By 2050 over 10 million customers will own distributed resources like solar, storage, home energy management systems and electric vehicles which can supply enough power to national grid to achieve zero emissions

CSIRO & Electricity Network, excerpts, from media releases, 6 December 2016:

Electricity Network Transformation Roadmap

No choice needed between Energy Security or Low Emissions – if we act now

A landmark report finds Australian energy consumers do not have to sacrifice security of supply or affordability to achieve a low emissions future, if action is taken now.

The two-year analysis by CSIRO and Energy Networks Australia has produced a comprehensive plan to keep the lights on, bills affordable and decarbonise electricity.

As Australian Governments meet to discuss energy security, the Electricity Network Transformation Roadmap confirms reliable supply can be maintained during Australia’s transition to a more decentralised, clean electricity system.

Energy Networks Australia Chief Executive Officer, John Bradley, said Australian families would be better off by $414 per year on average under the Roadmap’s suite of measures.

“The Roadmap would transform Australia’s electricity system, enabling more choice and control for millions of customers while saving over $100 billion by 2050,” Mr Bradley said.

“If we act now, the grid will be more secure and resilient, despite high growth in large scale renewables and two-thirds of small customers taking up solar and storage by 2050.”

CSIRO Chief Economist Energy, Paul Graham, said a key Roadmap finding was that $16 billion in network expenditure could be saved by 2050 if the grid buys support services from customers with onsite resources.

“Under the Roadmap, traditional network investments can be avoided where it costs less to ‘orchestrate’ distributed resources in the right place at the right time and this saves money for all grid users.

“By 2050, over 10 million customers will own distributed resources like solar, storage, home energy management systems and electric vehicles which they can use to sell grid support services worth $2.5 billion per year.

Mr Bradley said the Roadmap would require collaborative action by grid operators, governments and other parties.

“Grid operators can act directly on many parts of the Roadmap including transforming their customer relationships, service innovation, smart grid operations and developing new incentives for customers,” Mr Bradley said.

“However, a better energy future will need clear market signals. A key objective of the 2017 review of carbon policy must be securing a stable and enduring framework which will reduce the cost and uncertainty of decarbonisation.

“Australian electricity customers want an electricity future which avoids more frequent blackouts and bill shock while addressing global warming – this is their Roadmap,” Mr Bradley said.

Media contact and for a copy of the report:

Fiona Hamann, Hamann Communication (02)4573 2284/0415 191 659 fiona_hamann@hamanncommunication.com

The Roadmap Key Concept Report

Based on two years work and extensive consultation the Roadmap identifies the complex challenges facing Australia’s electricity system in the face of diversified energy supply and identifies a strategy for the future, as well as a deliverable plan to achieve it.

The report finds that with a co-ordinated plan in 2050:

• Customers retain security and reliability essential to lifestyle and employment
• Networks pay distributed energy resources customers $2.5 billion per annum for grid support services by 2050.
• Electricity sector achieves zero net emissions by 2050
• $16 billion in network infrastructure investment is avoided by management of distributed energy resources like solar and batteries
• Reduction in cumulative total electricity network expenditure of $101 billion by 2050
• Network charges 30% lower than 2016
• $414 annual saving in average household electricity bills (compared with roadmap counterfactual, business as usual, pathway)
• A medium family who cannot take up distributed energy resources is over $600 p.a. better off through removal of cross subsidies.

Residential bill outcomes for selected Australian household types in 2050 under the counterfactual and Roadmap scenarios

CSIRO and Energy Networks Australia have released this concept report, to engage with the diverse electricity industry stakeholders, who to together with networks, will play a key role in helping to deliver a more efficient and affordable electricity future to the customers the system serves.

About the Electricity Network Transformation Roadmap

Australia’s national science agency CSIRO and the peak national body representing gas distribution and electricity transmission and distribution businesses in Australia, Energy Networks Australia have partnered to develop an Electricity Network Transformation Roadmap (the Roadmap). The Roadmap is a two stage process running over approximately two years. For more information go to www.energynetworks.com.au/roadmap

Zero Net Emissions electricity - It can be done

Australia could beat its current international emissions targets and achieve zero net carbon emissions by 2050 according to new analysis from CSIRO and Energy Networks.

