Archive for January, 2016

How bleak is that?

It’s always news when the biggest energy company, ExxonMobil, rolls out a fresh outlook for global demand and supply and not news at all that observers picking over it will see what they want to see.

The 2016 edition of the company’s The Outlook for Energy uses 2040 as its horizon and is chock full of interesting information and perceptions.

For me, the most salient points are these:

Everyone knows global electricity demand is going to rocket and ExxonMobil quantifies the rise from 2014 to 2040 as 65 per cent — up from 20,548 terawatt hours in 2014 to 33,855 TWh.

Who gets what share of this pot of gold is a big question (perhaps the biggest). Using quadrillion BTUs as a measuring stick (each “quad” equal to roughly 45 million tonnes of coal or 293 terawatt hours of electricity and the 2040 number is 281), Exxon Mobil attributes 179 to fossil fuels, 54 to nuclear, 18 to hydro power, 11 to wind and 19 to all other renewables.

The biggest single power generation source in 2040 is seen to be still coal (95 “quads,” roughly what it is now) followed by gas (up from 47 to 76) — while nuclear, thanks to a giant leap in China, doubles from its present status.

How many media readers/viewers, I wonder get this impression, when they are told “coal demand will peak in 2025 and then fall in to terminal decline”? What does a “bleak outlook” for coal (as a report today calls it) mean when the full context is considered? It does, however, fit with the modern media meme — which (certainly here and in many other “Western” countries) is “mostly look on the non-bright side of life.”

What ExxonMobil actually says is that coal will provide about 30 per cent of world electricity in 2040 compared with 40 per cent now, with the big shift away from the fuel coming in the 32 countries of the OECD and with India’s use of coal-fired power more than doubling over a quarter century.

The company makes this observation about wind and solar power: “We expect strong growth, aided by policies that favor or mandate their use, with (them) accounting for more than 10 per cent of generation in 2040 (but their) use will vary widely by region. While wind and solar may seem free, significant investment is required to build (generation) — moreover these (intermittent) facilities use only a fraction of their capacity and must be backed up by other sources, typically gas, to ensure a reliable flow of electricity.  Although battery costs have fallen considerably, they remain too expensive to be considered with renewables as a replacement for reliable baseload generation.”

In 2040, ExxonMobil adds, wind and solar will provide less electricity than nuclear globally despite having three times the capacity.

The other fossil fuels point that tends to get lost in the wash is the observation that oil can be expected to remain the world’s largest overall energy source, delivering a third of our needs,, essential to transportation and as a feedstock for the petrochemicals industry, even as its once poor cousin, gas, pushes coal in to third place on the primary energy ladder.

Given Australia’s role as an exporter, the ExxonMobil projections for coal, nuclear energy and for gas are hardly grounds for the rending of garments (unless you are a green radical who wants them all consigned to perdition). In the case of gas, the company expects it to meet 40 per cent of the projected global growth in energy demand, fuelling everything from power turbines to industrial kilns, residential water heating and trucks.

The huge focal point for this demand is India and China, with ExxonMobil doing its modelling on the basis that the former will become the world’s most populous nation and that the pair will account for almost half of global energy demand growth. They are not alone here: the Outlook lists another 10 countries as accounting for a further 30 per cent of growth: Brazil, Mexico, South Africa, Nigeria, Egypt, Turkey, Saudi Arabia, Iran, Thailand and Indonesia.

As an adjunct to this, the company underscores that the next quarter century is going to see a huge burgeoning of the world’s middle classes, more than doubling to five billion people by 2030, with most of the growth centred in India and China.

This is hardly “bleak” news for Australian business and not just those shipping out mineral resources. Grounds, perhaps, for some of Prime Minister Turnbull’s sense of excitement?

ExxonMobil has been careful to underline the positive news for carbon abatement activity as it presents this perspective.

It sees energy-related emissions peaking in 2030, after rising 50 per cent between 1990 and 2014, and then starting to decline.

Of course, this is nowhere near good enough for those focused on impending climate catastrophe but it fits a great deal better with the rest of the well-founded projections that are available (e.g. from the International Energy Agency).

One big reason for the projected plateauing and then decline of emissions is our ability internationally to find ways to use energy more efficiently.

