TiP

To say that the Beyond Zero Emissions lobby group is unhappy with the Grattan Institute policy think tank this week would be an under-statement.

The institute’s new report “No easy choices: Which way to Australia’s energy future,” on which I wrote on this site on Monday, has been greeted with this spray from BZE: “It contains misleading comparisons, flawed analysis and glaring omissions on vital energy issues.”

It accuses the institute of pandering to the interests of companies like Origin Energy and BHP Billiton.

The lobbyists’ fulminations might carry a little more weight, although not much, if they haven’t appeared in the same week as official news that the Gillard government’s “solar flagship” program is floundering in the market place.

A lot of the research Beyond Zero Emissions has undertaken in the past 2-3 years is quite interesting, although the manner in which the group allows emotion and idealism to dominate pragmatism about energy supply is well illustrated by its own description of its goal: “To transform Australia from a 19th century fossil fuel-fuelled economy to a 21st century renewable-powered clean tech economy.”

A loaded view, one might say. One that tends to see a renewables supply future through glasses of a particular tint.

Apart from jumping up and down about its disagreements with the Grattan Institute over the costs of solar power, BZE has also dissed the hot rock geothermal industry, on which Julia Gillard and Wayne Swan, the Treasury and their consultants are basing high hopes for the “clean energy future.”

BZE snaps that “enhanced geothermal resources such as those found in Australia are currently highly speculative, achieving no serious projects anywhere the world over.”

More in the green mainstream, BZE is also not happy at Grattan Institute’s dissection of nuclear prospects for Australia. “For the institute to suggest nuclear power as being viable in this country is ridiculous, to say the least.”

It is indeed a week for greens going ga-ga.

Bob Brown is in a class of his own, and not for the first time, with his claim that criticism of Julia Gillard and her policies and actions is sexist, but his party also has had Martin Ferguson in its sights, accusing the Energy Minister of “mismanaging the (solar flagship) process from start to finish, helping to keep renewable energy from challenging coal’s dominance.”

Ferguson, who gives the impression of wearing abuse from the Greens (and the greenies) as a badge of honour, has reacted to the problems the initial “solar flagship” grant winners are encountering in two ways – apart from dismissing the Greens’ criticism as “dishonest,” pointing to the government’s lengthy consultations with the solar sector before making decisions.

The awarding of the two grants, he points out, included taking advice from an advisory group of solar experts operating at arm’s length from the political process.

(All this can be expected to get another airing when the Senate estimates review process calls in the Department of Resources & Energy next week.)

Meanwhile, Ferguson has extended the deadline for the $1.2 billion Solar Dawn project at Chinchilla from December 2011 until 30 June to enable it to see if it can reach financial close.

This is politically wise in the context of the Queensland election, apart from anything else.

In the case of the Moree solar farm in New South Wales, Ferguson has thrown open the bidding process again to all four consortia that were in direct competition.

This gives AGL Energy, Infigen-Suntech and TRUenergy an opportunity to update their applications as well as allowing the Moree joint venture to compete again.

There is $306 million in federal grants in play here.

Pacific Hydro, the leader of the Moree project following BP’s withdrawal from the solar game, says it is “disappointed” by Ferguson’s decision but TRUenergy has been quick to say it is ready to put forward its Victorian solar proposition (at Mildura) again.

The sticking point in the market has been the unwillingness of energy retailers to ink a power purchase agreement with the Moree JV, reflecting the overall difficulty of getting renewable energy projects off the ground in an environment where the Rudd/Gillard governments initially stuffed up the RECs through pandering to the rooftop solar brigade for political gain.

Observers of the federal large-scale solar program thought from the get-go that having a retailer tied in to a bid was a necessity for success.

In this context, it is interesting to see the “Australian Financial Review” reporting yesterday that the Commonwealth Bank, which supported one of the unsuccessful “solar flagship” bidders, is wondering aloud whether it is possible for solar projects to get off the ground here under the current low REC prices.

This situation has given Beyond Zero Emissions another opportunity to sound off.

It is critical of the Gillard government for “picking losers” through a grants system.

It wants a national feed-in tariff to “provide a level playing field” for investors and to “break the control of monopoly power generators Origin Energy, TRUenergy and AGL Energy.”

This, says, BZE will enable “any business, community or individual investor to start a wind farm or solar plant.”

There would be no real delay in commissioning wind farms at present, of course, if it were not for the afore-mentioned REC stuff-up.

(The Greens, by the way, see the whole affair as more reason for their current pet project, the Clean Energy Finance Corporation, to be launched in to life by federal parliament. It’s only $10 billion of taxpayers’ money, after all.)

As for large-scale solar power, Grattin Institute says this: “The cost of generating systems is the most important barrier to PV deployment today. Even over coming years, as a carbon price increases the cost of electricity from fossil fuels, the cost from PV systems will remain high among existing low-emission options.”

I don’t have the space here to do any form of justice to the institute’s detailed analysis of seven future electricity supply options – it runs to 177 pages.

This is available on the institute’s website and is well worth reading.

And, while all and sundry are peering darkly through their glass, it is important not to lose sight of the main message from this report: a carbon price alone will not be enough for Australia to meet the mid-century abatement target Julia Gillard has set.

This has major implications for end-users and taxpayers as well as for the economy, which Gillard and Tony Abbott now proclaim themselves so eager to debate.

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