Resisting Climate Hysteria

[sptrawler]

TS just introducing the price on carbon was not going to change things overnight - obviously. But in fact there was a significant change in the sourcing of electricity when the tax began as companies reacted to the charges.

But overall the point of a long term change in pricing is to encourage long term changes in energy production.

But don't take my word for it. Smurf is the resident expert on power generation. Why not hear his understandings?

As for your gas bill ? When that goes through the roof it will be almost solely due to the gas companies finding a way to price our gas at world prices because we are now building LNG gas trains in Queensland...

Long term changes in energy production will happen as technology improves.

Currently, as TS says, the tax just increases the cost of electricity.

The radical reductions at this stage, can be better achieved by reducing power consumption of household devices.
Also as is being done, by domestic solar installation, to mitigate a households usage.

The problem with this, is it reduces the amount of consumers who are supporting the infrastructure.

Therefore the cost keeps rising, and will do so untill power generation technology or power storage technology improves.

Currently, we are just grinding business into the ground, as they have to pick up more and more of the tab.

 

[burglar]

TS just introducing the price on carbon was not going to change things overnight - obviously ...

It is your own argument, sir, which bites you in the rump.

It is like paying car registration fees and expecting roads to improve.
And don't get me started on gas ...

 

[Julia]

That would make them unemployed! :

 

[Smurf1976]

It is NOT intended to necessarily reduce energy use. The main purpose is to make energy that emits CO2 more expensive than non polluting energy sources. It gives the market place a signal that they should get out of coal and into solar/wind/wave whatever.

The problem is with the actual numbers.

Eg $40 per MWh from black coal, make that $60 with carbon tax.

$80 - $100 per MWh from wind and more from other non-hydro renewables.

Cheapest option is just pay the tax.

Flow-on effects are also not considered in most analysis of the carbon tax. Eg the tax theoretically makes gas-fired power cheaper than coal. However the tax doesn't increase the supply of gas, just the demand for it. So we get a slight increase in gas-fired generation, and the gas price rises to match that of carbon taxed coal. End result = most electricity still from coal, but gas prices have risen beyond the extent of the tax itself.

Meanwhile manufacturers etc can still access untaxed power overseas, so that's what they're doing. Relocation - either of existing facilities or by means of not expanding or building in Australia in the first place.

All that said, in terms of actual electricity bills, the "reforms" of the past 20 years have contributed far more to power price rises than the carbon tax has that's for sure. If those objecting to the carbon tax are serious about wanting cheaper energy, they'd be looking to radically restructure the power industry as a higher priority than simply removing the carbon tax.

It's worth noting that slowly but surely, the industry itself is unwinding much of the "reform" and reassembling itself into 3 large vertically integrated utilities - Origin Energy, AGL and Energy Australia. Slowly but surely they are acquiring most generation and most retail just as the "Big 4" banks ended up owning most of the banking industry. Trouble is, this new structure is less efficient and more costly than either the one it is absorbing or the one we had for decades until the 1990's. The carbon tax is largely insignificant, at least for household and small business users, compared to all that.

 

[Smurf1976]

And don't get me started on gas ...

Gas is indeed just getting started in terms of price rises.....

 

[sptrawler]

The problem is with the actual numbers.

Eg $40 per MWh from black coal, make that $60 with carbon tax.

$80 - $100 per MWh from wind and more from other non-hydro renewables.

Cheapest option is just pay the tax.

Flow-on effects are also not considered in most analysis of the carbon tax. Eg the tax theoretically makes gas-fired power cheaper than coal. However the tax doesn't increase the supply of gas, just the demand for it. So we get a slight increase in gas-fired generation, and the gas price rises to match that of carbon taxed coal. End result = most electricity still from coal, but gas prices have risen beyond the extent of the tax itself.

Meanwhile manufacturers etc can still access untaxed power overseas, so that's what they're doing. Relocation - either of existing facilities or by means of not expanding or building in Australia in the first place.

