Climate Heresy: Natural Factors Behind Observed Changes In Hurricanes

Here’s something you don’t witness very often…German national public radio telling listeners that natural factors are behind observed changes in something related to climate.

I can’t tell you how many times I’ve heard the German media claim storms are linked to our disdainful energy gluttony. So it comes as quite a shock when you hear something about climate that doesn’t conform to Potsdam Institute dogmatism.

At their Die kalte Sonne site here, Dr. Sebastian Lüning and Prof. Fritz Vahrenholt bring up an example of how German DLF national radio. I’ve translated the German text:

Hurricanes are developing more quickly today than 30 years ago due to the Atlantic ocean cycle

A team of researchers at the US Department of Energy and the Pacific Northwest National Laboratory recently made an exciting discovery: Apparently, hurricanes are developing more quickly today than they did 30 years ago. Earlier it took longer, but now maximum strength is reached sooner.

The scientists have found the culprit – drum roll – no, it’s not the wanton activity of mankind, rather it’s the Atlantic AMO ocean cycle, which fluctuates with a period of 60 years. During the course of the AMO cycle, hurricanes change accordingly.

Here’s the press release from May 9, 2018:

Powerful hurricanes strengthen faster now than 30 years ago
The storms intensify more rapidly today due largely to a natural climate phenomenon

Hurricanes that intensify rapidly — a characteristic of almost all-powerful hurricanes — do so more strongly and quickly now than they did 30 years ago, according to a study published recently in Geophysical Research Letters, a journal of the American Geophysical Union.

While many factors are at play, the chief driver is a natural phenomenon that affects the temperature of the waters in the Atlantic where hurricanes are powering up, according to scientists at the U.S. Department of Energy’s Pacific Northwest National Laboratory and the National Oceanic and Atmospheric Administration.

They found that a climate cycle known as the Atlantic Multidecadal Oscillation or AMO is central to the increasing intensification of hurricanes, broadly affecting conditions like sea temperature that are known to influence hurricanes.

Stronger hurricanes in a day’s time

Last year’s lineup of powerful storms — Harvey, Irma, Jose, and Maria — spurred the scientists to take a close look at the rapid intensification process. This occurs when the maximum wind speed in a hurricane goes up by at least 25 knots (28.8 miles per hour) within a 24-hour period. It’s a rite of passage for nearly all major hurricanes, including the big four of 2017.

The team, comprised of Karthik Balaguru and Ruby Leung of PNNL and Greg Foltz of NOAA, analyzed 30 years’ worth of satellite hurricane data encompassing 1986 through 2015. The information came from NOAA’s National Hurricane Center and the U.S. Navy’s Joint Typhoon Warning Center.

Consistent with other studies, the scientists did not find that rapid intensification is happening more often nowadays.

But the scientists also looked closely at just how much the storms are strengthening. They found a sizeable jump in the strength of fast-growing storms — the storms are getting more powerful more quickly within a 24-hour period than they were 30 years ago.

The team found that the average boost in wind speed during a 24-hour intensification event is about 13 mph more than it was 30 years ago — on average about 3.8 knots (4.3 mph) for each of the three decades studied.

Several factors play a role when a hurricane gains more power rapidly, including the temperature of the surface of the ocean, humidity, characteristics of the clouds, the heat content in the ocean, and the direction of the wind at the surface compared to miles above. Among the biggest factors affecting the increase in magnitude in the last 30 years, according to the team’s analysis:

• The amount of heat available in the uppermost layer of the ocean, known as the ocean heat content. The warmer the upper ocean, the more powerful a hurricane can become.

• Wind shear: The less the vertical wind shear — the difference in the direction and force of the winds at the surface compared to several miles into the air — the more powerful the hurricane can become.

The influence of the Atlantic Multidecadal Oscillation
The team found that the biggest factor explaining the increasingly rapid intensification is the AMO. The result comes in part from analyses using 16 separate climate models to isolate the impact of global warming.

“This was a surprise, that the AMO seems to be a bigger influence in rapid intensification than other factors, including overall warming,” said Balaguru, the first author of the paper.

The AMO governs how the temperature of the waters in the North Atlantic cycles between warmer and cooler, with each period typically lasting a decade or more.

The cycling occurs for reasons scientists don’t completely understand, but it has broad effects on the environment.

For example, it plays a big part in determining the heat content of the oceans, an important factor powering hurricanes. The AMO has generally been “positive” — causing warmer waters — since the late 1990s.