The company points out that the world today uses about 10 per cent less energy per unit of economic output than it did in 2000 — with about half this gain being achieved since 2010. ExxonMobil adds that, with efficiency handled poorly, the foreshadowed overall global energy demand rise of 25 per cent for the period from 2014 to 2040 would be more like 110 per cent.

As I have said before, I find it odd that, here in Australia, we do not focus more on the efficiency issue — and I don’t see the current national goal of a 40 per cent gain in energy productivity by 2030 as something for much cheering. (On the other hand, the fact that the mainstream media and the body politic essentially treat the efficiency debate with ignore is pretty darned depressing, really.)

 

 

 

Hasten slowly

The high school I attended in Port Elizabeth, South Africa, in the second half of the 1950s had as its motto “festina lente,” which is Latin for “hasten slowly,” a favorite saying of the emperor Augustus, who held the view “that which has been done well has been done quickly enough.”

It is a perspective that, from many examples in a wide range of spheres, not least energy policy, in Australia and elsewhere is lost on many policymakers, their advisers (whose limitations locally are well discussed in the recent Quarterly Essay on political amnesia by the journalist Laura Tingle) and the mob of barrackers for radical change with their large number of admirers in the mainstream media.

“Hasten slowly,” of course, is not an admonition for masterly inactivity – and there are a number of examples of this in energy management here that can be called on in evidence – but caving in to the paradigm of urgency in the name of dealing with climate change is as particular area worthy of concern.

Just now you can find a pointer to the problem on the website of the Energy Supply Association, which published a short “Technology report” last month focusing in part on energy storage and on green analysts’ claims that investment in residential energy storage will increase 20-fold this year compared with 2015 and will reach 244 megawatts in 2020 compared with just 5.9 MW in 2014.

ESAA points to a recent review by CSIRO and the Clean Energy Council that, in part, addresses risk minimization as this sector grows.

In brief, the review identifies these issues:

First, there is a lack of knowledge on the variety of energy storage technologies and thus on how to care for and operate them safely in homes and small commercial-scale environments.

Second, there is currently no consensus on the appropriate method to extinguish a lithium battery storage fire.

Third, there is currently insufficient accreditation and training to support and provide qualifications for designers and installers on storage systems.

Fourth, emergency response teams have limited education about storage technology.

Fifth, there is a lack of standards for storage battery disposal and recycling except in the case of lead-acid batteries.

Sixth, Australian standards for battery energy storage and connection of the networks are incomplete.

Finally, stationary energy storage installations and “incidences” are insufficiently reported.

Needless to say, CSIRO and CEC have a range of proposals for how this situation can be addressed but it is hard not to take the view that, yet again, we have governments in a situation of trying to slam shut stable doors behind bolting horses.

This isn’t an isolated instance.

For example, around this time last year Environment Minister Greg Hunt wrote to the nation’s consumer affairs ministers and the solar industry expressing concern that 15 per cent of the then 1.3 million rooftop solar PV installations were “unsafe and second rate” and was promptly accused by vested interests of a “political scare campaign.” In September an Origin Energy senior manager said the incentive-fuelled solar boom had been “under-regulated” and asserted that “a lot” of subsidized solar systems “wouldn’t last 15 years” although the support program assumes they will.

It is not clear from publicly available material where this issue has gone. Having set the hare running, doesn’t Minister Hunt have an obligation 12 months’ later to report on progress, if any?

Nor has anyone in the media tried to conjoin the battery storage and solar problems – one wonders why when they are so quick to seize on other issues and inflate the negatives.

To these you can add the still-festering issue of network tariff restructuring to deal with the solar boom’s implications, the inability of jurisdictions to manage the roll-out of “smart meters” on the east coast and the laborious process of completing retail electricity deregulation.

There’s lots of “slowly” in all this but precious little understanding that the Augustinian admonition also includes “hasten.”

An even bigger question still lies heavily over the resilience of the NEM after years of market intervention by government, leaving us with large-scale over-capacity and a shape-shifting RET scheme (with the Labor Party promising to campaign in this year’s federal election for a 50 per cent target by 2030).

Whether the wind farms needed to meet the new 2020 RET will be completed in time and just what the implications are for consumers if they are not is yet another open question.

The fuss in recent days about the “watershed” moment for utility-scale solar represented by the commissioning of the Broken Hill plants highlights another “soundbite” situation that, as I have pointed out previously, requires rather more policy thinking across the spectrum of NEM supply and costs than is apparent at this time.

