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Electricity Pricing - Cost due to the Carbon Tax

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Cost due to the Carbon Tax

 

The carbon tax was responsible for the greatest proportion of the last round of electricity price increases; around half in NSW and nearly all in Queensland.

Initially the price of a permit for one tonne of carbon is fixed at $23 for the 2012–13 financial year.  Only the ‘largest polluters’ need pay.  They can buy as many permits as they need at the annual price. The fixed annual price will rise by 2.5% a year, until a transition to an emissions trading scheme in 2015–16, when permits will be limited in line with a pollution cap.

The effect of the carbon tax is to raise the cost of fossil fuel.  Obviously it has no direct impact on renewable energy.  Indirectly it may raise capital equipment and other input prices slightly.

A carbon price ‘pass-through’ of around 2 cents per kWh in the wholesale price has been estimated by the Australian Energy Market Operator.  This is the extra amount paid by retailers due to the carbon tax. 

I have previously commented on the economic distortions introduced by the tax and offsetting compensation - read more.  And more.

For example as part of the tax implementation ‘dirty’ brown coal generators have been given compensation to help them compete but cleaner black coal generators have not:

Victoria's dirtiest coal-fired power plants have snared the lion's share of $1 billion in energy industry carbon tax compensation - a concession that will protect jobs but slow the shift to renewable energy…

… Latrobe Valley's brown coal stations Hazelwood, Yallourn, Loy Yang A and B, and Energy Brix are the major winners from the government's $1 billion Energy Security Fund, which compensates the most greenhouse-intensive power generators for the loss of value to their assets under the carbon tax, due to start on July 1.

 David Wroe in The Age March 31, 2012

 

Is this tax to cut carbon or not? 

As presently implemented it is a tax to 'rob peter to pay peter'.  The money goes 'round but stays in the country.  The main damage done is due to the seemingly random or politically motivated distortions it introduces.   

But when international trading starts things will change.  The price is expected to more than halve, dismantling a good deal of the economic impact that it presently has.

At the same time it is expected that money will start to flow overseas, in search of carbon credits.  Some of these will be very dubious like carbon farming; commonplace in Europe and already devastating poor rural communities in Southern Portugal.  See my report of our trip there on this website.

The difference between this heavily flawed tax and the renewable energy target is that the target has the potential to actually force investment into renewable alternatives.  Unlike a tax that robs you to pay you (read what the Wall Street Journal had to say - here), the renewable energy target has really serious economic consequences.

 

 

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Travel

Cambodia and Vietnam

 

 

 In April 2010 we travelled to the previous French territories of Cambodia and Vietnam: ‘French Indochina’, as they had been called when I started school; until 1954. Since then many things have changed.  But of course, this has been a region of change for tens of thousands of years. Our trip ‘filled in’ areas of the map between our previous trips to India and China and did not disappoint.  There is certainly a sense in which Indochina is a blend of China and India; with differences tangential to both. Both have recovered from recent conflicts of which there is still evidence everywhere, like the smell of gunpowder after fireworks.

Read more: Cambodia and Vietnam

Fiction, Recollections & News

The Craft - Preface

 

 

 

Preface: 

 

The Craft is an e-novel about Witchcraft in a future setting.  It's a prequel to my dystopian novella: The Cloud: set in the the last half of the 21st century - after The Great Famine.

 As I was writing The Cloud, I imagined that in fifty years the great bulk of the population will rely on their Virtual Personal Assistant (VPA), hosted in The Cloud, evolved from the primitive Siri and Cortana assistants available today. Owners will name their VPA and give him or her a personalised appearance, when viewed on a screen or in virtual-reality.

VPAs have obviated the need for most people to be able to read or write or to be numerate. If a text or sum is within view of a Cloud-connected camera, one can simply ask your VPA who will tell you what it says or means in your own language, explaining any difficult concepts by reference to the Central Encyclopaedia.

The potential to give the assistant multi-dimensional appearance and a virtual, interactive, body suggested the evolution of the: 'Sexy Business Assistant'. Employing all the resources of the Cloud, these would be super-smart and enhance the owner's business careers. Yet they are insidiously malicious, bankrupting their owners and causing their deaths before evaporating in a sea of bits.  But who or what could be responsible?  Witches?

Read more: The Craft - Preface

Opinions and Philosophy

Electric Cars revisited (again)

  

Electric vehicles like: trams; trains; and electric: cars; vans; and busses; all assist in achieving better air quality in our cities. Yet, to the extent that the energy they consume is derived from our oldest energy source, fire: the potential toxic emissions and greenhouse gasses simply enter the atmosphere somewhere else.

Back in 2005 I calculated that in Australia, due to our burning coal, oil and sometimes rural waste and garbage, to generate electricity, grid-charged all-electric electric cars had a higher carbon footprint than conventional cars.

In 2019, with a lot of water under the bridge; more renewables in the mix; and much improved batteries; I thought it was worth a revisit. I ran the numbers, using more real-world data, including those published by car companies themselves. Yet I got the same result: In Australia, grid-charged all-electric cars produce more greenhouse gasses than many conventional cars for the same distance travelled.

Now, in the wake of COP26, (November 2021), with even more water under the bridge, the promotion of electric cars is back on the political agenda.  Has anything changed?

 

Read more: Electric Cars revisited (again)

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