Labor’s policy can smooth the energy transition, but much more will be needed to tackle emissions


Frank Jotzo, Crawford School of Public Policy, Australian National University

The Labor party’s energy policy platform, released last week, is politically clever and would likely be effective. It includes plans to underwrite renewable energy and storage, and other elements that would help the energy transition along. Its approach to the transition away from coal-fired power is likely to need more work, and it will need to be accompanied by good policy in other sectors of the economy where greenhouse emissions are still climbing.

The politics is quite simple for Labor: support the transition to renewable electricity which is already underway and which a large majority of Australians support, and minimise the risk that its proposed policy instruments will come under effective attack in the lead-up to the 2019 election.




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By aiming for 50% renewables at 2030, the party has claimed the high ground. That goal and perhaps a lot more is achievable, given that the large investment pipeline in electricity consists almost entirely of wind and solar projects, and that new renewables are now typically the cheapest options to produce energy with new plants.

The question then is what policy instruments Labor would use to facilitate the transition from coal to renewables.

NEG games

The government’s abandoned National Energy Guarantee (NEG) policy is now a political asset for Labor. If the Coalition were to support it under a Labor government, the policy would effectively be immune to political attack. If the Coalition were to block it, Labor could blame many future problems in electricity on the Coalition’s refusal to endorse a policy that it originally devised.

The NEG has many warts. Some of the compromises in its design were necessary to get it through the Coalition party room. That no longer matters, and so it should be possible to make improvements. One such improvement would be to allow for an explicit carbon price in electricity under the NEG, by creating an emissions intensity obligation for electricity generators with traded certificates. This is better than the opaque model of contract obligations on electricity retailers under the original version.

Underwriting renewables

But the real action under a Labor government might well come from a more direct policy approach to push the deployment of renewables. In his energy policy speech last week, Shorten foreshadowed that Labor would “invest in projects and underwrite contracts for clean power generation, as well as firming technologies like storage and gas”.

As interventionist as this sounds, it has some clear advantages over more indirect support mechanisms. First, it brings the costs of new projects down further by making cheap finance available – a tried and tested method in state-based renewables schemes. Second, it allows for a more targeted approach, supporting renewable energy generation where it makes most sense given demand and transmission lines, and prioritising storage where and when it is needed. Third, it channels government support only to new installations, rather than giving free money to wind farms and solar plants that are already in operation.

Managing coal exit

Where renewables rise, coal will fall. Labor’s approach to this issue centres on the affected workers and communities. A “just transition authority” would be created as a statutory authority, to administer redundancies, worker training, and economic diversification.

This is a good approach if it can work effectively and efficiently. But it may not be enough to manage the large and potentially rapid shifts in Australia’s power sector.

Contract prices for new wind farms and solar plants now are similar to or lower than the operating costs of many existing coal plants. The economics of existing coal plants are deteriorating, and many of Australia’s ageing coal power plants may shut down sooner than anticipated.

All that Labor’s policy says on the issue is that all large power plants would be required to provide three years’ notice of closure, as the Finkel Review recommended. But in practice this is unlikely to work.

Without any guiding framework, coal power plants could close very suddenly. If a major piece of equipment fails and repair is uneconomic, then the plant is out, and operators may find it opportune to run the plant right until that point. It’s like driving an old car – it runs sort of OK until the gearbox goes, and it’s off to the wreckers right then. It is unclear how a three-year rule could be enforced.

This is effectively what happened with the Hazelwood plant in Victoria. That closure caused a temporary rise in wholesale power prices, as new supply capacity gradually fills the gap.

One way to deal with this would be to draw up and implement some form of specific exit timetable for coal power plants. This would give notice to local communities, provide time to prepare investment in alternative economic activities, and allow replacement generation capacity to be brought online. Such a timetable would need a mechanism to implement it, probably a system of carrots and sticks.

Batteries, energy efficiency and the CEFC

Most public attention was given to a relatively small part of Labor’s energy policy platform: the promise to subsidise home batteries. Batteries can help reduce peak demand, and cut electricity bills for those who also have solar panels. But it is not clear whether home batteries are good value for money in the system overall. And the program would tend to benefit mostly upper middle-income earners.