Then there is the shemozzle that is the southern States’ gas development policy, a product of the inability of jurisdictions to look at the emergence of the east coast LNG export business and to reach timely decisions on how to foster the addition of supplies for domestic use. The ACCC’s inquiry in to the east coast market is due out in March.

This is the year in which we should expert to see energy ministers (through the CoAG Energy Council) demonstrate how they are going to live up to their pledge (made in December) to integrate energy and carbon policies with “a clear focus on ensuring consumers have access to low-cost, reliable supply as Australia moves towards a lower-emissions economy.”

Apart from commentaries I have written here and elsewhere, I can find no-one in the media pointing to this commitment and questioning how it will be met.

There is much, much more in the energy space that could be dragged in to this post, but the key point I think is that “hasten slowly” so that the steps taken are “done well” is not the hallmark of the past decade – which begs the question of how confident we should be that matters will change for the better?

Under the weather

Yesterday (Thursday,14th) it was Sydney’s turn to feel the rough breath of the rather harsh summer conditions we are copping in 2015-16 and the media, naturally, are full of stories of the drama (and tragedy) that the ensuing storms delivered.

Inevitably, such storms also deliver power cuts as network lines are brought down and/or sub-stations are impacted. A reported 70,000 homes were without electricity across the Sydney metropolitan area, the Central Coast and the Hunter Valley at one stage.

It’s a given in these situations that network crews will work flat out, often in atrocious conditions, to restore supplies as fast as possible commensurate with safety requirements. All part of the service. A glance at the distribution business websites tells the story of the storm impacts and the recovery efforts.

The costs of coping with such stresses, both in terms of building resilience in to grid systems and having adequate resources to cope with emergencies, show up in consumer power bills, a contentious area for the past several years.

An example of the scale and cost of emergency recovery is to be found in the current Ausgrid annual report — it records that last April’s major storm, which brought cyclonic winds and flooding, impacting 275,000 customers, mainly in the Hunter and Central Coast areas,  caused the most damage the network has ever sustained. The clean-up bill hit $39.8 million.

This activity is just one of many aspects of network charges but failures to cope in this area tend to get just as much publicity as angst about power bill increases.

As it happens, the New South Wales DBs are still waiting to learn the outcome of their current stoush with the Australian Energy Regulator over what revenues they can recover from now to the end of the decade. Their appeals against the AER decisions remain before the Australian Competition Tribunal in what is turning out to be one of the most long-winded of such deliberations. The tribunal has again delayed delivering its judgement and the new deadline for a decision is 15 March.

Not the least interested in the outcomes of the appeals process is the Baird government, which is working on leasing half of each of the two largest DBs, Ausgrid and Endeavour Energy, following its successful “sale” of TransGrid in 2015. I see media speculation that the Ausgrid deal could be worth $12 billion.

There is another side to the issue of power supply resilience under extreme conditions and it is the ability of the generation sector to cope with sudden, significant fluctuations in demand.

In the case just of NSW on Thursday, dawn saw the State load (which is predominantly located in the Wollongong-Greater Sydney-Newcastle area) at 6,234 megawatts — with coal-burning plants accounting for almost 5,600 MW and wind power 319 MW. By mid-morning, the load had ramped up to 10,555 MW — with coal plants accounting for 6,827 MW backed up by gas (1,508 MW) and hydro power (1,293 MW). The combined contribution of wind, large solar and PVs stood at 912 MW.

By just after noon, the NSW load had hit 12,263 MW (out of a NEM-wide total of 32,000 MW) — with the market operator reportedly concerned about a threat to supply security if one large generating unit broke down — and coal plants were accounting for 7,486 MW with hydro power providing 2,491 MW and gas 1,302 MW. The combined contribution of solar and wind power was 1,004 MW, helping to ease the pressure on conventional resources.

Finally at dusk, as the cool change (and destructive winds and rain) swept in to the Sydney area, the State load requirement fell back to 9,410 MW, with coal plant providing almost 6,300 MW and gas and hydro turbines each almost 1,400 MW. While wind farms accounted for 317 MW, the solar load had fallen back to just 28 MW.

