The Cassandra Page

In mid 2008, Sir Peter Gershon finalised a report into the efficiency and effectiveness of ICT in the Federal Government. That report was delivered to the Minister of Finance and responded to in late 2008. AGIMO was given a large role in the implementation of recommendations.

There is no doubt that the recommendations are good for the Government and promote operational efficiency across Agencies. The issues arise around the unintended consequences of action taken to implement the Gershon review, impacts of the global financial crisis and the required efficiency dividends from Agencies.

From 1997 through to 2007 the message from the Federal Government was clear. If the Private Sector could do the job then let them do it rather than employ Public Servants. Based on that, a large ICT focused industry developed in Canberra, accounting for at least 20% of the Private Sector employment in the ACT. Agencies were discouraged from employing permanent Public Servants. Now Gershon recommends the reverse in many ways.

The report makes no mention of the impact on the ICT services industry. As a result of the recommendation to employ contractors as Public Servants there has already been a noticable reduction of work for people who were employed under the arrangements encouraged by the previous Government. There is a lot right about having Public Servants performing service delivery and technical roles that are ongoing and clearly defined. Issues arise around how it is implemented rather than the end result.

The amount of change to business related to this decision is in the order of $A300-500 million in the contracting businesses¹. AGIMO held two consultation sessions on 30 Jan and 2 Feb with “Industry”. Prior to this the consultation had been with a select group of industry associations. The questions asked and the answers given suggest that there are a lot of unexpected consequences of the way Agencies are reacting to the Gershon Report.

There seem to be significant issues with what appears to be Policy on the run and it is quite unclear what AGIMO and the Government want from the Private Sector and therefore small companies in particular are unsure what they should be doing. On the surface, things look grim. AGIMO says that there will be significant opportunities in the medium term (after September) but it is still unclear what those opportunities are for and who will be best placed to participate.

What is good Public Policy in this area? Are we happy to risk losing a significant talent pool? Why should we look beyond the immediate impacts (that appear to be minor)?

Continue reading … Case for structural adjustment in Canberra ICT Businesses? &raquo

A simple question with a complex answer. Which is the best Public Policy? Subsidise energy usage for low income people or reduce their energy consumption by funding the  improvement of home energy efficiency?

Continue reading … Energy Efficiency or Energy subsidies? &raquo

Glenn Pure wrote a letter in The Canberra Times on Saturday that sparked some discussion.

This page did some analysis on the subsidies and effectiveness of Solar Hot water and PV technologies - particularly payback periods and the effect of subsidies.

The bottom line is that you can get a return on investment for solar hot water in 2-5 years in Canberra if you are an average user of hot water. If you use a lot of hot water then you get a pay back quicker. There is almost no need for boosting because we have clear skies and the Evacuated Tube technology is so efficient at converting diffuse sunlight to heat.

Subsidies for solar hot water are low compared to the benefits that Government gets in terms of saving the need for building more generating capacity and from carbon emission reductions.

So the question is whether it is goodPublic Policy to provide large subsidies (~$A8,000) for PV electricity generation or to provide small subsidies (~$A2,400) for solar hot water where the benefits to Government and the consumer are actually higher for the smaller subsidy. If Procurement guidelines were followed then there is no doubt that the Value for Money requirements would not be met, technically putting the Government in breach of its own guidelines.

This site is now re-opened for comments.

Hopefully the spamming will stop with moderated comments

Draft in progress

Nearly everyone has moved on from denying that climate change is happening.The challenge to reduce greenhouse gasses  and we see a big push for renewable energy generation from individual, BUT with a considerable counter push from fossil fuel lobbyists for a continuation of subsidies for coal diesel and other fuels. The assumption that underlies current Government Policy is that the best way to look after the future is to convince individuals to take personal responsibility for using and generating energy.

There has been a huge push for subsidies to individuals who install renewable energy systems in private residences and the Federal Government (Australia) has allocated $500 million for rebates to fund renewable energy and energy conservation measures as direct rebates/subsidies to individuals. This might be good but why not invest that money in public utilities? I looked around for the kind of analysis I have done here and could not find it… yet it seems to be vital information for those deciding how they might do better when choosing how they get their energy.

I have done some “back of the envelope” analysis that makes you think…

Continue reading … Private or Public Generation for Renewable Energy? &raquo

A short note on the links and references on this site. I make use of a few sources for this site to allow a bit more investigation and give you some assurance that the ideas are supported by others as well. I can link you to the public ones but not the ones which require a login.

New Scientist is really good. Archive search is a wonderful way to quickly check facts.

I do read Wikipedia because it is at least moderated content.  I never rely on it as a sole source but it can be good as background.