All that said, in terms of actual electricity bills, the "reforms" of the past 20 years have contributed far more to power price rises than the carbon tax has that's for sure. If those objecting to the carbon tax are serious about wanting cheaper energy, they'd be looking to radically restructure the power industry as a higher priority than simply removing the carbon tax.

It's worth noting that slowly but surely, the industry itself is unwinding much of the "reform" and reassembling itself into 3 large vertically integrated utilities - Origin Energy, AGL and Energy Australia. Slowly but surely they are acquiring most generation and most retail just as the "Big 4" banks ended up owning most of the banking industry. Trouble is, this new structure is less efficient and more costly than either the one it is absorbing or the one we had for decades until the 1990's. The carbon tax is largely insignificant, at least for household and small business users, compared to all that.

As per usual smurph, great post, hope many can get their head around it.

I just hope we have the renewables up and running before the gas runs out.lol

 

[trainspotter]

TS just introducing the price on carbon was not going to change things overnight - obviously. But in fact there was a significant change in the sourcing of electricity when the tax began as companies reacted to the charges.

But overall the point of a long term change in pricing is to encourage long term changes in energy production.

But don't take my word for it. Smurf is the resident expert on power generation. Why not hear his understandings?

As for your gas bill ? When that goes through the roof it will be almost solely due to the gas companies finding a way to price our gas at world prices because we are now building LNG gas trains in Queensland...

My electricity bill was $700 - $67 of this was CARBON TAX - so approximately 10% is a TAX - I get my electricity bill every 60 days = 6 bills a year = $400 EXTRA per annum.

GAS BILL is equivalent % increase.

All that is happening is the cost of living is going up and the electricity and gas prices are not going DOWN !!

Has it stopped my electricity supplier from polluting? NOPE !! Just passed the bill onto me
Has it forced my electricity supplier to suddenly build a NG power station so I can get cheaper electricity? NOPE !!

And economists are saying that this is the way of the future ? Here is a picture of the economists that agree that this is the "quantum leap" forward in reducing our emissions.


BERNIE FRASER



KEN HENRY



ROSS GANAUD

 

[basilio]

Nice little rant TS.

Clearly you didn't bother to consider anything that Smurf had to offer with regard to the cost of energy. Perhaps there might be other forces at play in ensuring energy companies and their CEO's stay exceedingly profitable

It's so easy to be an abusive prat isn't it TS ? And certainly this thread gives you every encouragement. Good luck to you.

 

[trainspotter]

Nice little rant TS.

Clearly you didn't bother to consider anything that Smurf had to offer with regard to the cost of energy. Perhaps there might be other forces at play in ensuring energy companies and their CEO's stay exceedingly profitable

It's so easy to be an abusive prat isn't it TS ? And certainly this thread gives you every encouragement. Good luck to you.

Yes it was a thing of beauty wasn't it.

I read Smurf1976 post and fully comprehended the thrust and validity of his missive. And a carbon tax aint one of them. OK let's go and launch ourselves 36 years in the future ... the year is 2050 and ya know what? Our carbon footprint will be exactly the same if not more. Population explosion, more vehicles on the road (they might even be electric but to manufacture these cars CREATES massive Co2 and mineral depletion) There will be many windfarms and hydro and wave generation plants and guess what ... we will STILL be pumping Co2 at the same rate if not more.

The economists are exactly that. They are looking at the ECONOMY ..Ken Henry even reckons the GST has to be increased to cover the expenses for Chrissake. A benefit is that they are EXPECTING Co2 levels to drop. As Australia only creates less than 2% of global output this does not make a lot of sense to me !!!!!!!!

Bernie Fraser is the chairman of some quango which he has his snout firmly ensconced and does not want to miss out on his 6.2 million dollar cookie jar.

Abusive prat? Did I personally sledge you? Did I in any way malign you? NOPE ... I pointed out that a carbon tax is increasing the cost of living and doing NOTHING to get the energy producers to "suddenly" go green so I can get cheaper electricity. Not now and certainly NOT IN THE FUTURE.

Now if you feel somehow that your view is more important than my view than good luck to you as well basilio.

