I appreciate the opportunity provided by the Senate inquiry to make this submission on a subject of such vital importance to the future of the Australian continent and its inhabitants. Apologies that it is being submitted so late.

Regarding the progress and adequacy of Australia's policies to reduce global warming, as measured by actual (and reliably estimated) emissions, the only word to describe the present situation is lamentable.

A: In relation to the effectiveness of Australia's policies to be able to achieve real reductions in this country's emissions, the following points need to be emphasised:

(i) There is no reasonable prospect that Australia can meet its present commitments up to 2008-2012 under the FCCC December 1997 Kyoto Protocol, on any scientifically valid method of calculating or estimating our true emissions. Even if all policies announced to date had been implemented 100% on time with 100% achievement of targets, it is probable that other factors such as land clearing in Queensland, the grossly accelerating combustion of brown coal in Victoria, and the probable construction of four coal-fired generation plants in Queensland would have had ten times the impact - in the opposite direction! The potential costs of buying emissions credits will be large, but most likely be dwarfed by the real economic costs to the community of extreme weather events, land degradation, loss of wildlife habitat, insurance losses and crop failures. The common sense solution is not to dash about trying to mop up all the CO₂ after the fact with emissions trading, it is to wrestle control of the energy infrastructure back from a runaway elite, and force it to heed public policy objectives through tough legislation, customer education, radical tariff overhaul, and the removal of all barriers to competition for the lower emission technologies. Only then is there a reasonable prospect that the right mix of generation technologies and end-use efficiencies will be achieved.

(ii) The differing international responses to the Framework Convention ought to be seen in the context of the flawed and unsustainable premises of post-cold-war globalisation. As Mr Howard has been made aware at the recent Commonwealth meeting in South Africa, the smaller states are getting the short stick as the sovereignty of the transnationals eclipses that of even some of the wealthier nations. The OECD's Multilateral Agreement on Investment hardly needs to be ratified, when one sees the impunity with which big corporations march into supposedly sovereign and democratic countries such as Australia and start throwing their weight around. Questions of monarchy vs. republic pale into insignificance in this context. And yet still we are told that globalisation is irreversible and inevitable, even if the economic "rationalist" principles underlying the behavour of global markets are to lead to complete collapse of the biosphere within a matter of decades or perhaps a couple of hundred years. This inquiry may not regard the overturning of globalisation as within the scope of its possible recommendations, but if there is a significant probability that the continued rampant expansion of the global economy in its recent unsustainable manner will wreck the planet's life support systems through global warming, a common-sense recommendation of this inquiry would be to call for a halt to globalisation (as presently being practiced by powerful corporations).

(iii) Emissions trading will fail unless it is REAL reductions that are being traded, and rigorously audited. Even then the potential for cheating, manipulation and distortion of such a market is astronomical. A concrete example of a potentially real reduction is if the future emissions of Hazelwood power station were to be bought as credits upon the premature dismantling of that power station. The perception of "reality" in this instance relies entirely on a consensus amongst stakeholders that its productive life without emissions trading would have been exactly x months, with a capacity factor of y per cent, and that new brown coal power station zee (American owned!) will never-ever be built to replace Hazelwood. Since x, y and no-zee cannot be quantified or guaranteed, it shows that trading may fail through interminable bickering of competing interest groups unless there is very strong and impartial government leadership in this area.

(iv) Policy effectiveness: Our land use policies, with their demand for "differentiation", are a very effective way to sabotage effective global implementation of the Kyoto Protocol: as the world's worst per-capita Annex 1 emitter, we should be not expecting special favours. We should be doing more than any other country, not less. This was correctly and forthrightly pointed out at Kyoto by a British delegate, the former Thatcher Minister, John Gummer. Unfortunately the Australian delegation, led by Meg Macdonald was oblivious to common-sense, stuck to Mr Downer's script, and we achieved Mr Howard's pyrrhic Kyoto "victory": Australia's recalcitrant stance has significantly jeopardised the chances of effective outcomes from Kyoto, because the correct perception of non-Annex 1 countries is of a wealthy nation not prepared to be a responsible global citizen. Our policies on the coal industry, the energy industry , energy efficiency measures, housing and transport measures, are, when measured in terms of delivering on their stated goals failing almost universally. This is especially the case for the electricity industry, because the National Grid Management Council removed environmental objectives from the COAG policy guidelines on privatisation. We will live to regret the weak and ineffectual "no regrets" voluntary policies of the National Greenhouse Response Strategy, the Greenhouse Challenge, and the squandering of the Telstra billions on dubious "mopping-up" projects, instead of confronting the emissions at source.