Harvard Business Review is also good. I get the print magazine and often check the archive online.

The Age in Melbourne is the newspaper I rely on most, followed by The Canberra Times.

The Diplomat is a guilty pleasure. I cringe at the ads targeted at people who aspire to be conspicuously wealthy but the comment keeps me in touch.

The Project Management Journal is something I love to receive each quarter. In my field of work it is the most useful journal.

I am using the spin words freely here so that you get the picture. I can assure you this these observations come from a highly reliable source and that I am certain they reflect the real story. Here is the story so far

Continue reading … A day in the life of a job seeker &raquo

The previous Australian Government established a principle of “Mutual Obligation” for people who were looking for work in Australia and receiving income support (called The Dole by many people). The concept seems quite reasonable on the surface and it is probably a good thing for a proportion of long term unemployed people who might benefit from a degree of integration into “working society”. However (and this is a big however) the application of the principle is where the issues are clearly still being seen.

Continue reading … The future of work in Australia &raquo

Not only is Capitalism under siege but the supremacy of the USA as dominant world power is also looking like it might be at an end soon. Why do I say that when the USA is clearly the most powerful nation in military and economic terns?

the USA has been the top world power for about 70 years. They took over from Britain just before WWII and Britain took the mantle from France in the aftermath of Napoleon and had about 130 years at the top. Before Britain there was Spain, the Habsburg Empire and the Holy Roman Empire that lasted 280 years in one form or another. The Ottoman Empire was probably in the ascendancy for 3-400 years but slightly to the side of the Habsburgs. Then you go back to Greek and Roman times. 500 years for the Roman Republic and then 400 more for the Empire is a standout in longevity as well as influence. I will avoid the eastern empires here.

The common reasons that caused each of these empires to decline and be replaced with others seem to be:

1. A decent into decadence and hubris
2. Abuse of economic and military power causing fragmentation of alliances
3. A culture building that said nobody else has anything good except us

In many ways you can see this in the USA now. Since the 1980s it has been the military and economic power but has steadily lost friends internationally by creating conflicts that suit its economic interests.

It has not been fatal but the signs have been there to see. Until 11 September 2001 and the subsequent wars “on terror” the USA was able to recover international respect and maintain its place as the world leader in most areas. In the last decade, the decline politically has been matched by a decline economically. This decline started in the 1970s and re-emerged in the 1990s and again in the past 3 years. Old industry and clinging onto old ways of doing things have limited opportunities. Still, the great ecomomic wealth of the USA was there to keep things going.

With the serious weakening of the USA economy and its “moral compass” in the past few years, it looks likely that the USA will rapidly decline in importance. Instead, it will be Asia, the subcontinent and possibly even Africa that will rise to make the USA relatively less important.

It will probably take another 10-20 years but it is likely that the USA will become more insular and its “adventures” internationally will be less and less supported by Europe, an emerging Russia and China. The effects of the trillion dollar bail outs on the USA economy and the Government will limit the ability to use Aid Diplomacy.

Where will it end up? We can look to France and Britain to see that after their decline (both due to wars and overreaching their capacity to manage large empires) they have become mature and solid international citizens that use their still large economic power and more limited military power judiciously and more in tune with other countries.

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The economics of power are not always what they seem. Here is a brief analysis of the relative economic merits of renewable energy and fuels for electricity production.

The coal industry has been telling us all that renewables are not ready yet. That renewables might be ok in the future and that they are limited. The reality is quite different and the economics are starkly in favour of renewables right now, as the Stern Report clearly identified. The really expensive option is to ignore climate change and keep burning coal and other fossil fuels.

Quite a few of the issues around the economics of power generation could do with some clarification and somewhat independent analysis. We mainly get highly partisan analysis provided by the advocates of some approach and rarely a broad spectrum view of the options available. I have made an attempt to surface some of the big issues that probably should be more widely understood.

The arithmetic is not the important thing because it is not a matter of calculating things to the 4th significant figure to know what needs to be done. It is sufficient to understand the big picture and the overall dimensions and leave the fine calculations to specific choices to do or not do a project.

Hydro-electricity

Hydro electricity is probably the most commonly understood renewable energy source. It has its place but there is a limit on how much of the wild river systems can be dammed and harnessed for electricity. We probably passed the limit well before the Five Gorges Dam.

Worth noting is that hydro-electricity storage is an important part of a total renewable energy package. You often hear people ask the pointed question “But can solar energy provide baseload power requirements?”.  Clearly solar energy cannot operate effectively with no sunshine (night and poor weather) but, it CAN generate more than is needed when the sun shines and power pumping stations that efficiently store energy in the form of water to be used in hydro-power stations.  In fact, this is a technique used in “baseload” coal stations to use surplus electricity generated overnight for use in peak demand periods.

