The Chief Scientist, Dr Alan Finkel, was asked by the Council of Australian Governments (COAG) to undertake an independent review of the national electricity market (NEM) that:

• delivers on Australia’s emissions reduction commitments
• provides affordable electricity
• ensures a high level of security and reliability

This was complicated task that needed to take into account:

• the closure of ageing coal-fired power stations
• escalating extreme weather events (like heatwaves, bushfires and storms) driven by climate change that test the resilience of the system
• increasing gas prices
• rapidly declining costs of wind, solar and battery storage

It also had to be politically palatable for the federal and state governments.

The energy users, the general public and industry just want long-term policy certainty.

The major points made by the review and the Climate Council’s view are summarised below.

1.   Emission Reductions

The minimum target for reducing emissions in the electricity sector should be a 28% emissions reduction below 2005 levels by 2030. While it places responsibility for more aspirational targets to 2030 and beyond with government(s), the review cautions higher targets could have ‘larger consequences for energy security’ and ‘implications should be re-examined’.

This target is consistent with the commitment made by Australia at the Paris Climate Change conference but the electricity sector needs to bear a greater share of the reduction. It is easier to reduce emissions in the electricity sector as many of the required technologies already exist and reductions in other sectors like transport and land use are harder to achieve. The Climate Change Authority, the government appointed advisory body, suggested that electricity emissions should reduce by two-thirds by 2030 and be zero by 2050.

2.   Clean Energy Target

The Finkel Review proposes introducing a Clean Energy Target, which would effectively replace the current Renewable Energy Target from 2020. Gas and coal (with carbon capture and storage) would qualify under the Clean Energy Target, as well as renewable energy. The Clean Energy Target would set a certain target amount of new ‘clean’ electricity (expressed as GWh or % of electricity) based on the required emissions reductions for the electricity sector. The Finkel Review leaves the target baseline and emissions trajectory to 2030 and beyond for politicians to decide.

Technologies with lower emissions, like renewables, would receive higher benefits than those with higher emissions, like gas and coal (which would still be required to be below a set emissions intensity level to receive any benefit). New coal stations that do not meet the target can still be built without penalty, increasing the emissions reduction burden from ‘clean’ electricity.

The Clean Energy Council website explains this mechanism in more detail. Modelling undertaken for the Finkel Review (based on 28% emissions reduction for the electricity sector) indicates the Clean Energy Target mechanism (and an emissions intensity scheme) would result in lower costs to households and businesses compared with no action at all (business as usual). The modelling shows renewable power continuing to grow, up to 42% of electricity supply by 2030 (58% still comes from fossil fuels by then, with no further brown coal closures), in contrast to business as usual of 35% renewable electricity.

Power generated by renewable energy in 2030 under the proposed Clean Energy Target – at 42% – is far too low. Under the Clean Energy Target, electricity supply from large scale renewable energy would only increase 9% from 2020–30 (about the same increase as has occurred in the past ten years, a decade marked by significant climate and energy policy uncertainty).

3.   Renewable Energy Reliability

The Finkel Review recommends a new requirement on new wind and solar power plants to provide a certain level of ‘dispatchable’ capacity (this was called a Generator Reliability Obligation). Dispatchable capacity is electricity that is available on call, as and when needed. New wind and solar would be required to provide a certain amount of battery storage or gas generation as determined by energy market bodies so that power is available with certainty, for example, when the wind isn’t blowing and other sources cannot provide sufficient power.

There was no equivalent requirement placed on new, or existing ageing gas or coal generation, despite the failure rate of ageing power stations increasing. For instance, in early February 2017, a severe heatwave across much of Australia’s south east and interior caused supply issues for the South Australian and NSW energy systems at a time of peak demand. In NSW around 3000 MW of coal and gas power capacity was not available when needed in the heatwave. High power users in industry were required to scale back production at great cost.

4.   Future of Coal

The Finkel Review recommendations focus on incentives to encourage new lower emissions power plants to be built, rather than phasing out or penalising polluting coal and gas plants. So the approach is intended to bring on new renewables without incentivising the phase out of existing polluting coal generators. Coal generation would continue to provide over 50% of Australia’s electricity by 2030 and 24% by 2050.

Coal should be phased out much more quickly. Australia’s coal-fired power stations are old, and polluting by world standards. The Finkel Review acknowledges that by 2035:

… approximately 68% of the current coal generating plants will have reached 50 years of age.

Its modelling shows most still operating at 2030 and some even by 2050. The review even considers it a ‘benefit’ for these old, polluting coal plants to continue operating.

The key recommendation for coal-fired power is a new requirement for power plants to provide three years notice before closing. A schedule for the closure of aged plants should have been established years ago.

5.   Future of Gas

The Finkel Review provides for a continuing role for gas power generation despites the issues with methane emissions and local environmental impacts of coal seam gas extraction. It acknowledges gas prices (and, as a result gas power prices) will continue to rise in future due to the demands of liquefied natural gas exports from Queensland, and the increasing price of producing gas from unconventional gas fields.

