Home > Environment > Big Oil changes sides in the War on Coal

Big Oil changes sides in the War on Coal

June 11th, 2015

As the time left to save the planet from uncontrolled climate change gets shorter and shorter, the previously glacial pace of movement on the issues has speeded up. One of the most important, and surprising, developments has been a string of increasingly sharp attacks on coal, coming from representatives of major oil and gas companies. As this (rather excitable) piece explains, the reason is simple. The policy debate has crystallised around the idea of a carbon budget – the remaining amount of CO2 that can be emitted while keeping atmospheric concentrations at levels consistent with 2 degrees of warming or less.

Obviously, if such a budget is imposed and adhered to, a lot of fossil fuel resources, currently sitting on corporate account books, will have to be left in the ground. Unsurprisingly, fossil fuel companies have done their best to prevent such an outcome, promoting science denial, and encouraging national governments to shirk their share of the burden with the argument that others should do more. Such a strategy implies a united front among fossil fuel owners, since the longer the imposition of a budget can be delayed, the better off they all are.

The recent break in the fossil fuel coalition therefore marks a new stage. Rather than try to expand the budget for all fossil fuels, the oil and gas companies have decided to get as much as possible for themselves, which means shutting down coal as fast as possible. The facts that have made such a strategic switch sensible are many and varied but the most important are

(a) the increasing recognition of the health effects of burning coal which gives national governments like that of China a strong incentive, independent of climate change, to reduce coal use
(b) the fact that the most immediately promising alternatives to fossil fuels are renewable sources of electricity which compete directly with coal, and are, to a significant extent complementary with gas (as a dispatchable source, gas-fired electricity tends to offset problems associated with the variability/intermittency of renewables.

What’s the appropriate response here? In the end, it will be necessary to phase out fossil fuel use altogether. But the logic of tackling coal first is inescapable. If that logic drives a wedge in the fossil fuel coalition, so much the better for all of us.

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  1. Donald Oats
    June 11th, 2015 at 17:22 | #1

    Our PM of the people, PM Tony Abbott, today explained his ulterior motives behind the removal of the so-called carbon tax, and the cutting of the RET—on Alan Jones’ radio show, as reported in the Guardian (online) by Lenore Taylor:

    On Thursday, urged on by the virulently anti-windfarm Jones, he said this: “What we did recently in the Senate was to reduce, Alan, capital R-E-D-U-C-E, the number of these things that we are going to get in the future … I frankly would have likely to have reduced the number a lot more but we got the best deal we could out of the Senate and if we hadn’t had a deal, Alan, we would have been stuck with even more of these things …

    “What we are managing to do through this admittedly imperfect deal with the Senate is to reduce the growth rate of this particular sector as much as the current Senate would allow us to do.”

    Abbott said the RET had been “put in place in the late days of the Howard government” but also that he regretted it. “Knowing what we know now I don’t think we would have done things this way, but at the time we thought it was the right way forward.”

    Now, none of this was written down by PM Abbott, so we can expect a 180 degree turn on this the moment a journalist tackles him about it (AJ ain’t no journo). But now we know. We really know.

    The upshot is that we should expect our Australian government representatives to be playing the game according to the ulterior motive Abbott has now declared openly; after all, they are paid to do the government work on policy execution…

  2. David Allen
    June 11th, 2015 at 17:37 | #2

    Tony Abbott is already at the point where he is more effectively damaging this country than a Manchurian candidate or enemy foreign power could hope for. It is amazing and sad that after all the wrecking he has done that he hasn’t been arrested. He is more dangerous to Australia than all of ISIS.

  3. ZM
    June 11th, 2015 at 17:40 | #3

    (I will just copy my comment here too.)

    The carbon budget idea and the divestment movement are quite complementary I think. One thing I have heard with regard to asking the organisations you have accounts with or are a stakeholder in (eg. superannuation companies or universities with endowment funds) how their investments are exposed to risk due to investing in fossil fuel companies, is that the next step would be asking them to develop a divestment strategy.

    It is not practicable to ask that everyone divests from fossil fuels right away, as fossil fuels need to be continued to be used to fuel various things. So the idea is that there should be a divestment strategy in line with keeping global warming to safe levels – here the scientific evidence is for 1 degrees of warming or 350ppmCO2e but governments have followed Nordhaus’ 1970s recommendation of a limit of 2 degrees of warming.

