The Great Carbon Tax Distraction

OR

Electricity Prices Going Through the Roof!
But Why?

The Anthropogenic Global Warming/Carbon Tax “debate” may be the biggest RED HERRING ever perpetrated on the Australian public.

RED HERRING: a deliberate attempt to divert attention

An ardent critic of the Carbon Tax wrote:

“People don't want a tax whose only purpose is to artificially make energy expensive to ordinary people and thus lower their standard of living!”, and

“I have seen the 'Anthropogenic Global Warming' (AGW) charade become the most regressive political issue in my lifetime. Its purpose is to impose carbon taxes on everything to reduce energy demand. In plain language, a deliberate plan to reduce the standard of living of ordinary working people and the poor.”

This critic may be describing a real problem but has identified the wrong bogeyman...

Rod Sims, head of the Independent Pricing & Regulatory Tribunal of NSW (IPART) – the regulator that sets electricity prices for “ordinary working people and the poor” - writes:

“Electricity prices have risen by around 30% in the last 4 years in Australia in real terms; this is a 30% increase on top of inflation.

The recent electricity price increases have mainly been driven by increases in network costs. For example, in NSW from 2007-8 to 2012-13 around two thirds of the electricity price increases are driven by rising network costs. Distribution spending has trebled from about $1 billion per year to about $3 billion per year.”

State Electricity Prices – Inflation Adjusted

Rod Sims, ‘Energy market outlook’ (Presentation to the Multi-Party Climate Change Committee, 10 November 2010)

These prices appear to reflect those paid by households and small-to-medium business customers.

A serious question to ask that needs to be addressed here is:

Electricity demand by “ordinary working people and the poor” has fallen 2% per year for the last 4 years.

Why are they paying $3 billion per year for a bigger distribution network?

Update, 1 June 2012 Spending for a bigger distribution network trebled from $1 billion per year to $3 billion per year - according to the above report by Rod Sims of 10 November 2010. The Australian Decentralised Energy Roadmap launched on 15 December 2011 reports distribution network expenditure as $45 billion for the 5 years 2010-2015. This is $9 billion per year. ($9 billion per year is the total for all Australian States. The figure of $3 billion per year that Rod Sims reports is most likely the expenditure for New South Wales (NSW) only.)  The question above should read - "Why are they paying $9 billion per year for a bigger distribution network?"

Another serious question to ask is who is responsible for creating the following situation:

40% of businesses that took part in an industry survey in December 2010 reported a DECREASE in electricity prices relative to the CPI over the last 5 years.

Larger companies were more likely to experience no electricity price increases or reductions in electricity prices.

More than 60% of businesses reported NO IMPROVEMENT in energy efficiency over the last 5 years.

Company energy efficiency improvements over the last 5 years

(Source: “Energy shock: confronting higher prices”, Australian Industry Group, February 2011)

The Australian Industry Group report might be retitled:

“Energy Nirvana: living with falling prices”

NIRVANA: a place or state of oblivion to care, pain or external reality.

Have ALL Australians been taken for a ride???

The “No Carbon Tax” movement is attacking what is little more than a "stuffed toy" that has been thrown to keep them occupied.

Pricing regulators have been slugging households with sky-rocketing electricity prices for 4 years and will continue doing this, with or without a carbon tax. Households are being compelled to pay for the generation and delivery of cut-priced electricity to large businesses who happily use it without any thought to increasing efficiency and reducing carbon dioxide emissions.

While the “No Carbon Tax” movement is devoting all its energy and efforts to stopping a carbon tax, it is being diverted from demanding an inquiry into the fixed-price electricity supply contracts that distort the electricity market and provide no incentive for large businesses to increase energy efficiency.

Power Station operator gets great value for investors

Building a new power station is a high risk investment.

HRL is currently fighting a legal challenge from Environment Victoria to its current plan to build a new power station in Victoria. HRL might find this challenge provides a completely unexpected and unintended benefit.

HRL's proposed power station has a design that is well below the performance that can be achieved with technology first offered for sale earlier this year by Siemens and GE.

This is not just a case of amazing good luck for HRL. It can now build, own and operate a power station with world-record efficiency. It is also a last-minute reprieve for investors who came very close to funding an obsolete power station with relatively low rates of return.

