Malcolm Turnbull specialises in scapegoating and threatening, while Josh Frydenberg sits there looking vacant, as well he might, until it’s his turn.
Danny Price in an article well worth reading, says Politicians have destroyed the trust needed to make the NEG work.
Kane Thornton CEO of the Clean Energy Council says NEG car is worth buying, even if tyres need pumping up, the flat tyre to him being the 26% emissions reduction target, which will be met by work under way before the NEG starts. If you want to use that analogy, the NEG is like a car without an engine, because it does no work.
David Leitch has two compelling articles – Energy (In)security Board and its modelling spreadsheet and Know your NEM: The ESB is becoming a laughing stock. If, however, you want to read just one article, read Simon Holmes à Court’s NEG promises death of wind and solar, and even battery storage.
Statistician George Box is famous for the aphorism “all models are wrong, but some are useful”.
Nobody expects the modelling to play out exactly, he says, but we would expect the modelling to make a clear case for the NEG.
It doesn’t. In fact I get the impression that the modelling had a different purpose – pretending that a NEG that does no work will lower household electricity bills by $550 pa. Others, including the above-mentioned plus Salim Mazouz, Frank Jotzo, Hugh Saddler, and earlier Bruce Mountain, can’t see how it will. Turnbull is saying that the states will be to blame if they reject the NEG and power bills stay high, and will be punished by angry consumers.
According to Holmes à Court here’s what the Energy Security Board modeller Acil-Allen says will happen as a result of the NEG:
We need to understand that AEMO has a very different view of what will happen with out the NEG. Follow the blue line on this graph from Mazouz, Jotzo, and Saddler:
This is how the ESB see our electricity system ‘transitioning’ to renewable energy over the next decade:
Mazouz, Jotzo, and Saddler derive an instructive graph from ESB modelling:
By contrast this is how Bloomberg saw it late last year:
Holmes à Court:
The most surprising outcome is the predicted death of the large-scale renewable industry — the modelling forecasts only 14MW of large scale wind and solar over 9 years. (For context, Australia is installing about that much every week of both wind and solar… ).
You need a magnifying glass to see it. 14MW is equivalent to four current model wind turbines.
This is how all this astonishing inactivity leaves emissions reduction:
Note the bar on the right of economy-wide reductions left unaddressed.
Somehow, magically, power bills will plummet. Remember that electricity generation represents only about a quarter of the bill. Several experienced commentators have come up with the same answer – the cost of power generation would need to fall by around 74%:
Mazouz, Jotzo, and Saddler struggle to find explanations, including the cost of money. Policy uncertainty is thought to evoke a premium of around 3% in the interest charged. However, they say uncertainty will not go away with this version of the NEG, Essentially it is too ridiculous to be stable.
I would ask, why do you need to borrow money when you are not doing anything? ESB even sees storage as essentially not happening apart from Snowy 2.0:
Holmes à Court:
- Surprisingly the modelling assumes that there is currently no storage in Australia. In this alternate universe, Australia’s three pumped hydro plants don’t exist — Tumut 3 (600MW), Shoalhaven (240MW and Wivenhoe (480MW).
There are no new mega-batteries, of the likes of Hornsdale (100MW) or Dalrympe (30MW).
The plethora of planned pumped hydro projects aren’t going to happen — Kidston, Goat Hill, Cultana, Shoalhaven Stage 2, Tasmania’s Battery of a nation — except for the 2GW Snowy 2.0 project. Apparently household batteries won’t materialise, despite thousands already in use and tens of thousands planned in South Australia’s Virtual Power Plant alone.
The only answer could be that renewables built under the RET between now and 2020 must be doing the work, if the power bill reduction is believable, which it isn’t.
Danny Price is right:
The government now says the introduction of the NEG will restore investor confidence in the NEM. Unfortunately, the truth will be very different. The introduction of the NEG is a necessary but not sufficient condition for the restoration of investor confidence. The government points to modelling to demonstrate the likely success of the NEG. Unfortunately, the model assumes all the preconditions for the NEG’s success [already] exist.
Seems bodgie modelling has made a mockery of the whole process. You also have to wonder who is calling the shots on the ESB and whether they actually understand which way is up. Price says the whole area is very complex (remember Bruce Mountain said the same). Price says you can count the people who understand the NEG, which he says is deliberately opaque, on the fingers of one hand. That leave room for perhaps one of the ESB members, but no more.
