Don't sell team, try and stop this company going the way of so...

Don't sell team, try and stop this company going the way of so many others! bought out by foreign interests.... and what the % of XT's anyone NAB's new format appears to not indicate status errrr...
http://www.climatespectator.com.au/commentary/productivity-commission-releases-bomb
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Productivity Commission releases a bomb
Tristan Edis

The Productivity Commission has released a report today delivering a scathing critique of electricity network regulation.

While the body was actually commissioned to prepare an analysis of benchmarking to better regulate electricity networks and the role of interconnectors, it has largely ignored its terms of reference. Instead it has taken a swipe at just about every aspect of the regulatory regime governing electricity networks. And for good measure also had a go at solar PV, proposing the small-scale renewable energy target be abolished.

The report makes it plainly clear, illustrated in the chart below, that contrary to Tony Abbott and Barry O’Farrell’s repetitive mantra, electricity prices have skyrocketed well before the carbon price and the reason lies almost entirely with electricity networks, shown in the expanding black part of the bar.



Most of the recommendations re-state what Ross Garnaut recommended in his 2011 report about network regulation:

-- We are overbuilding network capacity and this is costing consumers large amounts of money to little benefit;

-- We need to ideally privatise the network distribution businesses and at least remove the cost of capital free-kicks they receive;

-- The incentives in place governing networks are biased towards building additional network assets and against non-network alternatives such as better managing demand;

-- The Australian Energy Regulator needs greater powers and better resourcing to exercise those powers effectively ;

-- We lack a nationally co-ordinated approach to planning the transmission system which would be best handled by AEMO (contrary to the ridiculous recommendation by the AEMC that came straight out of dictates by Queensland and NSW state governments); and

-- We need wider roll-out of smart meters and time of use pricing that better reflects the costs consumers place on network capacity during peak demand periods.

Lots to like on addressing peak demand, but misses practical realities

This report is a very useful contribution to the energy policy debate, but as is always the Productivity Commission’s inclination, it largely ignores the value of second-best transitionary policies where political, social and technical practicalities get in the way of first-best solutions.

The Commission points out that we’ve got to fix our pricing structures for electricity to reflect times of network capacity constraints, observing:

“Households and smaller businesses are generally not exposed to time-based, cost-reflective network pricing. Thus, users are not encouraged to shift consumption away from peak demand periods, leading to hidden subsidies between peaky and non-peaky consumers, and over-investment in peak-specific investments. Currently, a low-income household without an air conditioner is effectively writing cheques to high-income users who run air conditioners during peaky periods.”

The report points out that peak demand events occurring for less than 40 hours per year (or less than 1 per cent of the time) account for around 25 per cent of retail electricity bills. The Commission estimates that a household running a 2 kW (electrical input) reverse-cycle air conditioner and using it during peak times receives a subsidy of around $330 per year with a peaky customer costing double that of a non-peaky customer.

To address this, the Commission proposes an accelerated roll-out of smart meters and critical peak pricing. This would be prioritised to those areas where network upgrade costs are likely to justify them.

While the report concludes that critical peak pricing must be passed-through to end consumers, I would suggest that this is not necessarily required. What is essential is that electricity retailers are charged by network businesses according to the strain their customer base impose on network capacity, but are then left free to alter their pricing structures to end-consumers however they like (with retail price regulations removed).

Retailers may then find it is better to give some consumers a flat electricity rate but bundle this with a range of demand management devices or energy efficiency interventions. This could end up delivering a superior result than just stabbing a relatively energy-ignorant consumer with a sharp price signal, which they have little idea how to avoid. This has been the experience of several utilities overseas and was covered in Climate Spectator several months ago.

While the Commission is pretty much spot-on with its recommendation about cost-reflective pricing, this has been recommended by others countless times stretching back over a decade and little has been done (for a rundown see this article). The one exception being in Victoria for which the government got mauled by the media and Liberal opposition.

I’ve had conversations with a range of government officials at state and federal government level where they’ve agreed on the need for accelerated roll-out of smart meters. But when I ask why it’s not happening they shake their heads and say it’s just not politically doable. According to these officials, politicians were already nervous about time of use pricing, but have been completely scared off by the experience in Victoria.

In light of this reluctance to roll-out more cost reflective pricing what do we do? On this the report is largely silent.

Also the Commission has fallen into the trap of thinking that investments in alternatives to network augmentation should be governed by incentives given to network businesses. Yet demand management alternatives to network upgrades aren’t a natural monopoly. The trick is not to get networks incentivised to do demand management, but rather to create a clear price signal for demand management providers to compete against network augmentation and against each other.

Related to this point, while the Commission takes a swipe at solar PV feed-in tariffs, of benefit to distributed generation it does recommend the implementation of:

“Arrangements that provide for direct payments from distribution businesses to distributed generation providers, which reflect the network value of their distributed generation capacity and output.

However network businesses could argue that they already provide for such payments.

The problem here lies with how these payments are left entirely to the discretion of the network business and don’t generate a transparent and clear price signal about what a generator would need to do to qualify.

Instead of one-on-one confidential negotiations between the DG proponent and the network business, the regulator should set capacity payments for generation provided during peak periods based on the avoided value of network upgrades. If DG doesn’t supply during the peak period they don’t get paid, but at least they know what is on offer in advance and can plan accordingly.

This is a good report and helps reinforce some of the positive things coming out of the AEMC’s Power of Choice review. But on demand management there’s more to this than just critical peak pricing and incentives for network businesses."

Some very big ++++ here peak pricing for consumers wow!