    For example: In Australia a lot of the companies that mine coal also mine various other materials too, so the divestment strategy could target companies that only mine coal, or some companies have bad environmental or social records, so the divestment strategy could target these companies.

    The divestment strategy could also be time based. So for Paul Gildings rapid mobilisation to return to 350ppmCO2e by 2100 you would try to make a strategy based on that time frame. So investments in ghg emitting companies would be consistent with halving emissions from 2018-2023; then from 2024-2035 (I forget the exact year) it would be consistent with achieving zero ghg emissions by 2035; then until 2100 the investment strategy would be consistent with negative ghg emissions returning the atmosphere to 350ppmCO2e by 2100.

    If you would like to ask your superannuation company, bank, or university if their investments are exposed to risk by investing in fossil fuel companies there are forms here , you just have to add your name and details. The site covers all countries and a great many companies and universities


  4. Hermit
    June 11th, 2015 at 17:43 | #4

    This is timely with the closure of the SA coal stations being brought forward from 2030 to 2018. As for coal vs gas I think it is a case of no honour among thieves. It should be pointed out that the US may be the only democratic country where the gas price is expected to be stable for some time. Major utility US Exelon has shut some smooth running nuclear plant in favour of combined cycle gas which is quick to build, relatively unopposed (though there have been political donations) and is less CO2 intensive than coal. This is all due to a glut of gas byproduct in fracking for shale oil. Some US gas has been selling for $2 a gigajoule when it was $4 a decade ago. At 40% efficiency it takes 9 GJ of gas to make 1 Mwh of electricity, since 1 Mwh = 3.6 GJ and divide by 0.4.

    In Australia claims of gas abundance particularly CSG appears to be the result of Magic Pudding thinking. It assumes that those who currently object to drilling will somehow be won over. That seems to be the basis for the Curtis Island LNG export facility eventually taking 70% of eastern Australia’s gas. What we will do for gas after 2050 or so? That’s for ammonia, ceramics manufacturing, industrial laundries, food processing, peaking plant and so on. Fact is absent carbon pricing coal will always have a long term price advantage.

  5. Newtownian
    June 11th, 2015 at 18:16 | #5

    Hmmm. Interesting. While coal is certainly public enemgy No. 1, I dont see much joy here for oil and gas either. The reason for this lies in the Devil in the Detail such as that provided in for example:

    “U.S. ENERGY INFORMATION ADMINISTRATION 2010. Annual Energy Review 2009. In: U.S. ENERGY INFORMATION ADMINISTRATION, . Washington, DC 20585: U.S. Department of Energy.

    To illustrate – Section 11 on international energy shows twice as much energy was actually obtained from oil and natural gas as coal (275 v 133 QBTU) in 2007. Also while gas is better than coal for lower carbon emissions per unit of primary energy generation the ratio is still only about 2 better. So the benefit I’m afraid I see is marginal at best for climate change.

    To illustrate further when you do the blue sky exercise of conceptually replacing all coal with gas in the US where the the mix is about the same as the global fossil fuel energy mix you would have got in 2009 (Table 12.2) you get only a modest decrease of 5.4 GT CO2 to about 4.5 GT.

    Separately primary energy grew between 1970 and 2000 at about 2.5% per annum or about 40% in 15 years, a trend which if only partially maintained would wipe out all coal to gas conversion gains it appears.

    All this explains why Shell sees a 4 to 6 C rise reported in the Guardian interview with their CEO as being much more realistic. Meanwhile the biosphere and the economy (from the high prices Shell et al. get) goes into the toilet?

  6. June 11th, 2015 at 19:06 | #6

    Also I think the oil industry can see a longer term survival strategy based on jet fuel/maritime fuel, plus plastics. The end game might be ruthlessly competitive but pushing coal out of the mix gives them more time to adjust (i.e. eat each other) …

  7. June 11th, 2015 at 21:14 | #7


    Maritime fuel eh? I’ve got this idea about using wind power to move ships. I know it sounds far fetched, but hear me out…

  8. Donald Oats
    June 11th, 2015 at 21:44 | #8

    The conviction of switching from coal to gas is mis-placed. It might be good for some nimble energy companies, but it doesn’t do much to solve the problem of GHG emissions and their consequences. Shell and other companies have surely anticipated the shift away from coal, and are looking for their exit, that being gas for now. If they were braver business people, they would leave as much coal and gas and oil in the ground as can be arranged, as they switch into renewable energy as their new industry. Or something else, just not using the reserves. The faster it happens, the better off we’ll be in the long run.

