OK I if call you Tony?
Tony, mate, I was thinking about you this morning as I read the paper and since its been a while since I've written to you, I thought I'd drop you a line.
Mate, some really really big stuff is happening around the world when it comes to energy. You seem to be busy and I figure that's why you are missing some stuff, so here's a really quick update for you. (Give Martin, Greg and Malc a buzz and tell them I said it's ok for them to plagiarize this and update the energy white paper if you like).
COAL FIRED POWER IS LIKE CHRIS DEBURGHS' "LADY IN RED"
As that gut wrenchingly awful song swims around in your head, remind yourself that coal mines, old steam powered generators, coal dust, mine fires and rampant CO2 pollution make the majority of the population feel even more nauseous than this horrendous power ballad. Sure, everyone wants cheap electricity (I'll come back to that) but the simple, UNDENIABLE REALITY is that apart from a small handful of directly involved people no-one in their right mind logically prefers dirty energy to clean energy. Check with Hunt'y - he's all over this stuff.
It's that simple.
Maybe it helps to remember the old incinerators that everyone had in our back yards when we were kids. Seemed smart at the time, but in hindsight shutting them down was the best thing we ever did, right? Even global consumption giant China, who I admit use a lot of coal, are rapidly changing their tune and heading the other direction ANNOUNCING PLANS to close down their worst coal burning plants and factories.
Tony, let it go mate.
THE ECONOMICS ARGUMENT IS A CROCK
I know you're a numbers man mate, and pretty conservative. I can understand that ploughing on digging up and burning the prodigious coal we have seems logical. But take a look around Tony. Most of the worlds major coal companies ARE LOSING BILLIONS, investors won't have a bar of them, and it aint' getting any better. They're the equivalent of that mad old uncle we all have who just quietly kept saying "Don't worry mate, the council will never find out we still have an incinerator - don't take the garbage out, we'll burn it!"
Divestment is growing, sales are flat and the major coal consumers are changing their mind.
You can even head downstream and see evidence of the pain. Just this week Europe's two biggest NON RENEWABLE UTILITIES ANNOUNCED RATHER LARGE LOSSES- E.ON burned EUR3.2 billion in 2014 and wrote down the value of many of its fossil fuel plants and RWE lost EUR2.8 billion and also wrote off its coal-fired assets. In fact, both these companies have announced "they can see the light" and are desperately trying to re-invent themselves. They are now talking about how the future lies in "new technology, large scale renewables, distributed generation, battery storage and micro-grids". Um, Tony mate, that's not coal.
Pretty simple mate; the biggest coal miners and now some of the biggest utilities are already in a world of pain. INVESTMENT IN NON RENEWABLE IS SLOWING and in renewables it's growing. "But renewables only works because we give them subsidies" I hear you say. Tone, mate, head on down to Treasury and get them to pull up their spreadsheets for you - you dish out around 10-20 times as much SUBSIDY FOR NON RENEWABLES as renewables already. Oh, and while you are at it, ask them if they think Mr and Mrs Jones are likely to spend their hard earned savings on buying "their own" coal fired power plant, so you dont have to pay for it in the first place. Walk out on the street and ask the first layperson if they think spending their weekly wage on solar and maybe even batteries sounds sensible.
You're getting this, right?
Our future economic prosperity is not likely to be in a declining, debt riddled, century old technology that's not doing so well today. Just sayin, you might want to rethink, well, everything.
THE RESOURCE IS GIVING ME SUNBURN
Now I know Marty and the others keeps saying "Tone, we've got a brazillion years of coal left; forget about it" and there are jobs and communities at stake here. But look at the facts mate. There are MORE JOBS IN SOLAR in Australia and THE US than coal already - dead set! New jobs are already being created, communities are growing (take a look at Nyngan and Broken Hill) because of solar and logically, it's going to keep growing as costs decline further.
I don't know what the answer is to the transition issues are but seems like you have two choices - ignore it and pretend its not happening or get on and help it happen.
And while you dropping in on Treasury, stop by the clever boffins at BREE too. They have some pretty cool charts and graphs and stuff that show that in terms of resources, there's one that we have that tops the lot, by about a gazillion times and it's free Tone's, free. We have more of it than almost everyone else on earth, most of those other countries desperately want and need it and you can send it them through some wires (we don't even need a boat).
Take a guess mate.
I'm trying to help you here, Tony. Remember the "Nation building" plans? The Snowy Hydro, the Ord River Dam and so on? You could go down in history as the man who built the next one. Give me a call, I'll introduce you to some folks I know who'd love to do it.
HOWS THE NEW SMART PHONE?
I heard you got a new phone recently, Tone. You're a man of the world so its probably a pretty schmick smartphone right?
Well I've got more big news for you - you can control energy with that thing! Trust me Tone, it's a hoot remotely switching stuff on and off from anywhere in the world - you can drive Margie and the girls mad wondering whats going on. Imagine switching the telly off in the last 60 seconds of I'm a celebrity Get me Out of Here or GoggleBox - hilarious!
But seriously, this ability to manage energy at low cost has arrived. The ability to buy and sell electricity, perhaps even from a battery, at the consumer level is about to arrive. The utility guys can even ask people to reduce demand. Some of the clever solar guys can even ADJUST THEIR SOLAR SYSTEMS to help the network guys from the other side of the world. All via your smartphone Tone's, your new smartphone.
I know, right? Amazing.