The landmark joint study, the Electricity Network Transformation Roadmap, confirms the grid can enable a zero net emissions system by 2050 and sets out measures to achieve it.

CSIRO Chief Economist Energy, Paul Graham, said that the Roadmap shows that it is possible to contribute to global targets to reduce emission while lowering the impact on household bills.

“CSIRO analysis confirms it is possible for the electricity sector to maintain a reliable, stable grid while achieving zero net emissions by 2050, in line with the aspiration of the COP 21 Paris Agreement,” Mr Graham said.

“On the way to a zero net emissions future, Australia’s electricity sector could exceed its share of current national carbon abatement targets, achieving 40% below 2005 levels by 2030.”

Energy system analysis concludes that an integrated set of measures will be required including stable enduring carbon policy frameworks and incentives to enable ‘orchestration’ of millions of distributed energy resources, like storage, electric vehicles and smart homes.

Energy Networks CEO John Bradley said the two-year Roadmap study involving hundreds of stakeholders found a national, integrated plan was needed to enable ambitious long-term abatement in the electricity sector.

“A low cost and secure transition of the electricity system depends on stable, enduring carbon policy and the Roadmap recommends an Emission Intensity scheme for the generation sector be developed by 2020,” Mr Bradley said.

“By contrast, carbon policy which could change dramatically at every election or differs in every state is a recipe for a high cost and less secure electricity service to customers.

“Analysis for the Roadmap indicates technology neutral carbon policy, like an Emission Intensity Scheme, provides least cost abatement and could save customers over $200 per year by 2030.”

Mr Bradley said decarbonisation would require transformational changes in electricity grids.

“Significant abatement is achieved by connecting millions of small scale renewables and our analysis forecasts Australia to have 6 times its current Solar PV capacity in ten years and 16 times current levels by 2050.

“The Roadmap also highlights the key role of transmission networks maintaining system stability in a low carbon future, with high penetrations of variable renewables.”

Mr Graham said the Roadmap analysis confirmed the critical role of thermal plant in balancing variable renewable energy output during the transition but this would need to be replaced over time by low emission solutions like battery storage, pumped hydro, gas fired generation with carbon capture and storage or Power to Gas hydrogen technology.

“Our current analysis points to a zero net emissions future enabled by battery storage and biomass but there is a fierce technology competition underway,” Mr Graham said.

“With so much technology innovation occurring, market frameworks which are technology neutral and allow the best solutions to emerge will deliver lower costs for customers.”

Mr Bradley said the pathway to a zero net emissions future would present significant challenges which were manageable if governments, industry and customer advocates worked together in a national approach.

“During forums involving hundreds of stakeholders, there was immense support for Australia’s electricity system to prepare itself for a zero net emissions future.

“We’re hopeful the Roadmap analysis and proposed measures will support State and Federal Governments consider these issues during the carbon policy review scheduled for 2017.”

The Roadmap Key Concepts Report has been released for external consultation. Feedback has been sought by February 16 and the program will be finalised in March 2017.

Industry Super/CBUS report "Overdue: Time For Action On Unpaid Super" published November 2016

How much super should you have right now and how much do you really have?

The Industry Super/CBUS report Overdue: Time For Action On Unpaid Super was published in November 2016.

The report states:

Introduced in 1992 at three per cent in lieu of a wage increase and as a means of boosting retirement savings, the Superannuation Guarantee (SG) is now a matter of right.

Today, employers are required to contribute at least 9.5 per cent (up from 9.25 per cent in 2014) to the superannuation accounts of every worker earning $450 plus a month.¹

In doing so, Australia has amassed a $2.1 trillion savings pool that, in shifting economic winds, increasingly holds both the nation and its people in good stead.

However, two new reports suggest some employers are undermining the system by not meeting their payment obligations. Separate analyses conducted by Industry Super Australia (ISA) and by Tria Investment Partners for Cbus indicate the non-payment of superannuation entitlements could be widespread and, in dollar terms, increasingly significant. These findings suggest further work is needed to fully understand the scale of this problem with consequential changes in ATO audit activity.