I wonder how many Sydney-siders, bombarded with fossil fuels must go propaganda, know (or care) about the significant role of coal in looking after their interests (not just for cooling but in keeping factories, hospitals, office blocks and shops functioning normally except where the storm had affected the “poles and wires”) when summer is doing its worst — and still more so how much the system depends on the conventional mix of coal, gas and hydro power (as it has done for so many years)?

With the likes of the Greens wanting to sweep all the coal plant away in little more than a decade, with gas production in NSW opposed at every turn by environmental radicals and NIMBYs and with development of nuclear energy beyond the political pale, how do Sydneysiders think their future, larger power generation requirements will be met (especially with the climate change lobby insisting there will be hotter and more volatile weather in years to come)?

They certainly don’t get to read, view or hear measured analysis of the challenge in mainstream media.

What capital costs do they think will be involved in attaining the Greens’ Nirvana? What impacts will there be on wholesale power prices and on the charges for a much-expanded transmission grid?  What are the implications for system reliability in a generation mix dominated by variable technology?

What does all this mean for jobs in the State economy? The public debate skims over all this like a Bondi surfer.

The number of people who are sufficiently energy literate to comprehend these points are few indeed and that includes the majority of policymakers.

A real debate on what would be an optimum generation mix to meet future needs for affordable, reliable power with a substantially lower carbon footprint simply isn’t happening — and where experts are providing evidence-based modelling, their efforts are ignored by the mainstream media or distorted in the social media.

To describe our energy discourse as under the weather is no exaggeration.

Colloquially, when we use the expression, it is usually a euphemism for the aftermath of over-indulgence — and that is a fair way to look at the decade-long binge our society has had with respect to future power supply (and gas supply, too).

It’s time to sober up.

 

Parties to transition

One of the weapons of radical environmentalists and some of their media fellow travellers over the past two years has been to smear the largest electricity retail businesses, purveyors of power to roughly three-quarters of east coast mass market customers, as “The Dirty Three.”

This attack flowed out of the sometimes near-hysterical campaigning of 2013-15 over the renewable energy target and accused AGL Energy, EnergyAustralia and Origin Energy of “holding back Australia’s transition to a renewable energy future.”

It was ostensibly fuelled by the trio’s investments in coal-burning generation in Victoria and New South Wales (where Labor began and the State Coalition completed the sell-off of government-owned power stations). And it had its venal side: householders were targeted to switch away from “The Dirty Three” to businesses selling just renewable energy.

Against this backdrop, it has been interesting over the holidays to scan the submissions to the Queensland Productivity Commission from the three businesses (and from others).

The QPC is engaged, at the Palaszczuk government’s behest, in reviewing solar power support in the State and will have a draft report published next month ahead of a final one in May.

The commission’s findings will be of some significance for the national debate over solar — but, apart from a bit of local coverage, there has been little or no mainstream media interest in the proceedings.

One can leave the solar tariffs debate canvassed in the submissions for another day; my interest for the purposes of this post is in what the mud-spattered “Dirty Three” have had to say about their overall approach to pursuit of a lower-emissions economy. (All the submissions to the QPC review are accessible on the commission’s website.)

This is a snapshot:

AGL Energy, which points out that it has invested $3 billion in renewable generation over the past decade, declares its support for the decarbonisation and modernization of the electricity sector “over the coming decades” and says “consideration needs to be given to both the transitional nature of the challenge and the essential service nature of a reliable and affordable supply.”

It adds that there are continuing challenges to utility-scale investment in renewables because of the significant over-supply of generation in the NEM.

“It remains unclear,” the gentailer says, “how new projects can be committed without complementary policy aimed at resolving wholesale market oversupply, facilitating the exit of older, emissions-intensive power stations.”

Origin Energy says it “supports the progressive decarbonisation of the electricity sector in Australia” and that it views increased deployment of solar and wind technologies as “a key part of this transition.”

The company says it expects installation of rooftop solar PV to continue to grow strongly, is investing in expanding its own solar and emerging technologies businesses and “supports the deployment of large-scale generation such as solar and wind.”

Origin adds emphasis on something its management (and other electricity industry leaders) have said time and again in recent years: “Our philosophy is that this deployment should be underpinned by sustainable policy that encourages the commercial uptake of renewable sources without excessive cost subsidisation.”