For example, the new high efficiency gas turbine from Siemens produces 12 MWh with the same fuel needed to generate 10 MWh with old gas turbines. For investors, that is 20% more revenue for the same fuel cost.

Even better, the new technology creates a mere 330 kilograms of carbon dioxide for each MWh, instead of the whopping 780 kilograms of carbon dioxide for the power station HRL was about to build. It is about 1000 kilograms below the current Latrobe Valley brown coal fired power generation! For investors, the carbon tax is slashed by nearly 60%!!!

HRL and its investors have been given a second chance to build the cleanest, most efficient and most profitable base load power station in Australia - using the cheapest coal in Australia.

Read all about the best carbon energy technology in a submission on the Clean Energy Legislation Package. A brief summary with a link is in this blog entry ++>

Some of the steps on the path show how HRL and its investors only narrowly escaped missing out completely on this opportunity:

September 24, 2009 ▸ HRL propose $750m dual gas power plant for Victoria
The CO2 emissions intensity of the demonstration project is expected to average 0.78 tonnes CO2 per megawatt hour over the life of the project. This is about 40% lower than the current Latrobe Valley brown coal fired power generation annual average CO2 emissions intensity of about 1.3 tonnes CO2 per megawatt hour.
Read more ++>

May 21, 2011 ▸ Big banks 'no' to coal plant

AUSTRALIA'S four major banks have rejected funding a coal-fuelled power plant proposed for Victoria, raising doubts about its viability despite its controversial approval by the Environment Protection Authority.

The EPA has cleared the way for Melbourne coal technology company HRL to build what would be Victoria's first new coal plant in nearly 20 years.

Under yesterday's ruling, HRL can build a plant at Morwell using new gasification technology, which is claimed to reduce greenhouse gas emissions from brown coal power by about a third, to roughly the level of modern black coal stations.
Read more ++>

August 26, 2011 ▸ Environment Victoria in court over new coal-fired power plant
Environment Victoria was back at the Victorian Administrative Appeals Tribunal this afternoon, for the next step in our legal challenge to the EPA’s decision to approve a new coal-fired power station for Victoria.

In a shocking move, HRL Ltd, the company behind the new polluting power station, is making a legal challenge against Environment Victoria’s rights to stand up for our environment in the courts.

HRL’s lawyers are arguing that Environment Victoria shouldn’t be allowed to appeal to VCAT against the EPA’s decision. They also challenged the legal standing of community climate group LIVE, Doctor’s for the Environment Australia, and a Brunswick based individual.

Trying to have environmentalists and doctors struck out of the proceedings before they’ve even begun raises a very serious question – why is HRL trying to avoid scrutiny of their project? What have they got to hide?
Read more ++>

Australia's Clean Energy Legislative Package

Gerbilnow and its submission to the Australian Government on the Clean Energy Legislative Package:

Securing a Clean Energy Future: Get the Carbon Technology Right

The up-to-date analysis in Gerbilnow's submission shows that with coal gasification with pre-combustion separation of carbon dioxide:

The cost of end-use energy is unlikely to increase further following the introduction of a carbon price. At a practical level the lowest cost technology available to meet baseload electricity demand is combined cycle gas turbine power stations fuelled with gasified coal.

It is recommended that the coal industry's relationship with Australian power stations be restructured so that it is an autonomous producer of Synthetic Natural Gas supplying fuel to CCGT baseload power stations, and further, that the coal-to-gas industry be encouraged to develop new clean products and markets...

Read a copy of Gerbilnow's submission on the Clean Energy Legislative Package.

Illinois has demonstrated that with Siemens AG technology, it is practical and commercially attractive for coal to provide clean ways to meet energy needs.

Quinn signs bill for Chicago coal-to-gas plant by Alex Keefe , July 13, 2011 The so-called "coal gasification" plant will turn Illinois coal and refinery waste into a natural gas substitute, without having to burn the coal. Democratic Gov. Pat Quinn originally vetoed the project, saying it would jack up consumer energy prices. But he says the new plan has been revamped. "Natural gas that's gonna be produced here will be purchased by our four major natural gas companies," Quinn said. "And there are rate caps to protect consumers." Quinn defended the project as a clean way to meet the state's energy needs.

