Treasurer Scott Morrison says cheap coal-fired power era is ending | AFR

by Phillip Coorey

Treasurer Scott Morrison says the era of cheap, coal-fired power is coming to an end and anyone claiming it is the sole solution to the nation's energy dilemma is propagating a myth.

In comments that push back at calls by Tony Abbott and others that Australia should ditch its commitments to greenhouse gas reduction and just build coal-fired power stations, Mr Morrison said that would not work.

New coal-fired power was much more expensive than that being generated by existing power stations which were nearing the end of their lives, he told a private policy forum over the weekend.

Current coal generators produce power at a cost of between $10 and $40 a megawatt hour whereas the newer, high-efficiency, low-emission plants (HELE) generate power at about $70 to $110 a megawatt hour.

Doubling down on the need for the federal government to adopt a technology agnostic policy approach, in conjunction with a clean energy target (CET), Mr Morrison said the only ultimate solution to price and stability was long-term policy certainty for investors.

"To solve the problem we need to have certainty around investment rules and conditions to enable that capital flow," he said. "That capital is there but it will not come without that certainty and we're working to achieve that.

'System in the future'

"If a HELE plant stacks up or a carbon capture and storage with HELE stacks up, by all means knock yourself out, but let's not think that there's cheap new coal, there's not."

"And [HELE] takes seven years to turn up, so if we think that is all of a sudden going to make your power bills cheaper next month, it won't.

"Whether it's a part of the system in the future, I think the rules will define that, but new cheap coal is a bit of a myth."

Earlier this year Mr Morrison passed a lump of coal around Parliament and said coal has "endured for over 100 years that Australia has enjoyed an energy competitive advantage that has delivered prosperity for Australian business".

On the weekend, he said there was "cheap old coal" coming out of existing stations such as Bayswater and Liddell and it was important the lives of these stations were prolonged to provide adequate base-load power while the sector transitioned.

Mr Morrison's comments came in a speech over the weekend to the Wombat Hollow Forum, a monthly ideas forum featuring high-profile guest speakers. The comments are consistent with other interventions in recent weeks by Mr Morrison as the Coalition girds itself for an internal battle over the design and adoption of a CET.

A CET would apply post-2020 and mandate that a certain percentage of energy be generated from sources designated as clean.

'Green theology'

At a minimum, Coalition conservatives want HELE, or so-called clean coal, designated along with renewables and gas while hardliners such as Mr Abbott now insist emissions reductions should not be a policy consideration, dismissing it as "green theology".

Mr Morrison took issue with this, saying "we've got to get rid of the 'ology' when it comes to how we deal with the energy debate".

"Everyone's got an ology ... climatology, coalology, whatever it is, everyone's got some sort of religious view when it comes to dealing with the energy market," he said.

"What we're focused on is the engineering and the economics and the ideology frankly has to take a leave pass because that doesn't solve the problem.

"If we stay focused on just one part of it, what's the price of this or let's build this, that doesn't, of itself, and arguably even at all, I think, really address the issue."

He said there was no turning back from cleaner energy sources and the intermediate challenge was reliable base-load power until renewables were more reliable.

"The only new power that is coming into the system ... is largely in the renewables area and we know that on the renewables front the system stability elements of that are not anywhere near where they need to be to have the certainty you need to run a proper energy system.

"But that said, we need to ensure that we get the rules right so people can have confidence investing in new energy supply. I don't care what they invest in, if they invest in coal or they invest in wind."

Construction halted on nuclear power reactors in South Carolina | NBC News

“The best case scenario shows this project would be several years late and 75 percent more than originally planned,” Santee Cooper President and CEO Lonnie Carter said in a statement. “We simply cannot ask our customers to pay for a project that has become uneconomical.”

Business pleas for government to back Finkel Review | AFR

Australia's business leaders have pleaded for politicians to fall in behind a market-based energy policy built on the Finkel Review's clean energy target to underwrite investment certainty and scathingly dismissed proposals for government to fund a coal fired power station as an answer to high energy prices.

Two of the most powerful figures in Australia's energy sector - former Origin Energy boss Grant King and Energy Australia managing director Catherine Tanna - have said no one in politics has clean hands on past energy policy.

During the BCA's roundtable discussion with the Australian Financial Review, Ms Tanna said that "nobody has a licence to go around and say that the market is working for customers as intended", because energy prices were so high.

But with a push underway within the federal government to provide support for the coal industry, and for government direct investment in a coal-fired power station, the BCA board was asked where coal should fit in to energy policy.

"The first thing I would say about that is coal is a legacy technology," Ms Tanna said.

"I'm not saying that it can't be part of the future mix. I'm just saying that it's a solution that my grandfather would have built.

"I think it is very, very unlikely to find a market participant that will fund such a new investment."

