Tony Abbott And Craig Kelly Want Frydenberg To Fiddle With His Small-scale Knob

Tony Abbott And Craig Kelly Want Frydenberg To Adjust The Small-scale Technology Percentage

Tony Abbott recently made a comment about the STCs that reduce the cost of rooftop solar to households and are commonly called the “solar rebate1.  Guess what he wants to do with them?  Do you need a hint?  Tell you what, I’ll make it easy for you and put it in the form of a multiple choice question.

Tony Abbott wants to:

(a.)  Increase the amount of STCs to increase rooftop solar power installations.

(b.)  Increase the amount of STCs and give everyone a pony.

(c.)  Do nothing and allow STCs to continue to be gradually phased out.

(d.)  Eliminate STCs.

What?  You chose the last option?  My, what a low and accurate opinion you have of him.

No Pony For You!

What you won’t be getting from Tony Abbott.

I have specifically focused on STCs, but what Abbott really wants to do is end all subsidies for renewable energy.  So not only rooftop solar power but also solar farms, wind farms, small and large-scale hydroelectricity, and bargearse power plants.  I mean bagasse power plants that burn waste from Queensland’s sugar cane mills.

This latest round of renewables bashing was brought about by Liberal MP Craig Kelly who is not as famous as Abbott but is every bit as fabulous.  Kelly recently called for an end to renewable subsidies and Tony Abbott just had to chirp up and give them a bashing as well like the natural born leader he is.

I don’t know why Kelly is so against renewable energy, but he his the only Member of Parliament with a nuclear reactor in his seat.  Personally I would have thought having a nuclear reactor lodged up your electorate might turn you off the idea of nuclear power, but he’s actually in favor of it.  Just one year ago he said:

“If we are fair dinkum and say we need to cut CO2 emissions, we have to look at nuclear. The problem is the approval process would take a decade and it would have to be bipartisan”.

Or maybe he’s not in favor of it and is just setting up a false dichotomy2.  That’s the sort of tricky things politicians get up to, you know.  In Canberra you can go for days without coming across a true dichotomy.

I find it hard to believe he is actually in favor of nuclear power as he should know better than any MP that the OPAL reactor we bought from Argentina3 was kind of pricey at $400 million and they’re not cheap to run.  After all, the Australian Nuclear Science and Technology Organisation (ANSTO) has an annual budget of around $150 million dollars4.  That’s about $16 per Australian household per year.  I’m not suggesting that ANSTO doesn’t do useful things.  They save lives.  But they’re not exactly helping to save the planet like rooftop solar does.

STCs Are Not A Cost But A Transfer

The first thing Kelly and Abbott are wrong about is saying that STCs are a cost when they are actually a transfer.

If you want nuclear medicine then that costs money.  You have to pay someone to shovel uranium into the reactor, you have to pay the wages of the person who whips the mutants so they turn the wheel to raise the control rods, and you have to pay for Aerogard so you won’t get any radioactive spider bites5.  The money spent pays for the effort required to make the nuclear medicine so it’s a real cost.  If you want more effort you need more money.

But the STCs received for installing rooftop solar are a transfer.  Money is taken from everyone who buys grid electricity and is given to people who install rooftop solar.  Almost everyone uses their STCs immediately to lower the cost of their rooftop solar systems (when you get a quote for solar it will assume this is what you are doing) but this is not necessary.  You can take your STCs, cash them in, and buy an Xbox if you like.

Now you might say the STCs are actually paying for a good part of the effort that went into installing the rooftop solar and making the hardware it is composed of.  And that is a reasonable thing to say.  But in this case the effort has gone into giving the homeowner cheaper electricity for however many years the system lasts.  So it’s still a situation where money is taken from some people and given to others who up with more money as a result.

So STCs are not a cost and if you did want to work out the average cost to household, you’d have to work out how much STCs raise electricity bills by on average and then subtract how much they lower electricity bills by on average.

Kelly and Abbott are still welcome to claim that this transfer isn’t fair if they want, but they are wrong to only look at the increase in average electricity bills and call that a cost6.  Also, because it’s a transfer doesn’t mean there are no losses.  It is generally said there are always some dead weight losses from a transfer, but I shy away from absolutes like that for good reason.

