COAG Energy Council fails completely

What a bloody joke:

Energy Ministers met in Perth on Friday for the first COAG Energy Council meeting in more than 11 months. Here’s some of what happened.

First up, it won’t be quite so long between COAG Energy Council drinks next time around – another meeting has been scheduled for March next year.

“Technology-Neutral” Hydrogen Plan Adopted

Ministers backed  the National Hydrogen Strategy, supporting the development of a “clean, innovative, competitive, technology-neutral and safe hydrogen industry” and established a the Hydrogen Working Group to develop it.

The “technology-neutral” bit is a worry. While hydrogen can be produced using renewables such as wind and solar energy (green hydrogen), it can also be produced with fossil fuels such as gas (blue hydrogen) and filthy brown coal (brown hydrogen).

The excitement over hydrogen, particularly Australia’s potential for exports, may not justifi`ed. Back in January this year, SQ’s Ronald detailed why he believed  there won’t be strong demand for Australian hydrogen and even if there was, it won’t be highly profitable.

Last Friday, The Australia Institute said potential export demand as cited by various corners including the Federal Government may be overstated by a factor of up to 11.

Mr. Merzian says rushing into hydrogen production could result locking in of fossil fuels for decades more.

COGATI

COGATI stands for the Coordination of Generation and Transmission Investment. It’s the brain/bastard child of the Australian Energy Market Commission (AEMC).

According to the Smart Energy Council, it’s possibly the worst from a long list of stupid energy policy ideas we’ve seen in Australia over the last decade.

The Council explains COGATI as:

The Clean Energy Council is also unimpressed with COGATI, writing to all Ministers ahead of the meeting advising they should not endorse the AEMC’s approach. The CEC’s response to the discussion paper on the COGATI  proposed access model can be found here.

The COAG Energy Council meeting communique doesn’t go into any great detail on COGATI discussions, but mentions Ministers agreed the AEMC should present its work for consideration by Council by March 2020. So, they’ve got some time to get it sorted.

Energy Security Board

The Energy Security Board (ESB) has been tasked with undertaking an immediate review of the NEM electricity reliability standard to ensure that it is fit for purpose, plus to gauge its benefits and costs to consumers.

The ESB is to provide advice for decision in March next year on immediate measures to ensure reliability and security of the electricity system.  It has also been asked to accelerate its work on short term actions to progress renewable energy zone connections.

According to a Victorian Government release, Ministers were also eager to see AEMO’s Integrated System Plan (ISP) actioned sooner rather than later. ESB has been told to get cracking on draft rules to help fast-track the Plan and provide these for discussion and agreement at the next COAG Energy Council meeting in March.

In short, the COAG Energy Council just agreed to investigate carbon taxing renewables and finding new uses for coal:

Talking after the meeting, federal Resources Minister Matt Canavan said the Federal Government took a “technologically neutral approach” to how hydrogen is produced.

This would include using stranded brown coal assets in Victoria, he said.

That will produce the same anount emissions anyway. $500m up the spout.

It appears gas didn’t get a mention.

David Llewellyn-Smith

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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Comments

  1. As mentioned in the article there is no off-take market for hydrogen so Canavan can be as happy as he likes, by the time there is a requirement for large scale hydrogen it is highly likely that we won’t be supplying it at first. So by the time consumers get around to needing our dirty hydrogen, green hydrogen will be cheaper or the coal stations would have still been closed down. I still can’t understand the logic in this government.

  2. Mr. Merzian says rushing into hydrogen production could result locking in of fossil fuels for decades more.
    There is the whole business plan.
    I’m sure Gina and St Baker will be delighted

  3. Japan and South Korea have indicated that they won’t accept brown hydrogen without cost prohibitive CCS anyway, so the whole discussion is irrelevant as no major investment will go ahead without some form of offtake agreement.

    If the customers didn’t care about emissions, they would just buy more LNG.

    • Found this…

      Bad news for everybody. China is set to add new coal-fired power plants equivalent to the EU’s entire capacity, reported the FT. In its bid to boost a slowing economy, the world’s biggest energy consumer is ignoring global pressure to rein in carbon emissions.

      Across the country, 148GW of coal-fired plants are either being built or are about to begin construction, according to new data. The current capacity of the entire EU coal fleet is 149GW. China is building so much coal power that it more than offsets the decline in the rest of the world.

      “China’s proposed coal expansion is so far out of alignment with the Paris agreement that it would put the necessary reductions in coal power out of reach, even if every other country were to completely eliminate its coal fleet,” said Christine Shearer at Global Energy Monitor. Beijing enjoyed one sliver of good press: South Korea, which routinely blames China for its smog, admitted that more than half of the country’s ultrafine dust is domestic.

      Why It Matters?
      China has made major gains in cutting pollution. A raft of clean air policies saved hundreds of thousands of lives in 2017 alone, according to new research by a group of Chinese scientists. But its continued reliance on coal-fired electricity raises serious doubts about Beijing’s commitment to fighting climate change.