(v) Economic incentives for competing technologies: the recent FCCC Conference of the Parties in Bonn was marked by several NGOs highlighting that the Clean Development Mechanism has already been successfully hijacked by the coal and nuclear industries securing funding to try and clean up their emissions by a few paltry percentage points. (e.g. fluidised bed coal combustion, thorium fission reactors). It is the law of diminishing returns, and no matter how many billions are squandered on these technologies, they will never deliver true sustainability. The sort of massive emission reductions that will sooner or later be necessary according to IPCC will require the winding down of coal (and nuclear on sustainability grounds) in a controlled fashion: but what do we get instead? - four new coal power stations underway in Queensland, and another for Western Australia, all presumably trying to sneak in before the door is slammed shut, then to plead for grandfathering of their emissions.

The flip-side of incentives is the hidden disincentives currently working against cleaner technologies: several submissions that the Australian Cogeneration Association has made to the Australian Greenhouse Office and the National Electricity Code Administrator (NECA) highlight the many fatal flaws in National Electricity Market (NEM) processes, leading to perverse outcomes in terms of competition policy and the public benefit. The ACCC has not put nearly enough weight on the concept of preservation of the planet as a public benefit.

Some examples of hidden disincentives and market distortions in the NEM include:

(a) Market Participant fees are an enormous barrier to market entry for small-scale renewable power projects;

(b) NEMMCO, the National Electricity Market Management Company has essentially outlawed "second-tier" energy trading by embedded generators who can't afford participant fees. This is an an outrageous abuse of competition policy, as it means that the network is transparent for big retailers to sell energy to contestable (i.e. second-tier) customers, but a small generator selling Green Power cannot, without breaking the rules of the National Electricity Code, sell energy transparently to any wholesale buyer except the local monopoly retailer associated with the local monopoly distribution business. So we do not have a transparent network: we have a one-way mirror. This is no accident - energy trading has been deliberately designed that way by the major power brokers, namely the existing large generators and the transmission asset owners, and needless to say is extremely anti-competitive;

(c) Regressive tariffs such as ACTEW's "Super Saver" with a huge standing charge, but a very cheap price per kilowatt-hour: by such marketing strategies the electricity retailer is able to sell more energy and lock out competitors, including gas, renewable power and energy conservation measures, with consequent huge growth of greenhouse emissions;

(d) I have evidence that the electricity industry is systematically spreading disinformation about the effectiveness of solar water heating. As a direct competitor against night-rate electricity in a real-time market, solar water heating is an enormous threat to the ability of the coal and baseload generation industries to build more coal-fired (or even nuclear) generation. The simple fact is that if there is insufficient demand regularly every night, then coal-powered units are redundant: they simply cannot be quickly switched off for a few hours every night. Pumped hydro capacity can also be viewed as a market distortion which aids and abets the construction of more coal plant, thereby hindering potential cogeneration/renewables development;

