The Age has a report about the three biggest American investment banks, Citigroup, JP Morgan and Morgan Stanley, releasing some new principles about financing electrical generation. Frankly, the press release from Citigroup is more informative. Basically, in consultation with some American green groups, the banks have figured out that carbon charging is coming, and that any new investment in electrical generation needs to take that into account.
The principles include recognition that funding demand reduction and renewable energy technologies should be given serious consideration, and the future carbon costs of conventional power, particularly coal-fired electricity, need to be given “enhanced diligence”.
You have to wonder what’s going to happen around Australia when the baseload electricity capacity crunch hits in the next few years (and it will; I’m prepared to take bets that demand reduction won’t be nearly fast enough to produce absolute cuts in power requirements). NSW and Victoria, at least, seem to still be pencilling in more coal-fired power stations - and NSW is trying to get the private sector to buy their existing ones. Given that carbon capture technologies seem to be fading into the future, getting banks to pony up the dough might be harder than they think.
Robert, these revelations are shocking! Revolting! Amplifying! Watts going on?
More coal-fired power stations you say. This is madness.
Robert, I’d be interested in your views on Mark Diesendorf’s arguments regarding base-load energy here and here.
Also, when you state:
are you arguing that demand reduction can’t be achieved fast enough, or that it won’t be achieved fast enough given existing and forseeable future policy settings, trends in corporate and citizen’s behaviour, etc?
Well gee, that might happen under a greens dictatorship. However, in the real world electorates won’t vote for parties that will beggar them. There will be no odious carbon tax to price coal-fired power generation out of existence unless there’s a cheap alternative. Ever.
It would be a great excuse to start using nuclear power of course, which isn’t a bad thing.
It’s all a bit of a dilemma for state governments, isn’t it?
Keeping the lights on while doing one’s bit for climate change is not going to be easy. As for nukes, forget it. The Victorian government can’t even dredge Port Phillip Bay without running a nimby Green gauntlet, and that’s after an exhaustive environmental study that found it to be harmless. Anybody who thinks nuclear power stations are going to built anytime in the next generation has got rocks in their head.
Seeing these banks have essentially bankrupted themselves through their involvement in the subprime fiasco, I guess they are making a virtue out of financial necessity.
Dirty, big Chinese banks have lots of money looking for a profitable home.
What about new baseload combined cycle coal that ‘buys’ or otherwise assumes the emissions for a decommissioned Hazelwood, while providing double or triple the electricity?
That’s how I would see a new brown coal generator being built. But nah, they’ll all be expensive gas ones, until we run out of gas.
Paul: Diesendorf’s not out of the ballpark - most of the studies suggest you can supply maybe 20% of your electricity with wind or other intermittent renewables without buggering things up too much. But that’s not going to shut down a single coal-fired power station.
As to the difference between “can’t” and “won’t”, they are not so straightforward. Clearly, if we were to go on something akin to a war footing, we could cut our emissions by a great deal very quickly. But I simply don’t see that happening, unfortunately.
John Humphreys of LDP fame calculated that a broad-based carbon tax would lead to something like a 10-20c in fuel prices. A smart government would introduce it just before an election, knowing that electricity prices would not rise until later.
Hey an opportunity to discuss a carbon tax without playing ‘where’s the evidence’ with GMB.
In the real world smart governments won’t introduce carbon taxes which are sufficiently badly designed to beggar people and economies. They will do things such as making the taxes revenue-neutral (e.g. using it to fund firms and individuals to reduce their carbon footprint) or using the revenue to phase out other taxes (e.g. payroll tax in Australia).
Outstanding. Now if only John Humphreys or someone will come in I can actually learn something. The Carbon Tax thread at Catallaxy is months old has two and half thousand comments and we’ve hardly discussed it all.
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At the monment it’s all about Iraq!!!!
Could be worse. Could be all about fractional reserve.
Mods, please delete post #1 and ban everyone.
Corrected for reality.
Good news. The age of cheap electricity is coming to an end and with it we’ll see less urban sprawl, more public transport and a healthier environment. That is if we have decent governments who aren’t tied to the past.
The fractional reserve thread is likewise crawling slowly toward the 3000 comments mark. There are wagers on which will get there first.
Well it’s not entirely good news now is it. In fact it’s actually shithouse news in many ways.
Corrected for intent.
Adrien, not entirely but it is good news for renewable energy and the planet.
I think a lot of individuals here are actually all focusing on this issue in a manner,that is both terrible and doesnt then allow for other matters to be considered.Which doesnt mean anyone is actually wrong in their immediate comments,because after all exactly none of us are making the decisions.And people like Iemma and the man chosen by Carr from unemployment to state Treasurer,is everything I actually and honestly hate about the University educated.Some points that rarely get mentioned re the building of,or recycling off to greener coal firing,is the aging population,the need for skilling and reskilling,and an obvious lack of monies in superannuation for those retired and retiring.Then there is community service obligations as a moment of law and judicial process,holidaying people from overseas, some consideration of skilling up our neighbours to the north besides harvest work,and the endless supply of engineers in China and India,who would just love to earn Australian bucks for a while.And the consolation prize for China and India is employment of their educated citizens and thus working alongside others from overseas,some worthy connections.The skill base is just organization,the cost of materials ,can be traded off,or penalty applied.Government can be flexible because law is set by them.Both Iemma and Rudd have taken the easy way out..the unions would also be still working,as training staff,and go-betweens with planners and engineers.Only Green type of objections are then worthy.Picking up a few trade related skills in later age can then be a paid working bonus,often these people come with their own caravans.Menshed Movement and Babyboomer sites already are dismayed by the loss of interest in these age groups as being useful citizens,women unexcluded Africans as well.We seem to be better at mathematics in comparison with the Iemmas………..
And don’t none of you be looking at biofuels for an alternative:
Co.———————————- IPO——————Jan 2008 –Gain
Australian Renewable Fuels May 2005@$1.00 $0.045 –95.5%
Australian Biodiesel Group Dec 2005@$1.00 $0.021 –97.9%
Sterling Biofuels……………… Sep 2006@$1.00 $0.079 –92.1%
Natural Fuel……………………. Dec 2006@$1.50 $0.11 –92.7%
Australian Ethanol …………………………….$0.45 $0.035 –92.2%
wbb: yep. Current generation biofuels are a tax rort, next-gen ones are still lab projects.
Oh, and did anyone notice what happened in the water industry when demand outstripped supply?
Affected Governments are building energy intensive desalination plants.
So much for imposed demand management.