Public engagement on the Package
The Government published drafts of key bills in the Package on Thursday, 28 July 2011, along with commentaries to explain them. These bills implement the detailed policy announced on 10 July 2011.

Submissions on the Package were to be sent to the Department of Climate Change and Energy Efficiency until 5pm on Monday, 22 August 2011. Before then, the Department met with stakeholders and legal experts to discuss the draft bills.

The Government will consider the views it received on the drafting of the bills before they are introduced into the Parliament.
Why has the Government released these bills as exposure drafts?
The draft bills that have been released cover the way that the carbon pricing mechanism will work. The Government wants to ensure that the detailed drafting is considered publicly before the Package is finalised and introduced into the Parliament.

Minister for Climate Change and Energy Efficiency Greg Combet said the Government is committed to supporting jobs as the economy is transformed.

Get Carbon Technology Right

GreatPoint Energy’s Hydromethanation process
produces Methane and Carbon Dioxide from Coal

Showcasing the Benefits of Cooperative Research Centres (CRCs)

These research centres are generally effective, but it is a rare system that cannot be made better.

There is an issue with at least one of the Cooperative Research Centres that can be substantially improved.

The area for improvement is the development of efficient clean-coal technology. An announcement was made in December last year on the direction of research for this topic. It could only seriously have been made by an advertising agency that imagined it could sell a technology to decrease the efficiency of coal-based power generation.

The entire world is moving to increase, not decrease, the efficiency of power generation and energy use.

In 2008 the Co-operative Research Centre for Coal in Sustainable Development recognised the rather obvious and sensible research strategy:

“In general the advantages of [integrated combined cycle gasification] IGCC are:

• It can achieve up to 50% thermal efficiency. This is a higher efficiency compared to conventional coal power plants meaning there is less coal consumed to produce the same amount of energy, resulting in lower rates of carbon dioxide (CO2) emissions
• Carbon capture is easier and costs less than capture from a pulverised coal plant...”

The benefits of this sensible research strategy increased substantially in May this year, with both Siemens and GE releasing new combined-cycle gas turbine (CCGT) power stations that can achieve world-record thermal efficiency in excess of 60%. A utility in Florida has already purchased 6 of the new Siemens CCGT power stations.

Siemens SGT5-8000 Gas Turbine
pushes world record in efficiency to over 60 percent

However, on 20 December 2010 the media reported:

“According to Peter Cook, chief executive of the Co-operative Research Centre for Greenhouse Gas Technologies in Canberra, the research effort [IN AUSTRALIA] is swinging back in favour of capturing carbon emissions after the coal has been burned rather than trying to radically alter the coal itself before combustion. 'We are seeing that more conventional ways of making electricity are being looked at again [IN AUSTRALIA] for post-combustion capture,' Dr Cook said.”

Though this was a very strange idea last December, it is even stranger now with the Opposition spokesperson for climate change Greg Hunt claiming the carbon tax means a 10% hike in electricity bills in the first year alone.

Having the Co-operative Research Centre for Greenhouse Gas Technologies researching technology to decrease the efficiency of power generation will certainly increase electricity prices.

This is a summary of power generation options for production of 1000 MWh of electricity with a carbon tax of about $24 per tonne of CO2 emissions:

• NEW TECHNOLOGY: Substitute Natural Gas (120 tonnes of methane, CH4) contains 90 tonnes of Carbon which is converted into 330 tonnes CO2 at 60% thermal efficiency. Carbon tax: About $8 per MWh which is 0.8 of one cent per kWh.
• OLD TECHNOLOGY: Coal with 270 tonnes Carbon converted into 990 tonnes CO2 at 40% thermal efficiency. Carbon tax: about $24 per MWh which is 2.4 cents per kWh.

• 

  XEBEC's methane separation plant

  Substitute Natural Gas-from-coal using hydromethanation technology requires Coal with 180 tonnes Carbon which is converted into 120 tonnes of methane (CH4) containing 90 tonnes of the Carbon and 330 tonnes CO2 containing the other 90 tonnes of the Carbon.
• The separation of the methane / CO2 mixture created by hydromethanation can be done with simple, inexpensive and commercially available technology. There is no research required.

