Home: Renewable Energy News: Sunday 13 April, 2008

Renewable Energy News

SUNDAY 13 APRIL, 2008 |

Climate Change Minister Penny Wong to join Rudd in China

Federal Climate Change Minister Penny Wong will join Prime Minister Kevin Rudd on the China leg of his overseas trip. Senator Wong has travelled to Beijing for a series of meetings to discuss how Australia and China can work together on climate change. “Australia needs to play a constructive and active role in finding common ground between the world’s nations in a long term solution on climate change,” Senator Wong said. “Countries like China are crucial to our efforts to deal with the global challenge of climate change. In developing a post-2012 global agreement on climate change, it is essential that we engage with China and other major economies like the United States and India. This visit provides the opportunity to strengthen Australia’s working relationship with China on climate change,” she said. Senator Wong will discuss joint initiatives with Chinese ministers and a range of other stakeholders. “Australia and China have a lot in common in tackling the global challenge of climate change. As major energy producers and users, we both have an interest in developing cleaner energy sources and pursuing sustainable development,” Senator Wong said. Australia and China are involved through the UNFCCC to develop a post-2012 global agreement that is equitable and sets acceptable greenhouse gas emission reduction targets. The two countries are also involved in other key forums, such as the Major Economies Meeting process and the G8 outreach process, to add momentum to these UN discussions. “It is critical that all countries, including all major economies, are involved in tackling this global challenge,” Senator Wong said.

Australia joins International Carbon Action Partnership

Australia has joined the International Carbon Action Partnership (ICAP), an association of governments working together on emissions trading. Prime Minister Kevin Rudd signed the new climate change partnership with the UK which is aimed at building a global low carbon economy and bolstering effective adaptation measures to combat increasing greenhouse gas emissions. Australia’s membership in ICAP is part of the bilateral agreement. “Building a global low carbon economy will provide new jobs, new industries and new growth for the future. This will require an ambitious long-term global target, supported by carbon markets that help drive investment in clean technologies,” Rudd said. “For Australia, finding a technological solution to carbon emissions from coalfired power stations is critical,” he said. ICAP was formed in October 2007 by several national and regional governments around the world. The EC is hosting ICAP’s first public conference in Brussels in May 2008. The current ICAP members are: the EC, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal, Spain and the UK from the EU; New Zealand; Norway; US RGGI members Maine, Maryland, Massachusetts, New Jersey and New York; US Western Climate Initiative members Arizona, British Columbia, California, Manitoba, New Mexico, Oregon and Washington.

UN Bangkok Climate Change delegates to address critical issues

The UN Bangkok Climate Change Talks ended with agreement on a work program that structures negotiations on a long-term international climate change agreement, set to be concluded in Copenhagen by the end of 2009. “The train to Copenhagen has left the station,” UNFCCC Executive Secretary Yvo de Boer said. “Not only do we have the certainty that critical issues will be addressed this year, we now have the bite-sized chunks which will allow us to negotiate in an effective manner,” he added. At the Bangkok meeting, delegates began fleshing out the ‘Road Map’ agreed at UN Climate Change Conference in Bali last year, which launched negotiations on a long-term international agreement, along with strengthening ongoing work under the UNFCCC. According to de Boer, delegates agreed that the use of emissions trading, the CDM and JI should be continued. “This sends an important signal to businesses that the international carbon market spawned by the Kyoto Protocol will continue beyond 2012. Businesses have been asking for clarity on this issue and now they have it, making it possible for them to plan their investments accordingly,” de Boer said. Parties also agreed to continue including forest and land userelated activities as a means to achieve emission reductions in the second commitment period. The group under the Kyoto Protocol will continue its work on the analysis of tools for developed countries to reach their emission reduction targets at its next regular meetings in June and August 2008.

Japan to help Indonesia meet climate change challenges

The Japanese and Indonesian governments have agreed to map out an assistance package by July 2008 to help Indonesia meet challenges presented by climate change, under Japan’s $10 billion climate aid initiative. The agreement was reached after Japanese Foreign Minister Masahiko Komura and Indonesian Finance Minister Sri Mulyani met in Tokyo during the two-day meeting of ministers in charge of development issues from the Group of Eight (G8) major nations. Japan invited Indonesia and seven other non-G8 countries – China, India, Brazil, Malaysia, Mexico, South Korea and South Africa – for three “outreach” sessions held during the G8 development ministers’ meeting. During their 20-minute meeting, Komura and Mulyani agreed to speed up discussions between the two countries on the Japanese climate aid package for Indonesia, Japanese officials said. Komura was quoted as telling Mulyani that Japan values efforts being made actively by Indonesia to address climate change and will actively support such Indonesian efforts. Komura also called for close cooperation between Japan and Indonesia to establish an effective framework to replace the Kyoto Protocol.

