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AGL, GE and Tesla join 21 other companies in open letter calling for the $1.3bn planned cut to the Australian Renewable Energy Agency to be dropped

Some of Australia’s best-known energy companies including AGL, GE and Tesla, have joined calls to halt plans to cut $1.3bn from the Australian Renewable Energy Agency.

The 24 companies signed an open letter to parliamentarians released by the Clean Energy Council.

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Professor Colin Green (Letters, 7 September) makes a classic first-world myopic error in believing that the rise in human population is mainly responsible for the impending ecological crisis. It is not numbers of people per se damaging the planet, but frenetic consumption in the wealthy world that lies behind anthropogenic climate change. You can curb family sizes in poor countries all you like – if you have the moral stomach for such gross colonialism and denial of essential human freedoms – but the ecological crisis will remain as long as we live the way we do in the rich world.

As Pope Francis puts it in his ecological teaching document, Laudato Si’: “To blame population growth instead of extreme and selective consumerism on the part of some, is one way of refusing to face the issues. It is an attempt to legitimise the present model of distribution, where a minority believes that it has the right to consume in a way which can never be universalised, since the planet could not even contain the waste products of such consumption.”

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An 18-month study looking at how the weather affects chronic pain reveals some surprising preliminary results.

Ian McEwan and Andrew Motion among those opposed to University of East Anglia’s rugby and parking development on wild flower meadows

A university with an international reputation for environmental science has been criticised by alumni, including Ian McEwan and Andrew Motion, for seeking to build a car park and rugby pitch on wild flower meadows.

The University of East Anglia’s (UEA) plans have been branded “crude” and “thuggish” by McEwan, while Motion, the former poet laureate, said they were “scandalous” and “deeply destructive”.

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Huge tank in Oxfordshire replicates the power and shape of the waves and will lead to improved coastal defences, building design and response plans

The full and devastating power of tsunamis has been recreated in lab for the first time, revealing valuable secrets about the little-understood waves. The work will lead to vital improvements to sea defences, coastal buildings and evacuation plans, ultimately saving lives.

Five major tsunamis have struck coasts around the world since 2004, killing 300,000 people, and the risks are rising as coastal cities expand. But the terrible violence of the giant waves means any scientific instruments present are almost always destroyed. The result is little knowledge of the huge forces with which tsunamis hit coasts.

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Kenyan conservationist Paula Kahumbu leads a new generation of Africans who are taking control of their environmental future

In the cool and serene area of Karen, near Nairobi, in the offices of the conservation organisation she has built, Paula Kahumbu eats chicken and rice and talks about a revolution.

Related: Why the Guardian is spending a year reporting on the plight of elephants

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A seven-month solo journey from India to the UK in a solar and electric-powered tuk-tuk has been paused after the driver's passport was stolen near Paris.

Lack of access to safe water in the war-torn country is driving migration and disease and pollution, say hydrologists and humanitarian groups

War-torn Syria’s water supplies are deteriorating fast, triggering migration and disease and stoking a pollution crisis in neighbouring Lebanon, hydrologists and humanitarian groups have warned.

“Water security continues to deteriorate for many civilians [in Syria]. Evidence shows that control over power and water infrastructure is [being] used as a weapon of warring parties,” said Noosheen Mogadam, a policy adviser with the Norwegian Refugee Council based in Gaziantep on the Turkish-Syrian border.

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Junichiro Koizumi disputes current leader’s description of situation at stricken nuclear power plant as being under control

Japan’s former prime minister Junichiro Koizumi has labelled the country’s current leader, Shinzo Abe, a “liar” for telling the international community that the situation at the wrecked Fukushima Daiichi nuclear power plant is under control.

Koizumi, who became one of Japan’s most popular postwar leaders during his 2001-06 premiership, has used his retirement from frontline politics to become a leading campaigner against nuclear restarts in Japan in defiance of Abe, a fellow conservative Liberal Democratic party (LDP) politician who was once regarded as his natural successor.

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Issue to be discussed in parliament after petition backed by leading conservationists gets more than 120,000 signatures

MPs will debate whether to ban driven grouse shooting after a petition created by a leading conservationist passed the threshold of more than 100,000 signatures.