At current gas market conditions, it observes that battery storage may be more cost effective than gas in providing security and reliability in the near future. However, the Finkel Review paradoxically urges government and industry to prioritise gas exploration and development.

See STEP Matters Issue 190 for more details on the issues with gas powered electricity.

Government Response

The Turnbull government has supported all the recommendations except the Clean Energy Target. They can’t get away from the vested interests of the coal industry. There are even rumours that they would consider providing financial support for a new ‘clean’ coal-fired power plant.

Coal-fired power is on the way out, globally, and in Australia. Clean coal is very expensive, if not technically impossible. But using public funds to prop-up this 19th century technology would lock in climate-destroying pollution and higher power prices for decades to come.

The Turnbull government is out of step with state/territory and local governments. State and territory governments are already on track to deliver the Clean Energy Target on their own:

• Victoria, Queensland, Northern Territory and South Australia are set to generate 40–50% renewable energy by 2030
• Tasmania is already running off 90% renewable energy
• ACT has contracted enough renewable energy to meet all its electricity needs by 2020

The states are setting strong targets that will help Australia reach net zero emissions by (and ideally before) 2050 in order to protect Australians from worsening climate impacts.

South Australia is about to get a 150 MW solar thermal power plant that will meet 5% of the state’s power needs. The 150 MW plant near Port Augusta is expected to be operational by 2020 and will power all the South Australian government's electricity needs. The plant uses the sun as a source of heat that is reflected by mirrors onto a tower containing molten salt that is used to create steam that drives a turbine. It is expected that more of these plants will be built.

Several local governments including Ku-ring-gai, Willoughby and North Sydney, have signed up with the City Powers Partnership set up by the Climate Council. Local councils who join the partnership pledge to take five key actions across renewable energy, efficiency, transport and working together. The partnership acts as a support network for sharing expert information and establishing joint projects.

The information in this article is sourced from the Climate Council’s commentary called Unpacking the Finkel Review.

One of the major concerns about the NSW government’s biodiversity laws is the fundamental flaws in the Biodiversity Offsets Scheme, which will lead to the widespread clearing of remnant bushland in the Greater Sydney area, in return for developers' cash payments – see STEP Matters Issue 191. The application of these payments is unlikely to make up for the biodiversity that is lost. Several groups are so concerned that they have written a joint open letter to the premier. It is not only environment groups involved. Others are the Heart Foundation, the Institute of Landscape Architects and the National Trust.

The letter (see below) calls for action from the government to make the rhetoric a reality that the legislation will improve biodiversity within Sydney. Members of the general public are invited to sign the letter.

Dear Premier

With Sydney’s population projected to grow to 6.4 million by 2036 and the worsening climate change-related urban heat island effect, we write to urge you to ensure that adequate levels of green space are provided to all Sydney-siders and Sydney’s unique bushland and wildlife is protected.

Sydney-siders highly value access to a range of formal and informal green spaces – trees, bushland, parks and sporting fields. This is borne out in previous public surveys and the strong community reaction whenever public green space is sold-off or alienated for development.

Extensive research, both in Australia and overseas, clearly shows that the environmental, social, spiritual and economic benefits of green spaces are irrefutable. Green spaces cool our city, reduce energy costs, increase property values, promote healthy lifestyles, improve air and water quality, reduce net carbon emissions, prevent stormwater runoff and provide important wildlife habitat.

Sydney's green spaces also play a key role in the health of Sydney's iconic blue spaces. For example, the revitalisation and resilience of Greater Sydney's six major river systems – Hacking, Georges, Cooks, Parramatta, Nepean and Hawkesbury, as well as Botany Bay and Sydney Harbour depends on the health and connectivity of the surrounding vegetation.

Despite these benefits, current NSW government policy and legislation is failing to protect Sydney’s green spaces as these are actively being depleted by clearing and alienation for grey urban and industrial infrastructure development. The Total Environment Centre’s SOS Green Spaces map highlights over 70 green spaces currently at risk of destruction. This includes peri-urban areas undergoing rapid development and the impacts of major transport infrastructure projects such as the South East Light Rail and WestConnex. This deteriorating situation must be addressed as a matter of urgency.

A Plan for Growing Sydney Direction 3.2 aims 'to create a network of interlinked, multipurpose open and green spaces across Sydney' also known as the Green Grid. This concept is also supported by the work of the Greater Sydney Commission. However, specific actions, policies, legislative changes and funding are required to shift this concept from rhetoric to reality.

As key stakeholders representing a wide range of interests and expertise about urban green spaces, we urge you to:

• Assign responsibility for planning, implementing and monitoring Sydney’s green spaces to an independent body with the mandate, skills, funding and resources to achieve a comprehensive network of formal and informal green spaces designed to maximise benefits to Sydney-siders and protect Sydney's unique bushland and wildlife in the long-term.
• Prevent the clearing of bushland in the Greater Sydney area unless strict like-for-like offsets can be located and protected in perpetuity within the close vicinity of the bushland being cleared (note: under the government’s current draft Biodiversity Conservation Regulation 2017, the proposed Biodiversity Offsets Scheme will lead to widespread clearing of Sydney’s remnant bushland, including threatened species habitat, particularly in Western Sydney).
• Prevent the alienation of community and Crown land, as well as removal of the tree canopy, from Sydney’s green space network.