Benefits Of STCs

Abbott and Kelly seem to believe there are no reasons for having STCs.  But they have a number of benefits beyond lowering electricity bills for Australians who install rooftop solar:

Lower Wholesale Electricity Prices:  Mainly by reducing demand for electricity during peak periods — or what were peak periods — electricity from rooftop solar helps keep wholesale prices down which reduces the cost of electricity for everyone including those without solar power systems.  This is something that must be considered if you want to work out the real “cost” of STCs to households.

Lower Costs Of Rooftop Solar:  STCs have helped drive down the cost of rooftop solar power in this country, making it the most competitive in the world.

Improved Health And Climate Stability:  By helping shut down coal power stations, rooftop solar is cutting pollution and preventing deaths and illness.  By reducing greenhouse gas emissions it reduces the damage done to the climate we depend on for little things such as agriculture, our animal friends, and civilization.  This is also something that should be considered in determining the “cost” of STCs.

Abbott and friends, or at least, friend7, never seem to mention these benefits.  I’m not saying they have to believe these benefits exist.  I’m just saying that they shouldn’t ignore these issues when discussing scrapping renewable subsidies.  In fact, I think they should proudly and clearly state what they believe.  For example:

Basically every working climatologist in the world believes human greenhouse gas emissions are causing global warming, but despite my complete lack of training, I think I know better than all of them.”

And:

I don’t think it is important to reduce coal pollution because I personally believe humanity’s medical knowledge is deeply flawed at the most fundamental level.  Furthermore, I believe my untrained opinion on this matter trumps that of health professionals and pretty much everyone else’s opinion as well.

Kelly Wants To Adjust The Small-scale Technology Percentage

It appears that Kelly is putting pressure on the Minister for the Environment and Energy, Josh Frydenberg, to adjust the Small-scale Technology Percentage.  I’m sure Tony Abbott wants this as well, provided he actually knows what it is.  Also, I have been told there is an army of unnamed backbenchers who are also clamoring for this.  So in other words, it’s just Kelly and Tony.  They used to be able to depend on Cory Bernardi, but he doesn’t play well with others and left to form his own party so he could play with himself.  

What Is The Small-scale Technology Percentage?

The Minister for the Environment and Energy technically has the power to adjust the Small-scale Technology Percentage (STP) which is the number of STCs electricity retailers must surrender.  The idea is the percentage gets set at a level that maintains rooftop solar power installations at a steady rate.  So Frydenberg basically has a knob he can twist to control how much rooftop solar gets installed.

APVI Graph

This graph from the Australian Photovoltaic Institute shows total PV installations. As you can see, solar installations have been fairly steady since 2011.

He also has the power to adjust the maximum price payable for STCs, so if he wanted to, Frydenberg, a man who has spent a lot of time promoting the building of new coal power stations, could effectively end STCs or crash their value down to zero.

Why Frydenberg Probably Won’t Touch His Knob

It is very unlikely Frydenberg will do anything to affect STCs at the moment and for now he’ll set the Small-scale Technology Percentage  to maintain a steady rate of solar installations as usual.  This is because increasing the cost of rooftop solar will be unpopular among voters and Ministerial powers are very rarely used in this way.

Ministerial Fiat Can Backfire

Legislation often has a clause or clauses written into it saying the relevant Minister can change or alter it or decide how it applies more or less at whim.  This is a safety valve feature in case situations change, legislation becomes confusing, or it ends up being abused.  But these clauses are almost never used to change the clear intent of legislation, despite giving the power to do so.

One reason is if the government sabotaged legislation they didn’t like, the same could happen to their legislation when they are in opposition.  But I think the main reason is, if a Minister uses their powers in this way and for whatever reason it isn’t popular, then the Minister’s own party is likely to blame him or her, so the Minister will almost always want to play it safe.

It is quite possible the only reason Kelly is calling on Frydenberg to fiddle with his knob is because he knows full well he won’t.  Politicians can be devious like that.  Just like people who aren’t politicians.

The Minister May Need To Touch His Or Her Knob In The Future

In just 10 months time changing conditions may start to cause a situation where the Minister for the Environment and Energy may need to adjust the Small-scale Technology Percentage knob.

