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Gillard Unveils Australia Carbon Tax to Cut Coal

Prime Minister Julia Gillard unveiled Australia’s first tax on greenhouse gas emissions from July 2012 to reduce dependence on fossil fuels and encourage renewable energy in the world’s biggest-coal exporting country.

Australia expects to raise some A$27.8 billion ($30 billion) in three years by making polluters pay an initial charge of A$23 ($24.74) a ton of carbon dioxide, then lifting the price by 2.5 percent a year, plus inflation, Gillard said today in Canberra. The tax will switch to a cap-and-trade system in 2015, while the plan provides about A$47 billion through 2020 to help households and industries and spur renewable energy.

Gillard, Australia’s least popular prime minister for 13 years, wants to cut emissions in the developed world’s biggest per-capita polluter to at least 5 percent below 2000 levels by 2020. She already has support from the Greens party and the three independent lawmakers needed to pass the program after plans to price carbon and tax profits of miners cost her predecessor, Kevin Rudd , his job.

“This is an ambitious transition plan for the Australian economy -- it’s not just about greenhouse gas emissions,” Martijn Wilder, the head of the climate change practice at law firm Baker & McKenzie, said today by phone. “Australia has been working on this policy since the late 1990s. It’s about time.”

The country, which relies on coal to generate about 80 percent of its electricity, will require about 500 businesses to pay for their pollution under the plan. The government also will more than double aviation fuel excise. The carbon program will increase the annual change in the consumer price index by 0.7 percentage point in its first year, the government estimates.

More Than Europe

“Australia will cut 159 million tons a year of carbon pollution from our atmosphere by 2020,” Gillard said. “That is the equivalent of taking over 45 million cars off the road.”

Power generators facing losses in the value of their assets will receive A$5.5 billion in assistance, Gillard said today. The government also said it will provide loan support to electricity suppliers and payment for the closure of coal-fired plants to remove as much as 2,000 megawatts of capacity by 2020.

While the carbon initiative has “some positive” details for the electricity generation industry, “risks remain for the stable, competitive delivery of secure energy supplies,” Brad Page, chief executive officer of the Energy Supply Association of Australia, said in an e-mailed statement.

SOLAR ENERGY HARDWARE PRICES PLUNGE(Bloomberg NEF) | Finance ...

Fresh fall in the price of solar photovoltaic technology will increase its competitiveness against fossilfuel based sources of electricity: London and New York – Pricing along the whole solar photovoltaic value chain declined sharply in the month of June, as European subsidy changes and policy uncertainties led to an inventory build‐up for manufacturers. Module prices are also falling, though at a slower rate, with a 6.5% decline in June bringing crystalline silicon modules to $1.68/W. Chinese manufacturers are offering modules at significant discounts, with prices at $1.49/W, while modules manufactured outside of China are still priced higher, at $1.79/W. Prices for solar modules are now 58% lower than in the third quarter of 2008. Overall the industry anticipates further price declines. Martin Simonek, solar analyst at Bloomberg New Energy Finance, said: “Currently the markets are oversupplied with modules, as manufacturers seek to reduce their inventories in markets that are demanding cheap modules because of reductions in subsidies. Producers are preparing for a painful consolidation that could see several players exit the solar industry.” Michael Liebreich, chief executive of Bloomberg New Energy Finance, commented: “These prices mean that in a sunny region, solar power can be generated for 18 US cents per kWh from large projects and 20 US cents per kWh from retail rooftops. Compare that to daytime electricity prices in some markets equivalent to 20‐25 US cents, and you can see things are about to get really interesting.” The data for Bloomberg New Energy Finance’s Solar Value Chain Index and Module Price Index is collected between the second and eighth day of each month through a questionnaire sent out to over 120 companies that buy, sell or trade polysilicon, wafers, cells and modules.

The monthly results for both indices are sent to all participating companies on the tenth day of each month. The Solar Value Chain Index started in May 2009 and the Module Price Index was launched in November 2010. Participation is free of charge for manufacturers along the solar value chain, and in case of the Module Price Index also for traders and developers. For further information on the Index, please contact  msimonek@bloomberg.

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