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Labor’s battery plan – good policy, or just good politics?


Labor’s platform also foreshadows a renewed emphasis on energy efficiency, which is economically sensible.

Finally, Labor promises to double the Clean Energy Finance Corporation’s endowment with another A$10 billion, to be used for revolving loans. The CEFC is already the world’s biggest “green bank”, co-financing projects that cut emissions and deliver financial returns. Another A$5 billion is promised as a fund for upgrading transmission and distribution infrastructure. These are big numbers, and justifiably so – building our future energy system will need massive investments, and some of these will be best made by government.

Big plans for electricity, but what about the rest?

Overall, Labor’s plan is a solid blueprint to support the electricity transition, with strong ambition made possible by the tremendous technological developments of recent years.

But really it is only the start. Electricity accounts for one-third of national greenhouse emissions. Emissions from the power sector will continue to fall, but emissions from other sectors have been rising. That poses a huge challenge for the economy-wide emissions reductions that are needed not only to achieve the 2030 emissions targets, but the much deeper reductions needed in coming decades.

A national low-carbon strategy will need to look at how to get industry to shift to zero-emission electricity, how to convert road transport to electricity or hydrogen, and how to tackle the difficult question of agricultural emissions. More pre-election announcements are to come. It will be interesting to see how far Labor will be willing to go in the direction of putting a price on carbon, which remains the economically sensible but most politically charged policy option.

As difficult as electricity policy may seem based on the tumultuous politics that have surrounded it, more seismic shifts are waiting in the wings.The Conversation

Frank Jotzo, Director, Centre for Climate Economics and Policy, Crawford School of Public Policy, Australian National University

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

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47% say prioritise cutting power bills: Ipsos


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The poll found stark differences between voting intentions and attitude to energy policy.
Shutterstock

Michelle Grattan, University of Canberra

Fresh focus will turn to the energy debate this week, with a Fairfax
Ipsos poll showing 47% of Australians support giving the main priority
to cutting bills, and Labor expected to release details of its energy
policy.

The Ipsos poll found 39% want the federal government to give the main
priority to reducing carbon emissions, while 13% were most concerned
with reducing the risk of blackouts.

In a highly interventionist approach, the government is concentrating
on wielding what it calls “a big stick” to force power companies to
lower prices.

Ipsos found a big difference in priorities according to which party
people supported. Among Coalition voters, 58% prioritised reducing
bills, compared with 22% who nominated cutting emissions and 20% who
opted for reducing the risk of blackouts.

But a majority of Labor voters put reducing emissions top (53%), with
36% opting for giving priority to cutting power prices and only 11%
nominating reducing the blackout risk. Three quarters of Greens voters
gave top priority to cutting emissions.

Voters outside capital cities are more likely to give priority to
cutting bills than urban voters. People aged 40-54 are more likely
than other age groups to be concerned with reducing bills, as are
those on incomes under $100,000 compared with people with higher
income.

Younger voters are more likely to give priority to cutting emissions
than older age groups.

The Ipsos poll has Labor leading in two-party terms 52-48%.

Bill Shorten on Thursday addresses BloombergNEF with a speech billed
“Labor’s plan to tackle Australia’s energy crisis”. The address will
be followed by a question and answer session.

Labor’s shadow cabinet will consider the ALP policy before the speech.

Labor has previously flagged it is open to incorporating aspects of
the National Energy Guarantee that the Coalition abandoned in its
internal meltdown that ended in the change of leadership.

Fairfax Media reported at the weekend that Labor’s policy “is modelled
on the guarantee, but the party is also working towards a much broader
set of measures as it seeks to compete with the government’s pledge to
bring down power prices and shore up supplies.”

The ALP is committed to cutting emissions by 45% by 2030 off a 2005 baseline.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

How biomethane can help turn gas into a renewable energy source



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Are there greener pastures ahead for gas?
Shutterstock.com

Bernadette McCabe, University of Southern Queensland

Australia’s report card on reducing its greenhouse gas emissions is not exactly glowing, but there are ample opportunities to get it on track during this period of rapid change in the energy sector. Greater use of renewable electricity sources like wind and solar are playing a large part in reducing emissions, and gas can also lift its game.

