Home: Renewable Energy News: Friday 28 March, 2008

Renewable Energy News

FRIDAY 28 MARCH, 2008 |

Offset ETS revenue with tax cuts, says Turnbull

“We should take the opportunity with the revenues from the emissions trading scheme to address both inefficient taxes as well as inefficiencies and inequities in our income tax system,” says Federal Shadow Treasurer Malcolm Turnbull. Turnbull says Australia’s ETS will result in the transfer of many billions of dollars from business and households to Government.

He says that the sums flowing from the ETS are going to be much greater than the combination of investments in research and development in low emissions technologies and energy efficiency incentives for households and businesses. Turnbull says that if Labor’s ETS only covers two thirds of all emissions, an auction price of $25 per tonne would raise $10 billion per annum in the early years. “In 2010 this would almost offset the revenue that will be foregone as a result of the income tax cuts,” he adds.

“A lot has been said about assisting low income households who will be hard hit by higher energy and fuel costs,” says Turnbull. “Reducing tax, including high Effective Marginal Tax Rates, on low income households should be a key priority.”

According to Turnbull, the objective should be: compensating tax and welfare measures must ensure that low income or pensioner households are not overall worse off by reason of the introduction of the ETS.

The ETS also offers an opportunity to phase out a number of very inefficient state government taxes, according to Turnbull.

“There is always a strong case for replacing relatively inefficient taxes with relatively efficient taxes. And with Government raising new carbon revenues the total tax take should be kept constant, or reduced,” he says.

“We must use this transition to a low carbon future as an opportunity to make our economy even stronger still, so that the costs we impose on carbon will be more than matched by the dividends from a more productive and prosperous future for all Australians,” Turnbull says.

Turnbull has engaged economist Henry Ergas to assist the Opposition in a full review of Australia’s federal, state and local taxation system.

Professor Ross Garnaut, who last week released a discussion paper on the design of Australia’s ETS, says proposals for a cut in the company tax rate to 25 per cent are worth considering, according to The Australian Financial Review.

“That is certainly something I would like to talk through,” says Garnaut, and “think about”, according to AFR.

Garnaut warns that “tight fiscal and monetary policy will be needed to ensure the start of emissions trading in two years does not lead to an inflation breakout”.

COAG discusses energy and climate change

Climate change represents one of the greatest economic and environmental challenges of our age, according to the Council of Australian Governments.

“The projections for Australia of the impacts of climate change are serious: a drying climate in our traditional agricultural area; a greater frequency of floods; droughts and storms; and, the impacts of higher temperatures on community health,” states a communiqué issued after the COAG meeting in Adelaide on 26 March 2008.

COAG notes that the introduction of an emissions trading scheme to achieve emission reductions will constitute the most “significant economic and structural reform undertaken in Australia since the trade liberalisation and financial market reforms of the 1980s”.

COAG stressed the urgency of the current work to bring together the different approaches on renewable energy targets to combine into one national scheme in order to provide consistency for investors looking to support Australia’s renewable energy industry.

“In addition, COAG agreed to consider options for a harmonised approach to renewable energy ‘feed in tariffs’ in October 2008,” the communiqué states. COAG also confirms its “commitment to cooperative concerted action to address climate change and agreed to finalise a comprehensive framework for addressing climate change at its October 2008 meeting”.

The communiqué has no update on how COAG will develop options to accelerate the uptake of energy efficiency measures as proposed in the forward work program of the December 2007 communiqué.

EnergyAustralia boosts Central Coast power

EnergyAustralia says New South Wales Central Coast households are expected to save more than $1 million on their water and energy bills and will reduce carbon emissions by almost 11,000 tonnes after taking part in their energy efficiency campaign. Energy and water saving devices were installed free of charge during March 2008 in about 3000 Central Coast households under a joint program between EnergyAustralia, Housing NSW and Wyong and Gosford Councils. EnergyAustralia energy efficiency expert Paul Myors says the households will now make long term reductions to energy and water use without changes to their lifestyles. “Energy efficient light bulbs were installed, water and energy saving showerheads fitted and water-saving Aqualocs were placed in taps in these Housing NSW homes,” he says. “Many of these homes have electric hot water systems. These systems are the most greenhouse intensive way to heat water in the home,” adds Myors. By cutting their hot water use, these homes are also reducing their electricity use, according to EnergyAustralia.

Higher temps equal higher bills reminds SA ombudsman

South Australians should be prepared to pay higher electricity bills as a consequence of the record heat wave recently sweeping the state, according to Energy Industry Ombudsman Sandy Canale. Canale says many householders would already have forgotten about their extended use of air conditioners and in some cases swimming pool pumps. “Some bills are going to be higher than usual this quarter because of the heat wave,” he warns.

China to spend on energy efficiency

China plans to spend Y41.8 billion (A$6.5 billion) on energy efficiency and greenhouse gas emission reduction schemes this year, an increase in funding of 78 per cent from 2007, the Ministry of Finance says. The Chinese Government has set national targets to reduce its emissions by 10 per cent between 2006 and 2010, and reduce energy consumption by 20 per cent for every Y10,000 of gross domestic product during the period. In addition, local banks have been warned against lending to businesses with poor records of energy and environmental conservation, the Ministry adds. From the environmental fund, Y7.5 billion (A$1.16 billion) has been set aside for 10 energy-saving programs comprising technology upgrades in certain factories, substituting the use of oil with other types of fuels where possible, and replacing old lighting equipment with energy-saving ones. The Chinese Government will spend Y4 billion on closing inefficient coal-fired power and steel smelting plants, and Y5 billion on raising water safety standards in major rivers and lakes. China’s emissions of sulphur dioxide and chemical oxygen demand have been on the rise, propelled by its high economic growth.

TransCanada mulls hydroelectric plant

AES and Riverstone Holdings have announced they will commit US$500 million each over the next five years to launch AES Solar with the aim of developing utility-scale photovoltaic projects around the world. The joint venture of global power developer AES and private equity firm Riverstone will take on projects ranging in size from two megawatts to 50 MW. AES Solar will focus at first on projects in countries offering the most attractive returns, according to the companies. As the costs of photovoltaic panels and installation come down, AES Solar will look to expand into other countries with appropriate market incentives, they add. Renewable energy accounts for roughly 20 per cent of AES’s global generation capacity of 43 GW. In April 2006 Virginia-based AES said it planned to spend about $1 billion over the next three years to expand its alternative energy business and bring to market new projects and technologies to reduce or offset greenhouse gas emissions.

News for Wednesday 26 March, 2008