Carbon offsets and credits require stringent accounting rules

Officials designing the rules of a carbon market among western US states and Canadian provinces have proposed allowing credits from other government-run emissions reduction programs to be traded in the regional market. Representatives from state environment agencies setting up the Western Climate Initiative, a carbon trading program among seven US states and two Canadian provinces, recommended including credits from emissions trading regimes in other parts of the world. “The WCI should consider allowing for compliance purposes by individual regulated entities the use of tradable units (offsets and allowances) from other government-regulated emission trading systems,” the recommendations stated, noting that the foreign markets must be recognised by the WCI as meeting “rigorous criteria for environmental integrity”. Officials pointed out that use of offsets and credits from other trading schemes require stringent accounting rules. They encouraged regulators to develop registries and carbon accounting systems now, “to prevent using tradable units more than once for compliance”. The regulators did not specify what types of credits they had in mind for potential use by WCI emitters.

Australian energy technology to improve coal

Australian energy technology developer GTL Energy Limited has been selected by a major North American energy consortium to provide its coal beneficiation technology to the proposed US$1.4 billion South Heart coal to synthetic gas project in North Dakota. Under a Memorandum of Understanding, project partners Great Northern Power Development (GNPD) and Allied Syngas Corporation, said Adelaide-based GTLE’s beneficiation technology had been chosen from a worldwide review of coal beneficiation technologies to upgrade the low-quality lignite reserves at South Heart. The GTLE technology is critical to transforming the local low grade coal into low moisture high grade briquette feedstock for use in the joint venture’s proposed US$1.4 billion plant at South Heart in southwest North Dakota, to produce synthetic natural gas by 2013, according to the consortium. GTLE’s beneficiation process converts low rank coal into a cleaner and more productive fuel by removing up to 80% of its water content, together with ash, sodium, and other impurities that interfere with clean combustion. As well as increasing the thermal value of the coal by up to 60%, the upgraded coal is easier to transport and handle, and produces significantly less CO2, nitrous oxide and sulphur dioxide emissions than if the low grade reserves were to be used without pre-treatment, according to the consortium. GTLE said it will now progress to commence construction of its first commercial scale module during 2008, to be in production by the first quarter of 2009.

Failure to curb emissions will lead to severe climatic change

Failure to curb the world’s increasing emissions of greenhouse gases will lead to more severe climatic changes that will affect developing countries the most, according to a new World Bank-International Monetary Fund report. The report, Global Monitoring Report: MDGs and the Environment—Agenda for Inclusive and Sustainable Development, is an assessment of the world’s attempt at meeting Millennium Development Goals, a set of eight globally agreed development goals, such as eradicating extreme poverty and hunger and ensuring environmental sustainability, with a due date of 2015. It found, among other things, that a third of the developing world’s population – 1.6 billion people – lack access to modern energy, and are forced to rely on carbon-emitting fossil fuels and biomass. “Preventing dangerous changes in climate will necessarily involve mitigation of greenhouse gases. This includes CO2 from fossil fuel use, but also mitigation of CO2 from deforestation and reduction of methane and nitrous oxide from agriculture,” the report said. “Poor countries will suffer the most from, and are able to adapt the least to, the effects of climate change. These include impacts on agriculture and human health and effects caused by rising sea levels and extreme weather events,” it said. “However, vulnerability to climate impacts varies widely among developing countries, suggesting that adaptation planning must be country-specific,” it added.