Mark Avery, a campaigner and former head of the RSPB, launched the petition in March with backing from broadcasters Chris Packham and Bill Oddie, and the League Against Cruel Sports, calling for grouse shooting to be banned because he said it often leads to the illegal killing of birds of prey, which eat red grouse.

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The ocean conservation society last week completed its first-ever expedition to document the richness of habitats and threats to marine life in waters off the Netherlands, UK, Norway and Denmark. The results from the two-month, at-sea study will be used to strengthen marine protection in the region

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No issue better connects the environment to people’s lives than energy. In order to deliver clean, affordable electricity we need to change our undemocratic system of supply

We are on course for a climate catastrophe. 2016 is set to be the hottest year on record. Unless the Paris agreement’s target of limiting the rise in temperatures by 1.5C is met, heatwaves like that in 2003, which killed tens of thousands of people in Europe, will become the norm. And that is before considering rising sea levels and desertification that will sink cities, and kill and displace millions, or the fact that the Earth has already lost half its wildlife in the past 40 years.

The task for politicians is to propose real solutions to the single most important issue facing humanity. Too often, the environment is considered a matter for scientists, enthusiasts and activists. To increase public understanding and energise the political debate, we need more than facts – we need a programme that resonates with people’s everyday experiences, offering not just warnings but opportunities and improvement.

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Labour leader to announce plans to massively increase renewable energy and phase out coal power earlier than currently planned

A Labour government under Jeremy Corbyn would ban fracking, ditch all coal-fired power stations and massively increase renewable energy, his leadership campaign has announced.

In the clearest signal yet that the party intends to embrace an ambitious environmental agenda and break its traditional strong links to mining and fossil fuel extraction, the Labour leader has pledged to phase out all coal power stations by the “early 2020s” and invest heavily in energy-saving to avoid building many new power stations.

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ARENA believed to have proposed a compromise on its funding position, in an effort to continue its support of new technologies and critical research.

More than half the shortlisted large-scale solar projects expected to get funding from ARENA tender. A total of 12 projects, mostly with single axis tracking technology and costs as low as $100/MWh are expected to win grants, with solar module costs set to slump again next year.

Heritage Lottery Fund report warns of a continuing a decline in the condition of parks as austerity budget cuts squeeze council budgets

The UK’s hugely popular public parks face falling into decline and neglect as a result of budget cuts, a new report warns.

Park use is rising, with 57% of adults now visiting their park once a month or more, while 90% of families with children under five head to their local green space at least monthly, the State of UK Public Parks 2016 study reveals.

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Lindisfarne On the table around the crust in my fingers it was like a dancefloor, with dominant birds and watching wallflowers

Sparrows had gathered in a coffee house courtyard on a late summer afternoon on Holy Island. Most of the tourists were chasing the ebb tide across the causeway as the North Sea wiped and revealed a sacred history every few hours. With the tide out, the island’s holy precincts endured their heritage quietly, with a few stragglers and the birds.

Furtive and mouse-like, the sparrows scuttled under tables, the lookouts venturing on to chair backs to scope out possibilities. They have an acute instinct for a good mark, and I had a sparrow-friendly vibe and a sandwich.

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Good news for Tesla drivers, with CTO JB Straubel saying the company expects "10 maybe 15 year life at a minimum" from its EV batteries.

The European Commission’s latest Quarterly report on electricity markets makes sobering reading down under.

Over the last year wholesale electricity prices have been falling just about everywhere across the developed world except here in Australia, where they are skyrocketing.

Figure 32 from European Commission’s Quarterly report on electricity markets analysing wholesale market price trends to the end of Q1 2016, in Euros per megawatt hour. The Platts PEP is the Pan European Power price index. Note that as recently as early 2015, Australia had the cheapest prices, now it is heading rapidly towards the most expensive. European Commission Quarterly report on electricity markets, see https://ec.europa.eu/energy/sites/ener/files/documents/quarterly_report_on_european_electricity_markets_q4_2015-q1_2016.pdf

Australian prices are now above European prices, well above the US prices and rapidly converging with Japan, which is still recovering from the shock of Fukushima in 2011 when prices rose to over eight times Australian.

With Japan now reactivating nuclear power production, and Australian LNG exporters putting the squeeze on domestic gas markets, it can be anticipated that Australia will soon be top of the price tree. Indeed, with 2016 Q2 and Q3 Australian prices rising at unprecedented rates, it probably already is.

