In today’s The Australian newspaper, reporter Matthew Warren presented an article which was supposedly a bad news story about the decline in the value of the electricity industry. The headline read “Electricity market shrinks by 40pc as prices tumble”.
Unfortunately, as the Internet shrinks behind walls of greed and information becomes available only to those who can afford to pay for it, I cannot find a complete electronic version of the story. It is here:
for those with a subscription and on Page 2 of the printed version.
The story says that the electricity market collapse was due:
“…to lower wholesale prices caused by an increased supply of renewable energy driven largely by investment as a result of the (Australian) government’s Renewable Energy Target.”
It goes on to say:
“Average prices and demand have fallen consistently over recent years …”
All this is reported as being a direct result of Australia’s new carbon tax since it was first mooted in 2007.
Now, correct me if I am wrong or missing something but:
1: Isn’t the move to renewable energy sources a desirable effect of the carbon tax?
2: Aren’t lower wholesale prices good?
3: If we have lower wholesale prices as a result of the carbon tax, why is Campbell Newman (QLD premier) and others saying that recent price rises are a result of the carbon tax?
4: Why does the press continue to highlight desired effects as something bad when clearly it is a good result for the carbon tax and investment in renewable energy sources?
Granted, for the electricity industry it may be seen as a bad thing. A few months ago one of Australia’s larger energy companies, Origin, downgraded their half-yearly profit to a measly $524 million. In context, that HALF year profit is about the same as the GDP of Tonga.
In business demand has always been a critical factor in a company’s success. No-one complained about the downturn in the cartwright industry. It was replaced by something better.
The rest of the world is getting behind renewable energy sources with a fervour. Somehow Australia is still denying the good benefits in favour of highlighting the “poor energy sector” which still wants to make carts while the rest of the world makes racecars.
An interesting graph presented by the Scientific America (http://blogs.scientificamerican.com/plugged-in/2013/07/10/the-global-outlook-for-renewable-power-in-one-graph/) shows the global outlook for renewable energy sources. The prediction is that renewables will become the second most important energy source in the globe by 2016 – in just three years.
News flash Australia! One of the fastest growing countries in the renewable space is China – the major player in Australia’s coal export business. The Scientific America report says:
“China is expected to account for 40 percent of the global growth in renewable power capacity between 2012 and 2018. Although a large portion of China’s renewable portfolio is hydro and onshore wind, the country could have the largest deployment of solar PV systems if financial incentives and a stronger policy push are made.”
According to a report on June 3 this year, again in The Australian, Australia is the world’s second largest exporter of coal used for power generation. And is our third largest market behind South Korea and Japan.
So, while we bemoan the fact that our largely coal-based power industry is in decline due to a boost in good clean power generation, our trading partners are reducing their dependence on one of our major exports.
It’s heartening to see the rest of the world paying attention and doing something about renewable energy sources. It’s also heartening to see that the effect of the carbon tax has been to drag Australia along the same path – albeit it with some sectors kicking and screaming.
Maybe we have lost the right to call ourselves “the clever country”. But maybe, just maybe, we can still have good outcomes in spite of ourselves.