US to invest in solar cells and hydrogen power

The US Department of Energy will invest up to US$5.2 million in basic research projects with 12 universities from across the country. In an effort to secure its place as a world leader in scientific research and innovation, universities selected will pair with a DOE national laboratory to maximise expertise. These research projects, ranging from advanced solar cells to hydrogen energy systems, are a part of DOE’s Experimental Program to Stimulate Competitive Research (EPSCoR), a Federal-State partnership program designed to lead the world in meeting the nation’s growing energy needs through increased competition in energy-related research and development across the nation. “The Department of Energy is pleased to provide the scientific strength and leadership of its laboratories to partner with the university community, contributing to the development of stronger academic research efforts and economic competitiveness under these awards,” DOE Under Secretary for Science Dr Raymond L Orbach said. EPSCoR supports basic research activities spanning the broad range of science and technology programs within DOE, and seeks to increase the number of scientists and engineers in energy-related areas to support President George W Bush’s goals of advancing national, economic, and energy security.

Western Australia to increase residential electricity prices

A recommendation by the Western Australian Office of Energy (OOE) to increase residential electricity prices by 47 per cent in 2009-10 and 15 per cent the following year has been rejected by the State Government.

Instead, the WA Government has decided that electricity charges for noncontestable customers (those that consume less than 50 MWh per annum) will remain unchanged for a further 15 months. There will then be a 10 per cent increase in 2009-10, with further annual increases to be phased in over a six to eight-year period.

The OOE draft report on electricity prices finds that all regulated electricity tariffs are currently significantly below cost reflective levels, with residential tariffs needing to increase by 47 per cent in 2009-10 with a further likely increase of approximately 15 per cent in 2010-11 expected to account for carbon costs. But Premier Alan Carpenter says such a move would cause too much pain for ordinary families and households. “Everybody accepts that prices will rise,” he says.

“Climate change and the rising cost of generating electricity means prices must increase. However, this Government will not be exposing families and householders to such big increases all at once,” says Carpenter.

“We will implement a series of staged price increases that will ensure Western Australians have the opportunity to adjust to the increased prices. We will also be launching an energy efficiency campaign that will help educate people about reducing energy consumption,” he says.

The OOE says that retail electricity tariffs need to reflect the costs of supply to ensure the continued security of supply and the financial viability of all electricity industry participants (both private and government owned).

The OOE says increases are required in 2009-10 to address pressures in the existing costs of electricity supply. New costs are expected in 2010-11, with commencement of a National Emissions Trading Scheme.

Carpenter says the Government will directly fund the shortfall between the regulated tariff and the cost reflective level through Community Service Obligation payments to energy retailer Synergy, estimated at $780 million over three years.

Payments to Synergy will be treated as income under the Vesting Contract, allowing generator Verve Energy to better recover its costs via the netback pricing mechanism, and will provide sufficient revenue for Synergy to procure new supplies directly from the competitive wholesale electricity market.

The Premier says the $780 million subsidy will allow for the shortfall between the cost of providing electricity and the price permitted to charge householders. “We forecast the first of those payments, in 2009-10, will be $273 million,” he says.

Aside from the introduction of the GST, the 2009-10 tariff increase will be only the second in 17 years.

Carpenter says the OOE’s review of the electricity retail market has also highlighted climate change issues as having a significant impact on the cost of electricity generation. “Renewable energy is more expensive,” he says.

“The review considered the impact of a national emission trading scheme in 2010-11. While estimates had been made on the costs of the scheme, the OOE was advising Government that given that the scheme was still in the early stages of development, there was considerable uncertainty around these estimates.

“Tariff increases in subsequent years will need to be determined down the track when we better understand some of the uncertainties, such as future carbon pricing,” he says.

“While the Government is keen to help customers as we move to sustainable prices, care must be taken to not undermine the intent of important environmental measures such as emissions trading. We clearly have challenges ahead with rising energy costs, but individuals can minimise these costs by taking action to reduce their use,” says Carpenter.

esaa chief executive Brad Page welcomed the release of the review’s findings and commended the Carpenter Government for recognising the need to provide CSO funding to achieve an otherwise unsustainable price for electricity.

“While we would always prefer that governments allowed prices to be determined by fully competitive markets, the WA Government has shown that it understands that competition cannot emerge if prices are held below costreflective levels. Providing a direct government subsidy to support the objective of progressive price rises is a victory for common sense and sets an example for all governments,” Page said.

Australia and China discuss clean energy options

Prime Minister Kevin Rudd and Chinese Premier Wen Jiabao have reaffirmed their commitment to the United Nations Framework Convention on Climate Change and the Kyoto Protocol and have expressed the great importance they attach to the issue of climate change.

