In ‘Environmental policy’ Category

Alan_Pears

The Pears Report: Far from the madding policy

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Are we finally moving from energy policy madness to policy making? Alan Pears explores the glimmers of hope.

THE THREAT of electricity blackouts in southern Australia next summer and our bizarre ‘gas crisis’ seem to be dragging us out of the rock-throwing approach to energy policy making.

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Stabilising the situation in southern Australia
While initially the debate over South Australia’s problems was about supply, the need to stabilise the situation before next summer has driven some useful developments on both the demand and supply sides.

A call for bids to provide battery storage resulted in 31 bids. Rooftop solar is booming, and large-scale solar and wind are going gangbusters.
This highlights how fast our 21st century energy industry can respond. It also shows how risky those big projects that take years to implement are. Even PM Turnbull’s ideas for Snowy and Tasmanian hydro will struggle to compete in the new world of modular, distributed energy solutions.

We have also seen a belated recognition that demand response can fix short-term problems. Demand response involves aggregators contracting businesses to cut demand or run backup generators at short notice—when paid a fair price for their contribution. This provides guaranteed reduction in electricity (or gas) demand, reducing the need for additional supply capacity.

It is widely used in other parts of the world, but our energy policy makers have been glacially slow in establishing a framework. States will need to set up demand response mechanisms through energy retailers, which they still regulate, as national regulators are very unlikely to act quickly enough.

Since first writing this, AEMO and ARENA have announced a demand response pilot project (www.bit.ly/AEMO-RI) of 100 megawatts. This is great, as someone is finally responding to the obvious: demand response is the quickest, cheapest way of avoiding blackouts. But the way this is being done has also exposed how broken our national energy market system is: they have had to work around the normal mechanisms. We need much more demand response capacity to break the market power of the gas and coal generators, so there is still a need for states to use their powers over energy retailers to drive demand response.

Energy efficiency programs could also help. When SA suffered blackouts because of a 90 megawatt (MW) shortfall, demand was around 3000 MW. At that time, household cooling was probably over 1000 MW: an ongoing building and air conditioner energy efficiency program could have avoided the problem, as shown in the graph on the next page.

The gas crisis
A sudden increase in wholesale gas prices and the difficulties many industries have had even negotiating new gas contracts have uncovered chronic failure in gas policy. It has also exposed the reality that many former energy ministers and politicians work for the gas (and oil and coal) industry.

For decades, Australian governments have proudly described our low energy prices as a competitive advantage—which has led local industry to complacently maintain appallingly inefficient use of energy. But governments have quietly supported an ‘open’ economy, including world parity pricing for oil and gas. These two positions have never been reconciled. The recent gas crisis has exposed a lot of skeletons.

The suddenness of the shift in east coast gas prices has shocked almost everyone. Yet a 2014 study by Deloitte Access Economics1 predicted a multi-billion dollar shift in annual income to the gas industry from other industries, and over 10,000 job losses.

The gas problem has spilled over to electricity, as high-priced gas generation has replaced lower-priced alternatives, due to factors including Abbott’s war on renewables (see The Pears Report in ReNew 139) and closures of old coal generators.

Logical policy would have assisted or required gas users to improve efficiency as markets were gradually exposed to global prices. But we have inadequately regulated, poorly designed markets.

I wasn’t surprised when the government intervened. A situation where Australians are paying more for gas than countries we export gas to clearly does not pass the PM’s ‘pub test’.

Energy efficiency and productivity—glimmers of hope
Most of Australia’s energy efficiency policies focus on providing consumer information and setting fairly weak standards for new equipment and buildings. Policies providing information on building performance at time of resale or lease are emerging. For existing buildings and equipment, limited information and energy auditing programs dominate. The ACT, NSW, Victoria and South Australia offer financial incentives for some activities under their energy retailer obligation schemes.

While these programs have delivered useful savings, they fall well short of an optimum outcome for society. Many of the benefits they deliver are not even measured or costed, and levels of ambition are low.

To put this in context, Australia is supposedly trying to implement climate policies at least cost. Our energy efficiency policies deliver tens of millions of tonnes of emission reductions at costs of minus $20 to minus $200 per tonne of avoided emissions. Put another way, they often offer benefit to cost ratios of around 8 to 1—saving Australians $8 for each dollar invested. Yet the Emission Reduction Fund pays around $12 per tonne of emissions avoided.

Yes, we have our National Energy Productivity Plan (with funding of $18 million), the $200 million NSW five-year plan and many others. But we spend tens of billions of dollars each year wasting energy. And if we included the cost of carbon emissions, that waste would increase by more billions. We have the balance very wrong.

One problem in mobilising improved energy efficiency and productivity is that decision-makers rarely invest in energy saving measures costing more than two or three times their annual savings—a two or three year payback. This is equivalent to delivering 30% to 50% annual interest. We don’t expect that from any other investment, including renewable energy.

There are lots of reasons for this that I’m not going into here. What interests me is that the potential to change this financially disastrous situation is beginning to take shape.



Residential peak electricity demand for South Australia, 2015. This shows the activities contributing to household electricity demand at the times of summer and winter peaks, compared with their average contributions when annual consumption is divided by the number of hours in a year. Over the whole year, heating and cooling is a relatively small proportion of average electricity demand, but it is a large proportion of the (much higher) summer and winter peak demand. Source: EnergyConsult.


Beyond energy audits
It is difficult to pinpoint the actual causes of energy waste in many appliances, buildings and industrial processes. Traditional auditing and sub-metering approaches don’t pick up many less obvious problems. Even when a problem is identified, someone has to do something about it. This costs money and time, and diverts focus from core activities. It involves risks, such as working with a contractor you haven’t used before or changing a process central to delivering your business income or your health or safety. And you have to find the money upfront.

Sophisticated analytical techniques are emerging that reduce or avoid the need for physical energy audits and sub-metering. Dynamic real-time benchmarking against models that predict ‘ideal’ performance can identify emerging problems and alert operators. Machine learning can identify the energy-consuming characteristics of each item of equipment to work out where energy is wasted as well as how much (see for example this CSIRO project: www.bit.ly/2kVbJS3).

These systems can calculate the cost of energy waste. They can also offer businesses and households tangible benefits that are often worth far more than the value of the energy saved, such as avoiding failure of a production line. Avoiding loss of a fridge full of food or avoiding the need to quickly replace a failed hot water service can avert a family crisis: what’s that worth?

New financing models
Another changing dimension is the emergence of new financing options to remove upfront cost barriers, not just for energy efficiency investments but for renewables, storage and other options. Financing can be packaged with ongoing monitoring and management systems and other services.

More households and businesses are placing value on insuring themselves against price rises and reliability issues of conventional energy systems, while the costs of alternatives are falling and their user-friendliness is improving.

Innovation
Innovation across many fields is transforming energy and resource requirements and fundamental business design for delivery of many products and services, and converting demand for products (and infrastructure) into services. Online shopping, health care and many other services create remarkable changes. Distributed manufacturing, 3D printing, computerised design, prefabricated building and many other changes are transforming production. Many also fit well with development of ‘closed loop’ resource use.

My awareness of these remarkable changes was raised recently by my involvement in writing a report for the Australian Alliance for Energy Productivity.2 This report scans emerging innovations that may have a big impact on energy productivity and efficiency. It is amazing how much is happening, even in Australia. There may yet be hope for Australia to become a low-carbon, successful 21st century economy! S

References:
1. Deloitte Access Economics: ‘Gas Market Transformations— Economic Consequences for the Manufacturing Sector’, www.bit.ly/2qHkDmm
2. Australian Alliance for Energy Productivity (A2eEP): ‘The Next Wave’, www.2xep.org.au/innovation-next-wave

Alan Pears, AM, is one of Australia’s best-regarded sustainability experts. He is a Senior Industry Fellow at RMIT University, advises a number of industry and community organisations and works as a consultant. He writes a column in each issue of ReNew: you can buy an e-book of Alan’s columns from 1997 to 2016, complete with analysis of a range of energy policy themes, at shop.ata.org.au.

This article was first published in ReNew 140.

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“Heartening” doubling of Victorian feed-in tariff

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The ATA (ReNew’s publisher) has welcomed the Victorian Government move to more than double the minimum solar feed-in tariff . From 1 July 2017, the feed-in tariff for rooftop solar in Victoria will increase from 5 cents to 11.3 cents per kilowatt-hour, benefitting about 130,000 households. The change follows findings by the Essential Services Commission (ESC) in its report last year on the energy value of distributed generation.