The South Australian Government and Tesla are planning to build a 250 megawatt Virtual Power Plant by installing solar panels and batteries in 50,000 or more homes.  By July next year they intend to have completed their trials and will begin installing solar panels at an average of perhaps 80 megawatts a year.  Some of these panels may go on the roofs of people who would have gotten solar power that year anyway, but presumably most won’t.

Eighty megawatts would represent around 9% of all the rooftop solar installed in a typical year and, all else equal, this would be enough to push down STC prices.  If virtual power plants catch on in other parts of Australia, which seems likely as batteries fall in price, then STC prices could potentially crash if the Small-scale Technology Percentage isn’t adjusted to compensate for the effect of Virtual Power Plants.

While a Coalition Energy Minister is unlikely to take action that causes STCs to crash, they may be happy to take no action and watch them crash.

Footnotes

  1. Technically STCs are not a rebate, but they really seem like one.
  2. A false choice where he implies that if you want emission reductions, then you must have nuclear power.
  3. Yes, some of the people who worked on the reactor had German accents, but you mustn’t read too much into that.
  4. See page 66 of this PDF.
  5. If you are bitten by a radioactive spider you can call what shoots out of your body web-fluid if it makes you feel better, but it’s not likely to be an accurate description.
  6. Kelly can’t even get the first part right as Michael describes here.
  7. What’s the difference between Fat Cat and Tony Abbott?  Fat Cat had friends.
About Ronald Brakels

Many years ago now, Ronald Brakels was born in Toowoomba. He first rose to international prominence when his township took up a collection to send him to Japan, which was the furthest they could manage with the money they raised. He became passionately interested in environmental matters upon his return to Australia when the local Mayor met him at the airport and explained it was far too dangerous for him to return to Toowoomba on account of climate change and mutant attack goats. Ronald then moved to a property in the Adelaide Hills where he now lives with his horse, Tonto 23.

Comments

  1. kelly appears to have inherited the ideological frothing at the mouth that macfarlane used to bear with pride

  2. Truly yesterday’s man. Enjoyed the headline… .

  3. Michael P Lippert says

    Blabbott is lower than a snake’s belly. I can’t understand that the press gives him so much air

  4. I have a solar rooftop system and a generator 4-kVa for when ERGON pulls the plug on supply.
    What I would like is a battery backup system that I could bring online for when there is no power supplied so that I don’t have to use the petrol driven generator.
    Any suggestions anyone?

    • The cheapest lead-acid batteries you can find: and count on replacing them from time to time, on the basis of Murphy’s Law eg.:- a suitable battery-bank @ about $80 per kw storage replaced every 3 to 5 years is going to be much more (DIY) reliable ~ and MUCH cheaper ~ than a single tesla-type battery.
      Then buy a LOT of very-cheap panels (saw some advertised yesterday for about 75 CENTS per watt with a 15-year warranty) and use them during the day to do the heavy-lifting such as fridge-freezers (which should get cold enough to last all night without firing up), washing machine/whatever, and to charge the battery-bank.
      Use the battery-bank at night for the less-power-hungry things like lights, TV, computers, etc.
      THEN use a suitable generator (check out the Bunnings home-brand ‘Full-Boer’ 2200-watt/pure sine-wave/remote control) to run heavier intermittent loads like microwaves, irons, whatever….and to add to battery-charging when necessary.

      NOTE:- for charging batteries you’re much better off to ignore the commercial charges, most of which only charge at a max. of about 8 amps @ 12v… Get an automotive alternator with a built-in regulator of course (about $100) and bolt it to a plank. Hook that up to a stationary engine via pulleys/belt and away y’go. Years ago I used a Celica 92-amp alternator run by a 14hp Honda, and it worked like a dream.
      Good back-up, too: for when you need over a kw of stand-by potential.

      How/when use use power is, of course, important. eg. I object to ‘air-conditioning’ on any basis’ ~ including that of environmental impact.
      Too hot?..Take a cold shower. …To cold? Throw another dog on the bed.
      (In the early days, temperature was expressed as a ‘One-dog night, Two dog night, Three-dog night, etc. If you needed more than five dogs it was time to go out and find a wife………. anybody’s!)

