I am participating in a project with other researchers from UTS, the University of Sydney and elsewhere, which compares the trajectories of energy transition in three countries; India, Germany and Australia. This is a preliminary set of arguments. It should not be assumed to express the consensus, conclusions, or more detailed knowledge of my colleagues, who are far better informed than myself.
We can begin with the simple observation that, greenhouse gas emissions are, at best, above targeted reductions (Germany), and, at worse, are steadily increasing (Australia and India). So the socio-political systems in place to reduce emissions and help the transition to renewable energies are not working very well.
All these countries seem to be encouraging what we might call neoliberal transition, where ‘neoliberal’ is defined as State encouragement of (largely big and established) business, the judging of acceptability by monetary profit or cheapness, and the provision of taxpayers’ money to protect those established businesses. Neoliberalism officially proclaims that the ‘free market’ provides the best solution to every problem, while not being ashamed to subsidise and protect favoured and influential market players (even while policy makers are claiming they are after a level playing field). The rhetorical point of neoliberalism is to posit business as the only, or most, important element in society, and profit-taking as the prime motivation for action. That helps explain why business interests are prioritized over all other interests. Neoliberalism, expresses the State as captured by capitalism, or specific corporate players.
Neoliberalism aims at maximizing profits and cheapness of production. Neither of which may always guarantee quality, or that the company works with local people in the local peoples’ interest. In Australia, the heavily neoliberal Federal government is talking of taxpayer subsidy of coal fired energy and is attempting to prolong the life of uneconomic coal based energy stations.
After blaming renewables for the steady increase in electricity prices (a point which is contested), the Australian government is attempting to force lower prices for electricity, which may harm smaller suppliers, and leave companies with less capital for investment in new energy sources. In the Hunter Valley in Australia, this move has involved a well-publicised fight against the closure of the Liddell power station, which its owners AGL, consider uneconomical, dangerous and fully replaceable with renewables.
The Government is also encouraging the opening of massive new coal mines, the expansion of old mines (primarily for export) and fracking, in the name of economic well-being.
Through these actions, the government appears to be putting the welfare of fossil fuel companies above everyone else.
In Germany, looking after established corporations has required a lot of taxpayers money in payouts and tax breaks. According to reports from the Federal Agency for Nature Conservation, Germany gives 55 billion euros ($61 billion US) in tax breaks to its biggest polluting industries, through exemptions from levies on kerosene, diesel and other sources of energy. Large corporations such as BASF SE and Thyssenkrupp AG benefit from exemptions from the Erneuerbare-Energien-Gesetz, surcharge which are offered to companies with very high levels of electricity consumption. This obviously undermines the function of the Emissions Trading Scheme, or any other economic factors in persuading companies not to use fossil fuels, or become energy efficient. In the neoliberal regime, these companies can simply point out that if they do pay the cost for not using low emissions energy, they can simply go elsewhere. And this must be morally right given neoliberalism.
Looking after established corporations in this way, has also helped lessen any beneficial effects from the EU Emissions Trading Scheme, which was initially weakened by the over-issuing of tradeable certificates so the scheme would not hurt big and powerful polluters. State protection of big business, while talking of free markets, is neoliberalism at work.
In India both coal and renewables are being boosted for ‘development’, which increases total emissions levels. While the official target is for a total of 175 gigawatts (GW) of renewables by 2022, a Brooking’s institute report claims that in India:
approximately 65 GW of [coal based] power plants are under some stage of construction, with about 50 GW progressed beyond paper plans
This is clearly on top of the already existing coal fired energy plants, which according to some sources amounts to 220GW.
In all these countries, expansion of coalmines and destruction of villages and fertile land continues to be a source of struggle – although this may be coming to a foreseeable end in Germany.
Community energy seems to be being discouraged. Indeed in Germany and India rates of community participation in the transformation seem to be declining, due to the reverse auction process (where players bid for a lowest price to provide electricity) in Germany, and the availability of the grid requiring locally generated power to be destroyed in India. In Australia, community energy may often depend on local Councils deciding to interact with their communities and support such participation, and is thus difficult in areas in which Councils are not supportive. This does not mean there are no community energy projects, but there are few formal guidelines, especially in Australia. In NSW, regulations appear to frequently prevent sharing of locally generated power with specific other local people, thus preventing the construction of microgrids, other than on the one property. This probably comes about because of the neoliberal benefits of privatising the grid, and the need to keep grid companies profitable.
Neoliberal methods, by definition, tend to cut out popular participation and community control. Neoliberal consultations are often cursory and private, or ‘commercial in-confidence’; as good consultations are costly and slow, and can be considered interferences in the flow of the established market. Neoliberal methods can also lead to the destruction of land rendering it unsuitable for agricultural purposes, or which change land use, and changes of people’s relationships to the land, through rigorous application of property rights which define property as disposable. The production of solar panels may also be heavily polluting, and the concrete bases used for field based renewables, both solar and wind, also emit greenhouse gases and possibly decreases the mass of soil fertility. This does not mean that renewables may not have far less disastrous effect than coal, but that renewables are not inherently without unpleasant environmental and social consequences, and neoliberal, or commercial, policies do nothing to discourage this.
All of this sets up the paradox that we are trying to reconnect people to the necessity of maintaining ecologies, by disrupting their relationships to the ecology (pleasurable and otherwise).
Cutting out community based renewables, with input from local players, may leave people open to being used to resist the transition completely, as when politicians, media and astro-turf groups appear to encourage ideas of wind turbine syndrome and normally ignorable environmental destruction, in a “by all means have renewables, but not here” move. In Germany, increasing resistance to land based wind farms, and above ground power cables going through the countryside, has already helped slow down the transformation, and similar signs are present in Australia.
One reason for supporting neoliberal transitions is that it could be relatively quick, and relatively free of financial risk to tax-payers.
However, Neoliberal transition can mean diverting money to established companies who are not engaging in transition, or supporting established companies effectively sabotaging the transition by refusing to co-operate with competitors, or refusing to build the necessary, and resilient, grid infrastructure.
A problem with community based energy democracy, is lack of co-ordination and lack of speed, as it takes time to raise money and get people on board. However, locally based renewable power grids may, as well as being more considerate to the local people and landscapes, may also be less prone to wide scale disruption from storm events, which are likely to increase with climate change.
This may suggest another paradox: energy democracy may not have the speed to produce the transformation in time, but if we do produce the transformation in time it may be alienating for most people, put in place without proper consultation or participation, and generate protest and disruption.
If all goes well, then Germany might reach its targets but, without radical changes, India and Australia will carry on increasing their emissions. This continues to suggest that the procedures of transition in all three countries require modification.
The most obvious suggestion is to stop expecting companies to do it all, to stop actively inhibiting those companies who are engaged in change, and to make it easier and clearer for local communities (rural and city based) to set up their own renewable microgrids and complexes.
But this may not be enough.