“It’s very heartening for solar households in Victoria to have a government that is serious about renewable energy,” says Damien Moyse, the ATA’s policy and research manager. “We also congratulate the ESC for its work on the issue over the past 18 months.”

The ATA contends that solar households and businesses across Australia provide greater value into the national electricity market than the narrow methodology used to calculate feed-in tariffs up until now. The new feed-in tariff is closer to recognising the full value that distributed generation brings to our energy market, which is important as solar and other demand-side technologies continue to play a greater role in our energy mix.

We at both ReNew and the ATA would like to see other states following Victoria and accurately reflecting the value of distributed generation through their feed-in tariffs.

For analysis by Jack Gilding on the best range for feed-in tariffs, see here.

Greenhouse emissions data

Phasing out fossil fuels

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Professor Peter Newman contends that our cities are driving a change which is reducing greenhouse gas emissions from both coal and oil.

IN 2016 the International Energy Agency announced that the world had changed. For the first time in hundreds of years the world was producing less greenhouse gas (GHG) emissions than the year before without this being caused by an economic crisis1. In 2015 the amount of GHG emitted to the world’s atmosphere decreased by around 0.5% while economic growth continued at more than 3%. A few scientists had predicted this, but mostly the fossil fuel lobby had been in complete denial over its possibility2.

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As Figure 1 shows, for the first time the industrial world was producing wealth without this meaning more fossil fuels and more emissions. Despite its huge implications for a world that has faced the global climate issue for decades without much good news, the world’s media were virtually silent.

China is now decoupling their economic growth from GHG very rapidly as shown in Figure 2. This provides great hope that the process will now spread to the whole emerging world. China invested $90 billion in renewables in 2015 (more than 60% of their investment in energy), so much of their continuing growth will be based around solar and wind rather than the fossil fuel-based economic growth of the past 15 years.

Read the full article in ReNew 139.

The Pears Report

The Pears Report – don’t mention the war

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Tony’s war on renewables may be ongoing, but what has been the effect? It’s not such an easy war to win, writes Alan Pears.

TONY Abbott did his best to kill off renewable energy when he was PM—and he’s still trying it seems. But it is interesting to look back at the consequences of his efforts. The war on renewables was meant to reduce electricity prices. But it has done the opposite—and a lot more.

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The big negative for renewables has been that the uncertainty created by the war led to a collapse in investment in large renewable energy projects. And the compromise 2020 large-scale renewable energy target (LRET), reduced from 41,000 GWh to 33,000 GWh, is now driving much less renewable energy development.

However, even the reduced LRET still means a lot of renewable generation capacity has to be built fast, from a near standing start, to generate 55% more renewable electricity than was produced in 2016, by 2020.

A report for the Clean Energy Regulator (www.bit.ly/CERMTRET) estimates an additional 6000 MW of generation capacity will be needed to meet the reduced 2020 target—a doubling of the renewable generation capacity installed since 2001. This has driven up the price of large-scale generation certificates (LGCs) from a long-term price of $30–$40 to $80–$90 (see box).

So it is now very profitable to build new renewable generation capacity under the LRET, and we are seeing a boom. Of course, Mr Abbott can now complain about the high price of renewables—that he caused by frightening investors which, in turn, has led to a shortage of new renewable capacity and LGCs. As in all markets, a shortage has driven up prices.

But Australian media have noticed that renewable energy prices for new generation everywhere else, and in bids for ACT government auctions (which are outside and additional to the LRET), are falling. Without the LRET uncertainty, LGC prices should have been stable or even falling as more new, cheaper generation was built.

Read the full article in ReNew 139.

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100% renewables – how feasible is it?

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With ongoing discussion by government and media about the effect of renewables on the grid, the ATA’s Andrew Reddaway and Damien Moyse consider the feasibility of 100% renewables for Australia.

THE ATA (ReNew’s publisher) supports a transition from fossil fuels to renewable generation in Australia’s electricity grid.
As well as being important to meet our international commitments to fight climate change, this brings other benefits such as improved local health outcomes, greater energy security and more jobs.

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However, as this transition progresses we must ensure the grid remains reliable and avoid economic hardship. How can this be achieved as we approach 100% renewables? This article considers the challenges of relying on intermittent generation, ways to address those challenges and a plan for moving forward.

Read the full article in this month’s longform.

Read more articles in ReNew 138.

Alan_Pears

The Pears Report: Reflections on reflections

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Two decades on and 75+ ReNew columns later, Alan Pears is still positive about our clean energy future. How does he do it? Alan reflects on the clean energy facts we all need to know.

It was a real thrill to launch the eBook of my first 75 ReNew columns at the recent All-Energy conference in Melbourne. The ATA team did a great job in production and organising the launch. And I really appreciated former Greens leader Christine Milne’s contribution through writing the foreword.

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One thought-provoking question from the audience at the launch was: “Don’t you get bored because we just keep going round in circles on energy policy?” Indeed, this question set me thinking: how do I remain so enthusiastic and positive about energy transformation, when progress is so much slower than it should be?

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I’m lucky. I work across a wide range of issues and with a lot of different people. So there is always something positive happening—somewhere. Even when things look stuck or are going backwards on the surface, it is usually possible to find some underlying positive innovation or a subtle shift in the fine print. I also have a tendency to look for the fundamentals, whether it is the underlying physics that shows how inefficient we are, or why and how people react the ways they do. I am always learning.

I also feel pleased that, over almost 20 years, I have provided ReNew readers with an insider’s perspective—from an independent, sometimes practical, sometimes naively idealistic person—on events, trends and possibilities on energy and climate issues.

I also recognise that those of us who drive change have to make a strong case and present it well. People need good reasons to change. And they need to feel confident that change won’t have adverse consequences for them, their families and friends. Of course, powerful vested interests manipulate the situation to highlight the risks of change and overstate the benefits of sticking with the status quo. The blockers have slowed (and sometimes reversed) change, cost Australia many billions of dollars and amplified the cost and pain from climate change, but their effectiveness does force change agents like me to do our homework—over and over again! And to become more creative and effective in communicating and influencing.

At the same time, I have felt my share of despair and anger as sensible policy has been blocked, reversed and abused. I have been frustrated as I have seen exciting technological and social developments squashed, and abuse of power run rampant. A few issues have caused me serious distress.

The appalling story of Australia’s energy market reform process is almost beyond belief, even for me at my most cynical. The naivety, arrogance and ruthlessness of key players and the failure of our leaders to pull them into line stand out. The unnecessary cost and pain of this process is beyond calculation.

The fact that, over 40 years after we realised that people want services, not energy, we still have an industry focused on providing more energy and trying to perpetuate the myth that we need more energy to build a better economy is truly devastating. The failure to integrate climate and energy policy, when fossil fuels produce three-quarters of Australia’s climate impact, will go down as one of the most tragic leadership failures of our time. Maybe that is belatedly beginning to change.

I am also struggling to understand how, 25 years after I helped introduce Australia’s first building energy regulations, some powerful building industry groups oppose sensible energy regulation even more aggressively and more righteously than they did then. Something is really wrong.

As we debate how to manage the closure of old coal-fired power stations, and the problems faced recently by South Australia with volatile energy prices and blackouts, I am completely bemused by the ensuing debate—and the level of ignorance, vitriol and blatant lying shown among the debaters. I am also (yet again) puzzled that the debate makes little or no reference to the major roles energy efficiency improvement and smart demand management could play in delivering solutions.

The election of Donald Trump as US president reinforces the need to focus on what we can do. I’m reminded of the old saying that smart people learn from the mistakes of others, while the not-so-smart have to make their own mistakes. Unfortunately, the education of Mr Trump on climate and basic energy trends will be very costly. But I hope it inspires many to do more, just as Tony Abbott’s war against climate and clean energy policy has had some surprisingly positive outcomes in Australia.

Some clean energy facts
So we don’t have to waste even more time debating our energy future, I thought it might be useful if I listed a few things we really know about energy.

1. Leave it in the ground
Two-thirds of global greenhouse gas emissions and three-quarters of Australia’s emissions result from fossil fuel extraction and burning. Most of the world’s existing ‘profitable’ fossil fuel reserves must be left in the ground to avoid dangerous climate change. Spending money on exploration and building extra fossil fuel supply capacity is money down the drain.

2. We know it creates more jobs
An energy-efficient renewable energy future creates more jobs than conventional energy, because most of the new jobs are in light manufacturing and services sectors, which are much more employment-intensive and much less capital-intensive than traditional energy supply industries. We have known this for decades.

