Environment
Friday, 9 November 2007
Last Updated: Friday, 9 November 2007
Mike Preston
Labor leader Kevin Rudd’s commitment to a 20% renewable energy target by 2020 will help clean-energy businesses move their technologies from development to deployment, a leading industry group says.
Rudd yesterday announced that a Labor government would require energy companies to source 20% of their electricity from renewable energy sources by 2020, an amount equal to 60,000 gigawatts per year.
The Labor target is 5% higher than the 15% target announced by the Coalition in September, and, unlike the Coalition, excludes energy generated from non-renewable sources such as nuclear and clean coal.
The higher target and exclusion of technologies like clean coal means Labor’s policy would provide a bigger boost for the businesses in the renewable energy sector, according to Renewable Energy Generators of Australia chief executive Susan Jeanes.
“There is quite a bit of extra room in the 20% target – that is about 15,000 extra gigawatt hours in the Labor target, which will give more room to move for alternative energy generators,” Jeanes says.
Labor’s emphasis on renewable energy targets differs from the Coalition, which has been more inclined to provide funding directly to renewable energy technology developers. Both approaches make an important contribution to the industry, but as more technologies move into a deployment stage, market mechanisms become more important, Jeanes says.
“Market mechanisms lets people find the cheapest source of energy possible, so as they come into operation that will help produce efficiencies,” Jeanes says.
Wind generation company Roaring 40s, which operates wind farms in Australia, New Zealand and China, today welcomed Labor’s announcement as good news for the renewable energy sector in Australia, according to managing director Mark Kelleher.
“As one of the leading renewable energy companies in Australia, Roaring 40s is pleased to see the announcement as it will provide big benefits for the company’s future prospects in this country,” Kelleher says.
Mike PrestonPrime Minister John Howard has announced that, if elected, his Government will create a $75 million scheme to support the development of renewable energy technology.
Businesses and researchers in the sector will compete for a share of the money through a competitive tender process.
Campaigning in Perth, Howard also announced that $5 million would be given to Carnegie Corporation, a local company engaged in the development of wave energy generation and clean coal technology.
Hot on his heels in the West, Labor leader Kevin Rudd has promised close to $500 million to put solar panels on the roof of every primary and high school in Australia.
Schools will be able to apply for grants of up to $20,000 to pay for solar power systems, Rudd says.
"We'd be reducing by the equivalent of 2.8 tonnes, of CO2 equivalent for the year in question," Rudd says. “And it’s important that our young people understand the magnitude of the climate change challenge.”
Mike Preston
A move to replace state renewable energy schemes with a single national clean energy target announced by Prime Minister John Howard yesterday could mean significant cost savings for the multi-billion dollar renewable energy sector, an industry spokeswoman says.
Under the new national clean energy target, 30,000 gigawatt hours of power per year will have to come from low emission sources by 2020, an amount that will be equal to around 15% of all energy generated.
Any energy source that emits less than 200 kilograms of greenhouse gases per megawatt of electricity generated will qualify under the target. Controversially, this means coal fired power that uses carbon capture-and-storage may count as “clean” for the purpose of the scheme, along with traditional renewable energy sources such as solar and wind.
The national scheme will replace a variety of different state schemes and territory renewable energy programs, but according to Renewable Energy Generators of Australia chief executive Susan Jeanes, the 30,000 gigawatt annual target will represent an improvement over the various schemes it will replace.
And, Jeanes says, while current state programs have worked well, there will inevitably be cost savings associated with the move to a singe national scheme.
“There is no doubt it will reduce red tape – the state schemes are great, have focused on getting the cheapest renewable energy available, but certainly bringing them all under one scheme will help the industry and create cost savings on the paperwork side of things,” Jeanes says.
The national scheme should boost investor confidence in the sector and result in a more efficient use of capital in the industry, which currently has assets of over $15 billion in Australia and employs around 15,000 people.
“At the moment you might go to Victoria to build a wind farm because the incentive is there to do that, even though conditions in another state might better suit that form of energy generation,” Jeanes says. “That shouldn’t happen any more, and those efficiencies will help attract developers and get more schemes off the ground.”
But Fiona Wain, chief executive of think-tank Environment Business Australia, says the national scheme won’t do anything to boost renewable energy targets and won’t make a substantial difference to Australian emissions levels.
