The Federal Government’s best achievement in spin this year has to go to its smoke (brown coal experiments) and mirrors (solar power experiments) announcements – both triumphs of gee-whizzery promise over economic and engineering delivery, both overshadowing Canberra’s continued lack of connection with the real business of dealing with carbon dioxide and electricity generation.

At the sharp end of the business, the biggest policy problem for the power industry in Australia is the lack of a coherent carbon trading policy, according to AGL’s CEO, Paul Anthony, while Australian farmers are missing out on $2.5 billion from carbon trading schemes because we haven’t made the Kyoto gesture, according to The SMH.

The thinness of Canberra’s reality was on display on Lateline where environment minister Ian Campbell was big on rhetoric and not much else.

He also seemed to be light on facts. When asked what sort of area the “world’s largest solar energy plant” would cover, he could only manage: “Well, ultimately it’s going to cover many hundreds of hectares. This is the first part of a program. We hope that with the success of the demonstration plant, we’ll be able to roll this out not only up in Mildura, but ultimately in places like China, over hundreds and hundreds of hectares.”

Sounds like he just didn’t know the answer, but he paints a funny picture of the future – mirrors from Mildura to Manchuria. If it’s “hundreds of hectares” to power a country town, the landscape around Shanghai will be interesting.

Meanwhile, back in the real world, plenty of energy industry players are highly critical of the federal government’s carbon policy vacuum on an anonymous basis, but AGL’s Anthony went on the record in a Eureka Report interview:

MICHAEL PASCOE: How hard is it to (grow the AGL power business) when there is a lack of clarity on national greenhouse policy and on national power policy?

PAUL ANTHONY: Yeah, look I think those things are issues in any business sector you have to deal with; there’s always ambiguity over policy. I think the biggest overhang though is the lack of any coherent policy on carbon trading. But we’re mindful of that and what we’re trying to do is build a modern fleet of generating capability that’s a mix of renewable and clean-burn gas-fired generation. So in the back of our mind, we’re assuming that there’s going to be a carbon policy in place, and every single step we take to build out our generation fleet is either clean-burn gas-fired technology or we’re looking at renewable technology.

MP:Is there a hidden cost in not knowing for sure and not having a firm federal policy?

PA: There’s always uncertainty in the business landscape going forward, and this is a particular that’s an overhang, but you just deal with it, otherwise the business becomes stationary and you don’t grow. So you just have to synthesise that lack of clarity into your business decisions and go forward, and that’s what we’ve done. We’ve made a deliberate decision to assume that there’s going to be carbon trading in place within maybe 10 years, and we’re factoring that into our investment decisions.

Unlike the Howard Government.

Peter Fray

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