Here, the company points to the messed up Queensland “solar bonus scheme” (a big green gesture of the Burke Labor government) resulting in increased costs (passed on to consumers) for networks that will accumulate to $1,387 million between 2015 and 2018.

(The Productivity Commission estimates the lifetime costs of the scheme, running to 2028, will be $4.28 billion. When one considers that “The Age” newspaper in Melbourne managed to get “shock” and “horror” in to a headline some time ago about a step that added $40 million to Victorian network customer costs, it’s interesting to consider what shrieking adjectives this sum might, but doesn’t, get in the media.)

Origin also speaks up in its submission to the QPC for a national, consistent approach to delivery of low-cost renewable generation rather than jurisdictions each going their own merry way.

While EnergyAustralia’s submission tends to focus on the State solar tariff issues at hand, it includes comment going to the irritating and dangerous habit of governments picking winners in the energy/carbon game.

It’s inconsistent, the company says, to apply benefits to solar generation via a FiT that are not available to consumers for other energy efficient behaviour — for example, to create the impression that rooftop solar PVs are more beneficial environmentally than large-scale solar farms.

And it adds this observation: “There can also be costs of displacing fossil fuel generation with renewables where (the latter) is not always available, is more expensive or cannot provide ancillary services.”

In addition to all the above, the Energy Supply Association, which includes the gentailer threesome among its most prominent members, contributes a thought to the QPC review that it needs to be borne in mind constantly by all governments: regulatory intervention can have a significant impact on the structure of the economy and on incentives to invest, “with delivered benefits generally coming at the expense of other industries, taxpayers and consumers.”

The tendency of environmental activists to shrug all this aside in favor of demanding dramatic action while resorting to emotive soundbites such as “The Dirty Three” is both a reflection of radical mindsets and of their hardheaded understanding (to quote Graham Richardson in “The Australian”) that “we live in an era when anyone aged under 30 gets most of their information from Twitter and Facebook.”

In this regard, I recommend reading a commentary by Laura Tingle, political editor of “The Australian Financial Review,” in “Quartely Essay.”

It’s entitled “Political Amnesia” and she talks in it of the mainstream media being “trapped in the present tense.”

She poses the question of what is the easiest thing for today’s journalists to report: the mechanics of a brawl or the substance of the matter being brawled over?

The answer is only too obvious and “The Dirty Three” meme is a case in point.

The willingness of these businesses (and others across the spectrum of energy supply) to engage in a debate on substance is on display in the QPC review and half a dozen (if not more) inquiries of recent months, but politicians as well as journalists are mostly “trapped in the present tense” — or should that be “the tense present”?

Energy is far from the only topic where this is the case but it is one of a handful that, in the words of ESAA above, can have significant impact on the economy and our standard of living.

The Queensland Productivity Commission’s solar report will be pored over with interest by energy stakeholders beyond the State’s borders when it appears but it is, to quote another inquiry outcome in a different area in recent days, just the tip of the iceberg,

In the case of energy, the messages from many contributions in the public arena are that transition is real, it’s happening all around us and, far from rejecting it, the mainstream supply sector is working hard to deal with it. Companies naturally strive for their own advantage. Their shareholders — millions of Australians individually and through super funds as well as overseas investors — would be very cross if they didn’t.

More than a few engaged in coping with transition don’t like the pace — too fast, too slow — and many are worried by the direction;  that probably should be in the plural because there are policymakers riding off in all directions, a trend unlikely to improve in a federal election year.

That activists are trying to hijack the transition’s direction for their own ideological purposes is surely beyond debate.

The big issue of the day — it was in 2014 and 2015, it will be in 2016 and beyond — is how to prevent a train wreck for consumers, investors and the economy as a whole.

The three main suppliers — whose customers run to some seven million mass power market account holders and therefore about 15 million east coast inhabitants — use every available stepping stone, like the QPC inquiry, to preach the gospel of good policymaking. Of course, they are not (and should not be) immune to criticism but neither should activists be allowed to vilify them unimpeded on the public stage.

The key reactions, of course, are those of policymakers themselves because their opinions frequently become law or regulations.

Is this a year when we can hope for some clear thinking by decisionmakers and effective action?

The recent CoAG Energy Council outcome suggests so, but I am afraid I remain to be convinced about the capabilities of the political parties to manage the energy transition to best effect. Tingle’s analysis of the failures of governance in today’s Australia resonates with me in many ways.