Michelle Grattan says that Frydenberg, along with Peter Dutton, is struggling with the currents in shark-infested waters. AFR cartoonist sees it a little differently:
While all this has been going on a group of scientists have worked out that if the temperature gets to 2°C there is a strong chance that tipping points will take us to 5°C no matter whether we have zero emissions by then or not. Michael Mann said back in 2014 that we are looking at 2°C by 2036.
Time to get on our bike. Zero net emissions by 2030 looks like cutting things a bit fine. The Coalsheviks should be arraigned for crimes against humanity.
I should have added what Holmes à Court said about reliability, or energy security, especially since Frydenberg was tonight warning Victoria that if they didn’t sign up to the NEG pronto the lights will go out:
- The modelling provides absolutely zero information on reliability, not surprising given that AEMO predicts the network will exceed the 99.998% reliability standard in every region over the next 10 years. The Reliability Guarantee only kicks in if the standard is expected to be breached. The modelling has not even bothered to make the case that the NEG improves reliability.
86 thoughts on “NEG becomes a farce”
Today’s SMH article headlined Energy deal in limbo as states step up their demands, by David Crowe, Nicole Hasham & Peter Hannam, link here, begins with:
I now added to the post what Holmes à Court said about reliability, or energy security, especially since Frydenberg was tonight warning Victoria that if they didn’t sign up to the NEG pronto the lights will go out:
The modelling provides absolutely zero information on reliability, not surprising given that AEMO predicts the network will exceed the 99.998% reliability standard in every region over the next 10 years. The Reliability Guarantee only kicks in if the standard is expected to be breached. The modelling has not even bothered to make the case that the NEG improves reliability.
Geoff M, The Guardian covers much of the same ground and states the Victorian demands as:
However, Victorian Energy Minister Lily D’Ambrosio told Patrician Karvelas on RN Drive that Victoria would not consider the NEG until the Commonwealth had passed legislation establishing the emissions targets.
She says that’s not new, but it sounds as though it is. I suspect the idea is to prevent Turnbull telling porkies about what the party room thinks.
Turnbull said on the weekend that the party room supported the NEG only to be contradicted by several backbenchers, including Craig Kelly.
Qld minister Dr Anthony Lynham won’t be at the meeting on Friday. He’s a surgeon and apparently will be doing voluntary work for PNG, so they’ll send an acting minister. I hope it’s Mark Bailey, now in Transport, because he was the one that got renewables moving in Qld.
Meanwhile we aren’t hearing much from the Qld gov’t except that their targets (50% by2030) are nonnegotiable.
Frydenberg finds state targets offensive because he says it’s his patch.
How does Lily D’Ambrosio square these propositions:
1. Commonwealth must legislate emission targets
2. Targets should be set by regulation, reviewed every 3 years, with 3 years’ notice of newly revised emission targets.
Minister Frydenberg should not be miffed by high State targets…. they are assisting the nation to crawl along towards Paris requirements, at a snail’s pace.
And once upon a time, power supplies were entirely in the hands of State authorities. Down here we had the SECV. I recall another State had the SEQEB.
No Federal Minister in those days grizzled…. oh wait, the Tassie HEC got into bother when it planned to dam the Franklin River….
Ambi, I was wondering myself how Victoria squared those two positions. The only thing I can come up with is that they want the Feds to legislate a regime that can be managed by regulation according to a framework set by the legislation.
Apart from electricity being a state matter, states have a right to develop and transition their economies towards a sustainable future. They are also better placed on how to structure how that happens in relation to the states’ topography, population dispersion and need.
They also want to know that the Feds, having intervened with Snowy 2.0 (like an elephant sitting down in the sand pit), won’t do the same with mad schemes to use their fiscal power to build coal, as the Coalsheviks would want then to.
The biggest uncertainties are in the LNP party room. It’s more than reasonable for the states to want them sorted before they proceed.
On targets, the ACT has been helpful ib saying, let’s start with 26% but then put in a revision clause that provides for the target to be reviewed when we reach 24%, which would be in 2021, if current forecasts are correct.
Sounds reasonable to me.
Otherwise we have Greens with 90% by 2030, ACT with 100%, Tasmania is basically 100% now, Qld with 50% by 2030, Victoria I forget, but I think 45% by 2025, Labor with 45% by 2030, and the Climate Council saying that anything less than 60% by 2030 is not fair dinkum.
I’ve always said 100% by 2030 for the whole economy, but I think that is a bit late.
