ELS Fortnightly News Wrap Up #7

Each fortnight, the team at ELS publish a news digest covering energy and sustainability. We read for our own pleasure but to save you time we identify a handful of pertinent articles from Australia and around the globe and add our own commentary. It used to be an internal memo but we kept being asked to share it, so here it is.

This fortnight has seen some real moves by big players in the energy space with takeover bids and ties being cut. Even the corporate regulator, ASIC was hard at work with an update on climate risk. Here are six of the best for your weekend reading:

ASIC updates guidance on climate change related disclosure
While this is a press release rather than an article, it is still a profound event in the climate/carbon space. ASIC have risks associated with climate change as part of the material risks that company directors need to demonstrate they have considered, managed and disclosed. It also serves a warning that directors may be in breach of their legal obligations if they choose to ignore climate risk. Developments such as these are almost more important that specific government policy… we’ve never met a company director willing to put their livelihood at risk over ideology.

Crazy gang coalition MP wants Queensland to leave main grid
A few weeks ago we said we had seen it all and unfortunately we stand corrected. The latest brain wave out of Queensland thinks they should disconnect from the NEM, as their excess power should remain in Queensland and push power prices down. In a spectacular display of market understanding, there is no mention of what happens when prices go down… does the Government shut its power stations or is private enterprise expected to do that? And no surprises for guessing what happens when supply is constrained (looking at you Victoria post Hazelwood), the price goes back up!

Shell lobs $617m takeover bid for ERM Power as it eyes Australian expansion
This is quite the interesting play here from Shell to diversify into the electricity market. As oil and gas are predicted to decline moving forward in the long term it is appears this is very much a diversification play. The interesting part will be what they do with ERM — will they look to keep things going with business as usual or will they really give it a nudge and push the other gentailers for market share. No doubt electricity project developers are closely eyeing how this unfolds.

AEMO worries about aging coal fleet and summer extremes, wants new tools
The annual Electricity Statement of Opportunities has been released by AEMO and there are some serious concerns over Victoria making it through this upcoming summer without breaching reliability standards. The blame has been layed at the aging fleet of thermal generators, with 2 major units out of service until mid December and concerns over generators ‘tripping’. On the plus side (maybe?), chances are you can make a pretty penny in Victoria if you’re operating at the right time!

Charity severs ties with engineering firm over Adani coal mine
The lightning rod of Australian climate activism, the Adani coal mine strikes again! Engineers Without Borders has ceased its partnership with large engineering consultancy GHD over its work on the Adani coal mine. This follows news another large engineering house, Aurecon, has cut ties with Adani after pressure from activists (read here). These are somewhat surprising developments but goes to show how deep the divisions created from this mine run and the perceived brand value destruction that comes from working on the mine.

Australia left in the shade over coal
Australia has become the odd one out on coal at the Pacific Island Forum by pushing back on any action (or statements) against the use and development of coal. While not surprising given the economic importance of coal to Australia’s economy, there is something particularly galling about pushing to protect a dying technology when clean alternatives are already available and these countries will literally disappear underwater if nothing is done. There are some words from the plaque commemorating the loss of the Okjokull glacier in Iceland that we wanted to highlight “this monument is to acknowledge that we know what is happening and what needs to be done. Only you know if we did it.” Rather apt isn’t it…

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