 

[basilio]

Obviously touching different parts of the elephant here TS.

When I made the comment about abusive prat I was referring to your sledging of the economists as a bunch of twits. I just don't think thats cool or useful.

You then jump to 2050 and suddenly your crystal ball gives you an insight into just how our economy will look ? Impressive. Is our future that clear and that determined ? Or do you simply have the best crystal ball around ?

The point about putting price on carbon from an economist point of view is that business responds very quickly to price signals. You believed that the carbon tax didn't have any effect on the amount of CO2 produced by power stations - that in fact all that happened was our costs went up.

Would you be surprised to learn that your crystal ball failed you on that point ?

Emissions drop signals fall in carbon tax take

David Uren, Economics editor
The Australian
January 23, 2013 12:00AM


CARBON emissions from the electricity sector have dived in the first six months under the carbon tax, with much greater use of renewable energy and cutbacks in consumption.

While the government believes the 8.6 per cent fall in carbon emissions shows its policies are working, it also means it will collect less from the tax than the $4 billion it anticipated this year.

.....Total emissions from the electricity sector in the December half were 7.5 million tonnes lower than in the same half of 2011.

The government cautions that a big abatement task remains, cutting total emissions by 33 million tonnes from 2011 levels by 2020. The fall in electricity demand was not anticipated by the Australian Energy Market Operator and is unlikely to have been included in Treasury's budget forecasts.

Analysis by Climate Change Minister Greg Combet's staff shows that total electricity production in the first half of the financial year fell by 2.7 per cent, compared with the corresponding period of 2011-12.

However, the analysis shows there has also been a big change in the mix of power, with much greater use of renewable energy from hydroelectricity from the Snowy Mountains and Tasmania, and also wind farms, while there have been cuts in use of both black and brown coal.

http://www.theaustralian.com.au/nat...carbon-tax-take/story-e6frg6xf-1226559632995#

____________________________________________

And if you want to see what the changes in CO2 emissions are as a result of the Carbon tax in 2014 check out the following analysis.

http://www.smh.com.au/environment/c...missions-since-carbon-tax-20140205-320a6.html

 

[trainspotter]

Obviously touching different parts of the elephant here TS.

When I made the comment about abusive prat I was referring to your sledging of the economists as a bunch of twits. I just don't think thats cool or useful.

You then jump to 2050 and suddenly your crystal ball gives you an insight into just how our economy will look ? Impressive. Is our future that clear and that determined ? Or do you simply have the best crystal ball around ?

The point about putting price on carbon from an economist point of view is that business responds very quickly to price signals. You believed that the carbon tax didn't have any effect on the amount of CO2 produced by power stations - that in fact all that happened was our costs went up.

Would you be surprised to learn that your crystal ball failed you on that point ?

http://www.theaustralian.com.au/nat...carbon-tax-take/story-e6frg6xf-1226559632995#

Shot yourself in the foot basilio? "cutbacks in consumption" means exactly that !!! Taxing the people who least can afford it means OF COURSE they will stop using the airconditioner / heater / whatever that gobbles up electricity.

But but but YOU claimed this to NOT be the case

It is NOT intended to necessarily reduce energy use. The main purpose is to make energy that emits CO2 more expensive than non polluting energy sources. It gives the market place a signal that they should get out of coal and into solar/wind/wave whatever. Thats it.

Penalising the end user by increasing costs is the name of the game here and the electricity companies do not give a fat rats clacker that they are passing on the carbon tax to the consumer.

It does not take much brain capacity to figure out that in 2050 our population will have dramatically increased ERGO more vehicles on the road and more consumerism ad infinitum.

So in 6 months the electricity companies quickly whipped up a hydro / wind / wave whatever to generate clean electricity? Hmmmmmmmmm ...

My crystal ball is working just fine thanks.

 

[basilio]

Very selective reading TS.

Big fall in electricity sector emissions since carbon tax

Date
February 5, 2014

Peter Hannam

Environment Editor, The Sydney Morning Herald


Australia's greenhouse gas emissions from the electricity sector are down about 7.6 per cent since the carbon tax was introduced in July 2012, or the equivalent of about 14.8 million tonnes.