See also Ian Dunlop – NEG: An abject failure of principled political leadership. He says gradualism won’t cut it, we are in an emergency. Also the government should be looking after its people, now and into the future, not killing them:
Kerry Schott of the ESB told Fran Kelly this morning that the real urgency related to the election cycle and reliability issues. Victoria goes into caretaker mode at the end of October, and NEM legislation needs to be passed in SA after sitting out there for public comment for a month. She says NEG is not needed until 2021, but the reliability issue needs sorting by mid-2019.
I think she can only be talking about proposed rule changes to allow AEMO to use demand response at their own discretion. I understand they can onl use it now in a specific concrete emergency, and then with the permission of the Australia Energy Commission, which has slow, drawn-out procedures and I think needs involvement of COAG.
Danny Price, who doesn’t like Audrey Zibelman and thinks the ESB is a dark phantasmagorical empire, complained in his piece linkes in the post that the NEG if legislated would change the game so that AEMO could get rule changes by simply going to the ESB.
In these days of ‘agile’ management, that seems sensible.
Demand response kept the lights last summer, and I think is sorted for 2018. However, AEMO can’t set up standing arrangements with major firms and has to repeat the painstaking business by putting out tenders each time, while the feds can hand out half a billion dollars without any such inconvenience.
Demand response needs to be normalised with longer term arrangements. I think it already is in Qld between the distributors and major firms and even households (google Peaksmart).
…not to mention $444 million to a smallish “charity”……
On Tuesday, I rang my state parliamentary representative’s office (Paul Toole MP – NSW Member for Bathurst) to urge that the NSW Government NOT SUPPORT the NEG as currently proposed.
Late yesterday, I prepared and sent a letter to my federal parliamentary representative (Andrew Gee MP – Federal Member for Calare) to urge him to NOT SUPPORT the NEG. My letter began with:
Topics in my letter included:
– Continued burning of fossil fuels is an existential risk to humanity
– Fossil fuels are finite energy resources, approaching a global supply peak
– Global coal power pipeline is shrinking fast – global peak coal capacity is near
– New renewables are now cheaper than new nuclear, coal and gas technologies
– Continued support for proposals for new coal-fired power generator units in the Lithgow LGA is futile
– The NEG appears to stifle new wind, solar and energy storage development
My letter includes these statements:
AGL full year profit almost trebles on higher electricity prices
High prices paid by consumers have nothing to do with this of course.
Nothing to do with the cost of supporting the middle men or privatization of course!
So, as a corporation, AGL is cruising along very nicely, John.
Even less inclined to be
bulliedpersuaded by Federal Govt pressure concerning its energy generation plans?
And it’s great for us, because when corporations have more money, (whether from increased profits or reduced tax), they inevitably employ more people (Jobs and Growth!) and eventually everybody’s better off – a rising tide and all that.
Can that be true, zoot?
What about the folk and businesses who have been paying much higher power prices? Hasn’t their spending power dropped? Isn’t it likely that their payments for other goods and services may have been lower recently?
Wouldn’t that affect jobs and growth, in a negative kind of way?
I mean good on AGL, lucky b*****ds, but what about the others?
“What’s good for AGL is good for Australia!”
Just ask any Austrian or Chicago school neoliberal market fundamentalist rational economist. He/she will tell you wealth trickles down.
Unfortunately I have yet to see any evidence of the phenomenon in the real world. And I assume those of us coping with unconscionably high power prices just have to keep in mind, “No pain, No gain”!
[off topic – I wish there was a sarc tag :-)]
While I’m here , it looks like Mr Turnbull is going to do to the energy market what he did to the NBN.
What a disappointment he’s turned out to be.
What a load of convoluted jiggery-pokery!
It is all a compelling argument for the nationalization of the entire electricity and fuel system, followed immediately by the replacement of all coal-fired and diesel driven power stations with renewable energy devices within 450 ~550 days.
“But, but, but it cannot possibly be done !”
“Sorry you feel that way, sir. Just step this way; there’s still a bit of room on this tumbril. Now, now, sir, if you come along of your own accord, I’m sure the guards will stop hurting you ….. Next?”
No Austrian or Chicago school neoliberal market fundamentalist rational economist has ever used the term “ trickles down “ in any way other than to illustrate the mendacious missuse of the English language by socialists.
( off topic reply to off topic rubbish )
The Carbon Price/Tax was effective public policy abandoned for no good reason?
wmmbb: Higher power prices are a defacto carbon tax that, if you believe the theory, will drive down power consumption and associated emissions.
Schemes like the ACT renewable auction scheme are far more effective, and, if anything will help drive prices down.
So Jump, is the trebling of AGL’s profits a good thing for society or not? After all, The Social Responsibility of Business is to Increase its Profits according to Milton Friedman.