    • Ronald Brakels says

      Hi David

      The problem with getting batteries only for use when the grid is down is it’s a very expensive proposition as most of the time the system sits there doing nothing. So you may want to consider if it is worthwhile getting a battery system just for use during blackouts or to get a battery system with full back up capability and using it daily to lower your electricity bills. This won’t allow it to pay for itself in electricity arbitrage but you may find its back up capability makes it worthwhile for you.

      Alternatively, you could wait a while and make do with your generator and see if battery system prices come down, as I’m sure they will.

      • Thanks Ronald.
        There’s always been an old adage:-
        Tomorrow, it will be cheaper … guaranteed!
        To fill you in a little, we live on the Atherton Tablelands, a very cyclone prone area (N-S of Cairns). The worst was “Larry” which our grid power was off for over 3 months!. The generator certainly paid for itself then.
        But since that time ERGON has periodically cut power either due to maintenance or power lines down. These outages avg. about one a month.
        The system I have set up is certainly due for upgrading. The power off stage invariably occurs either when someone is in the shower and then the water pump is off ( being in a rural setting means independence from local council infrastructure), or during cooking. Time off can be up to 2 hours & more.
        So my idea of a battery sys was to alleviate the need to go outside, crank up the generator, go to the power pole and reconfigure the plug settings. The worst is when there is a downpour which is most of the time.

    • If you get a battery for backup – ensure that is allows the panels to be charged from the solar without the grid. Many battery systems will shut down the solar panels if the grid goes down.

      A battery that does this well (if your solar inverter is less than about 2 years old) is the Powerwall 2.

  5. Ah Ronald,
    You do rant!

    Give us an answer to the peak power when people are cooking tea – or shut up!

    Dispatchable ………. solar AINT!

    I am highly sceptical of Global warming – (but I generate more electricity than I consume) – and have done since way before it was fashionable.

    IMHO All Government subsidies cost way more than the good they provide – because governments are NOT good managers.

    Do you think our electricity prices in Australia would be where they are now if successive Governments hadn’t meddled.?

    Do not forget that Freon 12 (arguably one of the most efficient refrigerants) was regulated and priced out of the market for causing an ozone hole over Antarctica. Thus dramatically increasing our power usage!

    If you don’t know where the Ozone hole was forming….. type “Mount Erebus” into Google maps.

    https://www.geog.cam.ac.uk/research/projects/erebusimpacts/

    “One of our findings is that Erebus is a significant source of nitrogen dioxide (NO2), a gas which plays an important role in tropospheric ozone chemistry. NO2 is not a primary volcanic gas but is probably formed by thermal fixation of atmospheric nitrogen at the hot surface of the lava lake. We have suggested that Erebus is the main point source for NO2 (and very likely other reactive nitrogen oxides) in the Antarctic troposphere. Given the high altitude and sustained degassing from the volcano, the measured emissions have implications for understanding aspects of both the atmospheric and cryospheric nitrogen chemistry of the continent.”

    DO NOT BELEIVE THIS – it was really the R12 refrigerant used in under arm deodorants and refrigerators that caused the Ozone hole.

    IT HAD NOTHING to do with DuPont’s patent on R12 running out!

    If you want to convince me – you will need to start quoting facts – and stop this rhetoric you seemed to be trapped in.

    Please define “Sun”
    If you give any other answer than “the biggest nuclear fusion of hydrogen into helium that man kind has access” (to the energy produced) I would be disappointed.

    YES I know the difference between fusion and fission – but we ait there yet!

    Those who worked at Olympic Dam and Mary Kathleen through the early days know that these areas were called “The sick country” well before yellow cake was discovered (by the indigenous people).

    I have always wondered is why the Nuclear waist should not be returned to near the mine area for storage – until it becomes a very valuable input to power plants of the future…..

    I do realise that I am probably “off the Christmas card list” for thinking Abbott may be right – BUT

    If the greenie solar cult can not survive without Government subsidies – They deserve to starve!

    Me – I just ordered more solar – to be paid for by the savings on electricity – and on my spreadsheet – the $43 REC per panel make VERY LITTLE DIFFERENCE.

    I think it is a good investment with or without REC’s- and at 19c kwh feed in tariff through Click Energy in NSW .