It also states:

Responsibility for ensuring SG payments are made rests almost entirely with individual employees.

High levels of disengagement, low levels of financial literacy and extreme information asymmetry mean that employees are ill-equipped to determine or address SG non-compliance.

Those most at risk of not having their SG contributions paid are younger, lower income earners working in industries with high levels of casualisation and sham contracting, including construction, cleaning and hospitality.

Small and medium-sized businesses are least likely to pay SG.

And that:

While individual experience may vary enormously, average impact of SG non-compliance is the loss of 7 months of contributions for a person earning the average wage in 2014.

Put baldly this report highlights the fact that Without action unpaid super will reach $66 Billion by 2024.

Key points in the report:

Two new reports suggest retirement incomes are being undermined by employers who are not meeting their Superannuation Guarantee (SG) obligations on behalf of workers.

These reports estimate that employers failed to pay at least $3.6 billion in SG contributions in 2013-14. The two components of the combined estimate are:

• Underpayment of SG for PAYG employees and sham contractors which Industry Super Australia (ISA) estimates was at least $2.8 billion in 2013-2014

• Unpaid superannuation for workers employed in the cash economy which separate research by Tria Investment Partners for Cbus estimates added an additional $800 million.

This equates to 30 per cent of workers not being paid part or all of their compulsory super.

Younger workers, low income earners and workers in the construction, hospitality and cleaning industries were most likely to miss out on superannuation.

On average, affected workers missed out on $1,489 or almost 4 months of superannuation contributions.

Using Tria’s projections and its own, ISA estimates that unless action is taken, unpaid superannuation will amount to over $66 billion by 2024.

These estimates are conservative - using a compliance benchmark of 8.5% of assessable income rather than the statutory rate of 9.25% in 2013-14. If these estimates took into account a loophole that allows employers to count employees’ voluntary contributions, via salary sacrifice, towards their SG obligations, the problem would be greater.

Government action is warranted. It should:

• Urgently investigate these new estimates

• Undertake detailed analysis of the types of industries and employers that do not pay SG

• Adequately resource the Australian Tax Office (ATO) to recover unpaid SG

• Immediately close the loophole that allows employers to count salary sacrifice amounts towards their SG obligations

• Investigate the feasibility of introducing real-time payment, reporting and compliance of SG using new Single Touch Payroll (STP) technology

• Introduce a direct, clear, enforceable mechanism for superannuation funds to recover unpaid SG from employers on behalf of members

• Retain existing penalties against employers who fail to pay SG and introduce stronger penalties, including personal liability for directors of companies that do not meet those obligations

• Extend the government safety net that protects unpaid wages and entitlements when a company becomes insolvent to protect unpaid superannuation.

The full report can be downloaded here.

Review of Australian Government "Direct Action Plan" to commence in February 2017

According to the Abbott and Turnbull federal governments: The Emissions Reduction Fund is central to the Government’s Direct Action Plan to cut emissions to five per cent below 2000 levels by 2020 and to 26 to 28 per cent below 2005 levels by 2030. It comprises an element to credit emissions reductions, a fund to purchase emissions reductions, and a safeguard mechanism…The safeguard mechanism will start on 1 July 2016. It will require Australia’s largest emitters to keep emissions within baseline levels.

Along with its alleged support of the expansion of renewable energy the Emissions Reduction Fund  (ERF) is the main component of the Coalition’s Direct Action Plan.

The original stated aim of the Direct Action was to reduce Australia’s greenhouse gas emissions by 5% below 2000 levels by 2020.

Having spent most of the original Direct Action funding by 2016 and with national greenhouse gas emissions rising instead of falling, the planned review by the Dept. of Environment and Energy is timely.

According to its terms of reference, the review will look at:

• the opportunities and challenges of reducing emissions on a sector-by-sector basis;
• the impact of policies on jobs, investment, trade competitiveness, households and regional Australia;
• the integration of climate change and energy policy, including the impact of state-based policies on achieving an effective national approach;
• the role and operation of the Emissions Reduction Fund and its safeguard mechanism;
• complementary policies, including the National Energy Productivity Plan;
• the role of research and development and innovation;
• the potential role of credible international units in meeting Australia's emissions targets; and
• a potential long-term emissions reduction goal post-2030. 