From John’s AGL link:
I’ve got no idea what that hedging jiggery pokey is about.
Recently EnergyAustralia (Hong Kong owned) made a mozza. In the SMH, EnergyAustralia triples profit.
They say prices are going to fall, and this graph shows how:
That will hardly produce savings of $550 on electricity bills.
BTW AGL is an Australian public listed company and would be a standard hold in super accounts, so their fortune is spread around a bit.
Thank you Brian. I have been flippant, but the obvious corollary to the LNP’s arguments for reduced company taxes is that company profits are ipso facto good for us all, no matter how they are achieved.
For the record, I don’t agree.
If I may be so bold, the profitability of corporations engaged in production, transmission and retailing electric power, is entirely relevant to a discussion of power supplies in Australia.
As also are the profitabilies of companies involved in manufacturing solar pv panels, wind turbines, large scale or domestic batteries; and the builders, plumbers abd electricians who install the gadgets on homes.
Really, without successful private companies, large and small, where would we be?
Look to your self interest, Sir!!
Of note, the AGL share price went down, principally because the market thinks profits will be harder to come by in the future. AGL is saying the same.
So we must look elsewhere for gushes of ‘trickle down’?
States and territories give National Energy Guarantee the go-ahead, link here.
Geoff M, you will note that the article is titled States and territories give National Energy Guarantee the go-ahead — for now.
They’ve given in principle approval, but have not backed off from their demands. In principle approval allows the NEM legislation to be exposed, so everyone can see exactly what is proposed.
The Turnbull government gets to proceed with their party room discussion. That’s the next step, we’ll see what happens then, but I heard Shane Rattenbury on radio. They are willing to talk, but the Feds will have to compromise if they want final approval.
As I understand it it’s about risk sharing.
AGL in this instance acts as the supplier that forecasts energy prices and purchases now energy to paid at the market price at an agreed time in the future.
A generator of energy also forecasts what the price will be at that time and if AGLs paying price estimate is above the generators estimate then the hedge contract is entered into.
When hedge losses occur it’s because the purchaser forecast to high and overpaid.
Hedging is Mr Huge Pockets sharing risk with Mr Lessbig Pockets.
It doesn’t directly effect the price of the given commodity in the meantime.
Hedging was originally about reducing risk. for example, a company that is placing an order in $US that is used to produce something that sells in $Aus might hedge to protect it from a sudden rise in the value of the $Aus.
Hedging costs money since the company will on average be paying someone to take some of the risk. That is money that doesn’t go into reducing prices or paying dividends.
Hedging departments can change from something that is about reducing risk into a dept that starts speculating in its own right. Can give nice profits for a while but then a bad call made worse by attempts to gamble (sorry hedge) have driven many companies into bankruptcy.
Power prices have gone up in part because of profit taking by middle people who contribute little and an inappropriate marketing system that drives up risk and average prices.
John D.: Yours was a delightfully concise an exact summary.
How would the ACT reverse auctions contracts for energy not be hedging ?
It’s the same principle only the taxpayers are taking on some risk.
Jumpy (Re: AUGUST 11, 2018 AT 8:12 AM):
Here’s the ACT government webpage on How do the ACT’s renewable energy reverse auctions work? The webpage includes:
This IEEFA article on energy reverse auctions in India includes:
It seems to me that energy reverse auctions are bringing down energy prices.
You also say:
Someone has to take-on the risk. If the generators take-on all the risk by speculating then energy prices will likely be higher, and the energy consumer will pay for it. Is that what you would prefer?
Geoff, don’t try to pull that shit.
I didn’t comment either for or against hedging.
You confirmed reverse auctions are hedging so your argument is with John that said,
So you may have a good case, but not with me.
Jumpy: I don’t see the ACT reverse auctions as hedging. They are essentially the same competitive tendering process that is the bread and butter of the industry you claim to work in Jumpy. In this case they are long term contracts to supply similar to the mining contracts I am familiar with.
Long term contracts give investors confidence and encourage them to offer very competitive bids(=low cost power). The process is particularly effective for renewables because the operating cost is negligible and the contractor is not exposed to the risk of coal and gas price increases.
Reverse auctions are being used world wide to drive investment in renewables.
John, no, I disagree.
I’m tendering on specific projects in the short term directly. If a builder offered to pay me more than I forcast the profit margin in 10 years time to be, I’d consider taking it and probably sign up.
