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another step to emissions trading « Previous | |Next »
May 28, 2008

Matthew Warren in The Australian draws attention to a key piece of the emissions-trading scheme jigsaw having fallen into place. He says that yesterday's announcement of privately funded gas-fired baseload electricity in NSW sets a floor price for carbon under the impending emissions-trading scheme of $20 a tonne. He says:

If there is a new coal baseload station, it will be built using clean-coal technology; at $20 a tonne for emissions, conventional coal-fired stations will be too expensive. Gas industry sources have privately calculated $20 a tonne is the minimum price needed under an emissions-trading scheme to invest in new baseload power stations. At that price, Queensland Gas's new combined-cycle power station will be able to compete with the existing stock of cheaper coal-fired plants. Any lower and they will not be able to proceed.

If this is the case, then a soft start to emissions trading; one that translates to a $200-a-year rise in household power bills and a 5.6c-a-litre jump in petrol. Warren adds that This soft start will mean the Government's mandatory renewable energy target of 20per cent by 2020 will drive most of the new energy investment in Australia. Without it, new wind power and other renewables would need a carbon price of $40 a tonne to enter the market.

A carbon price of $40 a tonne does not to be politically acceptable a the moment. But we kinda suspected that didn't we.

| Posted by Gary Sauer-Thompson at 7:56 AM |