    The flip side is that jobs in one line of work will disappear, while jobs in other lines of work will appear. This is where the government could assist (in Australia), if they wanted to make a positive contribution. With our emu heads emulating the proverbial ostrich, the best we can hope for is minimal negative contribution.

  9. June 11th, 2015 at 21:47 | #9

    My plans for wind powered ships has run into a snag. I fear that Tony Abbott and Joe Hockey will find them aesthetically unappealing. All that ugly, noisy kevlar flapping in the breeze.

  10. Tim Macknay
    June 11th, 2015 at 22:59 | #10

    @John Brookes
    On the other hand, team it up with rum, sodomy and the lash, and you’ve got Tony interested again.

  11. June 12th, 2015 at 01:07 | #11

    ‘Free market’, even constrained by carbon trading, unsustainable

    Ultimately, whether it is achieved directly by accountable democratic government or, somehow, by ‘market forces’, I expect a sustainable world, which would not be threatened with global warming, would include something like the following:

    Population stability – an end to the high immigration encouraged by the Abbott government and most state governments for the benefit of property developers and land speculators;

    communities in which most places of work, education, leisure and retail are less than a 15 minute cycle ride a way;

    public transport sufficient to make car ownership for longer journeys unnecessary;

    most food consumed by a community produced in market gardens close to that community or in the yards surrounding the free standing houses of its inhabitants;

    the manufacture of artefacts with built-in obsolescence to be outlawed;

    over-packaging outlawed, or at least taxed sufficiently to cover the cost of disposal in council landfill;

    all beverage or food containers to be manufactured to conform to design standards, be reusable and be paid for by consumers with refundable deposits.

    Unless something like this is achieved I think we stand no chance of reducing our consumption of non-renewable resources, including fossil fuels, to sustainable levels. The chance of achieving this with the ‘free market’, which is still the official ideology guiding Australia and much of the rest of the world, is close to nil.

  12. June 12th, 2015 at 01:17 | #12

    Professor Quiggin, the heading, in my post above, (again) has a <strong> tag, in place of the correct <\strong> tag. My apologies. Please remove that post. Thank you. – James

    ‘Free market’, even constrained by carbon trading, unsustainable

    Ultimately, whether it is achieved directly by accountable democratic government or, somehow, by ‘market forces’, I expect a sustainable world, which would not be threatened with global warming, would include something like the following:

    Population stability – an end to the high immigration encouraged by the Abbott government and most state governments for the benefit of property developers and land speculators;

    communities in which most places of work, education, leisure and retail are less than a 15 minute cycle ride a way;

    public transport sufficient to make car ownership for longer journeys unnecessary;

    most food consumed by a community produced in market gardens close to that community or in the yards surrounding the free standing houses of its inhabitants;

    the manufacture of artefacts with built-in obsolescence to be outlawed;

    over-packaging outlawed, or at least taxed sufficiently to cover the cost of disposal in council landfill;

    all beverage or food containers to be manufactured to conform to design standards, be reusable and be paid for by consumers with refundable deposits.

    Unless something like this is achieved I think we stand no chance of reducing our consumption of non-renewable resources, including fossil fuels, to sustainable levels. The chance of achieving this with the ‘free market’, which is still the official ideology guiding Australia and much of the rest of the world, is close to nil.

  13. Julie Thomas
    June 12th, 2015 at 06:43 | #13

    @Tim Macknay

    lol Rum, Sodomy and the Lash. It’s one of the Pogues best albums and the cover art is clever.

  14. June 12th, 2015 at 09:06 | #14

    At a recent junket in Paris on gas, Big Oil executives were talking up gas as the fuel of tomorrow. I speculate: are they cooling on oil too, not just coal? The ever-rising costs of oil exploration and development mean that they are being forced to cut back. A lot of prospects that were attractive at $100 a barrel are shelved at today’s $65. It’s as if they are tacitly conceding that Peak Oil has crept up on them.