In mining contracts, that you claim to be familiar with, are rife with hedging. If you don’t agree the ACT is hedging, take it up with the ACT Government that stated, to repeat GMs link,
A question I have is what occurs if something like Flannerys Geothermal wins an energy contract in the ACT, despite all the subsidies, and crashes. Who foots the bill ?
Jumpy: In terms of contract mining contracts can range from cost plus (owner takes all the risk) to fixed royalty per tonne (contractor takes all the risk) with lots of cunning variations in between. So I guess you could label all contracts as a form of hedging that reduces the risk level of at least one of the parties.
Jumpy (Re: AUGUST 11, 2018 AT 1:26 PM):
What “shit” would that be, Jumpy? I asked you a question:
You could have had a few response options:
1. Confirm that was your preference;
2. Deny that was your preference;
3. Ignore the question; or
You chose the fourth (‘fence-sit’) option:
The purpose of hedging is to moderate rapid price fluctuations – businesses and consumers need consistent and reasonable pricing to plan and operate. Rapid price fluctuations and higher prices reduce (or eliminate) confidence with consumers and discourage economic activity.
Here’s the Australian Productivity Commission Inquiry Report info on Hedging in the electricity market, that includes:
I suspect with that statement, you are implying that you are against hedging, particularly by governments (but I suspect you don’t want to expressly admit it), and you would accept rapidly fluctuating and higher energy prices, as that would be consistent with your apparent overriding anathema for any government interference in markets. If I have that suspicion wrong, then please do illuminate with us what your “case” is.
On yesterday’s ABC Insiders programme, during the final observations segment (from time interval 55:33), panellist Lenore Taylor (from The Guardian Australian edition) said:
Perhaps she was thinking about this article? Or perhaps this scientific paper titled Trajectories of the Earth System in the Anthropocene, dated August 6, by Will Steffen, Johan Rockström, Katherine Richardson et al., published in the Proceedings of the National Academy of Sciences of the United States of America?
Politicians and business leaders don’t seem to be able to get their act together – an abject failure of principled political and business leadership. Meanwhile, the world’s climate gets closer to locking-in irreversible, existential outcomes for humanity.
And then panellist Mike Seccombe (from The Saturday Paper) said:
I don’t understand it either.
“Funnily enough” I reckon the article you refer to at 5.05pm today (August 13th), is based on a scientific paper in PNAS, which you also cite.
“Funnily enough” Brian referred to it also, in the post above…….
published on August 8th.
The paper is admittedly speculative (cannot predict catastrophe with certainty), but points out many ‘positive feedback loops’ in the climate system. [The modelling problem, as usual, is to identify the strengths and timescales of those feedbacks. Suffice it to say, that so many of them being ‘positive’ doesn’t bode well for human, plant and animal comfort.]
“Funnily enough” none of this is funny.
Even with my taste for black humour, the joke is wearing very thin.
Nonsense, hedging if successfully done ( A ) by the nonproductive party can push prices up above the market rate. On the other hand, if done unsuccessfully ( B ) , push prices down. These hedge fund managers are more generally successful.
It is true that confidence and security ( C ) to a generator can lower prices.
Ultimately if the difference between A and B is on the higher side, does C outweigh it.
Truth is I don’t know, so I’m neither for nor against.
Your last paragraph is the same shit as above “ I suspect you are implying “ and intentionally miss -positioning me just to attack.
I’m sure there’d be a well established blog label for that tactic, whatever it is please stop doing it for your own sake.
Jumpy, are you sure about that?
This dictionary says (amongst other things) “Its purpose is to reduce the volatility of a portfolio by reducing the risk of loss”.
That definition is wrong.
It doesn’t deduce the risk, it shares the risk of both profit and loss.
The price it fundamentally a function of supply and demand.
I recommend Thomas Sowell’s book Basic Economics.
Or Economics in One Lesson by Henry Hazlitt.
One thing I’ll say, for what it’s worth, about the NEG is it’s deeply unpopular and receiving ridicule on right wing blogs too.
Jumpy: You quite rightly say:
The reason may be that it is lousy policy no matter where people are coming from.
It might be productive to ask what we would do now if we were starting from scratch and did not have to consider protecting the interests of those who are currently rorting the system or the politics of climate change.
Ambi, you are right about the article and the paper, and my earlier reference to it. I’m hoping to do a post, because from what I’ve heard so far it is more definite about tipping points than anyone has yet been. However, I did hear Will Steffen telling Patricia Karvelas that we still had carbon we could burn and gave the impression that the shit would not hit the fan before about 2045.