(e) Night-time voltages: Some simple experiments that I have performed on typical street lights prove that Australia could save half a million tonnes per year of emissions just from the 300 MW of public lighting that burns every night. Street luminaires are almost universally being operated at maximum voltage every night (around 254 volts), and my data proves that they are using up to 35 per cent more electricity (6) at this voltage than if they were operated at a lower night-time voltage, say 230 volts. Electricity retailers and coal generators stand to lose millions if regulatory authorities mandated that the system must run at 230 volts all night long, because there are many customer loads that would use less power, too. My best estimate is that in Victoria alone, the system being run at an average customer voltage of 247.5 volts, only three per cent above the "correct" voltage of 240 volts, is costing Victoria's residential and commercial electricity customers $60 million annually in inflated electricity bills. Since attempting to publicise my results on the ABC's web site Science Forum (4), I have been subjected to a sustained campaign by online critics, denying the validity of my scientific method, and dragging many "red herrings" into the debate in an attempt to discredit my results. When I started to raise the possibility that high "normal" voltage may increase the risk of house fires, my documents were the subject of a Federal Court subpoena issued in September this year by solicitors acting for the Electricity Supply Association of Australia. The subpoena sought documents specifically relating to power surges and brownouts, which is not exactly what I was talking about, but it seemed to me that the subpoena was an attempt by the ESAA to "shut me up". Even earlier than this, I raised the voltage problem as a market issue in my December 1996 submission to the ACCC on the NEM Code Authorisation process: engineering consultants from Western Power nit-picked a few errors of fact in my submission, and basically said voltage was a "non-problem" for the market, but I believe they misled the ACCC about the significance of voltage effects on customer's electriciy bills; (5)

(f) AS 2926 - the new 230 volt appliance standard. This obnoxious bit of skulduggery is currently being pushed through Standards Australia by committee EL40 on behalf of the ESAA and IEAust, ostensibly to "standardise" our appliance voltages internationally. OK, fair enough if you believe in the mantras of globalisation. But the spinoff implications for the electricity supply industry are truly enormous: they can, at their absolute discretion, continue to supply as many households as possible with 253 volts. Newer light globes and appliances designed for 230 volts but being "force fed" with 253 volts can use up to twenty-one per cent more electricity than the old 240 volt appliance of the same wattage rating being run at the correct voltage of 240 volts. Greenhouse emissions will also be inflated by up to twenty-one per cent. With the GST impost, the running costs to consumers may increase by up to thirty per cent, even if the price per kilowatt-hour remains fixed. Mr David Sweeting representing IEAust on the EL40 committee is on the public record as saying that "increased voltages will not increase customer's electricity bills". Indeed he telephoned me one Saturday morning and repeatedly tried to convince me I was mistaken about voltage effects, but I have not changed my position, because I have compelling experimental evidence to back my claims. see (2) , (6)

(vi) Two Examples of Policy effectiveness: (a) At the local level I have seen the City of Melbourne's "Sustainable Energy and Greenhouse Action Plan" currently just at the end of a public consultation period. It completely failed to mention the single most effective competitor to coal generation: namely solar water heating. However solar photovoltaics featured very prominently, because the local electricity retailer CitiPower is conducting a sustained campaign to promote photovoltaic technology on "100 rooftops". By my rough calculation every $2000 invested in photovoltaic panels will save about 400 kilograms per year of CO₂. The same $2000 invested in solar water heating could save 4,000 kilograms/year of CO₂ emissions if it replaced an off-peak electric storage hot water service (but only about 2,000 kg CO₂ if replacing gas). This is a ten-fold increase in cost-effectiveness of its emission reduction capability. So why are the power companies promoting photovoltaics to local government, when they ought to be encouraging solar hot water? Simply because solar water heating would threaten their income stream, and make them extremely unpopular with the National Generator Council and the ESAA, who want to keep their coal power stations running all night long by heating storage hot water tanks from Mallacoota to Mildura, with all the enormous losses and inefficiencies that that practice entails. (b) At the state level we will soon be losing most regulatory control over tariffs when full competition comes on 1 January 2001: this could be a major disaster if they all start behaving like ACTEW (see above), offering cheap rates and big standing charges. The existing tariffs in Victoria are bad enough, with the "Winner" tariff now being offered by default to new home owners by Powercor Australia and possibly by other retailers. The Winner tariff is an environmental disaster for the simple reason, that just like off-peak water heating, it encourages night-time electricity use, which distorts the daily load profile of electricity demand in such a way that even more coal-fired generators can be built: the flatter the daily load profile, the higher the proportion of coal will be in the total energy mix. If all customers switched off all loads every night, it would be very difficult or impossible for coal and nuclear to compete against gas turbines and hydro (in the absence of pumped storage).