    A data item in support of this speculation is that Big Oil PR against electric vehicles is nonexistent or so minimal as to be ineffective; it looks as if they have give up that fight before it’s started. They would have to take on not only Tesla, run by a marketing genius, but the powerful electric utilities. The mass of the automotive industry is hedged on evs and will not join a campaign against them.

    (cross-commented at CT)

  15. June 12th, 2015 at 09:12 | #15

    “This is all due to a glut of gas byproduct in fracking for shale oil.” IIRC the oil and gas formations are distinct: eg the Bakken for oil and the Marcellus for gas.

  16. June 12th, 2015 at 09:28 | #16

    JQ:” as a dispatchable source, gas-fired electricity tends to offset problems associated with the variability/intermittency of renewables.” True, but the inference that this guarantees a large market for gas is dubious. The EIA publishes charts of capacity factors for types of generating plant in the USA. That for combined-cycle plants, expensive baseload equipment, is 40%-60%, in the same band as coal and hydro. That for plain gas turbines, less efficient but much cheaper and used for peak lopping, is only 5-10%. In a high-renewables world, solar and wind are baseload and gas is the backup. The record does not suggest that huge quantities of gas will be needed for this.

    I would like to see analyses of the cost of getting from 90% renewable electricity to 100%. This is likely to be very expensive indeed. It will probably be better carbon-cutting value for the dollar to spend the money for the last mile on something else, like forests, electric trucks and synfuel for planes.

  17. June 12th, 2015 at 09:34 | #17

    PS: the peak lopping number for US gas turbine generators is that for a poorly integrated and largely obsolete grid. Australia has a much more modern one, so you would expect grid managers to have more options. Besides, grids everywhere are only at the beginning of the IOT revolution, with smart sensors everywhere and optimisation of systems by real-time crunching of big data.

  18. Ikonoclast
    June 12th, 2015 at 09:44 | #18

    I have some questions.

    1. Do any of the world’s largest coal burning nations currently have an effective broad-based carbon price or even one targeting coal?

    For information, the world’s largest coal burning nations are in order; China, USA, India, Japan, Russia, South Africa, South Korea, Germany, Poland, Indonesia. China accounts for over half of the world’s total coal consumption. So far as I can see, the world’s two biggest coal users (China and USA) have small, ineffective regional schemes which put little better than a token price on CO2 emissions. But maybe my information is out of date?

    2. Will anything change or change fast enough without an effective carbon price and/or effective regulation?

    3. Is there a danger of a kind of “Jevons Paradox” effect in that we will be so energy hungry that we will use all energy from all sources? That is to say, even if and when renewables become effective large scale sources of energy, will coal and oil continue to be utilised for a long time to come? Or will the better economics of renewables see fossils practicably recoverable fossil fuels still left in the ground?

  19. Jim Birch
    June 12th, 2015 at 10:53 | #19

    I’m in disagreement with most commenters.

    A move from coal to just about anything is a major improvement. Petroleum and gas have like twice the energy per CO2. There’s another significant strategic advantage, there is a lot less petroleum, so it will need to be replaced with renewables sooner. It is also more expensive, so economically it make the shift to solar more viable. If coal was an excluded option we’d just be a lot better off. This is a no brainer. Of course, these changes occur incrementally but the arguments are still the same.

    Politically, having the gas industry trash coal is an absolute bonus. I expect they will do a better – ie, more effective – job than green groups will in many places, eg, lobbying governments. There is a further benefit in the political validation of AGW action. The gas and petroleum industries will be treading a thin line.

    I’d also like to understand the argument for divestment. If Mr Ethical Investor doesn’t like coal it becomes a better option for Mr Average Investor. I can see it working a little indirectly perhaps through the industry ending up with less lobbying force, but it seems to me to be a clear case of banging away at the wrong end of the nail. Would it really work? Any solution that involves everyone (doing good) is a fail.

