APRA warns company directors about personal liability on climate change. Politicians should also take note.
APRA, the Australian Prudential Regulation Authority, has warned company directors and other decision-makers that they may be held personally responsible for dumb investment decisions in relation to a transition to a low emissions economy. If a coal-fired power station with or without CCS becomes a stranded asset, whoever approved the funds could be in the gun.
So even if the government changes the legislation to allow CEFC to lend to new coal-powered electricity generators, responsibility still lies with the directors of the Clean Energy Finance Corporation (CEFC).
There’s more in the AFR in Malcolm Turnbull is on a ‘clean coal’ collision course with APRA:
Prime Minister Malcolm Turnbull is on a collision course with the Australian Prudential Regulation Authority over his government’s crusade for Australia’s $10 billion green bank to invest in “clean coal” power stations, experts say.
The independent banking regulator entered the climate policy debate 10 days ago with a speech by APRA member Geoff Summerhayes warning that banks and their directors could be legally liable if they fail to consider the increasing risk of carbon-intensive assets such as power stations becoming “stranded’.
- a top adviser to APRA on the climate risk has warned that this [changing the CEFC rules] would be in “complete conflict” with Mr Summerhayes’ warning that climate risks are “foreseeable, material and actionable now” and that directors are on the hook for climate and carbon risks.
The advisor was Karl Mellon, who advised APRA’s Geoff Summerhayes on the speech, and who stress tests climate risk for insurance companies for a living.
The CEFC’s “clean energy” definition is currently a 50 per cent of the grid average of 840 kilograms of carbon dioxide per megawatt hour. The cleanest coal technology available emits 750kg/MWh.
Politics sucking power from energy solutions
On the same page of the AFR Ben Potter has an article Politics sucking power from energy solutions.
Back in the 1990s, he says, when we set up the National Energy Market it seemed that we were leading the world. However, now:
- We’ve turned what should have been a dry debate about how to keep the lights on while we shift from fossil fuels to low carbon into a huge ideological struggle.
And while all the navel-gazing has been going on, we’ve missed big developments and experiments in market design and “smart grid” technology in other countries that also have large renewable energy shares – not to mention some promising homegrown innovations.
We, on the other hand, are producing arguably the costliest, dirtiest electricity in the world.
Potter then talks about developments like the US using demand management to cover 8-10 per cent of peak load (we use one per cent), the Mira Loma battery pack in California to supply 15,000 homes for 4 hours, distributed networks and stuff.
Regrettably, he then talks about Chief Scientist Alan Finkel going to Ireland to study how they have limited ‘asynchronous’ power to 50%, as though that would have kept the lights on in South Australia. They should all take a stroll to the ANU to talk to Andrew Blakers, Bin Lu and Matthew Stocks who’ve come up with a study showing how we can have 100% renewables, cheaper than coal and gas, mainly through wind, solar and pumped storage.
I’ve detailed the Ben Potter article in part to show that information is getting through to the mainstream media that the captains of industry and finance might be reading. Certainly there is no excuse for ignorance on the part of pollies and their staffers. Turnbull’s personal actions indicate he knows which way is up.
Unfortunately the bottom of the AFR page is sullied with an article entitled Peter Beattie: Qld ‘crazy’ not to back clean coal:
- While the current Palaszczuk government in Queensland has committed to moving away from coal towards renewable power, Mr Beattie said carbon capture and storage projects as well as “clean coal” technologies such as super critical power stations had to be part of the mix.
“The reality of all this is there is going to be a transitional period, it just makes sense to clean up coal while in that transition,” Mr Beattie said in an interview with The Australian Financial Review.
“All the stuff that the Greens argue is bullshit, you’re not going to have renewables tomorrow that are going to provide all we need in terms of base load power.”
Beattie is currently chair of the Gold Coast Commonwealth Games organising committee, and should stick to stuff he knows about. The AFR should know better than to waste their time asking him.