February 5, 2009

Response to Federal Resources and Energy Minister Mr. Martin Ferguson.

The article provided by the Federal Resources and Energy Minister Mr Martin Ferguson coalesces around two themes, namely promote the resource development policies of the government and secondly portray “environmentalists” as lacking in knowledge, understanding and concern for the worlds under privileged.

He sympathizes with the 1.6 billion people around the world who have no electricity, while there is at least that many again who have access only to a deficient or inadequate supply. However linking this issue to China is a stretch given that mainland China has sound transmission and distribution infrastructure. It’s only the remote western areas such as Outer Mongolia and the Tibet territory that lack substantial power infrastructure.

India, Indonesia, South America and Africa have major population groupings with little or no electricity. In these regions Governments are implementing large programmes delivering electricity via small scale renewable systems. These are certainly practical and ultimately the most cost effective approach. Indonesia has some 6,000 inhabited islands thus inhibiting any large interconnected power grid. 90,000 remote village households in 2009 will be fitted with solar systems, building on numbers installed in recent years. India spends more on renewable power than Australia, driven by the needs of some 75,000 non-electrified remote villages. Even the large grid systems in India are now taking up multi megawatt grid tied solar plants.

Mr Ferguson outlines the Governments $4.5 billion programme to invest in clean energy technologies, described as an unprecedented investment. This investment of tax payers money is being made despite there is not one practical and commercial “clean coal” facility in operation around the world today. Any commercial scale system may need a decade to research and develop with no certainty of success.

Mr Ferguson draws on the proposition that renewable power is not a candidate to provide base load electricity. In other words it cannot generate at less than 10 cents per kilowatt hour. Today renewable generation costs are in the range of 15 cents up to 30 cents. However if the argument is turned to peak power requirements on summer afternoons when most Australian states risk black outs due to power shortages then this price range cents may be quite attractive.

Energy Australia recently published their latest tariffs (see SMH June 27 2009) showing that peak daytime home power and peak business rates were 32.4 cents and 31.90 cents per kilowatt hour respectively. Businesses also meet additional costs through peak capacity charges. With tariffs projected to rise substantially then renewable power can closely fit this need now. It can be seen as very effective future proofing as renewable systems do inherently have low operating costs.

One lesson from the German solar programme is that citizens when treated as real investors realize about another 2.5% return as opposed to leaving the funds as interest bearing accounts at the bank. Australia will benefit from a rational science based pathway as the Minister prescribes but also from a sound financially based policy structure that provides for the take up of emerging renewable technologies.

One clean energy technology positive is emerging in the light vehicle transport sector. Innovative US based R&D combined with Asian manufacturing skills is about to provide the world with an evolutionary step in automobile product offerings. Vehicle tank to wheel efficiency will increase from about 12% for the standard petrol engine today to about 60% for all electric car. This improvement will make it practical for battery charging from renewable generation, probably from solar panels dispersed across cities.

Mr Ferguson has used the predicament of the world’s poor and his apparent frustrations with the green movement to create an altruistic cum economic logic for the coal and uranium industries. This logic justifies pouring billions of dollars into highly speculative “clean coal” technology. As Albert Einstein said “We can’t solve problems by using the same kind of thinking we used when we created them.”

Read Australia’s Resource & Energy Minister M. Ferguson’s article in The Australian, published 24th July 2009 by clicking here.