  20. June 12th, 2015 at 11:04 | #20

    James, I think it is likely that what it would cost to go from 90% renewable electricity generation to 100% is about nothing. Or probably cheaper than 90% renewable electricity. This is because here in Australia once the Powerwall or similarly priced products from Tesla’s competitors becomes available, a large number of systems will be installed because for many people it will be cheaper to have a Powerwall or something similar for on-grid energy storage than not to. In New South Wales and Western Australia a Powerwall could provide a better return than the sharemarket average for the right households. As the cost of energy storage comes down more homes and businesses will install it, as it will save them money. As the cost of both energy storage and PV comes down, people will have an incentive to increase the capacity of rooftop solar sytems because larger systems will enable them to save more money. In time, Australia will have enough home and business energy storage capacity that, in conjunction with exisitng hydroelectric and pumped hydro storage capacity, the country could operate with 100% renewable electricity with with decreasing costs every step of the way. Australia’s hydroelectric dams operate at low capacity and are well suited to providing seasonal storage. And thanks to its low cost, excess solar capacity will help deal with seasonal variation.

    The Coal-ition could act to slow this process and kill a large number of people in a stochastic manner as a result, but I dont’ think they are likely to stop the transition to 100% renewable electricity generation.

    To go to 100% renewable energy use may take longer. And it may be cheaper to do things such as use oil for jet fuel and then remove the and sequester the CO2 released into the atmosphere, but getting to 100% renewable energy or zero net emissions, is far from an insurmountable problem.

  21. Hermit
    June 12th, 2015 at 12:56 | #21

    James W different fields differ in ‘wetness’. Most gas contains condensate like light oil and volatiles like propane. Bakken is said to be the main reason US now feels it is no longer at the mercy of OPEC imports. I think recent numbers are US consumption 19 million barrels a day of liquid fuel of which 5 mbpd is imported. However the fracking boom could be peaking now with many wells near the end of their initial two good years or so.

    To those who say Powerwalls etc herald a renewable energy revolution I suggest caution. They say don’t count chickens before they are hatched. To my knowledge there are roughly 0 Powerwalls installed in Australia not the million or so needed to make a difference. If the 2015 energy stats show we burned more coal than in 2014 and the 2016 stats show more than 2015 you’d have to wonder. That is whether this revolution is all that it is cracked up to be.

  22. Donald Oats
    June 12th, 2015 at 13:21 | #22

    Having watched this space for many years, I’d say colour me sceptical, with respect to Big Oil changing sides: it is all about capturing the narrative and steering it away from Big Oil killing, and onto more benign topics—from their point of view. They will still be part of the problem, guaranteed.

  23. John Quiggin
    June 12th, 2015 at 13:31 | #23


    Just about everyone is doing this in a half-baked way, reflecting the constraints of domestic politics. More is happening by regulation than by pricing. Still, the closure of coal-fired power stations and the cancellation of new projects is real, in both the US and China.

  24. June 12th, 2015 at 13:39 | #24

    Hermit, do you know anyone who says Powerwalls herald a renewable energy revolution? I think it’s fair to say they herald a revolution, that is a very large change, in on-grid home energy storage as it only becomes profitable here at Tesla Powerwall prices. But it only assists the uptake of renewable energy and doesn’t really change what is currently occurring. Renewable energy will continue to expand in Australia regardless of whether or not home and business energy storage is installed because it outcompetes new fossil fuel capacity on price, and so I would not say it’s revolutionary for renewable energy, as I don’t think the change it will make in that area is large enough. But it is still an important development.

  25. Hermit
    June 12th, 2015 at 15:10 | #25

    RB I think most people would get that impression from the first half of your earlier comment #20. We had Alan Kohler, a finance firm and the ABC wax lyrical about Powerwalls. However I suspect if home batteries gain any penetration they will be owned by our existing utilities (like AGL or Origin) with smart inverters and used as an alternative to peaking plant if they can get the numbers. Despite the wave of publicity I suspect Tesla will be slow off the mark in Australia.

    A lot can go wrong. A recent TV show highlighted problems with lithium batteries in the Boeing Dreamliner. Do the batteries really last 10 years? The fully installed private cost might be too high for most or the restrictive terms for utility owned batteries might not appeal. We use 682 million kwh of realtime generated electricity a day in Australia. That’s a lot for 7 kwh batteries to make a difference.

    Back to oil vs coal we have yet to see EVs displace our 18 million petrol guzzlers. That’s even more kwh to come from somewhere.

  26. June 12th, 2015 at 15:16 | #26

    Well, Hermit, fortunately I was able to correct your misaprehension.

  27. derrida derider
    June 12th, 2015 at 16:46 | #27

    The gas producers have got it right – gas is the fuel of tomorrow, and we should be thankful for it. Of course it is not the fuel of the day after tomorrow but that’s another story.