3. And it’s cheaper
An energy-efficient, renewable energy future will be cheaper than a ‘conventional’ energy future, even if we don’t introduce a carbon price. Much of our existing energy supply infrastructure will have to be replaced over the next few decades anyway, so comparison of the cost of a clean energy future with existing energy costs is invalid—the real choice is between different investments, and should include a science-based carbon price. A lot of energy efficiency potential is profitable (the ‘lunch you are paid to eat’ as pointed out by Amory Lovins decades ago). While renewable energy has been expensive in the past, costs are declining rapidly (and performance is improving), and it already seems to be cheaper or similar in cost to building new traditional energy plants. Interestingly, a clean energy future will also be mostly privatised—in a democratic way.

4. Plus more reliable and resilient
A well-designed, efficient renewable energy system should be more reliable and resilient than a centralised system, as local energy storage, smart management and generation reduce reliance on networks (where most disruptions occur) and transmission lines. Debate about supply of base load power can only be described as outdated and misinformed.

5. Developing countries benefit too
An efficient, clean energy future offers many developing countries multiple benefits including lower energy import costs, better services to the rural poor and lower pollution.

6. Transport is not just about EVs
Transport is a very challenging energy problem, not because it can’t be fixed, but because very few countries and cities even understand the fundamental problems. A car-based society is not practical, equitable or economic. Electric cars are only a small part of the solution. Virtual service delivery and workplaces, coordinated planning, comprehensive public transport, low-speed electric vehicles (with suitable infrastructure, speed limits and rules to ensure safety for all, including pedestrians), and better-organised walkable cities are needed.

7. Fly lower and less
Air travel is a much bigger climate problem than most people realise. The overall warming effect of air travel is two to five times the value calculated using Kyoto carbon accounting. And most of this impact is due to the release of emissions at high altitude, not CO2—so switching to renewable aircraft fuel doesn’t fix the problem. Flying lower and less, and transitioning to electric aircraft, will be necessary.

8. New buildings remain a problem
We are constructing buildings and urban infrastructure that will be future liabilities, not assets. And we are not providing the necessary infrastructure to support a successful economy and equitable, enjoyable lifestyles. The failures are deep and systemic. I really don’t know how we fix this one.

9. Add monitoring to appliances
Our appliances and equipment are ‘dumb’, as well as inefficient. They must all have built-in real-time monitoring, benchmarking and feedback systems so faults are detected, operation is optimised and inefficient products are exposed.

10. Skills currently in short supply
We have very limited numbers of designers, tradespeople, professionals and customers who are competent to deliver energy-efficient low-carbon solutions. We have poor supply chains to deliver what is needed. Training capacity is limited and certification weak. We have few incentives and many disincentives regarding sensible decision-making and action.

Overall, it’s a miracle we have progressed as far as we have! Based on our track record, it will also be a miracle if humanity gets out of the hole we’ve dug without a lot of pain, misery and conflict. But we have the tools and some smart people. The problems are our leadership, short-sightedness, the misguided fear we will be worse off in a clean energy future, and lack of vision and practical focus.
Merry Christmas and Happy New Year!

Alan Pears, AM, is one of Australia’s best-regarded sustainability experts. He is a Senior Industry Fellow at RMIT University, advises a number of industry and community organisations and works as a consultant.

This article was first published in ReNew 138.

csr-bradford-solar

Finding value in sharing

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Can we find value for both customers and the network in sharing locally generated energy and thus accelerate a transition to 100% renewables? Bruce Thompson and Paul Murfitt discuss the potential in microgrids, virtual power plants and more.

The transformation of the electricity network is certainly now upon us. Years of environmental advocacy, rapid technology advances and shifts in consumer demand are driving an unprecedented shake up of our century-old supply network. With this change come opportunities (and some risks) to harness the value of renewable energy across the grid as we drive towards zero emissions.

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Traditionally, Australia’s electricity networks were largely built and controlled by state governments, and operated as central power supply systems managed with two policy imperatives in mind: security of supply and cost-effectiveness. The much-heralded disruption is turning this system upside down, bringing technical and financial challenges along with opportunities.

The big shift to date has been ‘behind the meter’, where there is a clear case for householders and businesses to invest in solar PV to avoid the cost of conventional energy supply. Yet establishing value ‘in front of the meter’—sharing your locally generated energy across the grid—has so far been fraught.

With the tapering off of feed-in-tariffs, owners of solar have been frustrated they don’t receive a fair price for their homegrown generation. On the other side of the fence, network operators have been aggrieved by the need to manage the technical impacts of solar PV and wind while their business model ‘death spirals’ from lower consumption.

Beyond the angst, new models such as microgrids and virtual power plants are starting to demonstrate that sharing solar PV generation and battery storage across the grid can leverage the opportunities and help manage the risks inherent in Australia’s changing electricity sector. For customers, potential benefits include access to wholesale pricing and retail tariffs. For networks, there can be lower costs from local control and load management, particularly if the models can reduce peak demand and avoid the need for network infrastructure augmentation.

Of course, the value of sharing locally generated energy across the grid is dependent on the time of day, the time of year and the location. The key challenge for ‘in front of the meter’ solutions is not only to understand the technology, but also to apply the fundamental principles of supply and demand to determine where the greatest value can be realised.

Bruce Thompson recently joined GreenSync as the Community Development Director following 12 years at Moreland Energy Foundation Ltd (MEFL) as major projects director. He is also the outgoing chair of the Coalition for Community Energy (C4CE). Paul Murfitt was recently appointed director of energy efficiency for the Victorian Government and is the outgoing CEO of MEFL.

Read the full article in ReNew 137.

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Electric vehicles: the market in Australia and overseas

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Bryce Gaton reports on the evolution of government support and global carmakers’ production plans, which together are driving uptake of electric vehicles.

This year has seen a plane fuelled only by the sun travel around the world, a plethora of home electric storage systems come on the market, Australian households with solar PV systems pass the 1.5 million mark and a Tesla Model S travel from Sydney to Broome. Given 2016 is just past halfway through, what else is to come? Is 2016 to become the year that the hoped-for seismic shift in sustainable transport, energy sourcing and use truly begins?

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The power to change things is more in our hands than ever before and I will offer examples from around the world that hopefully we can look back on in 20 to 30 years time to say, “We really did start the sustainable transition then!”

Electric cars around the world

Right now, pure EVs with a 300+km range—the ‘Bolt’—are rolling off the Chevrolet production line to arrive in US showrooms in the last quarter of this year.

Similarly, Mercedes, Volvo, Renault, Nissan, BMW, Kia and many other Chinese makers already offer pure EVs in their lineups, and most of these have announced plans to match the 300+km range of the Bolt and Tesla Model 3. Mercedes is releasing plug-in hybrids (PHEVs) and even Jaguar is rumoured to be well down the track in developing an electric sedan and SUV to match the belatedly perceived threat to their core market from Tesla’s Models S and X.

And VW, as part of its mea culpa for the dieselgate emissions scandal, has recently announced plans to heavily move into electric vehicle design and production.

Overall, the trend towards less polluting vehicles continues, with global uptake of EVs and PHEVs climbing at an increasing rate, growing from 45,000 EVs sold in 2011 to more than 300,000 in 2014 (see Figure 1). EVs represent more than 1% of total new car sales in the Netherlands, Norway, Sweden and the USA (closer to 20% for Norway). And in China, 2014 saw 230 million e-bikes, 83,000 electric cars and 36,500 e-buses hit the road.

Read the full article in ReNew 137.

Alan_Pears

The Pears Report: Post-election shakeout

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Alan Pears takes a closer look at the interesting energy picture post the election.

THE energy picture is now fascinating. Energy (and environment) minister Frydenberg faces some short-term challenges. He must sort out the electricity and gas market messes. Strongly critical senate inquiries and a scathing Productivity Commission report look even more credible after problems with Basslink and South Australian electricity prices and supply, and high and volatile gas prices that have also driven up electricity prices.

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The new Liquefied Natural Gas export plants in Queensland face serious financial problems, while creating traumas for industrial gas and electricity users. Powerful energy companies are using their market power to block competition. And greenhouse gas emissions from energy are increasing.

These challenges are compounded by the government’s weak post-2020 energy and climate policies that contrast with its international commitment to cut emissions by 26–28% by 2030.

One change that may help the minister is the separation of the resources sector from energy and environment. This may reduce the influence of some powerful interest groups on management of our energy future—and about time, too.

When industries decline

The financial sector has noticed that the fossil fuel industry is in decline and has responded by reassessing the value of fossil fuel assets—downwards. Once decline is clearly locked in, a number of forces emerge.