    I just wish I had more roof space!

    REC’s or no REC’s!

    Now I have ranted nearly as much as you 🙂

    • Ronald Brakels says

      Hello Gremlin

      You want to know what we use to meet electricity demand in the evening? Well, here in South Australia, when we need dispatchable power to meet demand we use dispatchable power. We find this works well for providing electricity when people want to use it.

    • “IMHO All Government subsidies cost way more than the good they provide – because governments are NOT good managers.”
      For someone who demands definition you leave a lot of (more or less pertinent) ) factors undefined. eg. What do you mean by “good”, and how do you definitively distinguish between “good managers” and other kinds?…And for whom is any particular “management” either “good” or “otherwise’ ~ since you don’t bother to juxtapose “good” with “bad”?

      “Do not forget that Freon 12 (arguably one of the most efficient refrigerants) was regulated and priced out of the market for causing an ozone hole over Antarctica. “…….and in quite a few ‘anal retentives, too, apparently!

      Incidentally, why is it that EVERYONE who claims their opinions are humble are so fucking opinionated?

  6. ……….”Give us an answer to the peak power when people are cooking tea – or shut up!” ?????????

    1…….Only a dill would “cook” tea…..others use boiling water.
    2…….Only a dill without a thought for conservation OR cost would cook their dinner with electricity. They’d use one of the (many) varieties of gas. (including home-produced biogas, one variety of proven value is woodgas. The latter might be exploitable in large-scale garbage disposal, too (along with methane) ~ worth considering now that China has…..er ‘dumped’ us. 🙂

  7. Oh this site reminds me of the early days of OZISP – we just need Adam Todd – and we could get some real good flame wars going. 🙂

    If any one has a workable plan for a small scale Bio ingestor – I would love to build one!

    Humble? – sorry – it is a trait I was unaware I had……. (but I have a few runs on the board.)

    I am GENUINLY interested what the answer is!

    IF

    No Coal
    No Nuclear
    No Coal Seem Gas
    NO Fracking
    Sun and Wind are not reliable enough.

    NO ONE wants to use less!

    I joined a group called Geni A long time ago – it is now dead – I wonder with the advancements in Ultra High Voltage DC transmission – and other advances – and IF we could get forward thinking Polies – what we could achieve?

    http://www.geni.org/globalenergy/library/newsletters/1995/buckminster-fuller-on-the-global-energy-grid.shtml

    For on grid /off grid battery powered I LOVE the Victron – built for RV’s
    I run a 3KVA system with two 225 AH Golf cart batteries.

    It has programs that allow it to be set to many profiles.
    Mine is plugged in to AC – has the batteries and Solar panels – I have it set to use Solar first – Not charge batteries from the grid – draw from grid for to supplement load as needed or when battery gets low – and it acts like a giant UPS if the power goes off.
    It runs my LED lighting,refrigerator, freezer, Washer and there is a GPO for the Ironing on that circuit.

    • Ronald Brakels says

      Gremlin, there are plenty of ways to provide power on demand without using fossil fuels. Here in South Australia a 150 megawatt solar thermal storage power station has been approved for construction 30 kilometers north of Port Augusta. It has thermal storage so it can provide power when desired. There are plans to build pumped hydro storage in the Adelaide hills which can store excess power from renewables and provided as required, and there a virtual power station is planned that will consist of solar panels and batteries in thousands of homes. Thanks to the hard work of a vast number of people around the world this is not particularly expensive compared to using natural gas.

      But natural gas could still be used if the CO2 it use released into the atmosphere was removed and sequestered. This isn’t looking to be a particularly economical approach, but it is still an option.

    • Victrons are great for battery control.

  8. I visted a spanish 2mw biogas plant in spain in 2002 – there was a delegation from SA (pat conlon and his then chief of staff leon bignell) and a minsterial delegation from victoria, my job was to keep the idiots apart as both states had this infantile feuding on display/

    i recall that bignell spent more time drinking than attending actual conference sessions

    here we are in 2018 and the lack of progress (compared to what we could have done since 2002 is just astounding and absurd)

    geez, in 2000 I was looking at ceramic fuel cell tech, even the US navy had offiicers attending.

    so much time squandered on petty politics

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