Saturday, 9 June 2007

Elections, Emissions and Econs

The Sydney Morning Herald has produced a status report, detailing how things stand with respect to an Australian emissions trading scheme, what the politicos from both sides are saying (or more accurately not saying) and who the big winners and losers may be when the dust settles.

Don't expect much for now. Regardless of the election outcome, business will be the prime mover in any significant transition in energy production - and they aren't budging without some confidence in any eventual carbon price, how any system will be applied [i.e. different rules for different industries, different facility 'vintage', etc.] and when the whole thing will get underway.

So, to give themselves political wriggle room, both sides are leaving business, and voters, in the dark about the most important aspect of the new regime, one that will have a crucial bearing on the nation's economic future. [all issues I have bracketed above]

Combined-cycle gas turbines, which at $38-$54 per MWh are already commercial for peak and shoulder load generation, could become viable for base load supply with even a low carbon price, making the natural gas industry, and companies such as Origin Energy and AGL, which are already in gas-fired generation, some of the biggest potential winners. [nothing new to this blog]

"This includes both the economics of investments in new gas-fired generation plant and also expanded output from existing gas-fired generators." [says CommSec's Paul Johnston]
Clean coal is discussed, but noted as being in the pilot stage and fairly expensive ($64-$108/MWh).

Renewables are also mentioned but face some technical challenges (they are fairly well know so I won't repeat them - check the main article if you're curious.) One notable quote:

Renewables would probably do better under a Labor government because of its support for mandatory targets.

Remember that tired argument so often heard from environmental romantics... "renewables would thrive if only they received better financial support"... well they touch on this as well.

California's Silicon Valley, once the hub of IT and Internet entrepreneurship, which is now transforming itself into a hotbed of alternative energy, as venture capitalists pour billions of dollars into wind power, solar and ethanol technology and into energy start-ups with names such as SunPower.

And finally...

Nuclear power, at $40-$65 per MWh, is likely to be between 20 and 50 per cent more costly to produce than power from a new coal-fired plant at current fossil fuel prices. It would need a carbon price of $15-$40 per tonne to be competitive and require 10 to 15 years before the first plants could be operating, even assuming coalition governments are in place to approve them.

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