No guts, no glory on clean energy
In 2011, I spent some time in Spain with Ross Garnaut, visiting a solar thermal electricity plant that uses molten salts to store heat so that power generation can take place at night or on bleak days. This was a Spanish initiative that overcame a major objection to renewable solar power: the dependability of the energy being harvested. It is an antidote to the ditty Tony Abbott has been singing for the past year, explaining his contempt for renewable power: “When the wind doesn’t blow and the sun doesn’t shine, well, the power doesn’t flow.”
As we drove between the rows of reflective heliostats towards the central heating tower and the salt storage units, I commented to the Spanish plant manager, “This is like driving into the future.” He responded: “This is the future – our government has had the guts to invest in a number of pilot projects in conjunction with the private sector to expedite the future.”
Garnaut, an economist of international repute, was a key player in the climate change debate in Australia as an adviser to the Rudd and Gillard governments. He was very involved in the Multi-Party Climate Change Committee, of which Rob Oakeshott and I were members.
Out of that process came the much-demonised carbon tax: the fixed price on carbon emissions, transitioning to a floating priced emissions trading scheme. Key agencies such as the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA) were created to enhance renewable energy projects. Both agencies are under threat from the current government, despite achieving valuable progress towards a cleaner future.
After the carbon tax was legislated, much criticism was vented on the independents in the hung parliament for supporting a tax that “would make Australian business uncompetitive and cost jobs”.
One of the largest employers in my old electorate of New England, Bindaree Beef, was outraged and not afraid to say so. The patriarch of this family-owned meat-processing business, which employs 830 people and has an annual turnover of $400 million, declared that the tax would cost his company millions and undermine employment in Inverell. John (J. R.) McDonald demanded to know how his company could avoid the tax. Other meat processors had similar views.
Bindaree had emissions of 35,000 tonnes of carbon dioxide equivalents, 10,000 tonnes above the threshold. But what it did next set Bindaree Beef apart from its competitors. It provided global leadership in terms of new business models and completely reversed the doomsayers’ rhetoric about the impact of the tax.
Using a biodigestion technique uncommon in Australia, biogas was created using waste productand effluent, with the gas then used to generate power at the site, replacing heating coal. The current industry practice is to place the waste stream into ponds, but these emit methane and thus produce the carbon tax issue. With the biodigester, bacteria chew up the waste and create methane, and a very concentrated nutrient load that can be used as farm fertiliser. The recycled water produced is used for irrigation or other purposes.
The gas created by the biodigester powers the abattoir, replacing coal-fired boilers and accounting for more than half of the electricity used. Eventually, it could ring-fence the company from external energy sources – the ultimate micro-grid.
The technology employed at Bindaree was special because it had the capacity to digest the paunch of the cattle being slaughtered. The paunch is the first compartment of the stomach of a ruminant – the gut of the animal. Meat processors have historically had difficulty with the paunch waste and had to resort to landfill, with all its consequent difficulties. Not so the biodigester.
I raise this because it was a grant from the Clean Technology Investment Program, part-financed by the Clean Energy Finance Corporation the Abbott government attempted to dismantle earlier this year, that allowed Bindaree to build the $40 million plant.
Abbott’s desire to dismantle this funding body and other aspects of the clean energy framework is twofold. About half of it is pandering to the vested interests of power companies and fossil fuel producers. The other half is a hatred of everything achieved by the Gillard government and a dogged commitment to scrubbing from the legislature the many fine acts of the 43rd parliament.
Now the carbon tax has been removed, Bindaree will have a distinct advantage. The company is doing what the economic theorists have suggested for decades – value-adding to its core agriculture business rather than just exporting the raw product. Rather than being disadvantaged, as the naysayers suggested, the company will be in front of the game. They had the guts to do it and in doing so will enhance their position in the town of Inverell and nationally.
With success stories such as Spanish solar and Bindaree Beef, many ask why the Coalition government is so intent on destroying the renewable energy target and successful agencies such as ARENA and the CEFC.
When Abbott and Joe Hockey talk about policy issues in the medium to long term, surely energy sustainability and environmental good should be front of mind. Instead, they stay with the short term and mouth platitudes about medium-term solutions.
The brain snap that the treasurer had in May, when he said he found wind farms unsightly, is unforgivable. The inferences made about future developments send negative signals to the investment community, as well as dog-whistling changes to the renewable energy target. Hockey seems to forget that he was a member of the Howard government, which established the target.
Hockey was keen to milk Clive Palmer’s recent gaffe about his personal dealings with the Chinese, poring over how the comments could affect foreign investment decisions. But he conveniently sidestepped his own derogatory comments about renewable energy and the uncertainty that such absurd statements create in the investment community. There is, it seems, a very deliberate strategy pursued by this government to cultivate uncertainty with corporations who are moving to a more sustainable emissions future.
The Warburton report delivers on this message for the government, but does so with little credibility and demeans the author with its inherent contradictions. Dick Warburton’s inability to defend the rationale and conclusions of the report means it will have little academic interest but no doubt will become a political document to justify irrational decisions and cruel a fledgling industry.
The existing models of centralised power generation are being questioned and arguments for a more decentralised power generation model obviously threaten vested interests. The explosion in rooftop solar is one example. The development of micro-grids, of which the Bindaree plant is but one, is an exciting concept for the nation but particularly for regional Australia. To see regional politicians arguing against these schemes, which value-add to those communities, shows how out of touch some people have become.
Clive Palmer lost some face with the Australian community in the past few weeks. The government has him looking like a buffoon again, which is the way they want it. But the Palmer group has the capacity to restore some credibility by putting Australia at the forefront of renewable energy.
We know Clive has the paunch but we’re yet to see if he has the guts to save the government from itself. I know him a bit, and I think he does.
This article was first published in the print edition of The Saturday Paper on Sep 13, 2014 as "No guts, no glory". Subscribe here.