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ESG: The climate conundrum | Investments & Pensions Europe

Had Exxon Mobil reported its reserves differently in 2016, investors might have taken a another view of the company’s future trajectory. The company reported its Kearl oil sands as reserves, and in 2016 was ordered to debook them by the US Securities and Exchange Commission (SEC). An important shift in its disclosures ensued in March 2017, with proved reserves cut by 3.3bn oil-equivalent barrels.

In October 2016 the company admitted that, under the SEC definition of proven reserves, certain quantities of oil, such as those associated with the Kearl oil sands operation in Canada, would not qualify as proven reserves at the end of the year.

According to Tarek Soliman, senior analyst at the CDP, a non-governmental organisation based in the UK, the systematic practice of considering climate-related risk would have resulted in a different disclosure. It would transform investor perceptions if replicated across the whole oil and gas sector. “If the company were to integrate climate risk into its assessments, it would highlight that these assets show a high propensity to become impaired. They would have been downgraded to a resource rather than a reserve, and this problem would have been foreseen,” says Soliman.

Comment: Could climate cause the next financial crisis? | IPE, Paul Fisher

Tail risks have an unfortunate habit of becoming reality. That was one of the clearest lessons of the 2008 financial crisis – an event that I lived through and had to deal with, as a senior figure in the Bank of England’s markets department.


The financial sector is all about risk. Taking it. Avoiding it. Monitoring, measuring, and limiting it. And, crucially, making money from it. When the improbable actually happened, ‘safe’ AAA-rated assets became junk, liquid markets dried up, the trust that oiled the financial system evaporated and we had to take the most extraordinary measures in response.

But new risks are emerging around climate change that are poorly understood, hard to manage and, at the extreme, pose threats to the financial system not unlike those we faced in 2008.

The National Electricity Market has served its purpose – it's time to move on | The Conversation

The Finkel Review was a valiant attempt to find a path towards a 21st century energy market model for Australia. But political infighting and powerful interests have blocked one of its core proposals, a Clean Energy Target (CET). Despite the creation of a new Energy Security Board to try to hold regulators and policy makers to account, the ability of the present structure to deliver is uncertain.

State energy ministers, who have gathered today for the COAG Energy Council meeting, are now threatening to go it alone if the Commonwealth government does not commit to a CET. But the problem and opportunity is much broader. It’s time to step back and rethink energy policy.

Turning the climate crisis into a TV love child of Jerry Springer and Judge Judy | The Guardian

In the United States, people who refuse to accept even some of the basic tenets of climate science are calling for a heated debate.

“Who better to do that than a group of scientists … getting together and having a robust discussion for all the world to see,” the boss of the Environmental Protection Agency, Scott Pruitt, told Reuters.

And, of course, Pruitt thinks it should be on the telly.

“You want this to be on full display,” he said. “I think the American people would be very interested in consuming that. I think they deserve it.”

That’s right. Pruitt’s respect for climate science would see it reduced to a bastard TV love child of Jerry Springer and Judge Judy.

Musk bags first Model 3, as Australia implodes over car emission standards | Renew Economy

Australia’s push-me pull-you approach to electric vehicle adoption is again on display, after claims that the federal government was proposing nation-wide emissions standards for new cars sparked a furious reaction from industry and the press.

In the same week that Elon Musk claimed the first Model 3 “mass market” electric vehicle to come off the new Tesla production line, and when he unveiled what will be the world’s biggest lithium-ion battery storage array, the push back from incumbent industries in Australia was in full flight.

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Banks come out on top for climate change disclosure | Financial Standard

In its 10th annual corporate sustainability report, which assesses the level of sustainability disclosure by ASX200 companies, ACSI found  86% of banks were rated as "leading" or "detailed" in their reporting, while five out of seven banks reported on three key indicators: emissions, a policy and a target.

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Electricity investment overtakes oil and gas for the first time ever, IEA says | CNBC

Fossils fuels are no longer the largest recipient of investment in the energy sector, the latest report from the International Energy Agency said Tuesday.

Investment in the electricity sector received the largest level of investment for the first time ever, growing its share by 12 percentage points to 43 percent between 2014 and 2016. In comparison, over the same period, investments in upstream (exploration and production) oil and gas fell 44 percent.

"The key finding is that (the) global energy industry spent last year 12 percent less than the previous year," Fatih Birol, executive director of the IEA, told CNBC on Tuesday. "A big decline," he described.

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Explainer: What the Tesla big battery can and cannot do | Renew Economy

There’s been a lot of discussion about the Tesla big battery since the company announced last Friday that it would build a 100MW/129MWh lithium-ion battery storage installation – the world’s biggest – after winning the state government tender.

The battery will be owned and operated by French renewable energy developer Neoen (which stands for “new energy”), and will be located right next to the 309MW Hornsdale wind farm currently being completed near Jamestown.

But what exactly is it? And what can it do? And how much will it cost? We try to answer some of the main questions, and dispel some of the myths.