First, as ‘higher cost’ mining facilities are sold off at bargain prices, their new owners can cut prices, driving a ‘death spiral’ as lower cost mining facilities face tougher competition.

In the past, large businesses stopped the spiral by buying up smaller, higher cost producers then ‘managing’ their production, so that the demand-supply balance was restored at reasonable prices. Low cost producers might even flood the market with cheap product, to kill off their higher cost competitors, as has been happening in the global oil and iron ore markets.

But a combination of global economic problems and growth of competing solutions is blocking a return to ‘normality’ in the fossil fuel and mining sectors. In our world of disruptive solutions, these competing solutions include energy efficiency, renewable energy, shifts to high efficiency electric technologies, ‘virtual’ solutions replacing physical ones and radically different business models.

This highlights the failure of industries and policymakers to grasp a fundamental that US energy expert Amory Lovins was pointing out in the 1970s. People do not want materials, infrastructure, products or energy: they want services that provide ‘perceived value’, regardless of how they are delivered.

Another major outcome of an industry’s decline is that it loses many of the hidden benefits communities and governments have been providing it. Indeed, demands for more accountability and better performance build, just when the industry’s capacity to deliver them is declining.

As people realise that fly-in-fly-out, highly mechanised mines and power stations don’t create many local jobs—so there won’t be jobs for their kids—and that they pollute and undermine other economic activity, they are much less tolerant of mining and fossil fuels. At the same time, coal seam gas and mega-mines have much more visible impact. Concerns about mine rehabilitation are not being addressed, resources companies are cutting corners and government regulators are failing to hold them to account. Communities are realising they will be left holding the ticking bombs.

At a government level, community pressure and the need to maintain revenues while finding money for mine rehabilitation and decommissioning of old power stations are driving efforts to capture more revenue from fossil fuel and resources industries. In the past, policymakers simply discounted these future costs to negligible levels, but that doesn’t work now. Governments now realise that if the mining industry doesn’t pay, it will hit their budget bottom lines—soon.

Industry advertising campaigns, misuse of statistics and ‘behind closed door’ lobbying have successfully blocked higher taxes and stronger controls in the past. But as an industry’s influence declines, these strategies don’t work as well.

At the same time, it is possible for an industry, governments and communities to maintain denial about unstoppable trends for a surprisingly long time. Indeed, there will be bargains for buyers of some mines, and smart owners can use new technology and creative business models to cut costs, out-compete others and shift risk.

It is also in the interests of existing businesses to try to maintain confidence: not only does each extra month of production produce a lot of money, but it gives them more time to sell off assets to poorly-informed buyers, and to move into new areas of activity.

As they say, change is a time of threat and opportunity.

Where to for industrial, business and home heat?

In Australia, the focus of climate and energy policy has been electricity. It’s a core input to essential energy services, it’s expensive, and it’s responsible for a third of Australia’s greenhouse gas emissions. But provision of heat is responsible for half as much climate impact as electricity, or as much as transport. And often the equipment that uses gas or oil uses a lot of electricity as well. Recent rapid increases in gas prices and price volatility have focused attention on reducing dependence on gas, much of which provides heat.

Australia’s emissions from burning fuels for heat production are broken down in the pie chart above. There is exciting potential to cut these emissions by measures including improved energy efficiency, rethinking industrial processes to reduce the need for heat, and switching from gas and oil to high efficiency electric technologies driven by renewable electricity.

Many households are already moving away from gas to high efficiency reverse-cycle air conditioners, heat pump water heaters and induction cooking. But we need better-insulated hot water tanks and ovens, as well as thermally efficient buildings and smart electricity management systems, to minimise costs and maximise benefits.

In the commercial sector, gas use, mainly for space heating, hot water and cooking, is often appallingly inefficient. Inefficient (often old and poorly maintained) boilers, large losses from pipes and ducts, poor control systems, thermally poor buildings, and inefficient gas cooking provide very large potential for savings. Past low gas prices have led many to be sloppy in their use of gas.

Gas use in industry is often surprisingly inefficient, too. When losses from poorly insulated steam pipes and leaky fittings, ancient and inefficient boilers up to 50 years old and inefficient process equipment are considered, the waste is staggering. Under the Energy Efficiency Opportunities program (shut down by the Abbott government, despite outstanding cost-effectiveness and global recognition), companies were required to develop computer models of the energy and material flows through their processes and to benchmark efficiency against theoretical optimums. Many firms, and their experienced engineers, were very surprised by the scale of inefficiency and the scope for cost-effective efficiency improvement.

Industrial-scale electric heat pumps can now efficiently provide steam using renewable electricity. Improved catalysts are reducing the temperatures of processes. Green chemistry and advanced metallurgy are creating more productive processes, higher quality products and lower process temperatures. Smart controls and monitoring systems reduce reject rates (and the energy wasted producing items that can’t be sold). Improved heat recovery and heat/cool storage increase flexibility and allow previously wasted energy to be utilised.

At the point of use of products, ‘virtual’ solutions are replacing physical products and movement. These include weight reduction and shifting to lower emission impact materials (e.g. engineered timber replacing steel and concrete, and cement made from geopolymers). Increased recycling means lower temperature, less energy-intensive processes replace production of virgin materials.

We are also seeing exciting potential to replace fossil fuels with renewable energy across all combustion activities: ARENA recently funded a study that explored these possibilities.

Across all elements in the supply chain, the multiple benefits of new solutions, ranging from cooler commercial kitchens to lower reject rates and improved staff productivity, amplify the energy benefits.

The big question is whether Australians will capture these opportunities or continue to see themselves as victims of change. Maybe the emerging focus on energy productivity and innovation can help.

Alan Pears, AM, is one of Australia’s best-regarded sustainability experts. He is a Senior Industry Fellow at RMIT University, advises a number of industry and community organisations and works as a consultant.

This article was first published in ReNew 137.

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Up front in ReNew: Renewables for all

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AS ITS name suggests, Renewables for All is an initiative to help ensure equitable access to clean energy technology for all Australians “no matter their income or living arrangements.” Set up by the Coalition for Community Energy (C4CE), along with Community Power Agency and Starfish Initiatives, it provides a potential policy framework and business models for governments and agencies to work from, with briefing papers now available on:

  • Solar gardens: the establishment of central solar facilities that enable apartment owners/tenants and others who aren’t able to put solar on their rooftop to have access to clean energy and bill savings.
  • Financing via rates or rents: these mechanisms could allow payback over time by low-income homeowners or renters to councils or homeowners who finance the purchase of these technologies.
  • Community-owned renewable energy projects to increase clean energy accessibility and affordability.
  • Mini-grids and embedded networks: outlining the different approaches and benefits and what policy changes are required to enable them.
READ MORE »

For more information on this project and to download all the papers: www.bit.ly/2aWSuRZ

Read more news stories in the Up front section in ReNew 137.

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The world’s first baker

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Why don’t we know about the oldest grinding stones in the world, found in Australia, or the crops cultivated by Aboriginal Australians? Bruce Pascoe is helping change that.

If you were asked who the world’s first bakers were, what would your answer be? Most would think first of ancient Egypt where it is believed bread was first baked around 17,000 BCE. And yet there is evidence to show that grindstones in Australia were used to turn seeds to flour 30,000 years ago. Archaeologists found the evidence for this at Cuddie Springs in New South Wales in the shape of an ancient grinding stone which had been used to reduce grass seeds to flour. These were the bakers of antiquity. It took Egypt 12,000 years to repeat this baking experiment. Why don’t our hearts fill with wonder and pride?

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Australian sovereign nations cultivated domesticated plants, sewed clothes, engineered streams for aquacultural and agricultural purposes, and forged spiritual codes for the use of seed in trade, agricultural enterprises, marriage and ceremony.

This was and is an incredible human response to the difficulties of fostering economic, cultural and social policies. It may be unique in its longevity but also in its ability to flourish without resort to war. Australia’s reluctance to acknowledge what was lost can be witnessed in our ignorance of the birth of baking, the gold standard of economic achievement.

Why is this? Is it a malicious refusal to recognise the economic triumphs of the people from whom the land was taken or a simple culture of forgetting fostered by the bedazzlement of Australian resources and opportunities?

If we could rid ourselves of the myth of low Aboriginal achievement and nomadic habits, we might move toward a greater appreciation of our land. We might begin to wonder about the grains that explorer Thomas Mitchell saw being harvested in the 1830s, and the yam daisy monoculture he saw stretching to the horizon of his ‘Australia Felix’, the early name given to western Victoria. These crops must have been grown without pesticides and chemical fertilisers and in harmony with the climate; surely they are worthy of our investigation.