The review will commences in February with the release of a discussion paper and a call for public submissions. It is expected to be completed before the end of the year.

On 5 December 2016 the The Sydney Morning Herald reported:

The Coalition will consider a form of carbon pricing for power companies as part of a long-awaited review of Australia's climate policies, Environment and Energy Minister Josh Frydenberg has confirmed.

The review of the Coalition's direct action policy will focus on electricity price rises, energy security and cutting greenhouse gas emissions but will also look at whether to introduce an emissions intensity scheme for electricity generators – a type of carbon price different to the abolished scheme brought in by the Gillard Labor government.

The possible resurrection of carbon pricing is likely to trigger intense internal debate within the Coalition once the review gets under way next year, while environment groups and the federal opposition are likely to claim the terms of reference for the departmental review lack ambition, given the threat posed by climate change to the planet…..

The review comes in the wake of several analyses finding the Coalition's direct action policy - built around an emissions reduction fund that uses taxpayer funds to pay for cuts, mostly through tree-planting and better landfill management - is highly unlikely to be enough to meet Australia's current target of a 26 to 28 per cent emissions cut by 2030 compared with 2005 levels.

The response from Coalition backbenches was immediate and very vocal. Senator Cory Bernardi calling the intention to re-consider a limited form of carbon pricing one the dumbest thing I've ever heard and failed prime minister Tony Abbott MP referring to it as an ETS by stealth.

Expect more behind-the-scenes political brawling to find its way into the mainstream media before the review is completed.

Don't expect any meaningful policy to emerge which would help mitigate the effects of climate change - after all this is a federal government being ruled by an unruly, far-right, climate change denying element on its backbenches.

On 8 December 2016 The Sydney Morning Herald revealed that:

The Turnbull government has been sitting on advice that an emissions intensity scheme - the carbon policy it put on the table only to rule out just 36 hours later - would save households and businesses up to $15 billion in electricity bills over a decade.

While Malcolm Turnbull has rejected this sort of scheme by claiming it would push up prices, analysis in an Australian Electricity Market Commission report handed to the government months ago finds it would actually cost consumers far less than other approaches, including doing nothing.

It finds that would still be the case even if the government boosted its climate target to a 50 per cent cut in emissions by 2030.

Depending on the level of electricity use and the target adopted, modelling by Danny Price of Frontier Economics found costs would be between $3.4 billion and $15 billion lower over the decade to 2030.  Costs would be $11.2 billion lower over this time assuming average electricity use and the existing climate target.

The modelling is part of a group reports on the future of energy to be discussed by the Prime Minister and state premiers ahead at a COAG meeting in Canberra on Friday.

They include a preliminary report into the future security of the electricity market by chief scientist Alan Finkel, which warns that Australia has no clear path to meeting the 2030 emissions target taken to the Paris climate deal under existing policies.

While it makes no recommendations, the Finkel review cites the market commission, Australian Energy Market Operator and Climate Change Authority as all having found an emissions intensity scheme would have lower costs and less impact on energy security than other policies considered.

It comes in a week in which Mr Turnbull launched an aggressive attack on Labor over its support for emissions intensity trading as well as a 50 per cent renewable energy target….

Under all scenarios considered, the modelling in the commission report seen by Fairfax Media found an emissions intensity scheme was the cheapest option for consumers and business.

That remained the case if the emissions target was beefed up from a 28 per cent to a 50 per cent cut by 2030 compared with 2005 levels. Under the latter consumers and businesses would still pay $3.4 billion less than if no policy was introduced.

If demand for electricity was higher than average, the collective saving on electricity bills was estimated to be $15 billion.

An emissions intensity scheme sets a limit on how much a power station can freely emit for every unit of power generated. Cleaner generators that emitted less than the limit earn credits, and sell them to high-emitting generators above the baseline.

SGS Australian Cities Accounts 2014-15 and regional New South Wales

SGS Economics and Planning’s Australian Cities Accounts 2014-15 makes some interesting observations about regional New South Wales.