This reduction, revealed in the September-quarter National Greenhouse Gas Inventory figures released on Wednesday, was mostly countered by rises in emissions from sectors of the economy uncovered or only partially covered by the carbon price.

The total emissions, excluding increases in emissions from land-clearing, came in at 542.1 million tonnes of carbon dioxide equivalent for the year to September, or 0.3 per cent lower than a year earlier. When changes in land use are added, overall emissions for the 12 months came to 567.5 million tonnes, or 1.2 per cent higher.
Advertisement

The inventory figures have largely tracked a similar path for many quarters. Emissions from the power sector have been dropping, particularly since the introduction of a $23 a tonne price on carbon in mid-2012, making renewable energy supplies more attractive. Demand for electricity has also been dropping as manufacturing shrinks and energy efficiency efforts take hold.

Pollution from transportation, not covered by the carbon tax, has been rising steadily, while emissions from coalmine expansion and new gas plants have been soaring. The latter two sources are only partially covered by the carbon tax, now at $24.15 per tonne, with offsets or free permits reducing the cost to polluters.

John Connor, chief executive of the Climate Institute, said companies in sectors with rising emissions, such as industrial processes, were often the recipients of free permits, particularly in trade-exposed industries.

'Major headache'

For liquefied natural gas producers, the free permits covered about 65 per cent of their emissions, Mr Connor said.

‘‘We’re just at the dawn of their emissions profile, and they’ll be really starting to crank up particularly towards the end of this year,’’ he said. ‘‘They will be one of, if not the major headache for the Coalition which is why they are desperate to find ways to slice off growth of emissions in that sector.’’

Fugitive emissions, mostly from coal mining, were up 8.3 per cent for the year to September, while transport emissions rose 2 per cent, agriculture 1.8 per cent and industrial processes saw a 0.4 per cent increase, the government said.

For the 12 months to September, emissions from the power sector were 5.5 per cent lower, or 11.3 million tonnes.

Political take

Environment Minister Greg Hunt said the drop in emissions from the power sector was only ‘‘very slight’’ and was prompted by the renewable energy target and reduced economic activity.

‘‘The carbon tax is not cutting emissions in any meaningful or significant way,’’ Mr Hunt said, adding that it ‘‘does not work – plain and simple’’.

Fugitive emissions and those from industrial process and stationary power were rising even though they were covered by the carbon price, he said.

Greens leader Christine Milne, however, said emissions from the power sector had fallen each quarter since the carbon price had been introduced, and said Mr Hunt was ‘‘cherry picking’’ the data to ‘‘justify the Abbott government’s ideological opposition to effective action on global warming.’’

“Significant decreases in the electricity sector emissions have been neutralised by increasing fugitive emissions because of the Abbott government’s open slather rush to support the dangerous coal seam gas industry and coal mines,” Senator Milne said.

‘‘Reducing free permits and ending fossil fuel subsidies to coal and gas would help to drive down emissions but the Abbott government is keen to maintain the culture of entitlement in those industries,’’ she said.

Trajectory

The premise of the debate about changes in emissions from last year is wrong, said Frank Jotzo, an associate professor at Australian National University's Crawford School of Public Policy and deputy director, ANU Climate Change Institute.

"What matters is not the comparison with last years' emissions levels, but with what emissions would be if it was not for the carbon price," Professor Jotzo said. "Australia's emissions have been on an increasing trajectory, projections without carbon pricing were for strong increases."

"Now we're seeing only very slight increases which is progress," he said.

While the electricity sector is seeing the largest impact of the carbon prices, the impact is not as big as it would be if businesses believed that the carbon price was here to stay, Professor Jotzo said.

"To stop increasing emissions in transport and extractive industries like LNG would require a carbon price much, much higher than what is currently in place," he said.

Repeal vow

The Abbott government has vowed to repeal the carbon tax, which Labor and Greens have foiled so far by using their majority in the Senate to reject the move.