Read the full article in ReNew 136.

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Community energy steps up: Decarbonising locally

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Community energy is growing fast! Jarra Hicks and Franziska Mey of Community Power Agency report on the many projects taking off and some of the remaining barriers under investigation.

Since Australia’s first community-owned renewable energy project, Hepburn Wind, started generating in mid-2011, many projects have followed to create a small, but rapidly growing movement.

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Integral to that growth has been the Coalition for Community Energy (C4CE), a loose coalition of organisations working to promote and foster community energy projects. C4CE reports that there are now 73 groups developing community energy of all different kinds across all states and territories in Australia—from solar and battery storage projects to replace diesel in remote communities in WA, to bioenergy projects using town and agricultural waste, to partnerships with larger wind and solar developers.

In C4CE’s first assessment of community energy in Australia in 2015, groups reported on 23 operating projects, accounting for more than 9 MW of installed wind or solar capacity. Together they involve over 21,000 people and produce 50,000 MWh of electricity per year, avoiding 43,000 tonnes of carbon dioxide emissions. Since then, at least eight more projects have begun operating.

What’s driving community renewables?
The number one driver is that people care about climate change. A 2014 survey found that reducing carbon emissions to address climate change was the leading motivation for most groups (89%). In fact, almost half of all projects have grown out of climate action groups in communities. In a context where the effects of climate change are being felt more and more each year and our government continues to take a weak and changeable stance on climate policy, this is likely to keep driving communities to pursue their own local source of clean energy.

Also, we are starting to see links with the anti-coal and gas movements, as communities threatened with new fossil fuel developments want to pursue safer and less disruptive means of generating energy. This is especially the case in the Northern Rivers in NSW, where there has been an explosion of activity in the past four years, alongside a successful campaign to boot out coal seam gas.

Read the full article in ReNew 136.

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Mottainai vs methane: The case for textile recycling

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Sarah Coles explores the environmental and social benefits of diverting textiles from the waste stream, looks at industrial fabric recycling and takes inspiration from the Japanese practice of maintaining clothing for a lifetime.

In the 1965 film The Sound of Music, while the Captain is away in Vienna, Maria makes playclothes for the children out of old curtains. Perhaps taking this iconic filmic moment of upcycling as inspiration, my mother made a kaftan out of bright orange curtains in the 70s. “I was up there with the fashion,” she says. The orange kaftan was both fashionable and ethical, it seems.

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According to the Australian Bureau of Statistics, Australians throw out approximately 570,000 tonnes of leather and textiles per year, only 12% of which is recycled. This means each year roughly 500,000 tonnes of leather and textiles end up in landfill in Australia. Once textiles are in landfill they decompose and release methane, a harmful greenhouse gas. Dyes and other chemicals may leach into the soil, potentially contaminating groundwater.

The ecological and social burden of new clothes is well documented. The introduction to the 2013 book Sustainability in Fashion and Textiles reads: “Considering the whole textile chain, from spinning to finishing… large amounts of water and energy are used and, in general, non-biodegradable wastes are produced.” According to the report ‘The State of the Apparel Sector 2015’, it requires 2720 litres of water to produce one new white cotton T-shirt. In the textile manufacturing sector, sweatshops and child labour are prolific, and working conditions abysmal. The fashion industry promotes continual consumption; according to a Food and Agriculture Organisation (FAO) report, worldwide demand for textile fibres was 69.7 million tonnes in 2010. In short, the textile industry is brutally unsustainable.

Read the full article in ReNew 136.

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The Pears Report: Basslink blues, abatement buy-in

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Is a second Basslink cable the best solution for Tasmania? And with the UN now trading carbon offsets, how can you become a voluntary abater? Alan Pears reviews the options.

As a commentator who argued against the construction of the Basslink cable, recent proposals for a second cable between Tasmania and the mainland have led me to review my position—but not necessarily change it.

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It’s easy to argue that Tasmania needs a backup cable and that this could also provide benefits. But it’s not so simple.

The existing cable has brought both benefits and costs. On the one hand, Tasmania could profit from exporting peak power at high prices and from selling renewable electricity when there was a carbon price. It could also import cheap off-peak power from the mainland— increasing its greenhouse gas emissions.

But it costs 2 to 3 cents per kilowatt-hour (kWh), or $20 to $30 per megawatt-hour (MWh), to cover cable costs and energy losses. That’s a lot when, due to excess generation capacity, wholesale prices have been depressed to around $40/MWh in 2015–16 in Victoria, where Basslink feeds into the mainland grid. Peak prices have fallen due to renewable generation, energy efficiency, demand management and industry restructuring.

Basslink provided an excuse for Tasmanian governments to continue to ignore energy efficiency improvement. This would have cut consumer bills, made better use of existing generation capacity and provided benefits such as more comfortable homes and more productive offices. Development of new renewable energy generation in Tasmania has not exactly boomed. Tasmanians are also paying a high price for the failure of Basslink. So it’s not clear that Basslink has delivered a benefit relative to other paths. A retrospective study of what could have been done with the Basslink money could be interesting.

The economics of an additional cable are very sensitive to mainland electricity prices and the possible reintroduction of a carbon price. The ability of a second cable to provide useful backup also depends on what happens to Tasmanian electricity demand, investment in new renewable energy generation and rainfall for hydro generation as climate change plays out.

To compete with mainland renewable generation, Tasmanian generators will have to factor in the extra cost and energy losses of using the cable, so they would have to be significantly more productive than mainland generators.

Using the money saved by not building an extra cable (maybe a billion dollars or so) to instead invest in energy efficiency and new renewables, as well as revised dam management practices, could avoid the need for a backup cable and offer other benefits.

Also, instead of exporting to the mainland, it may be more profitable to divert excess electricity to running electric vehicles (or, given Tasmanian conditions, plug-in hybrids), which would offset the much higher cost per unit of energy of petrol and diesel fuel, and use a local resource to avoid import costs. And plug-in hybrids can easily switch to petrol if there is a power shortage.

I don’t have the data to make a call on whether or not another cable is a good idea. But I am inclined to be sceptical. Its cost must be compared with alternative options. And the risks of even greater exposure to mainland electricity market vagaries must be carefully weighed up.

Reframing thinking about emerging energy solutions
Recently we have seen intense discussion about the economics of storage and large solar thermal generation relative to other options. Many consider their economics are improving but are not quite there yet. My recent observations of events in Australia and other countries lead me to a different perspective.

Tasmania has been thrown into turmoil by the failure of the Basslink cable—with the low dam levels adding to the pressures and public debate about who to blame. A few years ago, Melbourne faced rolling blackouts as a major powerline to New South Wales was shut down due to a bushfire. And some Queensland power stations had their output limited by lack of cooling water during the last drought.

I’ve just come back from Japan, where the new green buildings and urban developments I saw are designed to run independently of the electricity grid for at least three days. A combination of on-site generation, storage, extreme energy efficiency and smart management systems deliver this capacity. They have realised that they need to be able to cope with natural disasters and technical failures without disruption of core services.

So the discussion about energy storage, distributed generation and smart management using a lot of data is completely different in Japan. They are simply getting on with a transformation. And, as in other fields, they are finding that lessons from experience allow them to reduce costs, identify benefits they hadn’t previously recognised and capture opportunities in new markets.

The contrast with Australia is remarkable. Our energy war, piecemeal approach and focus on narrow short-term costs are seriously undermining our future. Basically, we are being distracted by the detail while others are just shifting to a new paradigm. That’s how losers behave.

Climate targets and meeting them
The urgency for action on climate change is building. It now seems to me that responsible businesses, communities and individuals must reframe their targets towards ‘beyond zero emissions ASAP’, not just gradual reduction or even net zero emissions by 2020 or 2030. The good news is that it’s becoming cheaper (or even more profitable) and easier to cut emissions.
This means aggressively cutting our emissions both from our own emission generating activities and from the inputs to our lives and businesses.

Voluntary abaters must also buy and cancel offsets to balance the emissions we can’t avoid and to go beyond zero emissions. An exciting development here is that the United Nations has now set up a carbon offset trading website where individuals can buy and surrender internationally recognised carbon permits (climateneutralnow.org). I found a range of projects with offset costs from US$0.50 to US$5 per tonne of emissions avoided. One project even met the Gold Standard (see www.goldstandard.org, set up by WWF and endorsed by over 80 NGOs) for very high quality credits. You can select the ones you like best, based on the details provided.*

I road-tested the site by buying 100 tonnes of offsets from a small run-of-river hydro plant in India.