    Gas can only DELAY our need for renewables, not remove it. But even that is really worthwhile because moving from coal to gas is the quickest, cheapest and far the most politically feasible fix while the world gets it shit together. Thank Gaia for fracking.

  28. June 13th, 2015 at 14:08 | #28

    Derrida, we can certainly make more use of existing gas generating capacity and decrease the amount of coal that is burned and reduce emissions that way. This is what Australia’s carbon price, when we had it, did. But it makes no sense to build new gas generating capacity because new renewable generating capacity is much cheaper. This is the case in Australia and I understand that it is the case in the United States as well. Maybe there are places in the US where this is not yet the case, but not yet the case means that it is the case, because it is not enough for new gas capacity to make money this year, it has to make money for years to come to pay for itself and it is in the nature of wind and solar power to cause wholesale electricity prices to drop.

  29. Hermit
    June 13th, 2015 at 15:39 | #29

    RB I agree and disagree. We need open cycle gas (jet engine but no steam boiler) to fill in wind lulls but it is expensive and nearly as CO2 intensive as supercritical coal at ~750 grams per kwh. AEMO in their Statement of Opportunities (see website) suggest we could close some baseload plant but build more peaking plant.

    It is in the nature of hamburgers to squash molten cheese. Wind electricity sellers can bid low on the NEM knowing a) they have guaranteed market share backed by penalties b) the final seller will get about 5.2c per kwh LGC subsidy in the retail price. The lower wholesale price is handing back just some of the subsidy. Occasionally wholesale prices go negative to keep the wheels turning be they fossil powered or clean. Under normal circumstances households never see negative prices since the LGC, GST, transmission charges, retail margin, daily connection fees etc get added.

    Here’s an opinion that coal will be with us for a long time
    In Australia you’d have to think it will be our major power source for another 20 years. The power station closures like Anglesea and Northern are not the behemoths that power the east coast capitals.

  30. June 13th, 2015 at 17:45 | #30

    Hermit, we already have open cycle gas turbines. And combined cycle ones. And kerosene turbines. And power stations that are giant diesel generators. And coal power plants. We don’t need to build anymore fossil fuel capacity. We have enough. We even have a considerable amount of hydroelectric capacity and two pumped storage facilities. And interestingly, open cycle gas turbines are now obsolete for providing ancillary services. Thanks to decreases in the cost of battery storage, and in Australia soaring natural gas prices (which you are fond of updating us on), they are no longer cost effective. In Australia, thanks to the low and decreasing cost of rooftop solar electricity combined with minimal solar feed-in tariffs and high retail electricity prices, we will probably end up with a large amount of energy storage in homes and businesses that will provide ancillary services. But even if Parliament passes the Australian Patriot Act which bans home and business energy storage and creates the Department of Coalland Security to enforce it, energy storage will simply be located on grid where it will provide both ancillary services and arbitage, storing electricity when its price is low thanks to good winds and/or sunny weather, and selling it when the price is high.

  31. Hermit
    June 14th, 2015 at 08:41 | #31

    The pumped hydro projects Wivenhoe Qld, Shoalhaven and Talbingo NSW currently store about 5 Gwh per day I understand. We’ll need many times that amount to replace thermal peaking plant. Australia uses 249,075/365 = 682 Gwh of electricity a day. The base model Powerwall stores 0.000 007 Gwh. Except perhaps for affluent neighbourhoods it’s hard to see batteries making enough difference.

  32. Ikonoclast
    June 14th, 2015 at 09:49 | #32


    Australia’s topography is not well suited to hydro power in the main. We do not have many good sites for dams and hydro projects. We also have very little snow pack and very little runoff compared to many other countries as we are so arid.

    Given the above, bulk energy storage will have to take another form. Most likely for Australia and to complement solar power this will take the form of thermal energy storage in molten salt tanks.

    “The Andasol power plant in Spain is the first commercial solar thermal power plant using molten salt for heat storage and nighttime generation. It came on line March 2009.[57] On July 4, 2011, a company in Spain celebrated an historic moment for the solar industry: Torresol’s 19.9 MW concentrating solar power plant became the first ever to generate uninterrupted electricity for 24 hours straight, using a molten salt heat storage.” – Wikipedia.

