Sugar to Sweeten Up the Bitter Energy Supply Pill
Victoria’s “exceedingly ambitious” white paper recognises that owners of power stations must be compensated if they are forced to close early, but it’s no substitute for a trading scheme and is silent on a range of crucial issues, according to Energy Supply Association of Australia CEO Brad Page. Meanwhile, Queensland University of Technology scientist Dr Slade Lee says sugar cane production methods could hold the key to making ethanol cheaper.
CE Daily (28 July 2010)
Victoria’s “exceedingly ambitious” white paper recognises that owners of power stations must be compensated if they are forced to close early, but it’s no substitute for a trading scheme and is silent on a range of crucial issues, according to Energy Supply Association of Australia CEO Brad Page.

The paper offers no details on how much abatement each element will deliver and at what carbon price, he told CE Daily.

Reducing emissions to 20% below 2000 levels by 2020 (a 40% cut in per capita terms) “means an enormous change in our energy supply mix in Victoria,” he said.

“When 66-odd% of the electricity is still going to come from brown coal I do wonder if just the other 34% coming from gas and renewables can actually get you to the target that is being asked,” he said.

“And I can’t answer that question because I can’t see all of the contributions from all of the policies.”
State action will ‘complicate’ national efforts
Instead of individual states introducing their own policies, “national answers are the way to go, with a properly constructed national emissions trading scheme”, Page said.

“It really is not a substitute for a national carbon management plan … to have individual states starting to try to fill the void,” he said.

“Because it would be our view that in the life of the next [Federal] Parliament there will be a much clearer plan, and a plan implemented, and that getting out there too fast as a state actually complicates matters very dramatically for both investors and for policymakers alike.”

Page said individual state measures would be of limited effectiveness, given the interconnected electricity market operating in eastern and southern states.

The actions of one state alone “don’t actually change the investment climate and for that matter, because we are in a competitive, interconnected market, don’t necessarily deliver the outcomes that that state government might think it is going to get”.
Recognition for power station owners
However, there is at least one aspect of the white paper that Page views very positively – the plan to obtain four million tonnes of lowest-cost abatement from the State’s brown coal-fired sector.

“We actually would applaud the initiative on the basis that, for probably the first time since the CPRS debate commenced, we have a sovereign government in Australia that openly recognises that you cannot arbitrarily close plants early either through taxation measures, or some other intervention, without properly recompensing the owners for the lost value,” he said.

The white paper suggests a tendering process to secure the abatement, but Premier John Brumby specified it would involve a “staged closure of Hazelwood [power station]“, involving two of its generating units closing by 2014, when launching the paper on Monday.
Brumby said that, instead of the strategy increasing household energy bills, energy efficiency improvements are likely to result in cuts to energy bills for “many households”.

The feed-in tariff to support large-scale solar power plants is likely to cost the average household between $5 and $15 a year, he added.
Source: www.cedaily.com.au

By Jessica Mawer ABC Online (27 July 2010):
Scientists say they may have found a cheaper way to produce ethanol.
Dr Slade Lee from the Queensland University of Technology has met farmers and industry leaders in far north Queensland to discuss the region’s biofuel prospects.
Dr Lee says cane could hold the key to making ethanol production cheaper.
He says the enzymes needed to make ethanol are currently being manufactured in large, expensive processing plants but there may be a cheaper way.
“We’ve struck on a novel approach to the problem and that is to get the plants, the sugarcane plants themselves, to produce the cellulose, our idea is to actually get the plants themselves to produce those enzymes,” he said.
Source: www.abc.net.au