Adieu fossil fuels?

What is the real world?

Obviously this is a question that can (and should) be posed for many more areas than energy supply.

In the case of energy, post the Paris climate change summit, the point is becoming more pressing because one can easily see new conventional wisdom taking hold.

This can be illustrated by a national newspaper journalist writing (on the last weekend of 2015) of “the powerful mood for change following the historic Paris climate accord” — not apparently understanding that the Paris agreement is not a draft treaty, not a protocol, not a legally-binding step. (It does commit the signatories to work to “peak emissions as soon as possible” — which was a rejection of proposals for emissions to be stopped by 2060 — and sets 2023 for a “global stocktake” to assess abatement progress.)

In support of his perception, the journalist quoted a green investment booster to the effect that “you really don’t want to be exposed to the old economy in this low carbon world (to which) Paris has committed” and echoed a zealots’ placard outside the UN’s Le Bourget meeting place: “Adieu fossil fuels,” a motto picked up by “National Geographic” magazine and others, including Germany’s environment minister, who has declared “the world will have to say goodbye to coal, oil and gas.”

(Germany in 2014 consumed 111 mtoe of oil, 64 mtoe of gas and 77 mtoe of coal. Its non-hydro renewables use was equivalent to 32 mtoe. Not so much energiewende as scheinheiligkeit, minister.)

How far all this adieu stuff is removed from the real world can be readily illustrated via reading a review of resources and energy trade by the federal Department of Industry, Innovation & Science, issued as the newspaper commentary was being published.

Among other things, the review sees (1) global trade in metallurgical coal rising slightly in the new year (compared with 2015) to 302 million tonnes, (2) international trade in thermal coal also increasing marginally to 1,059 Mt, (3) China in the throes of building, or finishing planning, of 117,000 megawatts of higher-efficiency, lower-emissions coal plant and (4) India constructing 138,000 MW of coal generation as well as 49,000 MW of hydro-electric plant against 21,000 MW of renewables such as solar and wind power.

This real world also has oil production reaching its highest level since 2004 of 96.2 million barrels a day.

As well, the department expects global LNG supply capacity to be 12 per cent higher this year than in 2015, reaching 289 million tonnes, and demand to be eight per cent higher.

And the International Energy Agency, warning that the commitments global governments took to (and from) Paris are inadequate to curb carbon emissions for a two-degree target, has proposed a tougher approach where coal’s share of electricity supply in 2030 will be some 7,500 terawatt hours and fossil fuels’ overall contribution to the mix some 15,000 TWh – compared with almost 3,000 TWh for wind power and about 1,500 TWh for solar systems.

After a herculean, multi-trillion dollar outlay of capital to meet the IEA’s proposed path (significantly better in abatement terms than the one adopted by the Parisian summiteers), coal in 2030 in this scenario would hold 22 per cent of total primary energy demand (measured in millions of tonnes of oil equivalent), oil 28 per cent and gas 23 per cent – against a share of five per cent for non-hydro renewables and 12 per cent for bio-energy.

(The balance, says the IEA, would be nuclear power seven per cent and hydro-power three per cent.)

The IEA model, mark you, is not for a world in which “deniers” have sat on their hands — but it is manifestly not one, despite huge expenditure, where adieu has been said to fossil fuels or even auf wiedersehn (which is “see you later.”) Even in the agency’s world of stronger efforts than embraced in Paris, the “old economy” in which fossil fuels play a critical role is anything but kaput.

A rather more measured perception of what the UN summit has wrought was published just before Christmas in some newspapers (but was invisible to most Australians), quoting professor Warwick McKibbin to the effect that “Paris means the Australian coal industry will not expand as much as it otherwise would have; the coal industry does not shrink from today’s scale.”

And Harvard University’s Robert Stavins, an environmentalist of repute, offers the assessment that “the new approach brought about by the Paris agreement can be a key step towards reducing the threat of climate change” because all countries will be involved now in taking actions to reduce emissions” — but nowhere does he proclaim “the end of fossil fuels.”

In this context, it has been interesting in the holidays to read a lengthy (108 pages) commentary published in December by bankers Citi (“Energy 2030: Financing a Greener Future”).

The Citi researchers set out to review “the micro-economics of the changing energy environment” and one of the questions they posed themselves is “can renewables remain competitive in a lower-for-longer fuel (cost) environment?”