Gas provides nearly one quarter of Australia’s total energy supply. Around 130,000 commercial businesses rely on gas, and it delivers 44% of Australia’s household energy to more than 6.5 million homes which use natural gas for hot water, domestic heating, or cooking.

Gas has lower greenhouse emissions than most other fuels, and the gas used in power generation has about half the emissions of the current electricity grid.

Even so, natural gas can do more to help Australia meet its carbon-reduction targets.




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An industry document released last year, Gas Vision 2050, explains how new technologies such as biomethane and hydrogen can make that happen, by replacing conventional natural gas with low-emission alternative fuels.

Around the world

Worldwide, renewable natural gas is dominated by biomethane, which can be generated from organic materials and residues from agriculture, food production and waste processing.

Multiple products of anaerobic digestion.
Modified from ADBA with permission

The top biomethane-producing countries include Germany, the UK, Sweden, France and the United States, and many others are planning to use renewable gas more widely.

A 2017 report suggests that renewable natural gas could meet 76% of Europe’s natural gas demand by 2050.

What is biomethane?

Biomethane is a clean form of biogas that is 98% methane. Also known as green gas, it can be used interchangeably with conventional fossil-fuel natural gas.

Biogas is a mixture of around 60% methane and 40% carbon dioxide, plus traces of other contaminants. Turning biogas into biomethane requires technology that scrubs out the carbon dioxide.

Biomethane’s benefits include:

  • Net zero emissions
  • Interchangeability with existing natural gas usage
  • Ability to capture methane emissions from other processes such as landfill and manure production
  • Potential economic opportunity for regional areas
  • Generation of skilled jobs in planning, engineering, operating and maintenance of biogas and biomethane plants.

Australia’s potential for biomethane

While Australia currently does not have any upgrading plants, the production of biomethane can provide a huge boost to Australia’s nascent biogas industry.

The main use for biogas in Australia is for electricity production, heat, and combined heat and power.

Australia’s biogas sector has more than 240 anaerobic digestion (AD) plants, most of which are associated with landfill gas power units and municipal wastewater treatment. They also include:

  • about 20 agricultural AD plants, which use waste manure from piggeries
  • about 18 industrial AD plants, which use wastewater from red meat processing and rendering as feedstock for biogas production;

There is also manure from around one million head of cattle in feedlots, which is currently not used to produce biogas, but is stockpiled for use as fertiliser on agricultural land.

Australian biogas facilities.
CAE/USQ

There are untapped opportunities to produce biomethane using municipal sewage sludge, red meat processing waste, residues from breweries and distilleries, food waste, and poultry and cattle manure.




Read more:
Home biogas: turning food waste into renewable energy


The Australian Renewable Energy Agency is currently supporting the Australian Biomass for Bioenergy (ABBA) project. The Australian Renewable Energy Mapping Infrastructure (AREMI) platform will map existing and projected biomass resource data from the ABBA project, alongside other parameters such as existing network and transport infrastructure, land-use capability, and demographic data.

This topic and many others related to biogas and bioenergy more widely will be discussed at this week’s Annual Bioenergy Australia conference.

Of course, biomethane is just one way in which Australia can make the transition to a low-emissions future. But as natural gas is already touted as a “transition fuel” to a low-carbon economy, these new technologies can help ensure that existing gas infrastructure can still be used in the future.The Conversation

Bernadette McCabe, Associate Professor and Principal Scientist, University of Southern Queensland

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

New solar cells offer you the chance to print out solar panels and stick them on your roof


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This roof in Newcastle has become the first in Australia to be covered with specially printed solar cells.
University of Newcastle, Author provided

Paul Dastoor, University of Newcastle

Australia’s first commercial installation of printed solar cells, made using specialised semiconducting inks and printed using a conventional reel-to-reel printer, has been installed on a factory roof in Newcastle.

