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01/06/07 – PRIME MINISTER’S TASK FORCE REPORT– IPRA RESPONSE

  • The Prime Minister’s Task force report suggests the development of a national emissions trading scheme (ETS) to provide a least-cost, market led solution to reduce greenhouse gas emissions. The national ETS will provide a platform for Australia to participate successfully in other international ETS’s as they emerge over time. The scheme would also complement the existing initiatives Australia has already in place including the Asia Pacific partnership (including China, USA and India) and the $500m low emission technology fund.
  • International Power Australia (IPRA) welcomed the opportunity for Executive Director Tony Concannon to contribute to the Prime Minister’s Task force. IPRA has been able to draw on the company’s experience in European and other international markets during the comprehensive consultation process – international as well as across Australia – over the past six months.
  • Energy prices are expected to increase to fund the cost of reducing emissions. It is important that the coverage of the proposed ETS is as wide as possible to lessen the cost to consumers but still provide a price signal which changes energy consumption behavior.
  • A national ETS will help to provide the certainty and the economic incentive needed to achieve a genuine reduction in emissions from both existing and future energy infrastructure. It should be noted that the largest investment over the next 10 or so years will be in existing energy infrastructure, not new plant and equipment.
  • The development of a national ETS will be more effective (less expensive because more participants would be buying and selling) than State-based schemes. The market will decide the technology to be used to provide the largest reduction in CO2 at least cost.  The plethora of existing (or proposed) state-based renewable schemes will therefore not sit comfortably with a national ETS CO2 market price and hence should be either not implemented or disbanded over time (if projects have had funding raised against them already).
  • IPRA looks forward to continuing to work with Government and business on the next phase to design and implement a national emissions trading scheme. Permit allocation for emissions, and the emission reduction trajectory to be followed, are both very important – for existing and future investors – and are key to developing a viable ETS.
  • IPRA continues to provide a range of energy solutions including clean coal, gas, bio-fuel, solar, wind, distributed generation and smarter demand-side management. Regarding clean coal, IPRA is finalising plans to retro-fit low emission technology on one of its 200MW units at its 1600 megawatt brown coal-fired Hazelwood power station in the Latrobe Valley. This modification – using state of the art coal drying technology – promises to reduce CO2 emissions by 500,000 tonnes per annum.