And in Europe..
http://www.climatespectator.com.au/commentary/two-sides-clean-energy-story
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Two sides to a clean energy story

Published 8:27 AM, 18 Oct 2012
Bloomberg New Energy Finance

Different sides of the argument over government support for renewable energy were in the headlines in Europe last week, as Germany laid out a proposed framework for the future of its feed-in tariff mechanism and developers unveiled big plans for solar in subsidy-free Spain.

Chancellor Angela Merkel’s government announced October 11 a proposal to cap renewable energy subsidies when capacity reaches national targets. The move is designed to keep costs in check as the country phases out all its nuclear power plants by 2022.

Environment minister Peter Altmaier said the plan would see the state ending payments to wind and biomass as limits are reached. The exact limits were not described.

The proposed roadmap follows the government’s announcement in June that it will end further support for solar when capacity reaches a cap of 52GW. Some 20 per cent of Germany's electricity was renewably sourced in 2011, mainly from wind, biomass and photovoltaic projects. Germany’s installed renewable energy capacity at the end of 2011 included about 23.7GW from solar, 28.6GW from wind and 5.4GW from bioenergy.

Under Germany’s feed-in tariff system, which was adopted in 2004, power suppliers are obliged to acquire electricity from renewable sources at a guaranteed rate, depending on the technology, with the costs passed on to consumers.

The recently announced plan appears to be the latest compromise proposed by Altmaier to economy minister Philipp Rösler, who believes lowering feed-in tariffs will help counter rising electricity prices. In order to keep costs in check, hard caps would be put on renewable capacity, above which subsidies would stop. In exchange, the government intends to raise its target for renewable power from 35 per cent to 40 per cent by 2020. Altmaier did not say whether the reform would be completed before Germany’s general election in the autumn of 2013.

The cost of electricity may be a heated election issue. Germany’s power grid operators announced this week that it is boosting the surcharge consumers pay for funding renewable energy by 47 per cent to just over €0.5/kWh in 2013.

While feed-in tariffs are likely to remain for some time in Germany, rising electricity prices and Europe’s debt crisis have forced some countries in the region to pull back spending on new renewable capacity. Still, developers are looking to build plants even without government support. This is especially true in the solar industry, which has been helped by falling equipment costs.

Indeed, last week proved large-scale solar PV projects may not be over in Spain even after the country suspended renewable energy tariffs in January as part of government austerity measures.

German renewable energy developer SAG Solarstrom announced on October 10 plans to build 440MW of solar power plants in Spain. Solarstrom agreed with the solar companies Valsolar 2006 and Cavalum SGPS to develop and construct four PV projects with a total output of around 440MW in Badajoz, in the Spanish region of Extremadura, as part of a joint venture. The project has a total investment volume in the “three-digit million range,” according to the company.

Solarstrom is not the only German solar energy developer to announce this year it will go big in Spain, subsidy free. In April Wuerth Solar and Gehrlicher Solar said they plan to build PV plants in southern Spain that do not rely on feed-in tariffs and compete with wholesale power prices.

Wuerth intends to build a 287MW plant in the Murcia area for €277 million, while Gehrlicher said it plans to develop a 250MW solar park in the Extremadura region for about €250 million.

All of these projects need authorisation by the central government before they can proceed. They will also need equity and debt finance. Both those hurdles may turn out to be high ones for the developers to get over.

Elsewhere, one of the biggest market movers last week was First Solar. The US thin-film PV panel maker and project developer had big gains despite a depressing week for the WilderHill New Energy Global Innovation Index, or NEX. Shares of First Solar added 10 per cent in the week, while the NEX retreated 3.3 per cent, a somewhat steeper decline than broader market indexes.

First Solar said on October 8 that it would supply 585,000 panels to two planned photovoltaic plants in India’s Rajasthan state.

Meanwhile, for the second week in the row, US advanced biofuels producer KiOR was the NEX’s biggest loser, moving down 18.2 per cent. KiOR’s shares have fallen by about 62 per cent over the past year.

It has been a challenging year for clean energy overall. Bloomberg New Energy Finance announced last week that global investment in clean energy totalled $US56.6 billion in the third quarter of 2012. This was down 5 per cent on the second quarter and 20 per cent lower than in the third quarter of 2011, explained partly by weaker figures from the US and India, and a lull in wind farm financings.

The figures suggest that the full-year 2012 figure for investment in clean energy is likely to fall short of last year’s record $US280 billion. If so, 2012 would be the first down-year for world investment in the sector for at least eight years.

The numbers may look disheartening, but Michael Liebreich, chief executive of Bloomberg New Energy Finance, said the decline should not be exaggerated either. “The third quarter figure was still well over $US50 billion,” he said, “roughly equivalent to investment in the whole of 2004.”

EU carbon

European carbon allowances, or EUAs, rose 0.3 per cent last week as the UK pushed for the idea of cancelling permits, and auctions were delayed. EUAs for December 2012 closed on London’s ICE Futures Europe exchange at €7.83/tonne, compared with €7.81/t at the end of the previous week. Allowances traded as high as €8.02/t on Tuesday, reacting to a statement by UK energy secretary Ed Davey that he is pushing for the EU to cancel some permits to boost prices. They fell to a low of €7.62/t on Wednesday afternoon after Greek and German allowance auctions boosted supply in the market.

EUAs rebounded in response to news from the European Energy Exchange that it will hold its first auction of permits for Phase III (2013-20) of the EU Emissions Trading System on October 26, two weeks later than originally planned. United Nations Certified Emission Reductions, or CERs, plummeted 9.3 per cent to €1.66/t on an oversupply in the market and issuances of new credits.
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More +++++ here cap renewables ( this will stop costs rising and increase the target "raise its target for renewable power from 35 per cent to 40 per cent by 2020" this implies efficiency and Bluegen at the 'right price' may well ride the crest of the wave.

Too many issues here better minds than mine,better for you all to have a shot!

All good IMHO