Balaguru noted that while rapid intensification historically has occurred more often in the western Atlantic, that’s not where the team found the increasing strength of the last 30 years.

Rather, the phenomenon is strengthening more in the central and eastern Atlantic, especially to the east of the islands of the Lesser Antilles, which includes the Virgin Islands and Saint Kitts.

That’s the same area where the AMO creates warmer waters and boosts ocean heat content, in the central and eastern Atlantic.

That’s exactly the alley where hurricanes Irma, Jose and Maria powered up rapidly last year. It’s a proving ground of sorts where many of the most powerful hurricanes strengthen dramatically.

Balaguru notes that teasing out the effects of the AMO from broader effects of global warming was beyond the scope of the current study but is a focus for scientists.”

Even the IPCC-trumpeting Deutschlandfunk (DLF) found this worth reporting. On May 9, 2018, listeners indeed heard on the daily program “Forschung Aktuell” (Current Research) the following points:

Despite climate change, hurricanes have not become more frequent (which totally contradicts the usual DLF claims on this subject).
The current faster strengthening of hurricanes has NOTHING to do with anthropogenic global warming (AGW), but rather it depends on the AMO phase.

The causes of the AMO cycles are unknown and have nothing to do with AGW.

Yet, it is a pity that these revolutionary climate-realist claims (by DLF standards) were presented in just a very short report and that the inconvenient facts were not reported on in greater detail…

Don’t hold your breath thinking this is a new media awakening happening in Germany.

Expect Stefan Rahmstorf of the alarmist Potsdam Vatican to order the science illiterate DLF editors to be led deep down somewhere in the catacombs, and be made to recant the heresy.

SOURCE 





The ethanol gravy train rolls on

Opponents make compelling case but can’t derail or even slow this well-protected industry

Paul Driessen

Like most people I’ve spoken with, I have no innate, inflexible antipathy to ethanol in gasoline. What upsets me are the deceptive claims used to justify adding mostly corn-based ethanol to this indispensable fuel; the way seriously harmful unintended consequences are brushed aside; and the insidious crony corporatist system the ethanol program has spawned between producers and members of Congress.

What angers me are the legislative and regulatory mandates that force us to buy gasoline that is 10% ethanol – even though it gets lower mileage than 100% gasoline, brings none of the proclaimed benefits (environmental or otherwise), drives up food prices, and damages small engines. In fact, in most areas, it’s almost impossible to find E-zero gasoline, and that problem will get worse as mandates increase.

My past articles lambasting ethanol (here, here, here and here) addressed these issues, and said ethanol epitomizes federal programs that taxpayers and voters never seem able to terminate, no matter how wasteful or harmful they become. That’s primarily because its beneficiaries are well funded, motivated, politically connected and determined to keep their gravy train rolling down the tracks – while opponents and victims have far less funding, focus, motivation and ability to reach the decision-making powers.

Ethanol got started because of assertions that even now are still trotted out, despite having outlived their time in the real-world sun. First, we were told, ethanol would be a bulwark against oil imports from unfriendly nations, especially as the USA depleted its rapidly dwindling petroleum reserves. Of course, the fracking (horizontal drilling and hydraulic fracturing) revolution has given America and the world at least a century of new reserves, and the US now exports more oil and refined products than it imports.

Second, renewable fuels would help prevent dangerous manmade climate change. However, with the 2015-16 El Niño temperature spike now gone, average global temperatures are continuing the 20-year no-increase trend that completely contradicts alarmist predictions and models. Harvey was the first major hurricane in a record twelve years to make US landfall. And overall, the evidence-based scientific case for “dangerous manmade climate change” has become weaker with every passing year.

Moreover, the claim that ethanol and other biofuels don’t emit as much allegedly climate-impacting (but certainly plant-fertilizing) carbon dioxide as gasoline has also been put out to pasture. In reality, over their full life cycle (from planting and harvesting crops, to converting them to fuel, to transporting them by truck, to blending and burning them), biofuels emit at least as much CO2 as their petroleum counterparts.

Ironically, the state that grows the most corn and produces the most ethanol – the state whose Republican senators had a fit when EPA proposed to reduce its 2018 non-ethanol biodiesel requirement by a measly 315 million gallons, out of 19.3 billion gallons in total renewable fuels – buys less ethanol-laced gasoline than do average consumers in the rest of the USA. That state is Iowa.

In fact, Iowans bought more ethanol-free gasoline in 2016 than what EPA projects the entire United States will be able to buy in just a few more years, as the E10 mandates ratchet higher and higher.