I think that’s way too optimistic. Karvelas said something like”Oh good, we have a little time then” which is wrong and I don’t think Steffen put her straight.
Lenore Taylor is very knowledgeable about climate, went to the Paris meeting, may have gone to subsequent COP meetings.
John, the NEG is thrid or fourth best option. I think Mark Butler knows that but looks as though he’ll play along in the interests of waht’s politically doable, except for the targets.
Victoria has an election coming up and is being wedged by the Greens, so I think will play hardball. Laura Tingle report on 7.30 didn’t mention Victoria, which I think will be the biggest hurdle, though the ACT will probably join them.
Not sure where Qld is at. A pity Mark Bailey was moved to Transport.
Brian at 11.56pm.
(Hope you’re getting good sleep).
The problem is both long and short term, ja?
Lead times for some infrastructure, e.g. tunnels in the Snowy region, are quite long. Meanwhile the CO2 and other greenhouse gases keep emerging, water vapour abounds, deforestation proceeds, etc.
And the electricity sector is merely the easiest realm in which emissions can be reduced significantly. Low hanging fruit.
Some progress in manufacturing, transport, ….. and what of agriculture???
If it’s such a long, hard slog on electricity…. what prospect for strong progress in the other sectors??
Jumpy (Re: AUGUST 13, 2018 AT 7:01 PM):
If you don’t know, then how can you have an opinion about the subject?
So, I’m not allowed to express my suspicions/thoughts, Jumpy? Joe Stalin would be proud! I’m giving you the opportunity to explain your position, and you just throw up more mud.
I’m trying to tease-out the reasoning behind your statements. I suspect you don’t even know – unthinking/blind ideology perhaps?
Jump (Re: AUGUST 13, 2018 AT 8:59 PM):
So, you think you know better than the dictionary definition offered by Zoot (at AUGUST 13, 2018 AT 8:59 PM), and the Australian Productivity Commission Inquiry Report info referred to in my comment (at AUGUST 13, 2018 AT 4:37 PM)? Is that what you are saying?
Jumpy (Re: AUGUST 13, 2018 AT 9:08 PM):
That’s your observation of some others. What’s your opinion of the NEG? Do you have one? If so, what’s your reasoning leading to it?
My opinion of the NEG is here. Do you have a different perspective? Care to share?
Here’s another tack:
Hedging your bets
is a common phrase. Doesn’t it refer to reducing risk, not getting out on a limb where “all your eggs are in one basket”??
Egg Transport Authority
Phrase Of The Day:
merchant bankers’ gobbledegook
emitter: A. Abbott, MHR.
Q. Are there any merchant bankers, or former merchant bankers, in the Parliament?
SMH article headlined Turnbull gains Coalition support on energy over Abbott’s objections, link here, begins with:
Also covered by The Guardian here. It includes:
Expect higher electricity bills and less reliable power in the 2020s as almost no new investment in renewable generation kicks-in (under the currently proposed NEG) and ageing coal-fired power stations become more unreliable, unless the Senate and states/territories have the sense to extensively modify the NEG to encourage more investment in cheaper renewables.
Wow GM, you’re another one where “ wining “ on a blog is more important than your integrity and honesty.
Ok, I’ll just treat you like the others and scroll on by.
Best of luck and fair well with others.
Ambi, Michelle Grattan has the best news report I’ve seen so far on the NEG in Turnbull beats Abbott over NEG, now Frydenberg has to win Victoria. She quotes Abbott at length.
I think games are being played in that certain parties (Federal Labor and the states) want the NEG stopped, but want someone else to do it. This is frustrating for Richard Di Natale, who perhaps doesn’t understand that politics is the art of the doable, and one thing you have to do is win elections.
Federal Labor wants labor states to stop it, but the next thing to happen will be the Federal bit, about targets, will be presented to the HoR. I think there Labor will wave it through, so you’ll see Adam Bandt, Tony Abbott and perhaps three of his cohorts on one side and everyone else on the other.
Labor will then try to amend the legislation in the Senate, and have a reasonable chance of doing so, but it might go off to a Senate Committee before being settled.
If Labor gets its amendments through the Senate there is no chance they’ll pass the Reps, so we have stalemate, and the states won’t move.
If Turnbull prevails in the senate, then I think there is no chance Victoria and the ACT will accept low-ball targets.
That’s where I think we’ll end up, with Labor going to the election promising 45% reduction targets.
If you can go there, Tony Abbott’s full statement is at Quadrant Online. I suspect the intro was written by the Editor, not Tony.
Your summary of the political prospect is masterly.