“The urgency of what is facing us has really got to be taken seriously, and this measure just doesn’t do that,” Wain says.
“The minute that anybody talks seriously in energy terms about targets going forward gives more certainly and clarity of intent to investors and that is a good thing, but this is not a big step and more drive is needed to meet the challenges ahead of us.”
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Thursday, 21 June 2007
Beth Walker
Going green is a hot topic for most people but many businesses owners are flying under the radar when it comes to environmental compliance.
Most businesses want to do “the right thing” but there are two big stumbling blocks: they don’t know how or what to do to be more environmentally friendly; and they often think that being “green” costs money.
Research I have done at Edith Cowan University shows that the vast majority of SMEs (96%) are concerned about the environment but many didn’t understand that their business practices potentially have an impact on their immediate environment.
Collectively, Australia’s 1.8 million business owners make an enormous impact on the ecological footprint of society, both on their immediate local environment as well as in a global sense.
The good news is that these blocks can be overcome and governments at all levels are being to put up info on their websites, here are two.
http://www.business.gov.au/Business+Entry+Point/ and click on environmental management
http://www.sustainability.vic.gov.au/www/html/1517-home-page.asp
The second block, regarding the bottom line, can also be overcome with some simple strategies. The first place to start is to understand the three fundamental tenets of environmental behaviour and management, the 21st century 3Rs:
Reduce
Reuse
Recycle
Different industries will do it differently. But here are some really easy and inexpensive examples to get any business started on a green track.
Reduce:
- Turn off (rather than leave on standby) all non-essential electrical appliances at night, including computers, monitors and air-conditioners.
- Set all photocopiers to duplex and economy/draft modes.
- Replace ordinary light bulbs with fluorescent energy-savers when they need changing.
- Don’t print emails unless absolutely necessary.
Reuse:
- Packaging is one of the easiest things to reuse, and is a great way to save money. Buy refills of products rather than new.
Recycle:
- Make sure you have recycling bins for different products. These can simply be a cardboard box for paper and a small plastic bin for bottles/cans, and put them close to desks and sinks.
- Invest in washing-up detergent and replace disposables cups with ordinary cups or mugs and encourage staff to bring in their own from home.
- Check out if any of your “waste” is something that can actually make you money. Remember, recycling is also a growing industry.
It still comes down to the individual business owners to take control but a good start is to think about good environmental management practices as having the potential to increase rather than reduce the bottom line. That is good business sense in anyone’s book.
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Carbon entrepreneurs heat up Tuesday, 20 February 2007
By Kristen Le Mesurier
Businesses trying to sell carbon credits as recently as a year ago would have been greeted with a puzzled ‘What’s that?’ before being shown the door. But the continuing drought, Al Gore’s documentary An Inconvenient Truth and the Stern Report on climate change have shifted public perceptions and created a more receptive audience for entrepreneurs in the business of carbon trading.
A boom market is in the making. An Australian carbon trading scheme could create a market worth more than $4 billion a year, according to traders at Dutch investment bank ABN-Amro.
For entrepreneurs, carbon is a profit centre with huge growth potential, which has already been demonstrated in New South Wales. Its greenhouse gas reduction scheme, introduced in 2003 and aimed at the power industry, resulted in turnover ballooning from $59.1 million in 2005 to $184 million in the first nine months of 2006, the latest figure available. The scheme has traded 37 million credits since the scheme was introduced. With each certificate valued at $12–14, this market has so far turned over about $480 million.
The numbers are much bigger in Europe. The European Union emissions trading system, which was introduced to help member countries meet targets under the Kyoto Protocol, turned over $US8.2 billion in 2005 and a massive $US18.8 billion in the first nine months of 2006.
The market in Australia is ready. Resources giant Rio Tinto shocked the market when it broke ranks with other miners and manufacturers and called for a national emissions trading scheme in January.
“The language has changed. It is now more about when, not if,” says Andrew Peterson, PricewaterhouseCoopers’ Climate Change Services leader.
What is carbon trading?
Carbon trading involves capping emissions and allowing companies that pollute below the cap to sell their excess permits to others. The theory goes that putting a price on carbon provides a financial incentive to cut emissions. Businesses that choose to pollute are forced to pay market rates for that luxury.
Who are the carbon entrepreneurs?