So instead of just thinking about donating to worthy international charities, you can now choose to support projects that cut emissions and also deliver worthwhile social, economic and environmental benefits for their host communities—at bargain prices.

Now is a good time to buy quality offsets: they are unlikely to ever be as cheap again. And if we don’t buy and surrender them to cut global emissions, high emitters will buy them up at low prices to offset their emissions. If enough people buy up permits to reduce the present glut, prices will increase to a point where high emitters may actually focus on reducing their emissions instead of just buying compliance with cheap permits.

There is debate about the rationale for buying international offsets. The present low prices for offsets are an outcome of a number of factors, including weak targets, over-generous allocations of free permits, poor trading scheme design, lower than expected economic growth since the GFC, declining emission intensity of economies and corruption. However, once they are
certified by an approved scheme, they are legal ‘currency’, regardless of their quality.

Some argue that governments should act to disallow existing poor quality permits. But in my view this is unlikely, despite being desirable. This is effectively retrospective removal of a right to emit and would create a precedent many fear could then be applied in other policy areas. International negotiations are messy enough and, to me, it seems unlikely that agreement would ever be reached to do this. In any case, if you buy offsets you consider to be credible and which deliver additional benefits to communities, they are unlikely to be made invalid and they deliver tangible other benefits beyond
emission reduction.

The Australian government could work with the international community to improve the integrity of international carbon certification schemes, as well as its own Emission Reduction Fund rules

Alan Pears, AM, is one of Australia’s best-regarded sustainability experts. He is a Senior Industry Fellow at RMIT University, advises a number of industry and community organisations and works as a consultant.

* Another great option for offsetting emissions is through C3 run by the ATA (ReNew’s publisher). This combines offsetting emissions with renewable energy credits and donations to local community groups. www.climatechest.org.au/host/ata.

This article was first published in ReNew 136.

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How green is my solar?

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How long does it take to pay back the energy used in the production of solar + battery systems and how much of an effect do they have on the greenness of the grid? The ATA’s Andrew Reddaway investigates.

By generating clean electricity, solar systems reduce the amount of coal and gas that’s burned in power stations. This reduces pollutants and greenhouse gases released into the atmosphere, which cause disease and man-made climate change. Fossil fuels also require extractive processes such as fracking and open-cut coal mining, which have led to negative effects on the environment such as land degradation, water contamination and mine fires.

READ MORE »

It seems clear that installing a solar system will have a positive effect on the environment. But with several different types of system now available, including systems with batteries, how do they compare in terms of the environment?

Grid-connected without batteries

The vast majority of existing solar systems are connected to the grid and have no batteries. Your solar panels’ electricity is first used by on-site appliances, and any excess is exported to the grid to be consumed by your neighbours. Any shortfalls are supplied from the grid. This setup is relatively cheap and efficient, using a simple inverter that relies on the grid for its stability. However, it’s not very self-sufficient, because if a grid blackout occurs the inverter will switch off. (Although not always; some rare grid-connect inverters can use direct solar generation to supply household appliances in a blackout, even without batteries; for example, the Nedap PowerRouter.)

Since the grid has minimal energy storage, whenever your solar system is operating, a centralised power station will reduce its output to compensate. Each kilowatt-hour of solar generation reduces power station generation accordingly. In fact the benefit is even greater, as the power station must supply not only the end-user demand but also the losses incurred in the power lines, which can be over 20% for remote locations. Some people argue that because coal-fired power stations are inflexible, they’ll keep consuming coal at the same rate regardless of solar generation. Actually they are responsive enough; for example, Loy Yang A in Victoria can halve its output in less than an hour. Spread out over a geographically large area, solar systems’ overall impact is relatively gradual even when a cloud front arrives; this is forecast and managed by the grid operator in five-minute intervals.

With enough panels you can generate more electricity than you consume over a whole year, with your night-time imports more than compensated for by your daytime exports.

Read the full article in ReNew 135.

Alan_Pears

The Pears Report: Global energy markets

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Following his participation in two international summits recently, Alan Pears reflects on approaches to a transitioning energy market, both internationally and in Australia.

My opportunities to present at an Asia–Pacific Economic Cooperation (APEC) energy ministers’ conference and also an Association of South-East Asian Nations (ASEAN) energy summit late in 2015 gave me some fascinating insights into the energy picture beyond Australia. There was no debate about climate change—the science is accepted, the evidence is clear, and the impacts are real and terrifying. The two forums, however, showcased quite different approaches to addressing the issue.

READ MORE »

Among APEC ministers, there was intense discussion about how best to help the rural poor gain access to renewable energy off-grid or on microgrids. APEC energy leaders were, on the whole, quite progressive, and my presentation on the future role of clean energy generated a very positive response.

Energy efficiency was seen as a key priority, as was equitable access to energy and, of course, renewable energy. The Philippines has identified renewable energy resources 13 times larger than present capacity. Several speakers outlined goals to reduce energy intensity (energy use per unit of GDP); for example, China aims to achieve a 45% reduction by 2030 relative to 2005.

The need to attract private capital was also a major theme. Most focus was on large projects, although some emphasised the role of micro-enterprises. Of course, investment in energy efficiency and distributed renewables is a very effective way of using private capital!

Coal was mentioned, but without great enthusiasm. Coal is a problem for most APEC countries—coal imports add to their balance of payment problems, as well as pollution. APEC is supporting efforts to develop clean coal technologies as one of a number of themes, but my impression was that this is more because those supporting this approach are prepared to fund the work.

And APEC is not interested in upsetting powerful groups. Its focus is more about fostering dialogue and sharing experiences. Indeed, several people expressed their relief that newly appointed Australian energy minister Josh Frydenberg attended and participated constructively; Australia, one of the key drivers of the creation of APEC, had vanished from the scene since the election of the Abbott government, much to the bemusement of many.

The first day of the ASEAN summit in China was a very different matter, and reflected much more the Australian situation. It was dominated by presentations on large-scale generation projects—mainly renewable and nuclear—and grand visions of huge inter-country power grids that would enable the diverse renewable energy resources of the region to be shared, while also building regional cooperation. All this was based on an assumption that regional electricity demand would triple or quadruple—trending towards the US level of per capita consumption.

I was the only one of about 20 (all-male) speakers from the energy sector who questioned the assumption of massive energy growth, the logic behind large projects and the belief that inter-country grids would improve relationships. I was relieved when, at the end of the first day, quite a few people thanked me for my ‘intervention’. Clearly not everyone at the summit was excited by the scenarios presented. For me, this highlighted the enormous and powerful cultural forces within the energy establishment driving large-scale, capital-intensive solutions. I come from a very different perspective!

The second day was an incredible contrast. I presented at the Smart Cities forum—one of four streams; the others being nuclear, power grids and PV. Presentations discussed smart use of ‘big data’ to optimise building performance, applications of smart grids and case studies of low-carbon urban development. By the end of this day, my optimism had returned.

One of the interesting aspects of these experiences was the significance of the informal discussions and networking, which is difficult to achieve via the internet or correspondence. On the second day, I sat next to one of the key speakers from the previous day, and we discussed the concept of energy services and how people didn’t actually want energy. His summation at the end of that day included some of the points I had raised with him! On the following day we had a site visit to Yingli Solar, the fourth-largest PV manufacturer in China. A Chinese energy policy maker sat next to me on the bus, and we discussed the issues I had raised on the previous days. Our bus driver got lost, so our conversation continued for nearly an hour!

Now I’m back in Australia, slogging away writing my submission to the Victorian Essential Services Commission Inquiry into the ‘true value’ of distributed generation and trying to generate some interest in Australia’s National Energy Productivity Plan. Reality bites!

How to drive energy efficiency and productivity

Australia’s National Energy Productivity Plan (NEPP) was launched last December. Its aim is to deliver more economic output per unit of energy consumed. It includes quite a few worthwhile actions, but its weakness is lack of focus on the institutional and funding arrangements needed to drive outcomes.

To date, the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC) have proven effective at driving renewable energy research, innovation and commercialisation. Energy efficiency investments already represent about 30% of CEFC’s funding. But ARENA’s agenda is focused more narrowly.

One practical step forward would be to rename ARENA as AEPA (Australian Energy Productivity Agency) and broaden its terms of reference to include energy efficiency—and provide it with more funding. This would not solve the broader institutional blockages to energy efficiency, but it would start building Australia’s capacity to drive decarbonisation in an integrated way.

Low fossil fuel prices—what do they mean?

Over the past year we have seen global oil, coal and liquefied natural gas prices crash. Not many predicted this. It seems to be the result of over-production and lower-than-expected demand. For me, this is a very interesting phenomenon.