Notice that with the new technology, only two-thirds of the coal is required to produce the same amount of electricity that the old technology can produce. This will contribute to a reduction in the cost of electricity.

• In 2011, Australian thermal coal averaged about $AUD120 per metric tonne. The new technology saves at least 90 kg of coal for each MWh of electricity. This is a saving of about $10 per MWh which is 1 cent per kWh.

CO2 emissions are slashed by two-thirds. This will dramatically reduce any price rise from the carbon tax.

• Instead of paying carbon tax of about $24 per MWh which is 2.4 cents per kWh, the carbon tax will be only about $8 per MWh which is 0.8 of one cent per kWh.

The end result - the cost of electricity remains unchanged.

Power station owners can generate electricity that is both cleaner and cheaper, and have no additional cost due to the carbon tax to pass on to electricity consumers.

It is understandable that the coal industry might not want to see this technology installed. After all, the immediate effect is that orders for coal drop by one-third. However, it is not in the long-term interest of the coal industry to conduct research into inefficient power generation technology that is doomed to fail in the marketplace.

Lucky country tossing away its advantage

A post from The Telegraph blog of Piers Akerman - original at this link

Piers Akerman The Daily Telegraph August 05 2011 (12:00am)

ANY comparison with other Western nations demonstrates that Australia is the luckiest of countries - yet the Gillard Labor-Green-independent government seems hell-bent on destroying this legacy.

The continuing crash in retail sales is but one indicator of the crisis in confidence affecting our economy. But the worst retail figures to be recorded since 1962 were not due to the rise in internet shopping. They were due more to the uncertainty generated by this government's ideologically-based carbon tax and the effect it is already having on the cost of living through soaring power prices and the threat of job losses.

Australians are being prudent. In the face of infantile economic policies, they want to save for the crunch they know is coming. For some that crunch has already arrived.

NSW Treasury has looked into the federal carbon dioxide tax proposal and estimated it would cost the state 31,000 jobs, over 26,000 of which would be in regional areas.

This should be obvious to all. Regional Australia is home to most our energy intensive industries - the mines, factories and power generators. But apparently it is not obvious to wealthy inner-urban greens or the remnants of Labor's rusted-on support base who are not concerned about price or job losses.

The NSW Treasury study shows electricity prices under government's plan will increase by 50 per cent more than Julia Gillard's promised 10 per cent - an extra $500 for the average household.

Federal Treasury figures show that people in regional NSW already pay 25 per cent more for their electricity than those in Sydney. But far from fighting for their constituents against further price increases, the two NSW regional independents Tony Windsor and Rob Oakeshott have embraced the punitive tax.

Gillard's claim that the job losses would in some way be neutralised by new jobs in the alternate energy industry is sheer nonsense. So-called green jobs, where they have been created abroad, have been reliant on massive government subsidies.

It has been repeatedly demonstrated that the Gillard government's carbon dioxide tax plan has nothing to do with the environment. Even if it were proven carbon dioxide - and that created by human activity - had some effect on the atmosphere and global temperatures, any lowering of the level of carbon dioxide emissions by Australians would have no effect on the planet given the negligible contribution Australians make to global emissions.

Paying more for petrol, more for electricity for lighting, heating and cooling, more for every item manufactured in Australia and more for every delivery, will not save the Great Barrier Reef or have any effect on sea levels or rainfall.

The only effect of this tax will be to sabotage the national economy, provide employment to a raft of bureaucrats and give a handful of politicians bragging rights at international gatherings of like-minded doomsayers.

The Gillard government's response to logical criticism of its economy-destroying tax plan has been woeful. Unable to address the challenges to the so-called science upon which its tax is based, it has stepped up a campaign of political diversions.

Yesterday the Prime Minister made a speech on aged care policy and staged the opening of a handful of connections to the NBN, Infrastructure Minister Anthony Albanese was talking about airport security and there was a flurry of publicity about high-speed trains.

This is not government - this is toxic spin from the Hawker Britton strategy book.

Australia is lucky to have the rapacious Chinese as customers even if Gillard is able to overlook the fact that our biggest export is the very coal her government doesn't want Australians to be able to use at home.

Even so, the incompetent and deceitful Gillard government is doing its best to hobble the miners responsible for the bulk of our export wealth through its strident support for extremist environmental policies.

