can … achieve both short-term economic gains and long-term benefits by making clean energy part of their stimulus plans.

COVID-19 has undoubtedly been disastrous for Australia and the world. But it creates new opportunities in energy, economic security and climate action. To seize these opportunities, the Morrison government must chart a new industrial course for the nation by manufacturing Australia’s energy security.The Conversation

Elizabeth Thurbon, Scientia Fellow and Associate Professor in International Relations / International Political Economy, UNSW; Hao Tan, Associate professor, University of Newcastle; John Mathews, Professor Emeritus, Macquarie Business School, Macquarie University, and Sung-Young Kim, Senior Lecturer in the Department of Modern History, Politics & International Relations, Macquarie University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Snowy 2.0 is a wolf in sheep’s clothing – it will push carbon emissions up, not down



Luka Cochleae/AAP

Bruce Mountain, Victoria University

The massive Snowy 2.0 pumped hydro project is soon expected to be granted environmental approval. I and others have criticised the project on several grounds, including its questionable financial viability and overstated benefits to the electricity system. But Snowy 2.0’s greenhouse gas emissions have barely been discussed.

Both Snowy Hydro and its owner, the federal government, say the project will help expand renewable electricity generation (and by extension, contribute to emissions reduction from the energy sector).

However, closer inspection shows it won’t work that way. For at least the next couple of decades, Snowy 2.0 will store coal-fired electricity, not renewable electricity. In fact, I predict Snowy 2.0 will create additional demand for coal-fired generation and lead to an increase in greenhouse gas emissions for the foreseeable future.

Khancoban Dam, part of the soon-to-be expanded Snowy Hydro scheme.
Snowy Hydro Ltd

The problem explained

The expanded Snowy Hydro scheme in southern New South Wales will involve pumping water uphill to a reservoir, storing it, and then releasing it downhill to generate electricity when demand is high.

The emissions reduction potential of the project rests on what type of electricity is used to pump the water uphill. Snowy Hydro says it will pump the water when a lot of wind and solar energy is being produced (and therefore when wholesale electricity prices are low).

But the crucial point here is that wind and solar farms produce electricity whenever the resource is available. This will happen irrespective of whether Snowy 2.0 is producing or consuming energy.




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When Snowy 2.0 pumps water uphill to its upper reservoir, it adds to demand on the electricity system. The generators that will provide this extra electricity are the ones that would not operate unless Snowy 2.0’s pumping demand was calling them into operation.

These will not be renewable generators since they will be operating anyway. Rather, for the next couple of decades at least, coal-fired electricity generators – the next cheapest form of electricity after renewables – will provide Snowy 2.0’s power.

Snowy Hydro claims Snowy 2.0 will add 2000 megawatts of renewable capacity to the national electricity market. However Snowy 2.0 is a storage device, and its claim to be renewable rests on the source of the electricity that it stores and then reproduces. It is not renewable electricity that Snowy 2.0 will store and reproduce for the foreseeable future.

The Snowy 2.0 scheme will lead to more coal use in the foreseeable future.
Julian Smith/AAP

Why this matters

Ageing coal-fired generaters will account for a smaller share of Australia’s electricity production over time as they become uneconomic and close down. But projections from the Australian Energy Market Operator show coal will make up a significant proportion of electricity production for the next two decades.

It is only when all coal-fired generators have closed (and gas-fired generators have not taken their place) that Snowy 2.0 could claim to be using renewable electricity to power its pumps.

Does this matter? Yes, very much. Using Snowy Hydro’s projections of how much
electricity Snowy 2.0 will pump each year from 2025 to 2047 (the period over which they have developed their projections) I estimate that Snowy 2.0 will, on average, account for 5.4 million tonnes of carbon dioxide equivalent each year.




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This is clearly a big number – roughly equivalent to the annual greenhouse gas emissions of Australia’s mineral or chemical industry, and equal to the annual emissions of 2.4 million cars.

If we assume, conservatively, that emissions have a cost of A$20 per tonne of carbon, then Snowy 2.0 will impose an additional annual cost of A$108 million on the Australian community that will need to be countered by emissions reduction somewhere else in the economy.

Over 20 years, Snowy 2.0 will lead to more greenhouse gas emissions than three million cars.
Julian Smith/AAP

The NSW government has adopted a target of net-zero emissions by 2050. But using Snowy Hydro’s projections of pumped energy, average greenhouse gas emissions attributable to Snowy 2.0 over its first decade will increase NSW’s emissions by about 10% of their current levels each year.

This proportion will increase if the government successfully reduces emissions elsewhere.

Of course, emission reduction is not just an issue for the states. The federal
government has been at pains to affirm its commitment to the Paris climate accord. Snowy 2.0 will undermine the achievement of this commitment.

If additional energy storage is needed to stabilise our electricity grid, it can be provided by many alternatives with a much smaller greenhouse gas impact such as demand response, gas or diesel generators, batteries or smaller and more efficient pumped-hydro generators.

Meeting the climate challenge

Emissions associated with storage is given little attention in Australia but is well-researched overseas. Since Australia’s state and federal governments profess a commitment to reducing greenhouse gas emissions, this is a serious omission.




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Energy storage will increase emissions as long as fossil fuel generators dominate the power system.

In meeting the climate challenge, greenhouse gas emissions must become a more prominent consideration in the planning and approval of all electricity projects, including storage – and especially for Snowy 2.0.


In response the points raised in this article, Snowy Hydro said Snowy 2.0 would add 2,000 megawatts (MW) of renewable capacity to the national electricity market (NEM).

“In the absence of Snowy 2.0, the NEM will have to fill the capacity need with other power stations, which would inevitably be fossil-fuelled,” the company said in a statement.

“Snowy will sell capacity contracts (tantamount to insurance against NEM price volatility and spikes) to a range of NEM counterparties, as it does now and has done for decades.”

Snowy Hydro said Snowy 2.0 would directly draw wind and solar capacity into the NEM, via the contract market.

It said this market, rather than the wholesale market, drives investment and electricity generation.

“Snowy Hydro’s renewable energy procurement program, through which Snowy contracted with 888 MW of wind and solar facilities in 2019, has made the construction of eight new wind and solar projects possible,” Snowy Hydro said.

“In the NEM, what happens subsequently to the spot price is of little interest to the owners of these facilities, because their revenue is guaranteed through their offtake contracts with Snowy.”

The company said the energy produced by wind and solar plants, backed by Snowy’s existing large-scale generation fleet, was “the most cost-effective and reliable way to serve the customers of the NEM in the future.”

Snowy Hydro said Snowy 2.0 would pump water uphill using cheap electricity from wind and solar – often most plentiful when NEM prices are low – rather than expensive electricity from coal.

“The water is released when prices are high – this is one of the four Snowy 2.0 revenue streams,” it said.

“Given that Snowy has the water storage capability to pump when electricity prices are low, and generate when electricity prices are high, why would Snowy choose to buy expensive coal-fired energy to pump water uphill at times of high prices?”The Conversation

Bruce Mountain, Director, Victoria Energy Policy Centre, Victoria University

This article is republished from The Conversation under a Creative Commons license. Read the original article.