The Coalition's alternative plan to achieve a 5 per cent reduction of Australia's greenhouse gas emissions on 2000 levels by 2020 is its "direct action" plan to pay polluters to cut back. Greenhouse gas emissions are blamed for increasing global temperatures and forcing climate change, and governments around the world have pledged to act to reduce them.

That policy has been criticised by business groups – and political opponents – as being unlikely to meet the reduction target, given the budget caps and vague details released so far.

A Senate inquiry in Melbourne on Wednesday will add to the scrutiny of the direct action plan.

 

[wayneL]

Yes basilio, the carbon tax has been a resounding success....



...at transferring industrial capacity (ergo emissions) offshore.

Nice work.

 

[trainspotter]

Very selective reading TS.

You did not bold this bit?

The total emissions, excluding increases in emissions from land-clearing, came in at 542.1 million tonnes of carbon dioxide equivalent for the year to September, or 0.3 per cent lower than a year earlier. When changes in land use are added, overall emissions for the 12 months came to 567.5 million tonnes, or 1.2 per cent higher.

Great ... electricity companies suddenly are dumping LESS Co2 into the atmosphere because consumers are using less electricity because it COSTS more !

Pollution from transportation, not covered by the carbon tax, has been rising steadily, while emissions from coalmine expansion and new gas plants have been soaring. The latter two sources are only partially covered by the carbon tax, now at $24.15 per tonne, with offsets or free permits reducing the cost to polluters.

Which brings me back to my crystal ball and the year 2050 projections. MORE vehicles on the road and more consumerism ad infinitum which will INCREASE Co2 output regardless of what the coal fired powered electricity stations are doing.

Does not change the fact that increasing power costs onto the consumer is magically going to force power supply companies to start building renewable energy power generation plants. Who pays for that? The consumer ... again !

So what is the point of having a Carbon Tax if you can buy carbon offsets or receive free permits for mine expansion and new gas plants ?? HUH ??

 

[basilio]

TS after reading your take on the articles I agree that further discussions on this topic is fruitless.

 

[trainspotter]

TS after reading your take on the articles I agree that further discussions on this topic is fruitless.

I concur basilio. Co2 output is increasing irrespective of what the coal fired power stations are polluting into the atmosphere.

 

[Judd]

Some pretty pictures as your screen saver.

http://www.esrl.noaa.gov/gmd/ccgg/trends/index.html

 

[IFocus]

Yes basilio, the carbon tax has been a resounding success....

Not quite but a few company's I know waste an amazing amount of power the tax forced them to review at least some wastage but unfortunately not all.

...at transferring industrial capacity (ergo emissions) offshore.

Nice work.

Yes some impact but not quite the whole story.

AUD above 70-75 cents is killing the manufacturing company's I know big time.

 

[Smurf1976]

Not quite but a few company's I know waste an amazing amount of power the tax forced them to review at least some wastage but unfortunately not all.

Yes some impact but not quite the whole story.

AUD above 70-75 cents is killing the manufacturing company's I know big time.

Power waste - agreed there. I walked past a place today that has 4 x PAR38 floodlights (the same type of globe commonly used in household sensor lights) to illuminate a wooden business sign out the front. The sun was shining brightly and so too were the globes. So that's 600 Watts being used for no reason at all (assuming they're 150W lamps which is the most common size of PAR38 lamps in Australia).

Another one is a large very well known organisation that has 4 x metal halide lights illuminating their outside entrance 24/7. No point in that, it's total waste when its' daylight.

For the record, the electricity industry itself doesn't waste its' product in the way that customers do. I can assure you that the lights aren't left running in an empty workshop, office or an unmanned power station (hydro plants generally operate with nobody there unless there's maintenance work being done) when there's no need. The industry itself doesn't generally waste energy - it's consumers who do that.

As for manufacturing, it really depends on the specific industry. At two extremes:

A large scale brewery. Energy cost is a very minor part of the total production cost so no reasonable energy price is going to stop the production of beer either for the domestic market or for export. Wages etc are a far more significant cost.