    With all technologies which replace fossil fuel power, the issues will be cost and safety. The systems which prove to be economically viable and safe to operate will compete successfully in the long run, so time will tell. I now expect renewable energy with various storage methods to triumph completely over fossil fuels and nuclear power. This is just my bet. Will it happen quickly enough to prevent dangerous global warming? I don’t know. I hope so but I have some serious doubts.

  33. June 14th, 2015 at 10:30 | #33

    Hermit, we don’t need to replace our thermal peaking plants. Our current thermal peaking plants still, for the most part, work, and are generally capable of continuing to function for a considerable amount of time.

  34. John Quiggin
    June 14th, 2015 at 10:35 | #34

    “it’s hard to see”

    This is your only argument, Hermit. Wasn’t it hard, 10 years ago, to see a million Australian homes with solar PV?

    The leaps by which you get from “I can’t see this happening” to “This won’t happen” to “So, going nuclear is the practical alternative” baffle me every time. Perhaps, rather than restating “I can’t see this” you should have your vision checked.

  35. ZM
    June 14th, 2015 at 15:14 | #35

    Our Shire is very fortunate as the Victorian government has chosen one of our smaller towns, Newstead, to be one of the 100% Renewable Energy towns. This is very exciting. We already have a higher than average amount of solar panels here, and NGOs and the Council set up a bulk buy program, MASH, so residents have access to lower cost solar panels.

    “The Victorian Labor Party has sought to underline its renewable energy credentials by vowing to help the town of Newstead, near Bendigo, to become 100 per cent renewable energy by 2017, and become the state’s first “solar town”.

    The commitment comes a few days after party led by Daniel Andrews said that a Labor Government would reverse the wind farm restrictions imposed by the Coalition state government, and seek to unlock billions of dollars in stalled investment.

    Newstead is not the only town seeking to go 100 per cent renewable. Yackandandah is also seeking to go entirely renewable by 2022, and its Totally Renewable Yackandandah campaign will be officially launched next week.

    The Newstead initiative is led by Renewable Newstead, which wants it to become a town where “people talk and thing about energy and where understanding of our usage and our energy options become widespread in the community.”

    “Newstead will be a leading example of what can be achieved when locals and government work together,” D’Ambrosio said in a statement. “Not only will the residents in Newstead reduce their reliance on coal fired power and cut their carbon footprint, they will be driving down household costs through cheaper energy bills.”

    Environment Victoria said the initiate would create a valuable template that can be rolled-out across the state, and welcomed Labor’s commitment to ensure fair access, and fair prices, for rooftop solar”


  36. Hermit
    June 14th, 2015 at 15:42 | #36

    Pr Q I don’t need reading glasses to comprehend official statistics. They say that in 2013 we got 1.5% of our electricity from solar 2.9% from wind and 87% from burning fossil fuels. It’s on the cards the next set of figures will be even more carbon heavy. Some 40% of our primary energy demand was for transport with that energy almost entirely coming from oil. What am I not seeing?

    Most of our rooftop PV and hws was installed 2010-2012 and has since slowed drastically. Official statistics again per Clean Energy Regulator. Sure other parts of the world are installing quickly from a low base. Niches may fill quickly then level out. I don’t remember goji berries or chia breakfast cereal a decade ago so I bet their growth has been spectacular. I doubt however they will be a major part of our diet.

    Here’s a similar conclusion from the IEA.

  37. rog
    June 14th, 2015 at 16:11 | #37

    Despite the alleged lack of enthusiasm from financial markets for all things Carboniferous, the new $5B coal loader (ie the 4th coal loader) at Newcastle is to press ahead.

    As Krugman recently said

    Seriously bad ideas, I’d argue, have a life of their own. And they rule our world.

  38. June 15th, 2015 at 10:27 | #38

    ZM, good luck with the Solar Towns initiative, although I would have to say that the Victorian government giving support to solar towns is like the government of the region that contains the world’s most CO2 intensive power station supporting a project that looks green but contributes very little towards shutting down said horrible drowning power station. In fact, it is amazing how much it is like that. That said, it is far better than the state government being anti-renewable energy and the removal of excessive restrictions on the building of wind farms in Vic will save lives. But who knows, the PR effect from Solar Towns might have large benefits, although I suspect it might result in comments being left here in a few years time complaining about the cost per town and how solar only supplies 15% of the country’s electricity and so we need to immediately start relying on nuclear power.