[In a comment below Ambi says it should have been “Thanks Brian”]
Quadrant Online – ‘Unity of Lemmings’: How a Party Dies, thanks Ambi for the heads-up.
Victoria’s Energy Minister, Lily D’Ambrosio, made it crystal clear to Fran Kelly this morning that they won’t accept locking in 26%.
And why should any State which is working to increase power generation from renewable sources accept that low target?!!
That’s been the fly in the Federal Government’s “ointment” for more than a year now.
What do Minister Frydenberg and the PM propose to do??? Ban imports of Chinese solar pv panels? Ban manufacture or imports of wind turbines? Refuse permission for large scale solar “farms”? Close down existing hydroelectric plants??
Jumpy (Re: AUGUST 14, 2018 AT 6:41 PM):
Wow, Jumpy. It’s not about “wining” – presumably you mean winning? It’s about having the integrity of your convictions, and the honesty to explain them to others. If you had the decency to explain the thinking/reasoning behind your statements, then I may have had a bit more respect. We may still end up agreeing to disagree. But, if you can’t explain your reasoning for your statements, then it suggests to me a lack of thought – you don’t seem to think before you comment – that to me is unthinking/blind ideology/tribalism. And in these challenging times, for a decent civilisation to prevail, I think we need much less of that behaviour.
When I challenge your statements, you’ve displayed a general pattern of evasion, and resort to slurs and character assassinations to attempt to distract. Before you question other people’s integrity and honesty, perhaps you should be looking at your own shortcomings.
In other words, a head-in-the-sand approach? If you behave like a petulant child, expect to be treated like one.
Ambigulous (Re: AUGUST 15, 2018 AT 4:00 PM):
Ill-informed ideology perhaps? Particularly if the Coalition state governments don’t want to be seen contradicting their federal Coalition brothers/sisters, maybe?
On what grounds?
That would come under the relevant state’s jurisdiction, unless it’s on commonwealth land. The current bottleneck for renewable projects appears to be delays in grid connections.
The same reason they’ve relinquished responsibility in healthcare, education and everything else.
Basically they can both champion them at election times and blame the other if it turns to shit, which it inevitably does.
So everything a government ever does turns to shit. Is that your view, Jumpy?
Back there at 7.50am when I said “Thanks John” I should have written
Geoff at 5.33pm
Please note I was referring to States that claim to be “working to increase power generation from renewable sources”.
Several States do so claim.
Several have embraced targets much higher than 26%.
What I was suggesting, was that if Canberra currently believes a target higher than 26% is somehow not in the national interest, why would it not try to put a brake on renewable power installation and equipment??
Ridiculous, I agree.
But if they can’t persuade States to slow down on renewables, there are other tricks up their sleeves. So I was extrapolating, using an old debating trick called reduction ad absurdum.
Finally, you say that a couple of project types (solar farms, hydro generation) come under State jurisdiction. Indeed. And that is one of the nubs we are faced with, living as we do in a Federation.
How to master this trick: to get the States and Canberra to agree, co-operate, and meet (exceed) Paris requirements.
[reductio in a Courtroom….]
“Your Honour, if the Plaintiffs really hold these beliefs, why do they not in all sincerity carry out the actions we have outlined?? I put it to you that they are entirely insincere, nay, Hypocrites!! Condemned not by their own words, Your Honour, but by their obvious lack of consistent action.”
Ambi, I’m flattered to be mistaken for John!
Ambigulous (Re: AUGUST 16, 2018 AT 7:26 AM):
“We” (the citizens of Australia) need to tell/remind our parliamentary representatives that they are working for and on behalf of “us” (the Australian people and the respective state/territory/nation) for “our” best collective interests, and if they can’t get their act together, then they will no longer be required after the next election. Democracy requires participation.
Remind them why meeting (and exceeding) the Paris agreement is in the nation’s (and their own) best long-term interest. Remind them that new renewables are now cheaper than new nuclear, coal and gas technologies.
Latest is that Qld would pass the NEG and leave battle over targets to Mark Btler and the Feds.
I’m collecting a number of ‘expert’ views on NEG. The main issue is whether it is useless and benign, or actively bad.
Frydenberg NEG Factcheck – 8 lies on Sunday, by Smart Energy Council:
I found this interesting.
[Disclaimer: as a Sandgroper I’ve not felt compelled to study the NEG closely, so I apologise if the link is off topic]
Pretty much yes.
Compared to the agility and accountability of the free marketeers, the Governments display overwhelmingly sub optimal results.