Aluminium smelting, and to a lesser extent the smelting of other non-ferrous metals (eg zinc, manganese). Energy cost is huge due to the nature of the process. Electricity alone can be around 25% of the total production costs despite the generally cheap prices they pay for energy (smelters are always located in places with cheap power). When you're paying 3 cents / kWh and that's 25% of your production costs then paying another 2.5 cents due to carbon tax outright kills the economics of the business. End result = relocation overseas.

 

[Smurf1976]

I won't enter any personal debates, but here's how power generation is shifted from one source to another without actually building any new power stations.

This is for a hypothetical grid, but it's broadly similar to the situation in Victoria. Suppose that you have (for simplicity I'm ignoring maintenance outages etc here and keeping it in layman's terms).

Peak demand of 10,000 MW
Maximum load on a mild day of 6,000 MW
Average demand of 5,500 MW
Normal minimum (excluding blackouts due to storms etc) demand of 4,000 MW

Coal-fired generation of 6,000 MW
Hydro generation of 2,000 MW
Gas-fired generation 2,500 MW

On a hot day with peak demand, you have to run basically everything flat out or very close to it. You therefore have no choice as to where the power comes from - all available generation needs to be running and there's nothing to spare.

But at other times you have a lot of choice. Technical factors limit the ability to switch coal plants on and off, but they can certainly be ramped up and down from full load down to (depending on the plant design) 30 - 60% of capacity.

So on a mild day with 4,000 MW overnight and 6,000 MW during the day there are a lot of options:

You could meet the entire load from coal, apart from some hydro or gas online as spinning reserve (in case a unit breaks down suddenly).

Or at the other extreme you could have 2,500 MW of coal-fired plant online, only running at 2,000 MW, and fully use the available gas and hydro.

For hydro it is usually a case of having a limited water supply and choosing the best time to use it which is itself influenced by recent inflows. If it's dry then run it only to meet the peaks (saving water). If there's a flood then run it flat out 24/7. If it's moderately wet then just run it during business hours. Etc. This is how hydro is normally used in a predominantly thermal (fossil fuel or nuclear) system.

But for coal versus gas it is simply a question of economics. If coal is cheaper then you prioritise the use of coal and minimise the use of gas. Reverse that if gas is cheaper.

A complicating factor is that costs are not fixed per unit of output. Eg it costs money to have a coal plant online in the first place, but getting extra output from it is cheap once it's online (you already have staff there, everything is already running etc). So depending on the economics this will change the desirability of using gas versus coal and create a "lumpy" effect. Eg with a carbon tax at a high enough rate it makes sense to keep coal units offline where possible, but once it's running it may still be cheaper to run it flat out and use less gas.

But the overall principle is straightforward. Make coal cost more than gas, and some production will tend to shift from coal to gas, thus cutting the use of coal and increasing the use of gas. That said, it hasn't happened to any major extent with the actual carbon tax we have. There has been a bit of an increase in gas-fired baseload and shoulder period (ie business hours) running, but if you look at it right now then the brown coal plants in Victoria are, with one exception, running at or close to maximum capacity whilst the gas-fired plants are offline doing nothing. So you'd need a considerably higher rate of tax in order to bring about a large scale shift from coal to gas based on the existing power stations.

What about new power station construction? A carbon tax will certainly favour gas over coal. But once built, it still comes down to the day to day running costs. Eg Mortlake power station (Vic) is a brand new gas-fired plant of medium efficiency. It is sitting idle right now whilst the coal-fired plants are running. Meanwhile there are gas-fired units online in SA operating well below capacity with about 22% of the SA load being supplied from Victoria. Enough said.

For a hydro generator it is basically about having a limited supply of fuel (water) and trying to get the best price for it, subject to system constraints.

It's public knowledge that Hydro Tas is pushing the system as hard as possible whilst the carbon tax is in place in order to maximise revenue. That is certainly not something that has ever been denied, indeed it was publicly announced in July 2012 when the tax commenced that this was the strategy being pursued. Needless to say, production will be throttled back as the carbon tax ends.