A pretty clued in electricity guy in the US, said to his investors the other day "Our industry is in the early but unmistakable stage of a technology-driven disruption of historic proportion. This disruption ultimately is going to end in a radically transformed energy industry where the winners are going to be those who offer their customers, whether they be commercial, industrial or individual customers, a seamless energy solution that is safer, cleaner, more reliable, more convenient and increasingly wireless."
What he means Tone's, is that consumers not only already have some smarts on the smartphones, but they are demanding more every day and it includes energy management.
We can do it too. Ask Malc, he loves this stuff.
CRANK UP DEMAND
Now I know the utility guys are crapping themselves because everyone is getting all "efficient" on them. This is easy to solve Tone's, not a word of a lie!
We all like to drive. Everywhere. Fuel is a pain in the backside (volatile, short local supply and tends to cause some pollution).
Easy. Give Elon and the bikers over at Zero a call and check out their electric vehicles. They all need to be recharged regularly to be practical, so get them together with the utility guys and smoosh a deal. A mere 100,000 electric cars and bikes on the road using 30kW chargers equates to a potential demand of 3GW Tone's (that's lot). Its almost equal to all the lost demand through "efficiency" and would help keep the utility guys happy and allow them to smear costs across new users. Then, get them to whip up a two way interface (using the smart phones) so they can buy" and" sell the energy when its needed to cool down parliament house on hot days when stuff's going mental down there.
Assuming half were top end Zero's and half were decent Tesla's, it's like a massive battery with as much as 4.7GWh of stored energy. Handy, right?
The utility guys get some demand back (thats good economics!), we get some clunkers off the road and we can stop talking about gold plating because the battery will sort things out.
It's actually already happening in some places Tone; (check with Malc, I think he went to Elon's place recently).
This not a Nimbin pipe dream mate, its real and if you think about it, it's inevitable - the rev heads love these electric thingamajigs 'cos they go like stink! Think of the productivity savings through faster transport!
ELECTRICITY COST, ELECTRICITY SHMOST.
I know electricity cost is an issue and I bet Margie is all over you about the bills "Tony, would you" please" stop leaving the dunny light on and what on earth do you do in there anyway?" etc.
It complicated too for a bunch of reasons, but here's the drum; centralised energy is getting more expensive and distributed generation is getting way cheaper, pretty much everywhere in the world. We happen to have a bucket load of DG already and homes and businesses are just busting to put more on. In fact, even when you try to stop them, they still do it. Insane I know.
What it tells us is pretty straightforward - if you help them and get the rules right they'll do more. Much more. And you wont have to pay because they will. I know, awesome, isnt it!
The more they generate and store themselves, the lower their costs will be. The utility guys will have to work it out and bloody well catch up without pillaging on price, but don't tell them I said that.
HERE'S THE SHORT VERSION OF YOUR NEW PLAN
Get the editing guys to spruce this up a bit, and do email it to through to Marty, Hunt'y and Malc for a squiz, but here you go:
"AUSTRALIA'S ENERGY PROSPERITY FUTURE MEGA SUPER PLAN" (BY TONY ABBOTT, PM, MARCH 2015)
Dear Australian's
I've chatted with my guys and we have a bold new plan to make Australia a modern energy superpower and save you money. We are going to transition our economy and leverage our biggest resources.
It's bodacious, ambitious and courageous, but thats just how I roll now.
We engaged consultants from Kodak to ask for some tip's because they have some really good experience in this area and because I'm much more inclusive of other peoples opinion's now.
Think of it as like one of those really, really fast trains to the future, and I'm giving you all a free ticket to ride.
Our simple 5 step plan will take us from the past to the future in a single election cycle so you can judge me quickly.
We will save you money, clean up the back yard and get really, really techy so we have a bigger economy.
We will become a major global exporter of an all new commodity which hardly anyone else has, which is very cool because we'll have few competitors.
We have decided to use the two resources we have the most of - the sun and the wind.
Here's how it will work:
* GREEN ELECTRON EXPORTER OF THE YEAR. We are going for the green electron exporter of the year award and we are going to win. We are going to generate bucket loads of solar and wind power and share it with out nearby neighbours and make a clip along the way. You can do it on your roof, your factory or in the desert where we are going to build some whopping big plants too. It'll all be connected up.
* SUNNY HYDRO LUMINARY ELECTRO PLAN. We are announcing the Sunny Hydro Luminary Electro Plan (SHLEP). We're going to create thousands of jobs installing solar thinga ma ijgs near the Ord River Dam and give those people making lifestyle choices some work opportunities. We'll generate crap loads of power and used pumped hydro to store and release it when we can get a huge price for it across the channel.
* COAL IS OK, BUT IT STINKS when we burn it so we're going to leave a lot of it in the ground. Think of it as like when we made you get rid of your incinerators; ultimately we all felt better when we weren't smelling burning garbage every sunday night. The good news is, one day in the future, if we can use it without stinking up mums washing, it'll be there.
* RE-INVENTING THE REV HEAD. We respect the iconically Australian rev-head culture so we are going to help them go faster by getting electric cars because they are awesome. This will save them money because they are cheap to run and maintain and we can probably set some new land speed records - another trophy for the cabinet.
* REWARDS FOR GEEKS. Lets face it wireless technology is important and can do some great things. We will reward companies and individuals who invent new apps and stuff that help us trade electricity and then, we'll sell these to utilities who can't seem to do it themself.
Thats pretty much it in a nutshell and we'll get started in a couple of weeks.
(etc etc, sincerely your Tony, PM etc)
Hope this helps, talk again soon.