They take the view that the “battle between coal and gas” is as important to emissions abatement as the rise of renewable energy.

One of their observations is that “while new plant economics seem to favor the rise of natural gas, regional variations in costs and power demand growth could dampen its ascent to the benefit of coal.”

This leads them to argue that there is a need for governments to assess policies to support the use of gas as well as renewables (demonstrating yet again that, when you scratch moneylenders, the urge for government intervention, so long as it doesn’t impact on their own practices, is never far beneath the surface.)

Meanwhile, the IEA’s analysis of pledges embedded in the Paris accord comes down to this: even when investment in (all) renewable generation has reached $US260 billion annually in 2030, outlays on fossil-fuelled power supply will still stand at $US100 billion a year – and spending on new coal-fired plant will account for half of this.

In this world promised by policymakers, by the way, China will hold half the coal-fired power generation in 2030, having added 345,000 MW over 15 years. This fleet will emit almost five billion tonnes a year of greenhouse gases.

(It is worth interpolating here that the agency points out the Paris pledges also require $US8 trillion to be spent between now and 2030 on energy efficiency: one-third by motorists on better cars, another third on improving buildings and the rest split between the manufacturing sector and the road freight industry. Why the commentators, and especially those in financial media, think this can be effectively ignored is a mystery – at least to me.)

To repeat: what is the real energy world?

There are many ways of addressing the answer but one it certainly is not: the Pollyanna perception the media (in Australia and many other places) are intent on forcing on us where fossil fuels are “the old economy” with all the dismissive intent of the adjective.

Of course, how you perceive what the Paris agreement portends depends on your own interests or wishes — and, for our politicians, on the urge to play the public mood, as divined from opinion polls, to electoral advantage.

At one end of this spectrum is the view that Paris represents, to quote actor/activist (and Parisian flagwaver) Robert Redford, “an epic movement away from fossil fuels” – and, to quote Greenpeace, that “time is up for fossil fuels.”

There is also advice to activists from an American professor of their persuasion that they should “savor the moment, but not pause to rest.” Ensuring the accord amounts to more than a hollow proclamation, he avers, requires “overcoming resistance to the adaptations we have to make.”

From the other end of the spectrum, Australian journalist and academic Tom Switzer declares the accord is “a triumph of wishes over facts.” Never discount the selfishness of nations, he asserts. And Christopher Booker, controversial commentator of “The Daily Telegraph” in London, derides the summit as “the moment political panic over climate change collided with the reality of a fossil-fuel-based global civilisation.”

Scots marine eco-scientist Robert Wilson sums it all up like this on his blog: “Fossil fuels continue to dominate new energy infrastructure. Maersk is not unveiling solar powered container ships. Boeing and Airbus appear content with the age of kerosene. Steel makers are sticking with coal. Twenty million new cars are added to China’s roads each year. Electric cars remain marginal everywhere: in Germany, where they wanted a million of them on the roads by 2020 and in America where Obama spoke of a million being on the roads by 2015. Despite what you may read, China is still opening roughly one new coal power plant each week. India plans to double its coal production by 2020. Green Germany just opened a new coal power plant last month. Britain announced a phase-out of coal power plants, but plans to build a new fleet of gas power plants. Despite what most EU policy-makers believed we now appear to be entering an era of cheap oil and natural gas.”

 

And, for leading London economics commentator Martin Wolf (of the Financial Times), a big post-Paris imperative is to avoid sacrificing the growth of the world economy. While the rate of decline in emissions per unit of output must “accelerate hugely,”  he says, it is far too early to feel confident that the curve of emissions will now bend decisively downwards because of what governments wrought at Le Bourget.

Obviously, this whole shebang is not esoteric so far as Australia is concerned, not just because this country is heavily dependent on fossil fuels for its lifestyle and very dependent on exporting them for essential trade income, but because we are now embarked on a federal election year where the Paris agreement is a tool for the political gamblers – and we will all have to live with the consequences of the policy cards the poll delivers, having suffered a decade where political intervention in energy markets has notoriously failed us.

This is why an understanding among Australians of the real world of energy supply is very important – and why it is a worry that our leaders across the political spectrum, many journalists and the community at large (depending on the media for information that influences their voting) still apparently lack such understanding.