When looking at GROSS DOMESTIC PRODUCT - VOLUME MEASURE 2014-15: Regional NSW it finds this economic profile:

GDP ($ millions) $128,944 - that is $128.9 billion

Annual GDP Growth 2014-15 0.6%

Average Annual Growth (04-05 to 14-15) 0.8%

Share of NSW GDP (2014-15) 8.0%

Contribution to GDP Growth Whole Period (1989-90 to 2014- 15) 4.3%

“Growth of 0.6 per cent in Regional New South Wales was in the face of weakness across a range of industries”.

“…worst performing regions in per capita terms were Regional New South Wales, Brisbane and Queensland”.

Economy.id estimates that the Gross Regional Product for 2015 in Northern Rivers local government areas was worth:

Clarence Valley - $1.73 billion

Ballina Shire - $1.77 billion

Byron Shire - $1.47 billion

Lismore City - $2.05 billion

Kyogle Council supplied its own data which did not go beyond 2012, stating that its GRP was $330.8 million in 2011/12.

Total Estimated  Northern Rivers GRP – in excess of $7.02 billion.

Editor asks are "Councils being set up to fail?"

The Daily Examiner, editorial, 6 December 2016, p. 12:

These are interesting times inside the walls of Clarence Valley Council, with Wednesday's meeting regarding the Fit for the Future response exposing the fault lines.

There are differences between the elected councillors and also between some of those councillors and the council staff.

As a result, the proposed plan of action to become fit for the future was torn up and a new set of guidelines put forward.

Questions will be asked as to whether the councillors and staff can join forces to make the new approach work, but the real people who should be questioned regarding problems in local government throughout the state are Premier Mike Baird and his ruling Coalition.

Their attitude towards councils is nothing short of antagonistic.

There has been the series of forced amalgamations that have produced plenty of angst. Part of the amalgamation push was the Fit for the Future process, and to require councils like Clarence Valley's to submit their Fit for the Future response just a couple of days after the announcement of a miserly rate-pegging rise is harsh. Such decisions are being made by councils elected less than three months ago.

It begs the question: are councils being set up to fail to make further amalgamations easier?

Senate inquiry recommends orderly retirement of all Australian coal-fired power stations

On 13 October 2016, the Australian Senate referred the following matter to the Environment and Communications References Committee for inquiry and interim report by 28 November 2016 and final report by 1 February 2017.

The Committee recommended the orderly retirement of all twenty-four operating black/brown coal-fired power stations which currently make up est. 77 per cent of the national energy market and, are major contributors to greenhouse gas emissions in this country.

To date nine other coal-fired power stations have been decommissioned.

The report quotes the Australian Conservation Foundation and Climate Action Tracker:

The Australian Conservation Foundation (ACF) argued that coal fired generators impose significant external costs to human health, the environment, and public infrastructure, which typically falls disproportionately on coal-dependent communities. The ACF noted that estimated costs of health damages associated with coal combustion for electricity in Australia amount to $2.6 billion per annum……

According to the Climate Action Tracker, to meet the federal government's Paris targets, emissions must fall 1.9 per cent annually on average. Instead, they are rising about 1.2 per cent a year. This is a clear indication that current climate policy is failing to achieve required pollution reduction……

Inquiry into retirement of coal fired power stations, Interim Report:

List of recommendations

Recommendation 1

5.10 The committee recommends that the Australian Government adopt a comprehensive energy transition plan, including reform of the National Electricity Market rules.

Recommendation 2

5.11 The committee recommends that the Australian Government, in consultation with industry, community, union and other stakeholders, develop a mechanism for the orderly retirement of coal fired power stations to be presented to the COAG Energy Council.

Recommendation 3

5.12 The committee recommends that the Australian Government, through representation on the COAG Energy Council, put in place a pollution reduction objective consistent with Australia's obligations under the Paris Agreement in the National Electricity Objectives.

Recommendation 4

5.13 The committee recommends that the Australian Government establish an energy transition authority with sufficient powers and resources to plan and coordinate the transition in the energy sector, including a Just Transition for workers and communities.