Hydro power is a very low  CO₂ emitter in operation but large dams create a large carbon footprint when built. Other environmental damage is usually caused by damming rivers for hydro power that makes new hydro-power sources hard to find.

Wind turbines

Wind power is an enormous untapped resource.  A lot of wind power is difficult to harness because it is irregular or out to sea. But, where it can be harnessed, it is a potentially great contributor to total energy production. A quick look around Holland shows that you can readily integrate agriculture, industry and living space with wind power.  Denmark, Germany and other countries located in that region of Europe are rapidly increasing their wind generated power in response to global warming. Australia is severely lagging behind that. Globally, 1.5% of electricity is generated by wind power, but this was reported to have grown by a factor of nearly 5 over 6 years, between 2000 and 2006 ¹ and this is expected to double again by 2010. A growth rate of 20%+ per annum. Meanwhile Australia is introducing wind generation at less than 5% growth, despite favourable sites. See Crisis? for a discussion of why.

Now, lets think of the numbers here. There will be 160 Gw of electricity generated from the wind in 2010 on average all the time. That means around 2% of the expected demand then. The cost of wind generated power is going down as fossil fuel costs go up and that is before carbon trading kicks in. After that the economics are the proverbial no-brainer.

What is the available capacity of wind energy? It has been calculated at 72 Terra watt in a study at Stanford University.That is somewhat more than 5 times the estimated total electricity demand by the year 2020. The ramp up is obviously an issue but the raw capacity is definitely there.

For 1 Gwh of electricity (we have to multiply by hours to get energy from power output) of electricity is the same as burning about 450 tonnes of coal and producing 370 tonnes of Carbon (in the form of CO₂ and CO plus small amounts of other carbon emissions) or about 900 tonnes of CO₂ (more mass because of the oxygen molecules). The rest of the coal is waste and pollution like Sulphur and dust. Obviously these figures vary according to the efficiency of the power generation and the kind of coal used but it is a good median of the the current situation.

This means that we are looking at plenty of capacity to use wind and it is already economic to build wind power over coal powered stations. It is not the total solution to all our prolbems BUT, we COULD replace what we do now with just that one technology and not significantly lose any lifestyle or economic development. Wind produces 0.5% of the total CO₂ that coal does in the total lifecycle of the generating plant. it is 1% of the CO₂ of Gas generation which emits half the carbon of coal fired electricity generation and less pollution.

Electricity demand is shown in this link.

An analysis of Carbon Footprints of fuels is here. Also see … for my analysis of relative efficiencies and impacts of fuels.

Solar Photo-voltaic

Solar photovoltaic generation is what people think of immediately for solar power. It makes sense that you can convert sunlight to electricity and that is immediately usable. Currently, this technology is expensive to produces, costly to install and uses scarce materials to manufacture. It works well and is great for remote powering of electrical equipment. Many new developments aim to bring the cost of this technology down and it is expected to follow Moore’s Law for technology for at least the next 30 years. Large scale generation methods are also in embryonic stages.

The most promising things about this technology is the near certainty that the cost will reduce dramatically and that newer materials will allow integrated building materials to be incorporated into building structures that can generate electricity. Such advances will be highly beneficial in drier and sunnier places such as Canberra where roofing materials can be turned into efficient power generators for more than 300 days of the year.

Right now the CO₂ emissions from silicon photovoltaic cells are about 5% of coal powered generation due to the energy intensive manufacturing process. Installation costs are also very high because the panels are delicate and quite small, requiring several to be connected together to produce worthwhile output. Cost per Kwh is between 2-5 times that of coal fired electricity right now.

Solar photovoltaic power generation is not readily scalable to be used as utility power generation. Some research has suggested that PV combined with large scale concentrating mirrors might become economical but this is not in the near future and may require high temperature (superconduction at ~-50 Celsius) superconductors to be viable.

Solar Thermal

Solar thermal is already a technology that can be used to generate large amounts of electricity using steam just like coal fired or gas fired power. Its main limitation is that it is dependent on sunshine and cannot generate at night or heavy overcast days. It is however not short of energy. Each square meter of land receives 1 Kw of power from the sun when it is shining - this varies a bit but 1 Kw is a good average. That means that 1 sq Km can produce 1 Gw of power. a few hundred sq Km of solar generation can therefore produce most of the power needs of most countries.

Of course, there are issues with this. Ramp up time is going to be relatively slow. Most parts of the world do not have that much space to devote to power generation. BUT some DO. Arid regions that currently graze 1 animal per sq Km could easily be converted to power generation without economic loss. Environment considerations exist but not as great as many other issues. Certainly much less of an issue than global warming.