And so this past week, after months of battles, debates and negotiations, President Trump hosted a White House meeting with legislators The purpose was to address and compromise on at least some of the thorny issues that had put Ted Cruz, Joni Ernst and other politicians at loggerheads, as they sought to reform some aspects of the Renewable Fuel Standards (RFS) system while protecting their constituents.

In an effort to expand the reform agenda, by making legislators and citizens better informed in advance of the meeting, 18 diverse organizations wrote a joint letter to EPA Administrator Scott Pruitt, underscoring why they believe broad and significant RFS reform is essential. Signatories included major national meat and poultry producers and processors, restaurants, marine manufacturers, small engine owners, consumer and taxpayer organizations, and conservation and environmental groups. They were especially worried about the prospect that the Congress and Administration might allow year-round sales of 15% (E15) ethanol blends in gasoline, but they raised other pressing concerns as well.

* As large shares of domestic corn and soy crops are now diverted from food use to fuel production, poultry, beef, pork and fish producers (and consumers) face volatile and increasing prices for animal feed.

* Ethanol wreaks havoc on the engines and fuel systems of boats, motorcycles and lawn equipment, as well as many automobiles, which are not capable or allowed to run on E15. Repair and replacement costs are a major issue for marine and small engine owners (as I personally discovered when I owned a boat).

* Consumers and taxpayers must pay increasing costs as biofuel mandates increase under the RFS.

* Millions of acres of native prairie and other ecosystems have been turned into large-scale agricultural developments, because the RFS encourages farmers to plow land, instead of preserving habitats. This endangers ecosystems and species, exacerbates agricultural run-off and degrades water quality.

* Biofuel demand promotes conversion of natural habitats to palm oil and other plantations overseas, as well as domestically. Their life-cycle carbon dioxide emissions rival or exceed those of oil and gas.

* Expanding markets for corn ethanol by increasing E15 sales ignores and exacerbates these problems – while benefiting a small subset of the US economy but negatively impacting far more sectors, including the general public and the industries and interests represented by signatories to the Pruitt letter.

Following the meeting, several signatories expanded on these concerns – and noted that the compromise did increase E15 sales, while reducing the RFS impact on small refineries that were being forced to buy paper biofuel certificates because they weren’t making enough gasoline to need mandated real biofuel.

Requiring every American to buy ethanol gasoline “isn’t good enough” for biofuel companies anymore, the National Council of Chain Restaurants remarked. “Now they want a waiver from federal clean air laws so they can sell high blends of ethanol, which pollutes the air in warm weather months, year round.”

“Arbitrarily waiving the E15 [ozone emissions] restriction and permitting year-round E15 sales, without comprehensive reform of the RFS,” merely boosts ethanol sales and justifies future government-imposed increases to the ethanol mandate, the National Taxpayers Union noted. These “hidden taxes,” damage to small engines, and lower gas mileage are “a direct hit” on family budgets, especially for poor families.

The new year-round E15 policy will “cause serious chaos for recreational boaters,” the National Marine Manufacturers Association stated. Over 60% of consumers falsely assume any gasoline sold at retail gas stations must be safe for their equipment. It is essential that EPA launch “a public awareness campaign, improved labeling standards, and new safeguards at the pump that protect American consumers.”

“Granting a Clean Air Act waiver for the corn ethanol industry … would mean doubling down on a policy that has already been a disaster for the environment,” the National Wildlife Federation said. Congress needs to … reform the ethanol mandate before it does more damage.”

“US farmers are in a severe crisis and millions of people around the world are forced to go without food,” ActionAid USA pointed out. “We need policies that guarantee everyone enough food to eat, fair prices for farmers, and protect our environment. Biofuels don’t do that.” In fact, they make the situation far worse.

Unfortunately, a deal was struck. The noisiest and best-connected warring factions got what they wanted. These other pressing concerns were ignored, as the can once again got kicked down the road.

Refiners will now save hundreds of millions of dollars a year, by not having to buy ethanol that they don’t need to blend into the smaller quantities of gasoline they are refining. Corn farmers and ethanol producers will rake in hundreds of millions more a year. All that is good for those industries, their workers and investors, and the politicians who get their campaign contributions.

But what about the rest of America? The Congress, White House and EPA need to address our environmental and pocketbook concerns, too. When will the next negotiating session be held?

Via email





Scotland: Madness In Court As Politicians Are Caught Out In Fantasy Over Fracking

As last week’s astonishing hearing at the Court of Session made plain, any ambitious business that wants to invest, innovate, and create jobs, would be mad to hang their shingle in Scotland.