An effective consumer boycott of Winner tariffs and electric storage water heaters could kill coal-fired power stations and shut them down, without anybody having to spend a cent on buying up their alleged value as decommissioned hulks representing megatonnes of unburnt coal. Interestingly, the Victorian Regulator-General has come out in relation to the Y2K issue to say that Victorians should not turn off appliances at the stroke of midnight 31st December, because there is a potential that if we stop wasting all that power, the electricity transmission and distribution system might become dangerously unstable! So you see, they have actually DESIGNED a system that cannot be run efficiently, when customers try to save energy. Engineers misguidedly believe that they are being "efficient" when the system is running at full-steam twenty-four hours per day. This is Kafkaesque!

(vii) Social and equity consequences: I mentioned the benefits of lower average supply voltages being about $60 million saved per year in Victoria. The cost burden with the present high voltages falls disproportionately on low income groups, because the type of appliances and lights that they generally use are more susceptible to using increased power at higher supply voltages. Furthermore, the cost of replacing blown light globes and burnt out appliances (e.g. vacuum cleaners) is a much greater proportion of their income than for the wealthy. Also, rental accommodation tends to have a higher proportion of electric heating and cooking versus gas. Because many state governments provide winter energy concession, high voltage causing inflated power bills to pensioners is also demonstrably a hidden drain on state revenues ( I have drawn this to the attention of the privatised Auditor General's office in Victoria, but got no acknowledgement).

(xii) Carbon leakage: Should be encouraged in one specific case: Aluminium smelting should be shut down in Victoria. The public funds presently being squandered on the Portland Smelter Agreements can be used to subsidise the potlines being transplanted to Tasmania. If every Tasmanian home, school and office got solar water heating and solar air heaters, there may be sufficient hydro to provide the 500 MW load of the pot lines. Wind and cogeneration can take up the slack. Save millions by scrapping Basslink, and keep Tassie clean and green. Basslink is being touted as a way for clean hydro to access the mainland markets, but the sad reality is that more dirty Victorian power will flow in the opposite direction (a type of carbon leakage that some people want to encourage!). A recent economic analysis by the Australia Institute has calculated that this country would be better-off if the heavily subsidised aluminium industry was completely shut down, but if they must stay, then a move to Tasmania would be worth a heap of greenhouse credits (for the Victorian government, not Alcoa).

B: Government support for competition: Firstly, remove the market distortions that favour the incumbents: ACCC must urgently review the performance of NECA and NEMMCO in managing a recalcitrant market. Alternate points of view should be sought. Removing barriers to competition is much cheaper than supporting dubious "emerging" technologies. Gas cogeneration and solar water heating are NOT "emerging", they are proven technologies that are cost-competitive now, but the ACCC must force NECA and NEMMCO to pull down the barriers.

C: Improvements: Available studies will shed very little light unless they dig really deeply into the energy industry infrastructure, blowing away all the carefully crafted corporate spin. (not to mention the mind-set of ABARE, IPA, et al.)

(i) Policy No. 1: "Cinderella" Technology to Bloom: Eight million solar water heaters for Australia

There are about eight million households in Australia. If each dwelling had, by some miracle of government policy, a 5 m^2 solar water heater installed, then each midday in Australia (don't nit-pick about time zones!) there would be about 24 million kilowatts of nuclear fusion power being transferred almost directly into our hot water tanks.

But the sun is not always due north, or present on cloudy days, so in practice about 9 kWh equivalent per household per day can be collected. For 8 million households this is 2.6 x 10^10 kWh per year, or 26,000 Gigawatt-hours per year, for an emission saving of about 26 million tonnes of CO₂ annually, if it was all displacing electric storage water heaters. (halve the GHG benefits for an all-gas scenario)

How many coal-fired power stations could we dispense with, given that at least half of Australia's storage hot water is supplied by off-peak electricity? Possibly Callide C, Milmerran, Kogan Creek and Tarong, to name but a few.

When is the Sydney Olympics Committee going to give pro-rata prominence to the solar water heaters on Olympic village rooftops? Their web site shows that many of the dwellings have both solar photovoltaics and solar hot water, but all the publicity is on the solar electricity (photovoltaic) cells, even though solar hot water panels have TEN TIMES better performance as a greenhouse gas reduction technology (on a dollar-for-dollar investment basis).