The 200 square metre array was installed in just one day by a team of five people. No other energy solution is as lightweight, as quick to manufacture, or as easy to install on this scale.




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Our research team manufactured the solar modules using standard printing techniques; in fact, the machine that we use typically makes wine labels. Each solar cell consists of several individual layers printed on top of each other, which are then connected in series to form a bank of cells. These cells are then connected in parallel to form a solar module.

Since 1996, we have progressed from making tiny, millimetre-sized solar cells to the first commercial installation. In the latest installation each module is ten metres long and sandwiched between two layers of recyclable plastic.

At the core of the technology are the specialised semiconducting polymer-based inks that we have developed. This group of materials has fundamentally altered our ability to build electronic devices; replacing hard, rigid, glass-like materials such as silicon with flexible inks and paints that can be printed or coated over vast areas at extremely low cost.

As a result, these modules cost less than A$10 per square metre when manufactured at scale. This means it would take only 2-3 years to become cost-competitive with other technologies, even at efficiencies of only 2-3%.

These printed solar modules could conceivably be installed onto any roof or structure using simple adhesive tape and connected to wires using simple press-studs. The new installation at Newcastle is an important milestone on the path towards commercialisation of the technology – we will spend the next six months testing its performance and durability before removing and recycling the materials.

The solar cells can be installed with little more than sticky tape.
University of Newcastle, Author provided

We think this technology has enormous potential. Obviously our technology is still at the trial stage, but our vision is a world in which every building in every city in every country has printed solar cells generating low-cost sustainable energy for everyone. This latest installation has brought the goal of solar roofs, walls and windows a step closer.




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WA bathes in sunshine but the poorest households lack solar panels – that needs to change


Ultimately, we imagine that these solar cells could even benefit those people who don’t own or have access to roof space. People who live in apartment complexes, for example, could potentially sign up to a plan that lets them pay to access the power generated by cells installed by the building’s owner or body corporate, and need never necessarily “own” the infrastructure outright.

But in a fractured and uncertain energy policy landscape, this new technology is a clear illustration of the value of taking power into one’s own hands.The Conversation

Paul Dastoor, Professor, School of Mathematical and Physical Sciences, University of Newcastle

This article was originally published on The Conversation. Read the original article.

What’s wrong with big solar in cities? Nothing, if it’s done right



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Residents near big solar projects are often concerned they cause glare and noise.
Electrical and Mechanical Services Department Headquarters rooftop solar, Hong Kong/Wikimedia Commons

Jason Byrne, University of Tasmania

Many of us are familiar with developments of big solar farms in rural and regional areas. These are often welcomed as a positive sign of our transition towards a low-carbon economy. But do large-scale solar installations have a place in our cities?

The City of Fremantle in Western Australia is considering a proposal to use a former landfill site for a large-scale solar farm. The reportedly 4.9 megawatt solar power station on an eight-hectare site would be, it’s said, Australia’s largest urban solar farm. The initiative is part of Fremantle’s ambition to be powered by 100% clean energy within a decade.




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The proposal is facing some community opposition, however. Residents are reportedly alarmed by the potential public health consequences of building on a rubbish dump, which risks releasing toxic contaminants such as asbestos into the environment. Other concerns include glare from the solar panels, or excessive noise.

Similar complaints about solar panels in cities are being seen all over the world, with opponents generally of the view “they do not belong in residential areas”. So what are the planning issues associated with large-scale solar installations in cities? And should we be concerned about possible negative impacts?

What is large-scale solar?

According to the Australian Clean Energy Regulator, large-scale solar refers to “a device with a kilowatt (kW) rating of more than 100 kilowatts”. A kilowatt is a measure of power – the rate of energy delivery at a given moment – whereas a kilowatt-hour (kWh) is a measure of the total energy produced (so a 100kW device operating for one hour would produce 100kWh of electricity).

Device here refers to not only the photovoltaic (PV) panels – the actual panels used in solar energy – but also to the infrastructure “behind the electricity meter”. So interconnected panels may still constitute a single device.