Combined with exorbitant power distribution costs, the alarming trends highlighted by the EC’s report will be exercising the mind of our new Federal Minister for the Environment and Energy, Josh Frydenberg.

Comparison of wholesale electricity prices shown in the figure above as percentage of Australian prices. Note logarithmic scale. Data sourced from European Commission's Quarterly report on electricity markets, see https://ec.europa.eu/energy/sites/ener/files/documents/quarterly_report_on_european_electricity_markets_q4_2015-q1_2016.pdf How fast are Australian prices rising?

The trends highlighted by the EC’s report are expressed in Euros, so they somewhat obscure local dynamics. In reality, Australian wholesale prices are rising more steeply than ever before, having risen by around 45% over the last year. Prices over the last six months are now higher in aggregate than at any comparable time during the carbon tax period, which added around 50% to wholesale prices in the period 1/07/2012 - 17/07/2014. When the impact of the carbon tax on 2014 prices is removed, prices are up by more than 65% in just 2 years.

Wholesale prices averaged by season, on the Australian National Electricity Market (NEM) from spring 2009 through to winter 2016. For the carbon tax period 1/7/2012 through 17/7/2014, filled coloured bars show the prices with the carbon tax component subtracted, assuming an emissions intensity of 0.85 tonnes per megawatt hour. Actual prices for this period are shown by the open lines. Data sourced from AEMO half-hour aggregated price and demand datasets.

Compared to the same period one year earlier, wholesale prices have risen across all seasons and all jurisdictions in the last year, excepting summer in Queensland. The rate of increase has risen steadily from the spring 2015 through to the winter 2016. For the winter period of 2016, prices were up by an average by 85% compared to the previous winter, with the increase ranging from 65% in Queensland to 115% in South Australia.

Annual percentage changes in wholesale electricity prices on the National electricity market. The prices are calculated for the Spring of 2015 through Winter of 2016, compared to the same period one year earlier, for each of the mainland regions comprising the NEM. Data sourced from AEMO half-hour aggregated price and demand datasets. Why are electricity prices falling everywhere but Australia?

The reasons for wholesale electricity price falls in Europe and Japan are straightforward.

Both are dependant on imported gas, and with the oil-linked price for gas falling, so too are electricity prices. In the US market, the flood of shale gas greatly exceeds export capacity, so there is a continuing glut of cheap gas [1].

The story in Australia is quite different. Despite a three fold increase in gas production in the last few years, due to the opening up of new coal seam gas (CSG) fields in Queensland, the Australian domestic market is being squeezed as LNG exporters struggle to meet supply contracts.

In the Australian CSG industry it is an open secret that some exporters agreed punitive clauses in contracts should they fail to fill their LNG trains. Despite strong opposition from former industry champions such as John Ellice-Flint, exporters such as Santos stretched themselves on production by committing to two LNG trains. Now gas is being diverted from domestic markets to avoid industry collapse. The consequence is that Australian gas consumers are increasingly subject to scarcity pricing when domestic prices can rise to many times that which international buyers have contracted for the same gas.

Not surprisingly, steep rises in the cost of gas is causing a reduction in gas use in domestic electricity markets. In Queensland gas fired power output in winter of 2016 was down about 250 megawatts, over 20% on the year before. Meanwhile black coal generation was up 450 megawatts, with Queensland’s CO2-production from the electricity sector increasing by 5%.

An illustration of the impact of the rising cost of gas on the Australian electricity market are summarised in the figures below, which show how market prices varied with gas dispatch in Queensland over the winters of 2015 and 2016, respectively. In winter 2015, when gas dispatch averaged 1076 megawatts, there was no correlation between wholesale prices with the amount of gas dispatch, consistent with gas generation being a price taker. Then the average price of electricity was $39.6 per megawatt hour.

By winter 2016, when gas dispatch averaged 833 megawatts, a strong price correlation had established as gas generators increasingly set the price. Average prices had risen to $65.2 per megawatt hour with spot prices increasing on almost $100 per megawatt hour for each additional gigawatt of gas dispatch in winter 2016.

