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10 comments on The Bullroarer - Friday 25th July 2008
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WRT: emissions scheme "could cripple energy industry"
This is an unfortunate beat up of a study spun to get a headline.
The main claim is that the coal industry will be destroyed by any carbon pricing scheme. Unfortunately, the modeling is rather conservative for renewables (except geothermal and wind.) Solar thermal gets a $200/MWhr average cost in 2010.
The actual outcome of the modeling is actually quite different to what the implications of this are. Even with a $50/mt carbon price, there will still be a profitable Victorian lignite industry. Well, one of the 4 power stations will still be profitable (Loy Yang A). The rest will be assumed to close by the modeling.
The real big winners will be the hydro power stations and gas producers. Hydro because they have a fixed cost structure, and gas producers because they will be called upon to meet the electricity demand at a lower carbon price as well as be able to access export parity pricing via the QLD LNG plant.
I guess this is just a rent seeking activity by a lobby group. Unfortunate that it got a headline.
Yours,
Lachlan the Accountant
In this case the lobby group that funded the study is the ESA - the industry body for (largely coal fired) power stations.
So its not exactly an uninterested bystander...
I always found it a 'little bit' incoherent that the day of the release of the Garnaut Report, the Vic and NSW Coal-Fired generators and associated Unions were up in arms about it, claiming it would kill the industry (a worthy goal, imo). Within a week the those statements, a new Coal-Fired plant was announced.
Of course, it was being built with CCS in mind, which should be 'ready' for commercial development 'in about' 17 years, and which would cut emissions by 30%, or roughly down to the same amount of emissions as a black coal-fired plant, before allowing for the increased burning of Coal the run the CCS equipment, so, no real abatement of emissions at all.
But hey, it made a good headline...
28 percent over 10 years is... about the RBA's target rate for Inflation (2.5 - 3% p.a.). It's even less than that when you consider the the RBA's Rate includes compounding, while the reports dowes not. Nothing to see here folks, move along please. :p