By this definition, there may already be large-scale solar installations in Australian cities. In Sydney for example, the recently opened system on top of the Alexandra Canal Transport Depot is by all accounts a large-scale solar system. It combines around 1,600 solar panels with enough battery storage for 500kWh of electricity.




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Sydney’s closer to being a zero-carbon city than you think


But this is not Sydney’s largest solar installation. That honour is presently held by the Sydney Markets in Flemington, among Australia’s largest rooftop solar installations, which generates around 3 megawatts (that’s 3,000kW). To date, there have been no publicly disclosed complaints received about these facilities.

Large-scale solar (sometimes called “big solar”) can also refer to solar arrays that use mirrors to concentrate sunlight onto solar PV panels. This is different to concentrated thermal solar, which uses mirrors to focus sunlight onto the top of a tower to heat salt, oil or other materials that can then be used to generate steam to power turbines for electricity generation.

What’s the problem with solar in cities?

Internationally, there is increasing recognition cities could be ideal locations for large-scale solar installations due to the amounts of unused land. This includes land alongside freeways and main roads, flood-prone land, and rooftops on factories, warehouses and residences. And locating big solar in cities can also reduce the energy losses that occur with transmitting electricity over long distances.

Australia’s combined rooftop solar installations already supply the equivalent of enough power for all the homes in Sydney. And even former landfill sites – which have few uses other than parkland and are often too contaminated to sustain other land uses such as residential development – can be a good use of space for solar farms. But such sites would need to be carefully managed so contaminants are not released during construction.

Large-scale solar installations can present some challenges for urban planning. For instance, mirrors can cause problems with glare, or even damage if they were misaligned (problems thus far have been in solar thermal plants). Maintenance vehicles may increase traffic in neighbourhoods. Installing solar panels could cause temporary problems with noise and lighting. And views could potentially be disrupted if adjoining residents overlook a large-scale solar installation.




Read more:
Pace of renewable energy shift leaves city planners struggling to keep up


But not all of these impacts would be long-term, and they can all potentially be managed through planning approval, permitting processes and development conditions. Installing screens or trees can improve views, for instance. Glare is a potential problem but again can be managed via screening (at the site or on overlooking buildings) or protective films on the panels.

The issue with the proposed solar farm in Fremantle is the fact it’s planned atop a former landfill site, known to contain harmful substances including asbestos, hydrocarbons and heavy metals. Unless carefully managed, construction of the solar farm could disturb these materials and potentially expose nearby residents to health impacts.

Most state environmental protection agencies recognise risks if the use of potentially contaminated land is to be changed, and have developed stringent guidelines for landfill management.

The Algarve Lagos solar farm in Portugal shows how empty land in cities can be used to host energy efficiency platforms.
Wikimedia Commons

The City of Fremantle has approved the proposed development, subject to the preparation of a site management plan among other conditions. Depending on site management, and the characteristics of surrounding neighbourhoods, poorly managed big solar on landfill sites could become an environmental justice issue. From this perspective, residents’ concerns are understandable, and the City of Fremantle will need to ensure it carefully monitors construction.




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Infrasound phobia spreads … to solar energy cells! What’s next?


Lessons for planning

It is reasonable to expect that cities will increasingly host large-scale solar installations. With careful site selection and management, the multiple benefits of clean energy can accrue to urban residents. Otherwise leftover or marginal land can derive an economic return.

The ConversationOf course care will need to be taken to minimise potential habitat loss or off site impacts such as visual intrusion, noise, and glare. But solar farms also have the potential to provide new habitats both via physical infrastructure (sites for nesting) and as part of site rehabilitation and management.

Jason Byrne, Professor of Human Geography and Planning, University of Tasmania

This article was originally published on The Conversation. Read the original article.

Victorian minister plays hardball with Turnbull on the NEG


Michelle Grattan, University of Canberra

The Turnbull government is facing fresh trouble over its energy policy ahead of a crucial meeting next week, with Victoria’s Energy Minister Lily D’Ambrosio warning that the state won’t be rushed into signing onto the National Energy Guarantee (NEG).