In case you missed it, the Scottish government was up before the beak over its decision to ban fracking last year in a case was brought by Ineos owner Jim Ratcliffe and Reach CSG.

We know fracking is banned because first minister Nicola Sturgeon told us so last year. She shouted: “Fracking is being banned in Scotland, end of story.” Meanwhile, the SNP’s website states: “The Scottish Government has put in place a ban on fracking in Scotland — meaning fracking cannot and will not take place in Scotland.” That pretty much passes the duck test.

Yet James Mure QC, the expensive silk representing the Scottish government, insisted the suggestion that fracking had been banned in Scotland was, er . . . wrong. He told the Court: “The concept of an effective ban is a gloss. It is the language of a press statement.”

Ineos director Tom Pickering rightly described it as an “Alice in Wonderland” situation. But why is anyone surprised?

We live in a political environment where the nation’s insipid economic growth is continually greeted as “good news” by the Scottish government, despite the fact that it is abysmal compared with that of the wider UK.

Then there’s the £500m business fund that has still failed to offer any significant cash to the nation’s entrepreneurs. There’s the vague plans for a National Investment Bank and the global business hubs across Europe’s capitals that exist mostly in the SNP’s imagination.

The crass duplicity on display in court last week is what passes for government in Scotland. A devolved parliament where the truth has no constituency and accountability is avoided at all costs. A place where, as Mr Pickering succinctly put it, businesses have to go to court to determine if ministerial announcements can be taken at face value.

But this government isn’t just failing employers. Look at the debacle of our National Health Service in Scotland, the mess the Scottish government has created in our education system where standards are falling like a stone and teachers are paying for school supplies.

Ratcliffe’s company has invested £1.5bn at Grangemouth, the biggest industrial investment Scotland has seen for decades. His firm accounts for about 4% of Scotland’s economy. Along with the 1,300 workers at Grangemouth, Falkirk council estimates about 9,000 jobs in the area depend on the plant. He invested £200m buying the Forties pipeline, and has also spent, in good faith, £50m acquiring what are, to all intents and purposes, useless fracking licences in Scotland.

Despite this, and despite Ratcliffe’s clear commitment to Scotland, the Scottish government has consistently opposed his ambition and insulted his investment.

SOURCE 






Conservative Groups Take a Stand, Go Against Carbon Tax

A coalition of conservative and free market think tanks are heaping praise on an anti-carbon tax resolution that was recently introduced in the lower chamber of Congress.

Americans for Tax Reform, along with more than 20 like-minded organizations, issued a joint statement Thursday in support of a House resolution that explicitly condemns a tax on carbon dioxide pollution. Majority Whip Steve Scalise and West Virginia Rep. David McKinley introduced the nonbinding resolution.

The one page resolution states that “a carbon tax would be detrimental to American families and businesses, and is not in the best interest of the United States.”

The idea of a carbon tax — a charge levied on companies according to the amount of CO2 they emit into the atmosphere — has been recommended as a possible alternative to strict regulations. Liberal lawmakers and a handful of environmentally-minded Republicans have pushed such proposals.

The purpose of Thursday’s resolution is to get lawmakers on record as opposed to a carbon tax, according to Scalise. The Louisiana Republican argues that a carbon tax would largely undo progress the U.S. has made toward energy supremacy.

“Working with President Trump, this Congress is leading America toward energy dominance and strong economic growth, yet some liberal Washington special interests continue to pursue a radical agenda that includes imposing a job-killing carbon tax, which would raise costs on everything we buy from electricity and gasoline to food and everyday household products,” Scalise said Thursday as he introduced the resolution.

Others agree. A total of 26 like-minded organizations signed and published a letter in support of the majority whip’s resolution, adding that such a tax would all but erase the economic benefits made after the passage of GOP tax reform in 2017.

“The undersigned organizations urge you to support the concurrent resolution, introduced by Majority Whip Steve Scalise (R-La.) and Congressman David McKinley (R- W.Va), which expresses the sense of the Congress that a carbon tax would be detrimental to the U.S. economy,” wrote the coalition of conservative groups, and published the same day the resolution was introduced. “We oppose any carbon tax. We oppose a carbon tax because it would lead to less income and fewer jobs for American families.”

In addition to Americans for Tax Reform, Americans for Prosperity, Competitive Enterprise Institute, FreedomWorks, Tea Party Nation, and several others signed the letter. The memorandum also listed the groups’ findings of what would likely happen if a carbon tax was enacted and warned of massive job losses and a heavy drop in GDP.