Even Greenpeace got it wrong when they put photovoltaic cells on Kiribilli House during their protest stunt - the panels should have been solar hot water collectors instead.

It is time the politicians and bureaucrats stopped listening to the highly paid lobbyists for various special interest groups and started to put some common-sense sustainability policies into ACTION.

(ii) Policy No. 2: A real supply voltage averaging 240 volts now and 230 volts by 2003 to counter the industry's malicious implementation of AS 2926.

(iii) Policy No. 3: Radical tariff reform, with an urgent phasing out of cheap night-rate electricity tariffs such as the Winner Tariff and all discounted off-peak electric storage water heating tariffs.

D: Effects on Ecosystems: Beer and Williams (3) have done research which shows that in Gippsland, climate models for global warming predict more severe and intense bushfires. The study was based purely on temperature, humidity and wind considerations. Another factor needs to be researched urgently, and that is the local effect that emissions from the Latrobe Valley may be having on the Gippsland forests: my concern is that very high concentrations of CO₂ from the chimneys of Loy Yang, Hazelwood, et al. can quite plausibly be force-feeding local Gippsland forests with CO₂, thus increasing carbon sequestration much more than the high global background levels of CO₂ might suggest. This may lead to a much greater fuel load during drought years, than has ever been the case before lignite was burnt in such massive quantity in Gippsland. Therefore the tropospheric plumes from the power stations may directly contribute to bushfires of unprecedented intensity and danger. If this causal link is proven, then power stations should provide significant support to Gippsland's CFA firefighting capabilities.

E: Should the opportunity arise, I would be very happy to give evidence in person, or brief the Committee members further on any of the issues that I have raised in this written submission. I respectfully suggest that the inquiry needs to ask itself and relevant stakeholders the following questions: (a) Why has Australia got it's energy policy so disastrously wrong? Could it be something to do with the work of highly paid lobbyists acting on behalf of rich and powerful sectional interest groups who care nothing for present consumer rights, the public benefit, or future sustainability of the biosphere? (b) Is contestability i.e. "competition" through a monopoly distribution network, a farce and a charade that has been misleadingly implemented by economic rationalist ideologues exploiting the recent fashion for privatisation of public monopoly assets? (c) Is it reasonable behaviour, consistent with its dominant corporate/elitist culture, in an industry coming to terms with rapid change, or is is a case of unconscionable market conduct for the electricity industry to be issuing nuisance subpoenas to its critics, and running a public disinformation campaign against cost-effective renewable technologies? (d) Is the Electricity Supply Association of Australia a negative influence that is behaving like a cosy cartel of former monopolists, who are all now supposed to be acting independently? Should the ESAA therefore go the way of the Ice Manufacturers Association? The ESAA's New Zealand equivalent has already disbanded itself because of incompatibility with competition policy objectives. Unfortunately some industry observers are already of the view that the Titanic of the ESAA already has a lifeboat called the National Electricity Market Management Company (NEMMCO), and possibly NECA's system planning committees. (e) Is it the appropriate role of expert professional bodies like the National Committee on Electric Energy (a Chapter of the IEAust), to try to stifle objective scientific debate on the technical issues relating to voltage, by accusing me of hatching a "conspiracy theory" when I approached their committee members by email to get their views on my voltage ideas?

Michael Gunter mickgg@suburbia.com.au 22nd November 1999

References:

(1) My web site http://www.voltscommissar.net

(2) Downloadable online copy of my voltage article from "ReNew" magazine issue #68:
http://www.hotkey.net.au/~bmwken/voltage.pdf This is also attached as voltage.pdf

(3) "Estimating Australian Forest Fire Danger Under Conditions of Doubled Carbon Dioxide Concentrations," T. Beer (CSIRO Bushfire Unit, Mordialloc 3195, Australia), A. Williams, Clim. Change, 29(2), 169-188, Feb.1995

(4) "Self Service Science" http://www2.abc.net.au/science/k2/stn/ containing my "table of contents" at http://www2.abc.net.au/science/k2/stn/october1999/posts/topic96.shtm

(5) http://www.voltscommissar.net/acccvid.htm#240volts

(6) http://www.voltscommissar.net/phantom3.htm

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