In a speech to be delivered on Tuesday, D’Ambrosio will play on dissent in the Coalition, saying: “Malcolm Turnbull is trying to get us to sign up to something that hasn’t gone to his own party room – a place full of climate sceptics”.

“Every time we get close to a national energy policy, the Coalition party room shoots it down,” she will tell a clean energy summit in Sydney. An extract from her speech was issued ahead of its delivery.

“How can we have any confidence in what they’re asking from us if it hasn’t been through his party room first?

“We won’t rush into supporting a policy that we’re not certain is in the best interests of Victorians, just to appease to coal ideologues in Canberra.

“We won’t support a scheme that leaves the states in the dark and leaves us all hostage to the extremists in Turnbull’s party room,” D’Ambrosio will say.

Victoria’s shot across the bows on energy comes as Turnbull faces difficult fallout from the government’s disappointing byelection performance on Saturday, especially in the Queensland seat of Longman, where the Liberal National Party’s primary vote plunged by 9 points to just under 30%.




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This is fuelling a push from some within the Coalition for the government to abandon its policy for tax cuts for big business if, as expected, a fresh attempt to get the legislation through the Senate fails. Labor successfully exploited the company tax issue in the byelections.

Turnbull’s weakened authority will also embolden party room critics of the energy policy, led by Tony Abbott – although these are in a minority. Abbott on Monday repeated his call for Australia to withdraw from the Paris climate agreement and to cut immigration.

The Guardian reported on Monday that Energy Minister Josh Frydenberg had flagged a two-stage process, as he tries to bed down a deal on the NEG. Under his timetable the NEG mechanism would be agreed on August 10 at the meeting of the Council of Australian Governments energy council. On August 14 the states and territories would get the Commonwealth legislation on the emissions reduction part of the scheme and discuss it in a phone hook up.

The key to this timetable is that it would allow Frydenberg to put the Commonwealth legislation to the Coalition party room on August 14 ahead of it being presented to states and territories. He has previously said the legislation would go to the party room.

Abbott has unsuccessfully pressed for much more party room input before any Commonwealth-state deal is done.

It is not clear whether Victoria will actually try to stall a deal next week, or is just playing politics ahead of the meeting.

D’Ambrosio will say Victoria has “acted in good faith” on the development of the proposed NEG “but it’s no secret that like many other states, we have major concerns about it.”

“We have made it very clear from the beginning – we won’t let any policy get in the way of Victoria achieving our legislated renewable energy targets. Our targets are the only real guarantee to bring down power prices”. Victoria would continue to discuss its concerns ahead of next week’s meeting.

Meanwhile, amid the uncertainty about the company tax cuts’ future, Finance Minister Mathias Cormann strongly defended them. Cormann, who has been the government’s negotiator with the crossbench, is seen as its most committed advocate of the tax plan.

“We are working with the crossbench as we speak to secure the necessary support,” he told the ABC.

Pressed on whether the government would take the policy to the election if it could not win the Senate vote, Cormann said: “That is our position”.

“The bigger businesses around Australia in many ways are most exposed to the pressures of global competition and they employ many millions of Australians directly. Weaker bigger businesses in Australia means less business for smaller and medium-sized businesses.

“It also means lower job security for the people that big business employ directly and lower job security for the many employees in the many small and medium-sized businesses who supply products and services to those bigger businesses,” Cormann said.

Federal Liberal MP Luke Howarth, from Queensland, told Sky that if the measure could not be passed it should be dropped.

The ConversationAbbott, interviewed on 2GB, said he accepted the economic case for the company tax cuts but there were no votes in them.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

The National Energy Guarantee is a flagship policy. So why hasn’t the modelling been made public?


Bruce Mountain, Victoria University

Central to the public debate about the National Energy Guarantee (NEG) has been the numerical forecasts of its effects – in particular how much it will reduce power prices. In a democracy whose households pay some of the world’s highest electricity bills, it is obvious why this measure should shape the narrative on energy policy.

But Plato tells us that good decisions are based on knowledge, not numbers. What’s more, electricity markets are incredibly complex, and therefore not amenable to straightforward predictions.