    Even ignoring the cost of greenhouse gas emissions from burning coal and just looking at the health costs alone, since these mostly occur in Victoria it is very likely to be enough to justify a massive buildout of wind and rooftop solar capacity and the funding of efficiency improvements. Emergency shutdowns of the coal power stations that are most damaging to human life could also be justified on the basis of health costs, as the years of healthy living gained could far outweigh a short term increase in electricity prices resulting from a temporary increase in natural gas use.

    Unfortunately health externalities are likely to continue to be mostly ignored. I just hope that wind and solar capacity rapidly expands in Victoria and in other states, and makes Victoria’s coal plants unprofitable, just as South Australia’s single operating coal power station is no longer cost effective to run, even in the absence of a carbon price, and will be shut down within 9 months to 3 years. While Victoria’s brown coal plants have shown a willingness to continue to operate even when receiving an average of under 2 cents a kilowatt-hour for electricity, they are not quite as hard to beat economically as that makes them seem, as many coal power stations, or individual units, are only one major failure or major overhaul away from becoming unprofitable to operate.

  39. Ikonoclast
    June 15th, 2015 at 15:17 | #39


    This simply means we need a rapid implementation of a punitively high CO2 emissions price. That would be a game changer. The fault lies not with renewable energy’s inherent capacities but with late stage capitalism’s inherent nature. Fossil fuel industries, still being the most powerful energy capitalists around have bought off the politicians and they control the agenda. The people do not control the agenda, the oligarchs do.

    How will this change? Not easily. It will probably take a salutary disaster of some kind which hurts a lot of rich Westerners and is clearly attributable to climate change.

  40. Tim Macknay
    June 15th, 2015 at 16:29 | #40


    Most of our rooftop PV and hws was installed 2010-2012 and has since slowed drastically.

    This is misleading. The way you go on about it, you’d think PV installation had fallen off a cliff. The reality is that PV installation in Australia has been increasing in a more-or-less linear fashion since 2010, at around 1GW per annum in installed capacity terms.

    There were large spikes in the rate of installation in 2011 and 2012, which were caused by buyers rushing to install ahead of the phaseout of the very generous Queensland and NSW feed-in tariffs. The rates of installation across 2013 and 2014 were roughly the same, and higher than the rate in 2010. Although fewer systems were installed in 2013 and 2014 than in 2011 and 2012, the average size of the systems was larger, so the rate of installation in terms of capacity remained about the same as the earlier years.

    So the real story seems to be one of more-or-less steady growth, despite the volatile policy environment. As to whether or not the rate of installation sustained through 2013 and 2014 will continue through 2015, it’s too early to tell.

  41. June 15th, 2015 at 18:01 | #41

    Despite massive cuts in feed-in tariffs in the time period – in Queensland from 44 cents a kilowatt-hour to 8 cents and then maybe 6 cents to nothing – the total amount of point of use PV installed in Australia has been surprisingly constant over the past 4+ years. Now there is nearly no room to reduce feed-in tariffs, further decreases in system costs will make rooftop solar a more attractive investment for households and businesses. As the cost of PV comes down, households have an incentive to install larger systems to increase their self-consumption. If there is no political interference from people who would rather have people die, mostly members of the world’s poorer nations but also Australians, than change our current fossil fuel use, then I expect the installation of rooftop solar to increase. One estimate has the cost of PV modules decreasing by 25% in the next three years and that does not seem unreasonable.

  42. Tim Macknay
    June 15th, 2015 at 18:18 | #42

    @Ronald Brak

    the total amount of point of use PV installed in Australia has been surprisingly constant over the past 4+ years

    You mean the growth in point of use PV installation in Australia has been surprisingly constant over the past 4+ years. The total amount has been steadily increasing.

  43. June 15th, 2015 at 18:52 | #43

    D’oh! – The total amount of point of use PV installed in Australia *annually* has been surprisingly constant over the past 4+ years.

    Thansk for the correction.

  44. June 18th, 2015 at 00:47 | #44

    I certainly hadn’t expected to see it to this extent. http://reneweconomy.com.au/2015/hazelwood-owner-issues-call-to-arms-against-coal-12342

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