If you were to discover a brand new country what mechanisms would you put in place that would ALLOW “ renewable” energy to flourish, not force ?
Let’s hear what mechanisms you would put in place, considering that you generally argue the best possible, fair and equitable, market based solution would spontaneously arise as long as no-one forced the participants to follow a particular procedure.
And you thought the 26% target was a farce? Now this is getting even farcier: Malcolm Turnbull’s backdown on Paris emissions target fails to appease Coalition detractors Leaves Malcolm looking even weaker and out of control and delivers???
One of the reasons I am in favour of competitive tendering for long term contracts is that it gives contractors the certainty that comes with contracts and thus avoids the risk that the next government change the rules in ways that reduce the return on investments. (Ex: Abbot’s changing of the carbon tax and creating uncertainty re the NRET.)
Herald Sun headline down here in rain land, says “Andrews Govt. plan to install solar panels on 650,000 homes, to cost $1.2 billion”.
[story behind a paywall]
It must be referring to an election promise.
If the plan can assist in circumventing the financial barriers making it unlikely that a landlord would install rooftop solar PV on her rental property (because the tenants reap the monetary reward), then I like it. Of course, we need to see the details ….. Could be a big boost for electricians, installers, solar panel retailers, importers; and maybe keeping the nascent battery storage market ticking along?
Energy policy doesn’t have to be a sequence of failures. Glimpses of progress occur.
(Phasing out incandescent light globes was one, admittedly small, but progress it was. And the Rudd/Garret home insulation scheme was another.)
“Our Taxes At Work”, a Home for the Optimistic
John, it would be difficult to be farcier.
Sounds good, Ambi. If the citizens decide they should continue to govern.
Ambi, there is an article in The Guardian – Victorian Labor offers half-priced solar panels for homeowners in $1.24bn pledge:
The Victorian government will support the accreditation of 4,500 electricians to install the panels, and is setting up a new agency, Solar Victoria, to oversee the project.
Andrews said he would consider what the Federal Government was doing about NEG when the policy actually stabilised.
Good work, BB.
1.2 Bill divided by 650k, plus the bureaucracy and the electrician agency doesn’t add up to 4 K each on my calculator.
Let me guess, the rollout over 10 years is heavily cost weighted toward the later stages of the scheme, when it’s someone else’s problem.
( Note: 1.2 Bill is less than 1 month of interest payments on the national debt )
Ambi: It is a bit hard to work out how much benefit a renter gets from solar. Not much if you are out all day but big mobs if you stay home most days and run the air conditioner flat chat.
But wouldn’t the renter’s power bill tell the story in the year after installation, say?
Do you think the Govt is likely being over charged? What capacity on a roof? 2kW? 3.5kW? 5kW? Notice the Govt is offering loans. Fiscal conservatism in action.
Yes Ambi. It’s a $1.24bn election promise. If that is what the gov’t is going to spend, what expenses would there be other than the Solar Victoria agency and bad loans?
On the ABC news last night, in the Victorian scheme people pay back half the loan over four years, so it’s part subsidy.
It may be too much to hope for, but it would be pleasant if the States began a bidding war: domestic solar plans vs wind farm approvals, around the wide brown land.
Back in the 70s, States competed on offering cheap electricity to aluminium smelter firms and other industrial enterprises, to invest in their State.
(I’m not suggesting Victoria is a leader…. We lag well behind Qld in rooftop solar installation, and well behind SA in wind generation capacity.)
By the way,
I wish to nominate formally, as
Word Of The Week
which was apt when he wrote it and today became aptier.
Katharine Murphy sums up the situation in one headline.
And no, I haven’t read the article … yet.
zoot, it’s worth reading. She lets go with both barrels, follows up with a bazooka and finishes with artillery.
She sounds fed up. And why not?
Bipartisanship, practicality, principle, future planning: all tossed out the window. Abject surrender. “White flag Prime Minister” is a term that will echo.
So we will have an ALP government, elected in two stages: the first stage, as it turns out, was the very close Federal election result last year.
I hope Cathy McGowan stands again and is re-elected. A few independents in every State, please.
(I had been foolish enough to think that the Coalsheviks and Mr Abbott were virtually powerless. I offer my sincere apologies. Ignore anything else I may say in future.)
Ambigulous, I have now read it and I agree, it’s well worth reading.
Ms Murphy occasionally falls into the trap of reporting the horse race, but when she writes about policy matters she can be brilliant.
It helps, I believe, that she didn’t train as a journalist (she wrote her honours thesis on Sylvia Plath).
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