The Energy Security Board has put numbers at the centre of its NEG proposal, but the basis of these numbers is not clear. With 22 colleagues at 10 other Australian universities, we are calling for state and territory ministers to ensure that the ESB’s modelling is available for proper scrutiny. I explain here why I support this request.




Read more:
Infographic: the National Energy Guarantee at a glance


On October 17, 2017, the newly created ESB claimed in a letter to federal energy minister Josh Frydenberg that annual household bills would ultimately be A$100-115 lower under the NEG as a result of the NEG being introduced.

The ESB said this calculation was based on its estimate that wholesale electricity prices under the NEG would be 20-25% lower than under business as usual, and 8-10% lower than under the Clean Energy Target proposed by the Finkel Review.

No analysis or modelling was provided to justify these claims. But five weeks later the ESB had altered its forecast, releasing a report claiming that wholesale electricity prices would typically be 35% lower with the NEG than they would be without it. Underlying this claim was the assumption that only 597 megawatts of renewable generation would be developed between 2020 and 2030 if the NEG was not implemented.

Since more renewable generation than this was installed just on the roofs of Australia’s households and businesses in the first five months of 2018, the ESB was effectively suggesting that without the NEG investment in renewable generation would all but dry up.

This stands in stark contrast to the verdicts of other analysts. Bloomberg New Energy Finance predicted that 24,000MW of renewable generation (40 times more than the ESB’s figure) would be built between 2020 and 2030 without the NEG. Bloomberg also predicted less new renewable capacity with the NEG than without it.

Final design on the table

The ESB last week released its final design for the NEG to policymakers, but not the public. It now claims that the policy will reduce household electricity bills by A$150 a year relative to business as usual. It also now says that without the NEG around 8,000MW of new renewable generation will be installed (13 times more investment than it predicted eight months ago).

But the ESB says all of this will be installed behind the meter on the roofs of Australia’s homes and businesses and it persists with the assumption that no new large-scale renewable capacity will be built without the NEG.

But once again this seems to contrast vividly with what others are saying and doing. Several major companies have signed contracts for large-scale renewables, including Telstra, Carlton & United Breweries, Orora, and BlueScope Steel. The ESB’s assumption that all large-scale renewables development will grind to a halt without the NEG is even less plausible now than it was in November 2017.

Others have previously noted that the ESB’s estimate of renewable investment from 2020 to 2030 bears no relation to the estimates from the Australian Energy Market Operator (AEMO) of around 18,000 MW of additional renewable generation between 2020 and 2030, despite the ESB’s claims to the contrary.

However, the ESB’s final design has now helpfully clarified what several other analysts have already pointed out: that meeting the government’s target of reducing the electricity sector’s greenhouse emissions by 26% will require emissions reductions of just 2% between 2020 and 2030 beyond what is already set to be achieved. That is a meagre 0.2% cut per year that the NEG policy will be required to deliver.

I estimate that this will in fact be achieved several times over just with the 8,000MW of new rooftop solar capacity that the ESB predicts will happen even if the NEG is not implemented. To be clear, on the ESB’s numbers, Australia’s electricity sector greenhouse gas emissions will be lower than the government requires them to be, even if the NEG is not implemented. So how then can it be plausible to predict that the NEG will stimulate additional investment in renewable capacity beyond what would happen anyway?




Read more:
Explainer: why we shouldn’t be so quick to trust energy modelling


You can’t have your cake and eat it. If a policy is intended to make no difference to what would happen anyway, how can it be expected to drive down household bills by A$150?

And without putting its modelling into the public domain where it can be subjected to wider expert scrutiny, how will we know whether the ESB’s assumptions actually hold water?

The ConversationThe NEG will be a massive administrative change to Australia’s energy market, and a potentially substantive change if future governments set much higher emissions reduction targets. State and territory energy ministers are being asked to accept the ESB’s promise that household electricity bills will decline by 30-40% in the next few years, and that the NEG will account for a fair part of this. Those ministers should scrutinise this rosy projection carefully before accepting it. After all, the public will be looking to them, and not the federal government, to make good on these price pledges.

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

This article was originally published on The Conversation. Read the original article.