“Both sides reiterated, in accordance with the principle of common but differentiated responsibilities and respective capabilities and consistent with the Bali Roadmap, the need for developed countries to continue to take the lead in reducing greenhouse gas emissions beyond 2012 and the necessity to assist developing countries in enhancing their capability to address climate change,” says a joint statement.

During Rudd’s visit to China he reaffirmed the Australian Government’s commitment to invest $20 million in an Australia-China Joint Coordination Group on Clean Coal Technology.

“These funds will mean the Australian Government is now investing $94.6 million in China specific climate change and water programs out to 2015,” says Rudd.

“Both countries believe that actions to reduce emissions from deforestation should be one of the aspects of future action on addressing climate change and reaffirmed their support for the China-initiated Asia Pacific Network on Sustainable Forest Management and Rehabilitation, established during APEC in Sydney in September 2007,” he says.

There were three items listed under Identified Initial Areas for Closer Australia- China Cooperation, including Closer Policy Dialogue, focusing on the UNFCCC; Expanding the Australia-China Climate Change Partnership, and Developing Clean Energy, with attention on developing low emission technologies.

“Both countries welcomed current Australia-China cooperation in these areas occurring through the Asia Pacific Partnership on Clean Development and Climate, the Australia-China Joint Coordination Group on Clean Coal Technology, and our bilateral climate change partnership,” says Rudd.

Meanwhile, on his trip to London, Rudd and British Prime Minister Gordon Brown announced an enhanced partnership “to tackle the causes and impact of climate change”.

One feature of the partnership includes the governments of Australia and the UK working collaboratively on technological solutions to climate change and in particular energy efficiency and carbon capture and storage. Rudd says Australia will work with the UK, the US, China and countries like Norway on “translating this technology into an effective commercial reality”.

ASX eyes link to NZ emissions trading scheme

The Australian Securities Exchange wants the New Zealand Government’s emissions trading scheme linked to its Australian counterpart “at the earliest opportunity”.

A trans-Tasman market would boost efficiency and allow trading to cut emissions at the lowest possible price, ASX general manager of emerging markets Anthony Collins has told the New Zealand Parliament’s finance select committee.

The ASX says it intends to service the New Zealand market by providing a clearing house for over-the-counter trades in emissions credits, futures contracts, and settlement services. Collins told the committee that there was nothing in the Climate Change (Emissions Trade and Renewable Preference) Bill, now before Parliament, which would prohibit the development of a robust market in New Zealand. Collins predicted that successful exchange-based spot markets and futures markets in carbon emissions would emerge when a sufficient critical mass of buyers and sellers became available.

He says transparency of the market would be a key factor, as would the extent to which the Australian and New Zealand systems were compatible, for instance in the extent to which they each covered forestry and agriculture. New Zealand stock exchange (NZX) chief executive Mark Weldon told the committee that New Zealand would have a “first mover” advantage with its trading scheme.

The NZX says it plans to start operating a Wellington-based carbon trading market, TZ1, from the middle of 2008, providing the initial funding and acting as a cornerstone shareholder. The market would also use NZX’s trading infrastructure.

Weldon called for rules which would allow players to hedge or manage risk in a forward market in a credible way. He also asked for tax incentives for global corporates to establish regional operations in New Zealand, and said there could be potential extra benefits for the economy if global companies traded out of New Zealand.

M-co, which operates New Zealand’s wholesale electricity market as well as a voluntary carbon market registry, and is trialling a wholesale gas market, says it is pleased with the Government’s move to emissions trading. The select committee is due to report back on the bill by the end of August 2008.

Texas approves net metering rule for solar power industry

The Public Utility Commission of Texas has voted unanimously to approve a net metering rule that the solar-power industry has argued will be onerous for solar panel owners and that will discourage the development of the state’s vast solar power potential. Under the rule, which is supported by retail electric providers and recommended by the PUC staff, owners of solar panels will need to pay for separate meters that measure the outflow of any power they send to the grid. The rule also fails to exempt solar-panel owners from paying distribution charges to their local utility in months when they feed more electricity into the grid than they receive. Retail providers say that the separate meters are needed because the value of the electricity received from or fed into the grid varies depending on the time of day. Solar-power proponents say that single meters capable of measuring both power inflow and outflow would best meet the intent of the law.

News for Friday 04 April, 2008