Usually, low prices would drive up demand until production was matched by demand. But not this time. Many economists argue that the problem is that low economic growth is limiting demand growth. But there seem to be some other factors at work.

First, global economic development, especially in China, is shifting from physical production to services, which are much less energy intensive (that is, they use much less energy per unit of economic activity). Second, services are displacing resource production and manufacturing, reducing average energy intensity of the existing economy. Third, distributed clean energy is swamping traditional energy supply, as it is now cheaper and much less risky. Fourth, modular, mass-produced energy solutions (both supply side and demand side) are accelerating, driven by remarkable innovation and cost reduction.

While traditional economists keep hoping that demand will recover to take advantage of the low prices, we are seeing some very different responses. For example, the Indonesian government has taken the opportunity provided by falling oil prices to remove subsidies on diesel and other petroleum fuels. This positions Indonesia to shift to a low-carbon future and improves government revenue significantly while also reducing oil import costs.

So the global economy seems to be moving on, beyond fossil fuels. As an OPEC sheik said in the 1970s, “the Stone Age didn’t end because we ran out of stone”.

Some organisations, such as banks and big fossil fuel producers, will try to fool investors by continuing to deny the need for change while they quietly shift their own investments, selling to those silly enough to believe that fossil fuel projects are good investments, then admit afterwards that change was necessary, and claim that they have managed the transition competently.  I’m glad my investments are in other sectors!

Alan Pears, AM, is one of Australia’s best-regarded sustainability experts. He is a Senior Industry Fellow at RMIT University, advises a number of industry and community organisations and works as a consultant.

This article was first published in ReNew 135.

Glenn Evans reading the electricity meter with clients John and Lea Mungbando

A tropical take: smart cooling in the tropics

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A Northern Territory program that works with low-income residents to reduce their energy bills and improve their comfort is starting to see results. Robyn Deed talks to one of the energy assessors about his approach and how the project is progressing.

ReNew first reported on COOLmob’s Smart Cooling in the Tropics project in December 2014, when the project was just starting. Since then, 480 households have had initial home visits and many have had upgrades applied to their homes.

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Data is also being collected. This is the first large-scale project to identify and measure the best approaches to cooling, comfort and energy efficiency in tropical Australia. The outcomes will be used to inform national energy policy, and to influence building codes and rating systems to make them appropriate for the tropics.
The research findings will consider a range of factors including which treatments produced the biggest energy cost savings, which households achieved improvements in comfort levels, and which participants gained better awareness of energy consumption issues and opportunities.

While the evaluation phase is only just starting some early anecdotal observations are giving a flavour of the evidence to come, says Project Manager Jessica Steinborner: “The two primary issues identified through the home visits are heat gain and air flow.”

Heat gain

  • Many homes have no or inadequate shading and a number have dark roofs.
  • A high proportion of homes assessed have outside walls of high thermal mass.

By the end of the project, nearly a quarter of participating homes will have had a heat prevention solution such as shading or reflective roof paint.

“Shading has been a really popular treatment. In addition to preventing heat gain, shading creates a protected outdoor living space away from the hot concrete interiors of their homes,” says Jessica.

Air flow

  • Ventilation is often restricted either as a result of the orientation or because of the design, with windows and doors poorly located to capture a prevailing breeze.
  • Many homes have fly screens in disrepair and consequently not in use, leading to houses being shut up with the air conditioner on.

Half of the households will have received a treatment addressing air flow including upgrades to their doors and windows to facilitate passive cooling and upgrades to their fans (ceiling, wall and floor).

Other observations and some surprises

  • The majority of participants are home during the day and, despite reporting the highest discomfort in the afternoon, they were opting to not use the air conditioner until the evening.
  • Average number of air conditioners was three and average temperature setting was 24 °C.
  • On average, participants were using 26 kWh/day, the average usage for Darwin.

Until more data is available, it’s great to hear comments like this: “I have lived in Darwin for 15 years and this is the first time I’ve felt cool and comfortable during the wet season,” says Mieme, one of the participants.

Read the interview with one of the energy assessors in ReNew 134.

ecoMaster measuring up for draughtproofing

A focus on thermal efficiency

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Energy efficiency is perhaps the most critical aspect of sustainable living, yet it’s oft-ignored and subject to changing government policies. Robyn Deed talks to Lyn Beinat from ecoMaster about the changes she’s seen in the energy efficiency industry and her top tips for householders.

Energy assessment business ecoMaster has seen many government policy introductions and exits over the 11 years they’ve been in business. They’ve had to constantly adapt. “Even changes to solar panel rebates and the RET have affected us, although we don’t deal with solar products,” says ecoMaster CEO Lyn Beinat. Government support is crucial to confidence. Lyn comments, “Perhaps people decide it’s all too hard or likely to be too costly when the government support isn’t there.”

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The biggest shift in ecoMaster’s approach has been that they now look at the whole house right from the start. Lyn says, “It’s not that we want people to do everything all at once, but we’ve found that people are often focusing on just one aspect, like secondary glazing, when that may not be the most important thing to look at. The biggest problem is often draughts.”

Another change they didn’t expect at all has been a move into product development. Their research and work on their own home, and with clients, has led them in that direction. Maurice Beinat (Lyn’s husband and ecoMaster’s Chief Technical Officer) has done a lot of energy efficiency assessments (“more than anyone on the planet!” claims Lyn) and through that they identified problems that needed better solutions.

For example, for draughtproofing, Lyn says there are many products available, but it’s hard to find ones that are going to last: “many of the stick-on draught excluders will only last a year or so before they start peeling off, or they’ll cause problems for door closing,” notes Lyn.

Read the full article, including approximate costs for thermal efficiency changes, and Lyn’s top tips in ReNew 134.

The rebound effect

On the rebound: countering the sceptics

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Does energy efficiency lead to energy use that offsets some of the savings, via a ‘rebound effect’? It’s not that simple, says Alan Pears, and in fact, the opposite can happen.

MANY ‘energy efficiency sceptics’ argue that saving energy simply leads to increased energy use that offsets the savings. Some go as far as suggesting energy efficiency is a waste of time and a sham.

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Indeed, there is a large body of literature that documents the existence of a ‘rebound effect’. But there is wide disagreement about how large it is—estimates range from a 10% to 70% reduction in net savings. Studies find that the extent of this rebound varies across sectors and activities.

On the other hand, other studies have shown that estimates of potential savings from energy efficiency policies have often been conservative, and costs have been over-estimated. For example, recent analysis of the effectiveness of Australia’s appliance efficiency programs, using improved field data and analytical methods, increased the estimated benefits by a factor of two (as measured by cost per tonne of avoided carbon).

The International Energy Agency has shown that, if the multiple benefits of business energy efficiency measures are considered, total savings can be up to 2.5 times the value of the actual energy saved. These benefits can include productivity improvement, health benefits, reductions in costs in infrastructure and more.

Like many issues, the rebound effect has an element of truth underpinning it. But, overall, it is not a game changer. Indeed, with the right policy settings and in many situations, investment in saving energy can amplify overall energy savings. This article aims to unravel the story.

What is rebound?
The term ‘rebound effect’ itself reflects a bias against valuing energy efficiency. It implies that some or all of the claimed savings from energy efficiency are inevitably taken back through increased energy use. This can certainly occur, but the opposite, amplification of savings, can also occur. The outcome depends on the policies, the behaviour of decision-makers, and the technical detail.

Broadly, the critical factors influencing the size and direction of the overall change in energy use due to energy efficiency improvement are how big the financial savings are, how they are spent, the overall impact of that spending as it flows through the economy, and technical system effects.

A more balanced term might be ‘flow-on effect’.

Consider an extreme example. If I use the money I save through energy saving actions to buy a block of energy-intensive aluminium, overall energy use may increase, as more energy will have been used to produce the aluminium than I am likely to have saved. But if I invest my savings in more energy saving actions, or to support the growth of an energy saving industry, I will amplify the energy savings.

In practice, the overall outcome is difficult to estimate: if the aluminium I buy is used to reduce the weight of a car, the fuel savings may exceed the lifetime energy ‘cost’ of the aluminium—if I believe the aluminium industry’s research! And, if the aluminium is eventually recycled, up to 90% of the energy ‘invested’ in its production will be recovered, reducing future energy consumption.

Read the full article in ReNew 134.

”The future is bright fellow women of renewable energy.” Miwa Tominaga delivering a rousing speech at the
2015 All Energy Conference. Photo courtesy of the Clean Energy Council.