With the US on its uppers and Europe fighting a rear-guard action to keep its currency from being dragged under by debt-defaulting nations, Australia should be soaring. That the nation is undergoing a crisis in confidence not seen in 50 years must be blamed on the Gillard government and its insane desire to strip the nation of its greatest natural advantage - cheap energy.

We must stop the insanity of the carbon dioxide tax and remove the threat of preventing Australians from creating their own prosperity from the opportunities that exist naturally on this continent.

GE's Solution for Carbon Tax, Electricity Prices AND CO2 emissions

Option 1: Generate electricity efficiently, cheaply, and with low CO2 emissions

GE’s Super-Efficient Jenbacher Gas Engines Bring Energy Independence and Economic Opportunities to French Greenhouses

MILAN, ITALY—June 8, 2011—Since the beginning of the year, two of GE’s (NYSE: GE) flexible, high-output and efficient Jenbacher J624 two-stage turbocharged gas engines have enabled French grower Serres Vinet to generate all of the hot water and electricity required for its extensive tomato and lettuce greenhouse operations in Machecoul, in the Loire-Atlantique region. These are the first two-stage turbocharged gas engines in France, and they are the heart of two cogeneration plants powering Serres Vinet’s existing greenhouse operations plus a recent 17-hectare (42-acre) expansion. GE presented the innovative installation this week at the POWER-GEN Europe show in Milan.
…
No other gas engine manufacturer currently offers such a super-efficient two-stage turbocharged unit. Each Jenbacher J624 engine offers about 4.4 MW of electrical output and 4,014-kilowatts (kW) of thermal output at 44.4 percent electrical efficiency and 47 percent thermal efficiency. The units at Serres Vinet operate on natural gas and are key to the ability to configure Serres Vinet’s cogeneration plants to achieve an overall energy efficiency of more than 90 percent, with NOx emissions continuously below 350mg/Nm³. GE also has provided the control systems.

Option 2: Buy electricity that is expensive, creates high CO2 emissions, and attracts high carbon tax

(Source: Independent Pricing and Regulatory Tribunal)
Table 1.3 Indicative annual bill for business customers in each standard supply area ($ nominal)

	2010/11 (current)	2011/12	Change
EnergyAustralia	2,006	2,365	359
Integral Energy	1,982	2,289	307
Country Energy	2,917	3,445	528

Note:
Bills exclude GST but include climate change levy. Bills calculated using 10,000 kWh per annum and EnergyAustralia’s General Supply All-time tariff, Integral Energy’s General Supply tariff and Country Energy’s Urban Business tariff (5740). Inflation is 3.3%.

(Electricity at a price of $2,289 for 10,000 kWh is equivalent to $63.60 per GJ of electrical energy.)

Option 3: Buy gas to generate electricity that is cheap, creates low CO2 emissions, and attracts low carbon tax

(Source: Independent Pricing and Regulatory Tribunal)
Table 1 Indicative annual bill for AGL regulated retail customers ($ incl GST)

Type of Customer	2010/11	2011/12	$ Increase
Typical business - 184 GJ per year	3,289	3,350	61

(Gas at the price of $3,350 for 184 GJ is equal to $18.20 per GJ of thermal energy.)

Using gas that costs $18.20 per GJ to generate electricity in one of GE’s Super-Efficient Jenbacher Gas Engines - at 44.4 electrical efficiency - produces electricity for $41.40 per GJ.

This electricity is 1/3 cheaper than paying $2,289 for 10,000 kWh - electricity for $63.60 per GJ.

This electricity creates 60 percent less carbon dioxide emissions.

• (400 kg per MWh instead of 1,000 kg per MWh for coal-fired electricity generation.)

This electricity attracts 60 percent less carbon tax.

It's easy to save electricity and reduce carbon tax

The Hon Barry O’Farrell MP
Premier of NSW
MEDIA RELEASE

“Small business will have little choice but to pass on these massive hikes in electricity prices to their customers - dealing a double whammy to families and seniors across NSW,” Mr O’Farrell said.



Whether you work for a local, state or federal government agency, there are simple ways that you can save power and cut down on carbon pollution at work.

Everything we do to reduce power will make a difference. For a few tips to get you read more ...

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