“For example, a 2014 Heritage Foundation report found that a $37 per ton carbon tax would lead to a loss of more than $2.5 trillion in aggregate gross domestic product by 2030. That is more than $21,000 in income loss per family,” the letter claimed. “In addition, a carbon tax would cost over 500,000 jobs in manufacturing and more than 1 million jobs by 2030. According to a 2013 CBO report, a carbon tax is highly regressive.”

However, carbon tax opponents should have little cause for worry. Energy dominance has been a cornerstone of the Trump administration’s agenda. President Donald Trump, who has worked prolifically on rolling back environmental regulations, is not inclined to levy a new tax on fossil fuel companies.

Despite the president’s energy agenda, and most congressional Republicans standing firmly against the idea of a carbon tax, there are still some that argue a carbon tax is a conservative solution to fighting climate change. Alex Flint, the executive director of the Alliance for Market Solutions, is among them.

“Those who oppose a carbon tax are rallying their defenses for a reason: they see supporters gaining momentum,” Flint stated to the Washington Examiner in a report published Friday. “A revenue neutral carbon tax that replaces burdensome regulations is a good, conservative idea. It is much more efficient than regulations, and the revenue can be used to reduce other taxes and grow the economy. We recognize the politics today are difficult, but they are going to change.”

Alliance for Market Solutions isn’t the only conservative organization aimed at wooing Republicans into reducing carbon pollution. Other GOP-affiliated groups, such as ConservAmerica and republicEn, have pressured the White House and congressional Republicans to embrace carbon taxes as a free market strategy to address climate change.

If Scalise’s resolution passes, it would not come without precedent. The House of Representatives passed a similar version in June 2016, earning six Democratic votes and no Republicans opposition. Scalise was the sponsor of that resolution as well.

SOURCE 




The rapidly disappearing subsidies for wind and solar in Australia

This sounds like very good news

One of the loudest, most controversial and misinformed debates around Australian energy policy has been the level of subsidies for wind and solar farms.

It is mostly based around the renewable energy target and the market price of its principal pricing signal – the certificates known as LGCs, which have been trading at or above $80/MWh for some time.

This has led to some outrageous claims about the amount of money that is supposedly being pocketed by renewable energy developers, such as the Saudi company that owns the Moree solar farm.

Conservatives, and the Murdoch media in particular, continue to parade and parrot the false story and fake news that the renewable energy target will pocket some $45 billion of subsidies out to 2030.

It’s nonsense. Such claims are based on the assumption that all LGCs attract the market price – currently around $80/MWh. But in reality only a small percentage of “merchant” generators do that.

And those claims also assume that the price will remain at those inflated levels until 2030. Clearly, they are not.

The price of LGCs is already showing signs of significant decline as it becomes clear that the RET – which seeks 33,000GWh of new renewables by 2030 – will not just be met, but could be significantly exceeded.

That has pushed the future price of LGCs down sharply

Many analysts expect that the price will fall to zero once the new build is completed and the excess of certificates flood the market. It is not a matter of if there is a price crash, says Tristan Edis of Green Energy Markets, but when.

What is often forgotten in the tirades against wind and solar is that many project developers have already forgone any subsidies, because they have signed long-term contracts, known as PPAs (power purchase agreements), for between 12 and 15 years.

Most of these contracts, particularly those signed in the last 12 months, provide effectively zero value to the LGCs. These include projects such as the 530MW Stockyard Hill wind farm, the 200MW Silverton wind farm, and the 470MW Cooper’s Gap wind farm.

Those contracts – like most others for wind and solar farms – were signed with the realisation that the LGC market price was heading to zero, or negligible, value in the 2020s.

But the key is that the prices for both the electricity and the LGCs have been struck below the prevailing cost of electricity, sometimes as low as $55/MWh.

This has also been the case for the ACT’s goal of sourcing the equivalent of 100 per cent renewables for its electricity by 2020. That program requires the LGCs to be surrendered at no cost to ensure the ACT’s efforts are additional to any national target.

So far, the ACT has done well out of its contracts because the first two wind farms have actually been returning money to ACT consumers, rather than requiring a top up over the market price.

It is important to note that the price of LGCs actually have little to do with the actual cost of the solar farms or wind farms, but are merely a financial instrument that provides an incentive for retailers to meet their obligations.

So, why are the LGC’s at such a high price of $80/MWh when that level of subsidy is not needed, and renewable energy projects can be developed and operate at an all up price of $55-$70/MWh?

