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Inconvenient accounting for State renewables ambitions

By Geoff Carmody - posted Friday, 2 March 2018


Victoria can’t claim imports of SA wind power as part of its own RET achievement under production accounting.  But if the ACT does so, why won’t Victoria?  What will SA think?  If the ACT and Victoria claim renewable power imports towards their RETs, how can SA do so as well?  Consistent accounting would preclude double-counting.

What about the brown coal state, Victoria?  Under production accounting, it must accept responsibility for local brown coal power production.  Some (via the Heywood interconnector, etc) is exported to, and consumed by, South Australia to ‘keep the lights on’ when the wind doesn’t blow or the sun doesn’t shine.  These exports have probably increased since SA blew up its own coal generation plants.  You can bet SA won’t want to include them in its RET measure of ‘green’ virtue.

Similar questions apply to accounting for Tasmanian hydro production and exports via BassLink to Victoria, and imports of Victorian coal power production the other way when enough hydro is not available.

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Left to their own political devices, will the states claim renewable power more than once, while fossil fuels are ‘ignored’?  Possibly.

I’ll leave NSW and (at present) Qld alone.  Within the NEM, they just keep the lights on, mainly via coal power, when other power fails.

The national RET is calculated by the Commonwealth Government.  It presumably will use production-based accounting, as supported by it internationally.  Its calculations will be the sum of individual state and territory renewables’ production.  Will these state and territory results be published?  If not, why not?  They will be very interesting.

Could Australia use a state-territory renewables consumption accounting framework?  The ACT would love it, politically.  Victoria might like it, too.  I doubt SA and Tasmania would be enthusiastic.  That would make achievement of their RETs harder, by adding imports of coal power and subtracting exports of renewables from their local renewables production.  Nationally, it’s probably a no-no.

Maybe all this really doesn’t matter.  Each state or territory will spin its own politically self-serving accounting treatment of its own globally-puny efforts.  If these add up to more than our actual national renewables production (still puny by global standards), so what?

Given our 1.3% (and falling) contribution to global emissions, I see that point.  But why should the political optics of this bullshit cost so much for power customers, our international competitiveness, efficient allocation of scarce resources, and, increasingly, for the poorest and most vulnerable people in Australia? 

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This is yet another symptom of power failure.

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About the Author

Geoff Carmody is Director, Geoff Carmody & Associates, a former co-founder of Access Economics, and before that was a senior officer in the Commonwealth Treasury. He favours a national consumption-based climate policy, preferably using a carbon tax to put a price on carbon. He has prepared papers entitled Effective climate change policy: the seven Cs. Paper #1: Some design principles for evaluating greenhouse gas abatement policies. Paper #2: Implementing design principles for effective climate change policy. Paper #3: ETS or carbon tax?

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