Pattern of market prices with gas dispatch in Queensland in winter, 2015. Abundant ramp gas during this period meant there electricity prices were decoupled from gas use. The grey points represent individual 5-minute dispatch intervals. The violin plots shown the distribution of price event for 8 gas dispatch bins, while the black circles show the means for each of the 8 bins. The red shade shows the linear fit to the 5 minute data at the 95% confidence level. Data sourced form AEMO 5-minute dispatch tables. Pattern of market prices with gas dispatch in Queensland in winter, 2016. Gas scarcity in the domestic markets during this period meant there electricity prices were strongly coupled to gas use, with prices rising on average $92/MWhour for each additional gigawatt of gas dispatch. Data sourced form AEMO 5-minute dispatch tables. We really need to talk about gas

In 2015, the availability of “ramp” gas made Queensland settings somewhat analogous to the US, where cheap gas increasingly fuels electricity generation. By winter 2016 when more LNG export trains had been commissioned, scarcity pricing was manifesting in our domestic gas markets impacting our electricity market, big time.

As the EC’s quarterly market report flags, this is a terrible outcome for Australia, obliterating our competitive advantage as a cheap provider of electricity in a little over a year. And it is hurting like hell, most severely in South Australia which has always been more exposed to gas prices than other states by virtue of its limited coal reserves.

While several compounding factors have played out in extreme price rises in South Australia, as discussed in my last post, the broader rises across Australia have their underpinnings in the rising gas prices as well as contractual arrangements in the gas market, including piping. The smoking gun is the steep rises in Queensland - a market that to this day remains essentially a renewable free zone.

The damaging reality of the situation is highlighted by a recent post on the tech website Whirlpool

• “We are a business in SA [South Australia] with high usage (use up to 14MW), on spot pricing since June 1st – and are turning everything off when a spike hits – but the last 5 minute spike was at the end of the half hour pricing cycle (price is averaged in half hour periods). We just chewed through $75,000 worth of power in a half and hour! (we are used to paying $1000). This period while the interconnector is down could effectively burn about 3 years of profits in 4 working days if the forecast prices come to fruition.”

One might ask why such energy users exposed themselves to spot (wholesale) pricing (the norm is via the contract market). Whatever, the cautionary is that 14 MW represents 1% of average South Australian power consumption. Ten such business at threat of going under would be devastating, with potential to reduce South Australian electricity demand by 10%.

The horse has bolted, so what next?

The EC’s quarterly market report was already flagging in Q1 2016 that Australian electricity production was expensive by international standards. Since then, further steep price rises across the NEM in autumn and winter 2016 have further exacerbated price differentials, surely now placing Australia amongst the most expensive producers of electricity in the world.

No doubt the gas lobby will absolve the gas industry from any responsibility for the recent events that have transpired on our electricity markets, arguing the solution lies in even more gas production, and that renewable energy policies are more to blame.

To be sure, eastern Australia is short on supply of cheap conventional gas from the offshore Gippsland Basin and a few other locations. Expanding the gas base by exploiting unconventional resources such as CSG was always going to come at a price, since such resources are inherently more expensive.

But developing the new CSG fields at such scale was always going to risk that production would fall short of targets. As much was acknowledged by the joint Department of Industry and Bureau of Resources and Energy Economics study into Eastern Australian gas markets

The current development of LNG in eastern Australia and the expected tripling of gas demand are creating conditions that are in stark contrast to those in the previously isolated domestic gas market. The timely development of gas resources will be important to ensure that supply is available for domestic gas users and to meet LNG export commitments. Such is the scale of the LNG projects that even small deviations from the CSG reserve development schedule could result in significant volumes of gas being sourced from traditional domestic market supplies

The hope is that the events of 2016 are transients, related to temporary development schedule difficulties. If they are not, then god help domestic consumers. A broader question for our gas exporters is why should so much risk from such development schedule difficulties be defrayed onto domestic consumers?

In prosecuting the case to deliver more of our national gas resources to market, perhaps it is not too much to ask that domestic consumers are offered some insurance against any further development schedule difficulties incurred by our exporters? After all, it is our gas.

Domestic reservation, anyone?

Notes

[1] Shale gas economics in the US is linked to co-produced liquids, and thus differs markedly from the CSG fields in Australia where there is no liquid hydorcarbon production.

Disclosure

Mike Sandiford receives funding from the ARC for geological research.

Researchers have created an interactive web tool to estimate how much energy could be generated by wind or solar at any global location.