Simply, it’s yet another example of where the incumbent utilities, in this case the retailers, are playing the market. Not illegally, but simply because the rules allow them to do so.

The price is high because not enough renewable energy generation has been built to meet the progressively higher annual targets, creating a shortage of LGCs.

This occurred because of the three-year investment strike that was caused by the Abbott government’s attempts – supported by many energy incumbents – to try to scrap, and then reduce the RET, from 41,000GWh to 33,000GWh.

That investment delay meant there was a shortfall in LGCs, so prices hit the market cap – it had nothing to do with the cost of building wind and solar farms.

Because of this, some retailers are still taking advantage of the rules. ERM power, for instance, in 2016 chose to pay the “shortfall charge” for not meeting its required number of LGCs.

It was a quite deliberate move. ERM has a three-year grace period to make up that shortfall, so while it paid a $150 million fee, that fee is fully refundable, and ERM will make a handsome profit – already estimated at $45 million – by buying the LGCs when the price falls.

Indeed, ERM CEO Jon Stretch discusses this very strategy in our latest Energy Insiders podcast, which you can listen to here.

According to the Clean Energy Regulator, around $238 million of shortfall charges have already been paid, and will likely be redeemed. Mark Williamson says retailers are likely to take a similar approach if the spot price for LGCs remains high this year and next.

“We’re pointing out the reality that the longer the spot price stays in the mid-$80 range, well above the $65 penalty price, there will be some temptation for some to pay shortfall, or to use the flexibility to carry forward less than 10 per cent of their liability,” Williamson says.

“And there is the prospect of more shortfall to come the longer it’s up there.”

Tristan Edis, from Green Energy Markets, predicts there could be a surplus of 80 million LGC once the RET is met.

“Across the life of the RET scheme to 2030 we are looking at a massive oversupply,” he says. “The question isn’t if we’ll see prices collapse but when.”

Edis agrees that because projects are still to be completed, a shortfall could continue until 2019, ensuring that the price stays high, and retailers paying the shortfall charge.

Even as late as 2020, retailers could still elect to pay the penalty price, or shortfall charge,   judging that the oversupply in 2023 will be so big that they can pick-up lots of them very cheaply.

They can then use these cheap LGCs to make good on the shortfalls they incurred in 2020 to claim back penalty refunds from the regulator, as ERM is doing.

The other complication is the structure of the proposed National Energy Guarantee, or any other scheme, and whether that allows generators to “double dip” into creating both an LGC and a NEG emissions obligation.

(That much may be academic if the Coalition retains its meagre emissions targets for 2030, as it has promised to do. Most analysts say the 26 per cent emissions target will be largely met by 2020 by the build out of the RET)

“If the NEG were to allow double dipping where a generator can create both an LGC and a NEG emissions obligation entitlement from the same megawatt-hour of generation then LGCs become worthless pieces of electronic paper that don’t mean anything for abatement purposes,” Edis says.

“If instead, they follow the prior recommendation from the AEMC for a baseline & credit scheme, where a renewable generator would have to choose between either an LGC or a NEG entitlement but couldn’t create both from the same MWh, then LGCs retain an ongoing value equal to a NEG entitlement.

“The second option that disallows double dipping will provide a far smoother transition that avoids pulling the rug from underneath participants in the secondary market for LGCs.”

So, if renewables don’t need subsidies going forward, then what’s the problem?

The problem is that without further incentives, or reasonable emissions reduction targets, the main energy retailers will have little or no reason to build new wind or solar, and will be happy to keep spinning maximum profits out of their fossil fuel generators.

That leaves only the household and corporate market as potential parties to contracting new wind and solar farms, and additional demand created when coal generators are due to retire.

There could be plenty of activity in the corporate market – with Sanjeev Gupta’s GFG Alliance contracting one solar farm already for its Victorian steel works and planning to build 1GW of new solar and storage for its South Australian assets.

Numerous other corporates are turning to wind and/or solar, with companies like Carlton & United Breweries committed to 100% renewables, and others to follow.

And they can be sure that the costs of wind and solar will continue to fall, even below the mid $50/MWh pricing that has been reported for projects like Snowtown and Murra Warra in Victoria.

As the CER’s Williamson told RenewEconomy on the sidelines of Australia Energy Week: “I’m also hearing that even the ultra-low prices we’ve heard disclosed in PPAs (power purchase agreements), that we may see lower prices further to come.

“I guess that’s going to be interesting to watch, in the context that wholesale prices are decreasing, but are currently still above those prices of new-build variable renewables.”

SOURCE 

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