carbon price and the energy sector june 2011 kane thornton director of strategy & operations
Post on 15-Jan-2016
224 views
TRANSCRIPT
![Page 1: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/1.jpg)
Carbon Price and the Energy Sector
June 2011
Kane Thornton
Director of Strategy & Operations
![Page 2: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/2.jpg)
Agenda
• Carbon and the Australian energy sector
• Energy Sector Objectives
• Carbon price impact
2
![Page 3: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/3.jpg)
The Clean Energy Council
• Peak body representing Australia’s renewable energy and energy efficiency sector.
• Represents more than 500 member companies involved in developing and deploying renewable energy and energy efficiency.
3
![Page 4: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/4.jpg)
Carbon Emissions
![Page 5: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/5.jpg)
5Emissions Reductions
Source: Stern Review, 2007
![Page 6: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/6.jpg)
Implicit carbon price 6
![Page 7: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/7.jpg)
7
Australia’s Abatement Challenge
(DCC, 2009)
![Page 8: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/8.jpg)
8Abatement Challenge
(Garnaut Review, 2008)
![Page 9: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/9.jpg)
9Australia’s Emissions
![Page 10: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/10.jpg)
Energy Sector Objectives
![Page 11: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/11.jpg)
11
Energy Sector Objectives
1. Demand side response
2. Accelerate renewable energy
3. Support low emission generation
4. Encourage new technology
5. Phase out high emission generation
![Page 12: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/12.jpg)
12
Australia’s Renewable Energy
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Renewable % 20% RET target
Original MRET target
![Page 13: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/13.jpg)
13
![Page 14: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/14.jpg)
14
Proportion of Renewable Energy
(International Energy Agency, 2009)
0102030405060708090
100
Korea
Luxe
mbo
urg
United
King
dom
Irelan
d
Japa
n
Belgium
Nethe
rland
s
Czech
Rep
ublic
Russia
n Fed
erat
ion
United
Sta
tes
Slovak
Rep
ublic
Hunga
ry
Greec
e
Austra
lia
Germ
any
Poland
Spain
Franc
e
OECD tota
lIta
ly
Mex
ico
China
Turke
y
Wor
ld
Portu
gal
Denm
ark
Canad
a
Switzer
land
Austri
a
Finlan
d
Sweden
New Z
ealan
dIn
diaBra
zil
Norway
Icelan
d
Australia
World Average
![Page 15: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/15.jpg)
Carbon Price
![Page 16: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/16.jpg)
16
“Climate change is a result of the
greatest market failure that the
world has ever seen”
Sir Nicholas Stern, 2007.
![Page 17: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/17.jpg)
17Objective of a price on carbon
• Places a cost on emissions• Cost to produce greenhouse gas
intensive products will increase. • Financial incentive to reduce emissions:
– Polluters: • produce less greenhouse gas intensive products
or• invest in activities or technologies which can
reduce their emissions. – Consumers:
• purchase lower greenhouse gas intensive products (such as renewable energy)
![Page 18: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/18.jpg)
18Alternatives
• Carbon tax• Emissions Trading
– Cap and Trade– Baseline and Credit– Hybrids (Frontier Economics, McKibbon)
• Direct Government intervention
![Page 19: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/19.jpg)
19How it works
• The quantity of emissions produced is monitored and audited (NGERS).
• Polluters need to acquire a ‘permit’ for every tonne they emit.• The number of ‘permits issued by the Government in each
year will be limited (cap).• Firms compete to purchase the number of permits they
require.• Firms that value the permits most highly will be prepared to
pay most for them (trade).• For some firms, it will be cheaper to reduce emissions than to
buy permits.• Certain sectors and firms might receive some permits for free,
as a transitional assistance measure. These firms could use these permits or sell them.
![Page 20: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/20.jpg)
20Key Design Elements
• Liable parties• Scheme abatement target• Use of revenue• Compensation• Offsets• International Links
![Page 21: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/21.jpg)
21Electricity Prices
(Garnaut Review, 2008)
![Page 22: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/22.jpg)
22
Energy Sector Objectives
1. Demand side response
2. Accelerate renewable energy
3. Support low emission generation
4. Encourage new technology
5. Phase out high emission generation
![Page 23: Carbon Price and the Energy Sector June 2011 Kane Thornton Director of Strategy & Operations](https://reader035.vdocuments.mx/reader035/viewer/2022081603/56649d2d5503460f94a0497c/html5/thumbnails/23.jpg)
Conclusion
• Carbon price is inevitable• Australia’s competiveness is at risk• Must reduce emissions from energy
generation• Carbon price is critical
23