Sydney's green spaces are a vital component of its liveability and resilience as a city. Your positive action in protecting and enhancing our green spaces would strengthen your leadership in Australia’s much-loved and admired iconic first city, for current and future generations.

We, the sixteen signatories to this open letter look forward to an opportunity to discuss this important issue further with you.

STEP’s public fund, the Environment Protection Fund, is registered as a Deductible Gift Recipient (DGR) via the Register of Environmental Organisations administered by the Department of Environment and Heritage. This means that donations to the fund can be claimed as a tax deduction.

We have received the annual return form. This form used to be a simple exercise especially for a small organisations like STEP. However this time there are more questions. The government wants to know the breakup of the application of donations in categories of on-ground environmental remediation (no definition provided), research, education, advocacy, legal, overseas, administration and staff. Is this question anticipating a change in the eligibility requirements for DGR status of donations?

In 2016 the Senate Standing Committee on the Environment conducted an enquiry on this issue. The committee’s report concluded that the purpose of granting DGR status should be to support practical environmental work in the community but then took a very narrow interpretation of the meaning of ‘practical’ and recommended that:

annual expenditure on environmental work be no less than 25% of the organisation’s annual expenditure from its public fund.

Treasury has released a Discussion Paper on this issue and the general administration processes for charities. Currently there is overlap and some confusion between reporting and responsibilities under the Charities and Not-for-profits Commission and the Register of Environmental Organisations. Resolving these issues is welcome but they are also proposing that eligibility should be based on the amount of remediation work carried out.

Why single out the environment organisations for what is basically a financial penalty compared with other charities and lobby groups?

The Discussion Paper states that:

DGR tax arrangements are intended to encourage philanthropy and provide support for the not-for-profit (NFP) sector. Along with other tax concessions to the NFP sector, DGR status encourages the delivery of goods and services that are of public benefit.

It asks for ‘stakeholder views’ on the recommendations of the parliamentary committee, and also whether the government should go even further:

Views are sought on requiring environmental organisations to commit no less than 25% of their annual expenditure from their public fund to environmental remediation, and whether a higher limit, such as 50%, should be considered?

We ask the question, is the revenue forgone in providing tax deductions to environment groups a cost or a benefit? It is more cost effective to prevent damage to the environment in the first place rather than clean up the mess afterwards.

Activities like research, education and monitoring are vital for the prevention of damage. Take as an example the recent ABC program on Four Corners of illegal dumping of construction waste next to the Hunter River discovered by the Community Environment Network on the Central Coast. They were doing the job for the Environment Protection Authority. How much would the clean-up cost if dumping continued unabated? This monitoring would not count as remediation.

Donations and their tax deductibility are especially valuable for organisations like the Environmental Defenders Offices that provide a vital means for the general public to receive advice of their rights when threatened by developments.

Often it is the people living near the development site or mine who are aware of the potential damage not the government bodies. Take the coal seam gas exploration operations as an example, local farmers had no way of obtaining the scientific analysis to be able to object to miners entering their land. Ultimately when the full picture of potential groundwater pollution became clearer the NSW government had to take steps to limit the powers of miners to explore.

Business lobby groups like the NSW Minerals Council are actively supporting the limitation on deductibility status on the grounds that groups like Lock the Gate are simply activists ‘destroying the economy’.

If the proposal goes ahead it will demonstrate that the financial clout and expert lobbying teams of business interests are more important than the views and wellbeing of individual citizens who are concerned about the environment or are adversely affected by a development.

Submissions are now closed but STEP found out about the paper in time to make a submission. It is not too late to send a protest to your local member of federal parliament.

Over the past century, average land surface temperatures have risen by almost 1°C across the Australian continent. Models suggest this may have already had significant impacts on Australia’s ecosystems and biodiversity, but these impacts have not been systematically investigated.

CSIRO Land and Water and the Department of the Environment and Energy are undertaking an exciting project to collect observations and anecdotes that will help to build a national picture of the kinds of ecological changes that have been occurring across the country over the past 10 to 20 years or more, and where changes may not have been occurring. We are looking for people with strong links to Australian environments (e.g. farmers, natural resource managers, ecologists, naturalists, rural scientists) to share their perceptions of recent ecological change (or lack of it) in an area they know well, and how this might link with climate or other change.

To participate, you would need to be able to select a natural area (e.g. your local region or farm, a nature reserve, urban bushland) that you have been familiar with for at least the last 10 years. Note that we are interested both in areas where change has been observed and where change has not been observed.

The survey will take about 30 min. Click here for additional information about the project.