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Sydney-based green energy marketer Jackgreen forecasts a net profit after tax in the vicinity of $5 million for 2006-07, reported The Australian Financial Review (31 May 2006, p.28). It quotes one analyst as saying it is difficult to project the company’s price-earnings ratio.

Slow start … Jackgreen sells electricity in NSW, Victoria and South Australia entirely sourced from wind farms and hydro generators. Despite a slow start after a backdoor listing in December 2004, it finally received its financial services licence in March last year.

… but unique selling point: While it has had to draw on the support of its institutional investor, Babcock & Brown, and raise a further $2.09 million, Jackgreen has a unique selling point: its renewable energy costs the consumer no more than its coal-based cousins.

Households coming on board: Since March last year, Jackgreen has signed up 10,000 households for three years and hopes to provide electricity for 100,000 homes by June next year. The shares, which listed at 20¢ before falling to 7¢ last year, closed on Monday at 40¢.

Expensive strategy: A fund manager who did not wish to be named says: "Jackgreen’s equal [pricing] strategy has been expensive but it gives people what they want." In 2004, Jackgreen surveyed 3000 households and more that 90 per cent said they would sign up to green energy if it cost them no more than other energy.

Opposition not on strong ground: The analyst says: "The issue is that Origin and others have to generate green energy anyway to meet the government’s 2 per cent target and they then charge the customer more for it."

The Australian Financial Review, 31/5/2006, p. 28

Source: Erisk Net  

There has been no detailed assessment in Australia of the costs of nuclear generation, notes The Age (29 May 2006, p.B6).

Coal not cheap if carbon costs included: Australia benefits from cheap coal, which at present provides a long-run average generation cost of about $40/MWh. Adding carbon capture and storage (CCS) facilities would increase that cost to nearly $100, although this may fall to about $70 as CCS technology improves.

Nuclear looks good if US claims can be believed: The costs of most renewables remain high, with wind at about $80 per MWh. The main costs of a nuclear plant lie in its construction, although new reactor designs have significantly reduced these costs in recent years. In the US, the long-run average costs of a new Westinghouse 1100MW nuclear reactor are stated to be under $US35 a MWh (about $A46).

Decommissioning included? This is said to include all costs, including waste disposal and decommissioning. In a carbon-constrained world, this will represent cheap electricity.

Terrorism the real worry: The contemporary problems with nuclear energy have little to do with operational safety. Rather, the main concerns relate to terrorism, namely possible attacks on nuclear generators or on waste transportation. These issues would clearly need to be dealt with.

The Age, 29/5/2006, p. B6

Source: Erisk Net  

Heavy taxpayer subsidies would be required to get privately owned nuclear power into operation in Australia unless the Government joins the Kyoto Protocol, according to David Uren, economics correspondent of The Australian (29 May 2006, p.2).

Building and running subsidies needed: A report prepared for the Australian Nuclear Science and Technology Organisation (ANSTO) finds the Government would have to foot 21.4 per cent of electricity bills for the first 12 years and contribute to the cost of building the plant.

Financial risk high: "If the owner takes the entire financial risk, then the nuclear station produces electricity at a cost that is significantly higher than would a new coal-fired or gas turbine power station," the report, commissioned from a British scientist, says. It appears to undermine the Government’s push for a fresh debate on nuclear power in Australia.

The Australian, 29/5/2006, p. 2

Source: Erisk Net

Despite being Britain’s wettest May for 23 years predictions of the third hot, dry summer in a row have authorities in crisis mode, preparing for the most critical water shortage the island nation has ever seen. Telegraph story

The report cited remarks by Lu Jianjian, a professor at Shanghai’s East China Normal University and a member of the government’s main national policy advisory body.

The effects of pollution have been seen in the reduction of the number of animal species living in the river from 126 in the mid-1980s, to just 52 as of 2002, Lu was cited as saying.

"Many officials think the pollution is nothing for the Yangtze, which has a large water flow and a certain capability of self-cleaning, but the pollution is actually very serious," Yuan Aiguo, a professor with the China University of Geosciences based in the Yangtze port of Wuhan, was quoted as saying.

Pollution has forced cities that use the Yangtze for some or all of their drinking water to move plants further upstream to find usable supplies. The commercial hub of Shanghai, with a population of about 20 million, is among those cities.

Without measures to reduce pollution, up to 70 percent of Yangtze water could be classed as unusable within five years, Xinhua quoted Yuan as saying.

Another expert, Liu Guangzhao, said the level of pollution would kill off plant species, "and the river would become a dead river," Xinhua said.

Agricultural runoff and industrial waste make up the bulk of the pollution, followed by domestic sewage and oil residue and sewage from the 210,000 ships that ply the river each year, it said. (AP)

May 30, 2006

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