OMG, what a week; what a half year and what a complete debacle the Australian solar industry is facing.
Whether you are a fan of Kevin Rudd of not, I haven’t met a single person yet who thinks this week’s leadership change has done anything except create more uncertainty and prove (as if we had doubts) that the majority of our political leaders are completely missing the point.
We don’t want grandstanding, puerile statements about “having to do this or that for the sake of the party”. We want decisive, consistent and high quality leadership.
We don’t want more broken promises, backflips or “fig leaf” policy. We want considered, intelligent and well articulated policy.
The Labor party’s unprecedented and utterly unfathomable (to me anyway) decision to dump their leader and replace her with a leader who had already been dumped once was bad enough, but I just caused a fracas in the local coffee shop when I saw the headline on the Daily Telegraph and used my best, loudest expletive.
The “Golden Book” proudly proclaimed “Prime Minister Kevin Rudd aiming to dump carbon tax for emissions trading scheme” and that “Kevin Rudd will push to dump the carbon tax and go straight to an emissions trading scheme in a bid to unshackle the government from the politically toxic policy.”
In a nutshell he is talking about reducing the price from around $26/Tonne of CO2 to around $6, according to reports.
From the pub to the Parliament the only thing we can all agree on is that our political system has spiraled into a populist contest that seems increasingly ignorant of the real facts. Case in point; the Carbon Price and electricity trends.
Our new Prime Minister has crumbled under populist pressure and confirmed the ignorant, head in the sand view that the Carbon Price isn’t working and costs lot (neither of which are true). On day one.
Well, if he had read the Australian Energy Market operators National Electricity Forecasting Report that was released this week (or better still if any of the party’s advisors were able to influence him on policy instead of politics) he would have realised that the Carbon Price is having a positive impact on the reduction of energy use. Its a price signal that is working. He would have noticed that US President Obama is pushing harder than ever to reduce carbon intensive energy from his speech this week. He may have noticed that China continues to ramp up support for renewables and demand for coal is at risk because of water availability. He may have noticed that the coal industry in Australia can even see this fundamental shift coming and increasingly desperate now that the issue of “unburnable fossil fuels” has been raised by the International Energy Agency. Had his team skimmed the report and briefed him, he would have been aware that PV uptake is forecast to continue to grow and that energy efficiency and building standards are all reducing demand and have the potential the lower wholesale energy costs, as they have done elsewhere.
They might also have noticed that because we have a staggeringly inefficient “hub and spoke” energy distribution system, to meet the forecast demand of 188,898 GWh this year we will need to generate something like 13,000 GWh of energy EXTRA which will then be wasted through transmission and distribution losses and could be avoided through distributed energy like PV. We already highlighted the enormous financial savings to be had here in our previous story on Queensland.
If he had called me, or any other analyst watching the market closely, we could of also advised him that despite the forecasts, PV installations in the first half of 2013 look likely to to be well in excess of 400MW; a slow-down compared to 2012, but far from a collapse and better than some had expected.
The AEMO report also highlights that demand is forecast to return to growth, (albeit at slower rates) throwing the energy industry’s constant carry-on about the need for “fixed charges instead of consumption based charges” out the window. If demand grows as forecast they have more units of energy to spread their costs over AND we are almost over the top of the investment cycle anyway AND prices have skyrocketed anyway. The Carbon Price is one of a number of small elements of electricity cost which are helping to solve what our new Prime Minister once said was “the greatest moral challenge of our time”, and he’s just chucked it out with the baby’s bathwater is desperate, ill considered attempt to hold power, despite what makes good policy.
There is unequivocal evidence that it’s working, you numbnuts.
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