This kind of generation if located a long way from cities will lose efficiency in terms of transmission losses but the clearest advantage is that it can support energy intensive industries such as aluminium production in remoter areas. The essentially free and clean energy once these systems are in operation can greatly help to generate sustainable development in regional areas far from traditional power generation.

Many grid management issues exist and need to be solved, however, it is clear that solar thermal is economic and feasible and can be done now.  As part of an overall approach to reducing carbon emissions, it seems a compelling option.

Geothermal

Geothermal power generation is another abundant source of energy. IT is not widely available but where it is available, it is extraordinarily efficient. Iceland is able to generate a quarter of its electricity and a large portion of its heating needs from geothermal (3 quarters is from hydro-power). In Australia, there are some outstanding sites for geothermal power that are yet to be seriously exploited.

The technology is not very new and the power source is nearly inexhaustible. Places like Hawaii and Indonesia may be able to harness this energy to generate highly sustainable industry and good working conditions in the tropics.  Such developments could result in significant shifts in economic power.

Wave and tide

Waves and tides form another large untapped resource. The capital cost of building a power station to capture tidal and wave energy is high but the operation and maintenance is low.

Bio Waste

Using waste products for making bio-fuels is a different thing entirely from using food crops to make bio fuel as discussed here.

There are many agricultural and industrial activities that can make use of “waste” by-products to generate a little or a lot of energy. Garbage tips are in fact a major source of a potent greenhouse gas, methane. Capturing methane at a garbage tip is a good way to reduce that contributor to global warming. But! methane is just natural gas - the stuff we buy to cook with and heat water and our homes. A number of garbage management companies are now capturing that methane and using it as a fuel onsite and sometimes on-selling it as bottled gas.

Similar things apply in sewerage works, abattoirs, intensive farming and food processing. Waste products can be used to generate power to operate a processing plant, warm things up or be used elsewhere. Sugar cane producers typically burn cane and other vegetation. New techniques (re-invented from the depression era) make fuel grade alcohol and methane from the waste products instead of burning.

Building it

So, if there are so many options available and they seem so straight forward to implement what is the problem? The usual answers are:

• The technology is inefficient - we need to wait for better technology
• The cost is not competitive with coal, oil and gas
• It takes too long to build
• Solar energy is only produced during the day so it cannot produce baseload power
• There is no skills base to build and manage it (ie the grid is not capable of taking it)

The efficiency issue is moderately true. However, there is no impediment to solar thermal. It is quite efficient already and more efficiency is possible. Given the enormous resource going to “waste” right now, what is the problem? It is not like burning fossil fuels where inefficient processes lose the value. You are getting the sunlight for free. Other technologies like PV will become more competitive when they are more efficient (as with all generation methods)

Cost competitiveness is hotly debated, the Garnaut Review in Australia shows quite clearly that the “hidden” costs of burning fossil fuels will be borne by the community and not the polluters. When you add that cost you get a much more favourable cost for renewables. Solar generation becomes much more competitive and wind is already competitive in many parts of the country. As economies of scale build and the grid is adapted to the differing profiles of renewable power generation and more sophisticate control mechanisms are built in then those problems will not be problems anymore. They will, instead become major opportunities to become more efficient.

Carbon tax/credits make the whole renewables pricing structure a complete new equation. In less than 3 years it has gone from uncompetitive to very competitive and that trend will only continue as fossil fuels are depleted and the cost of carbon emissions is fully added in to energy costs.

The baseload power argument is a furphy. IT is a coal power plant term that reflects the limitations of coal fired generation. Coal must keep burning even at night to generate power even when ther is no demand for it. This is why off-peak electricity is cheaper (water heating and industry) to encourage use of electricity at night. Peak generation during daylight hours is in fact beneficial. These days the peak demand comes from airconditioning at exactly the time the sun is shining brightest. Wind generation is variable but happens at any time the peaks tend to be around dawn and dusk which suit the domestic demand for electricity at these times.

In california they are building a 177 Mw solar thermal power station in about 7 months. That will power about 120,000 homes (36 Kwh per day on average). This is not very slow compared to building hydro, coal or nuclear generation that takes many years of construction and infrastructure to transport fuel. Solar and wind fuel comes to you. All you need is a connection to the grid to produce power. That means that the management issue is actually less of a problem overall. Managers can concentrate on electricity rather than  other things.

It is not economics that is stopping renewable energy. It is not a lack of sound technology. It is a combination if self interest and denial that prevents rapid implementation of renewable energy sources. Germany and other western European nations are showing the way, now it is up to the USA, Australia, China and India to take the next steps and make renewable energy the mainstream.