For a growing number of entrepreneurs, trading in emissions is a way of making money by doing good. “It can be an uneasy partnership,” says Dave Sag, the chief executive of Adelaide-based carbon credit trader Carbon Planet.
“But it comes down to this: If we’re a for-profit organisation we can ask venture capitalists for $60 million because we offer a return on investment. I could ask all of the greenies in the world for money and they’d scratch their beards while shaking their head.”
Entrepreneurs such as Sag are springing up in the brokerage business, creating markets by facilitating trade between consumers. Some, such as Easy Being Green’s Paul Gilding and Nic Frances, are in the business of selling offsets – guarantees that for every tonne of carbon emitted, a tonne somewhere else is removed by planting trees or installing energy-efficient technology.
Some entrepreneurs have started up consultancies, stepping into back rooms and boardrooms to devise emission reduction strategies. Others are rushing to get clean technology to market because a level playing field with coal-based alternatives is no longer a pipe dream.
Sydney-based Easy Being Green started out in 2004 using the mandatory NSW greenhouse gas reduction scheme (GGAS) to get paid for increasing household energy efficiency. It sold $36 million worth of carbon credits to consumers and businesses last year, according to chief executive Paul Gilding.
The business models behind Easy Being Green and other carbon offset organisations such as Elementree, Carbon Neutral, Greenfleet and Climate Friendly, are much simpler than they first appear. They collect money from individuals and businesses, help cut their emissions by installing smaller shower heads, for example, then use the money left over to reduce pollution somewhere else on the consumer’s behalf.
Carbon Planet differs by retailing carbon credit certificates, which are regulated under the NSW GGAS scheme, for $23 a tonne. The certificates are bought from Forests NSW for $14.30. “We actually transfer ownership of the credits in NSW’s greenhouse gas register under the state emission scheme,” Sag says.
Investors are starting to take notice
Entrepreneurs report that the route to venture capital is getting smoother. Because of the worldwide appetite for clean technology, investors are ready to listen to pitches, says PwC’s Peterson.
“I’m seeing enormous interest in SMEs with processes or technologies that could be monetised and brought to market. There are definite opportunities for carbon offset businesses when it comes to raising venture capital.”
The clean technology industry snared 328 cash injections worth $6.65 billion in 2006, according to the Australian Cleantech Map , produced by Clean Technology Australasia.
Gilding says: “Investor interest is rising exponentially. We have more people expressing interest than we have a need for the money at the moment.”
After investing about $1.5 million to get Carbon Planet up and running, Sag is talking to venture capitalists in the United States and Britain. “The next two years will be a sprint. Heading overseas for VC funding means we can raise 100 times more than our initial investment.”
Challenges facing carbon traders
Emerging markets come with big risks. For the new carbon traders, government schemes are the biggest challenge because the goalposts can move unexpectedly.
Easy Being Green had its revenue halved last September in just six weeks when the NSW Government scrapped an arrangement whereby Easy Being Green handing out energy efficient lightbulbs in exchange for tradeable carbon credits. The credits were worth cash.
“Being completely dependent on regulation is really scary. The voluntary end of the market [where individuals pay to offset their emissions] is still small and emerging. Until that gains momentum our revenue depends entirely on government-based schemes,” Gilding says.
Carbon Planet’s Sag says that right now, other carbon traders are the industry’s biggest challenge. One scandal could destroy the industry’s credibility. “It’s a topical industry all of a sudden, so the cowboys are out in force. There are no standards, no regulation, so who knows whether consumers are actually getting the emission reductions they pay for.”
Export markets await
The new carbon traders are using the internet to launch on the world stage. Almost 60% of Carbon Planet’s customers are overseas. “Geography is irrelevant. Consumers buy carbon credits over the net with their credit card. Emissions are global, after all,” Sag says.
Carbon Planet gets involved in the countries it sells to. It is creating a code of best practice with the UK’s Department of Environment Food and Rural Affairs. “We need standards to be as rigorous as possible. The idea is that companies who don’t comply won’t be able to trade in the UK,” Sag says.
Easy Being Green’s predecessor and partner, environmental consultancy Ecos Corporation, started by Gilding in 1994, has offices in the US and the UK and clients as big as Ford Motor Company and DuPont. “About 50% of consulting work comes from the US and the UK,” Gilding says.
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