Our ETS Future 'Will Not Come Cheaply

AUSTRALIA will be unable to produce affordable baseload power supplies while meeting its emissions targets under present policy, new research has found.

A study by Melbourne's Grattan Institute, to be published today, warns that while carbon pricing will help make low-emissions technologies competitive, it will not be enough without big structural and policy changes.

Tony Wood, the institute's energy program director, says governments face "an acute intellectual and policy challenge" steering a course between inadequate support for low-emissions technologies or unduly favouring one technology over another. He cautions "Australia's move to a low-carbon future will be too expensive unless they do."

The Grattan research stresses markets as the primary mechanism by which Australia can reduce its emissions, but it says markets cannot work properly unless governments optimise regulatory and policy frameworks.

The study also warns against letting ideology limit the scope for manoeuvre by preventing serious evaluation of carbon capture and storage and nuclear energy. "A range of technologies available today can generate electricity at or below 0.2 tonnes of carbon dioxide per megawatt-hour and have significant scale-up projection," the Grattan research finds.

"Yet none currently represents more than 2 per cent of Australia's electricity supply and

their future technical and economic potential is shrouded in uncertainty."

The report finds further refinement of the underlying technologies of low-emission energy options will be the most important tool for their future development and commercialisation.

It reminds governments of their roles overseeing the development of new transmission networks and pipelines, resource maps, market frameworks, regulations and engineering skills.

The Grattan researchers urge the commonwealth to ensure the carbon pricing scheme works properly by setting long-term emission caps and call on all governments to act to ensure there is a level playing field for all power-generating technologies.

The report's authors urge the removal of obstacles that impede technologies such as wind and geothermal from connecting at large-scale to electricity grids built around the needs of very large fossil-fuel plants.

Our ETS Future 'Will Not Come Cheaply

OneSteel Gets $64m Ahead of CarbonTax

MANUFACTURER OneSteel will receive $64 million to help it prepare for the introduction of the Federal Government's carbon tax in July. 
 
Climate Change Minister Greg Combet announced today that the advance payment had been finalised under the government's $300 million Steel Transformation Plan (STP).
OneSteel expects to receive the payment within 30 days and it will be recorded as income in the company's financial statements for fiscal 2012.

Labor finalised a similar $100 million advance to BlueScope Steel in December.
"The assistance provided to the Australian steel manufacturers will help OneSteel and BlueScope to adapt and modify their business models to ensure their long-term sustainability in a low carbon economy," Mr Combet said in a statement.

OneSteel chief executive Geoff Plummer told the stock exchange the company was "pleased with the government's interest in steel manufacturing in Australia" and welcomed the funds.

The STP, announced in July 2011, was intended to help steel makers adjust to the government's carbon tax, which will start with a fixed pollution price of $23 a tonne.

But the advance payments will also help OneSteel and BlueScope deal with the high Australian dollar, weak domestic demand and excess supply in international steel markers, Mr Combet said.

Labor's $300 million STP was passed by the Parliament in November alongside the 18 carbon tax bills.