Burning down the RET

Tony Abbott's recent pro-logging comments suggest that the requirement for his renewables review to consider electricity generated from burning native forests might actually go ahead.

The response to the Abbott government’s announcement of its Renewable Energy Target review has focused on the ideologically hostile members of the review panel and the likelihood that the target itself will be gutted. But there is also a potential blow to Australia’s native forests in the terms of reference:

“The review is also to consider the Government’s election commitment to reinstate native forest wood waste as an eligible renewable energy source.”

This inclusion gains added potency in light of Prime Minister Tony Abbott’s recent anti-national parks and pro-logging comments. If it wasn’t already obvious, it’s now clear that if you are come in any shade of green, in the federal government’s eyes you have a target on your back – and not the renewables kind.

Since the government will claim a mandate for this change and the review will be conducted from within the PM’s office, we can safely assume that (unless the review recommends scrapping the RET altogether) it will recommend that the RET legislation be amended to allow native forest wood waste to be eligible for Large-scale Generation Certificates (LGCs).

Wood waste is already eligible for LGCs, but it is defined in the RET Regulations as “sawmill residue, other than sawmill residue derived from biomass from a native forest.” This clause is a result of the Labor-Greens-independents deal after the 2010 election, with the Greens being firmly of the view that electricity generation would be a new equivalent of the woodchip industry in terms of its marginal economics but destructive environmental impacts.

A complementary move against native forests has just occurred in New South Wales. From 2003 until last Friday, environmental regulations prohibited the burning of native forest residue for electricity generation. But with a change to the (Orwellian) Protection of the Environment (Operations) Regulation, native forest logs can now be burnt for this purpose. The change isn’t limited to large scale forestry operations either; it also applies to land clearing on private land where the O’Farrell government is also intent on reducing environment protections.

Why this change is being proposed is unclear. The NSW forestry industry claims that it would not be economic to use either the offcuts of native forest sawlogs or pulplogs just for the dollar value of the energy generated in the wholesale market, given that their value as electricity would be no more than the cost of felling and transporting them to mill furnaces.

This is probably true. However, the economics would be greatly improved if native forest logs could also generate LGCs (especially if these return to their historical average price of around $35/tonne), and if the energy could be sold into the spot market during periods of peak demand, when prices can reach many times their current average of under $50 per MWh. The change appears to be aimed primarily at creating a new market for woodchip logs following that industry’s serious and ongoing loss of income from exports.

While the government claims it won’t increase the rate of logging, clearfelling by woodchippers has never been environmentally responsible and the moves to weaken existing controls for private and public land are both unacceptable. It would be better for our rapidly deteriorating koala populations and other native forest biota if offcuts were left in situ as habitat. Even better, multi-aged native forest should not be logged in the first place, with all of our demand for forest products being met from plantation timbers. This is increasingly happening, with nearly 90 per cent of forest products in Australia now being derived from plantations.

If the impacts on biodiversity are not enough of a worry, burning trees is also a particularly inefficient way to generate energy, especially considering their value in storing carbon over decades and centuries. One unpublished study I recently read found that wood-fired power may produce three times the greenhouse emissions of a coal-fired power station over 200 years, especially given the loss of carbon in old-growth native forests (NSW Greens MLC John Kaye is claiming the figure is more like six times). Estimates I have seen for the cost of electricity generated from native forests logs (without LGCs) are in the order of  $10-20 per MWh, making it up to four times more expensive than coal-fired power without a carbon price.

Let’s remember that even without these changes to state and federal legislation, the industry can still generate electricity and LGCs from plantation log offcuts and sawmill residues.

Total Environment Centre is calling for consumers to boycott electricity generated from native forests. To help them choose, we are working on a simple tool that compares retailers on the basis of their environmental performance. One of our criteria, alongside the fuel mix of their generation assets, their commitment to the RET and whether they have CSG investments, is whether retailers have committed to not using energy from native forest logging.

Mark Byrne is energy market advocate at the Total Environment Centre.