The double-glazed ceiling: Women in renewables

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When asked why it is important to have a gender balanced cabinet, Canada’s Prime Minister replied, “Because it’s 2015.” Sarah Coles looks around in 2015, wonders why Australian women are under-represented in the renewables sector and speaks with leaders in the field about ways to address the imbalance.

LAST month the Clean Energy Council (CEC), the peak body for renewables in Australia, held a Women in Renewables lunch as part of the All-Energy Conference in Melbourne. The lunch was organised by Alicia Webb, Policy Manager at the CEC. Roughly 20,000 people work in the renewables sector in Australia. Men outnumber women in all fields: solar, wind engineering, energy efficiency, hydro, bioenergy, energy storage, geothermal and marine. At the 2015 Australian Clean Energy Summit hosted by the CEC there were 93 speakers, 11 of whom were women.

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Women are generally under-represented across science, technology, engineering and mathematics (STEM) fields. According to the Australian Bureau of Statistics, of the 2.7 million people with higher level STEM qualifications in 2010–11, men accounted for around 81%.

There are myriad reasons for the low numbers of women in renewables. Gender disparity starts early with cultural stereotypes and lack of encouragement from teachers. Around 25% of girls are not doing any maths subjects in their last years at high school. When I was in year ten and acing science, my biology teacher said to my mother, “Sarah is good now but her grades will suffer when she starts noticing boys.” Returning home my mother (holder of a science degree) delivered a succinct verdict, ”Mr P. can get stuffed.” But discrimination like this is still common.

Some people think a change in governance is needed; that if there are more women in leadership roles this will have a trickle-down effect. As of 2014, women made up 21% of the Rio Tinto board and 22% of Qantas. Stats like these are often bandied about as examples of progress but to my mind if you take a big piece of pie and cut it in half you end up with two equal portions, not one piddley 22% sized piece and one 78% chunk. I decided to speak with some women at the top of their game to find out what should be done to even up the portions.

Miwa Tominaga

Miwa Tominaga knows what it is like to face gender discrimination at work. Miwa’s first full-time job was as the only female electronics technician at a radio transmitter site. She moved to Victoria to pursue a career in the sector, first working as a CAD drafter for electrical building services and then landing a job in renewables doing technical support at a company that manufactures electronic solar charge controllers. While she was working she studied renewable energy through an online course. When she provided phone support, hearing a woman, people would often ask to be put through to someone technical.

Later, installing solar panels at Going Solar, a woman said to Miwa, “Don’t take this the wrong way, but you do know what you are doing, don’t you?” The answer is a resounding yes. Miwa won 2014 CEC’s awards for ‘best install under 15kW’ and ‘best stand-alone system’. She currently works at a solar inverter manufacturer doing sales and tech support: “because it’s a worldwide company there are lots of opportunities.”

When I ask Miwa about discrimination she says, “A lot of women have experienced renewables being a male-dominated industry.” Miwa gave a speech about it at the CEC lunch. “I think it makes a huge difference if you’re working with men that see you as an equal not as an assistant. There have definitely been times when I have been judged for being a woman, especially by customers.” But she says that most of the time people are very supportive or indifferent towards her gender. “They say, ‘Oh wow, you’re gonna get on the roof by yourself!’”

Miwa thinks a top-down approach is a game changer. Danish legislation requires companies to work actively towards gender equality. It is one of the countries that has legislated for quotas around female board representation. Norway passed a law in 2005 requiring companies to appoint boards that include at least 40% women. Malaysia passed a law requiring female board representation of at least 30% by 2016. Miwa thinks Australia needs quotas too. “Start from the top at the board level. I do some volunteering for Beyond Zero Emissions (BZE) and I know that they make sure the board is about 50% women, 50% men. It makes a difference when they start at the top. It sets an example and really gives women opportunity.”

Emma Lucia

Emma Lucia felt empowered by encouraging teachers at school, and went on to study Mechanical Engineering and Arts at Monash University. Emma says she became interested in renewables when she was at university and studied abroad. “When I was finishing university everyone went into either automotive, mining, or oil and gas. My first job was actually supposed to be as a mining consulting engineer! I remember sitting in an environmental engineering class, which I did as an elective in my final year of university and thinking, ‘Is this [mining] what I really want to do with my life?’ I wanted to have a positive influence on the environment not a negative one.” The mining consultant role fell through and Emma worked as a building services engineer doing environmentally sustainable designs. “Through that I knew energy is where I wanted to be. I wanted to be in renewable energy. I could see that that would be a game changer.”

Early on in her career she felt constrained by the attitudes in the male-dominated engineering field. “In one company the more interesting work was often offered to my male colleague ahead of me,” says Emma. She found support, though, from other colleagues, who refused to see her sidelined. But it was difficult having to fight such battles, and in the end she decided a sideways transition was needed. “I now work in a more people- oriented role, but still using my skills, and in a renewable energy company. It’s been a good move,” says Emma.

She believes that having support mechanisms within organisations is a crucial step in overcoming discrimination. Emma says that “sometimes women may be a little bit more self doubting” so support from the organisation can help. “Also you need to trust yourself and trust in your abilities and really back yourself.” She adds, “Find a mentor or trusted advisor or someone you can bounce ideas off of who can help you cut through when you have problems in your career.” Emma thinks a key to gender diversity is to network with like-minded women and to get more women on boards, “I’m on the board of the Australian Institute of Energy and I actively look to increase the diversity of our committee members and speakers. I feel very strongly that change doesn’t happen in isolation.”

Katrina Swalwell

Dr Katrina Swalwell is a senior wind engineer and former Secretary of the Australasian Wind Engineering Society. After school, Katrina was all set to go into science at university but happened to do work experience at CSIRO with an engineer who said, “Why don’t you go and become an engineer and get paid more for doing the same job?” She completed a Science and Mechanical Engineering degree followed by six months study in Denmark looking at wind turbines. At university, about 20% of the undergraduates in engineering were women. “The vast majority of my fellow students were really supportive, nice guys. I had one case where a guy complained openly that I got better marks than him because I was a female. My friends and I just laughed because I did preparations for the pracs and he never did, so we thought that might have a bit more to do with it.”

Katrina says that, while she has always been supported in her career, most of her female friends who went through in engineering are no longer working in technical roles: ”The opportunities aren’t necessarily there. There are more opportunities in management or other things. They’ve gone into a whole variety of roles, a lot of them technically related, like one is a patent lawyer and one does electricity market modelling; she would call herself a modeller rather than an engineer now.” It isn’t all doom and gloom: “I think renewables is a great industry in that it is relatively new so there isn’t that entrenched resistance to females in the roles.”

Katrina says flexibility is key to attracting more women to male-dominated roles. For example, in Denmark there is state-supplied childcare. “The company that I work for is German. They’ve got laws now where there is six months paternity leave just for the father, so it has really prompted guys to take some time out.” Taking time off becomes more accepted for everybody as a result.

Katrina says girls need to be informed about their options, “If I hadn’t had that mentor when I was in year 12, I probably wouldn’t have been an engineer.” Like Miwa and Emma, Katrina sees boards as an important catalyst for change. “I’ve been involved in the women on boards group. They encourage women to consider taking board roles. They provide a service for companies that are looking to increase their gender diversity.”

Mentoring, support for diversity, workplace policies that support flexible working hours, baseline measurements and representation targets are some of the ideas for tackling the under-representation of women in renewables. At last year’s All-Energy Conference there were only three women speakers out of a total of 30. We still have a long way to go but change is afoot. The Clean Energy Council has introduced a policy of no all-male panels at the 2016 conference.

The renewables industry in Australia is working hard to accelerate the advancement of women but it needs to get gender equality targets enshrined in law. We need to address gender pay gaps, prioritise the issue and create accountability. We often hear politicians speaking about renewables targets but the time is ripe for them to address the issue of gender targets across this booming sector because, as Emma puts it, “Renewables are going to play a significant role in Australia’s growth so encouraging diversity in renewables will ensure better outcomes for the future of our country.”

Lego v Barbie

Miwa: “I was definitely a Lego kid. I ended up playing with a lot of my brother’s cars and stuff. I think my Mum stopped buying me Barbies because I didn’t play with them!”

Emma: “I did have a Lego kit and another one of my favourite toys was my Barbie Ferrari car.”

Katrina: “I had a Lego technical kit, the one with motors, so I could play with that. I was encouraged to explore whatever I wanted to do but I think my mother was still very surprised when I chose to do engineering

Image: ”The future is bright fellow women of renewable energy.” Miwa Tominaga delivering a rousing speech at the
2015 All Energy Conference. Photo courtesy of the Clean Energy Council.