A lot of people die without making a will. There used to be a degree of personal satisfaction in directing how your worldly goods would be distributed and the sure knowledge that this would happen according to your instructions. In today's world, that outcome is far from certain.
The law of the land has given itself the right to over ride your wishes and second guess where any wealth you leave behind may be distributed. That decision will now be made by a learned judge who knows absolutely nothing of the lifestyle you lived, nor the reason that personal relationships broke down - and simply makes judgement on a mix of formulae and how he or she is feeling on the day of that decision Often personal feelings and attitudes to life will colour the outcome.
It is perhaps understandable that the estate of the hugely rich may be contested by relatives. Where multi millions of dollars are involved there are usually family expectations and even promises that have not been fulfilled. The cases passing through the court system today reconfigure the outcome and distribution of more modest wealth and its progression to nominated beneficiaries.
One recent case involved the estate of a woman who passed away at the ripe old age of ninety-nine. She left an estate valued at $2 million, most of which was represented by the modest family home at Turramurra which was valued at $ 1.8 million because of the Sydney home price bubble. It is doubtful if that woman would have considered herself " wealthy "
She willed her estate to one of her two daughters. The daughter who was not mentioned in the will went to court to sue her sister and a benevolent judge promptly handed her $ 425,000, completely ignoring the wishes of the deceased. In a breakdown of this judgement $ 2615 was specifically awarded for pilates and water aerobics.
The estranged daughter admitted that she had never had a close relationship with her mother and had been rebellious. She had become estranged from her mother, who did not attend her graduation and disproved of her marriage, which ended in divorce. There was further friction following the death of her father in 1996.
It seems that there was a degree of balancing of estate distribution between her mother and father. Her fathers estate of $ 86,168 went entirely to the errant daughter and this went unchallenged by her sister. It could be argued that to a degree the imbalance of value between the father and mothers estates could be mainly attributed to the recent surge of home prices in Sydney, and yet that anomaly was completely disregarded by the judge.
Knowing that her errant daughter had benefitted from her fathers estate this mother had probably felt justified in rewarding the daughter who has stood by her in her declining years, only to have that benefit snatched away on the whim of a Supreme court judge. Her wishes on how her estate was to be distributed were completely ignored.
No wonder so many people fail to go to the trouble - and expense - of making a will. What's the point, when the judiciary will treat it with contempt and make their own decisions ?
Tuesday, 7 March 2017
Monday, 6 March 2017
Those Fabulous - Diamonds !
There is no doubt that the most expensive mineral on planet Earth, given its value by weight and size - is the Diamond. It came to prominence in 1866 when a farmer's son picked up a curiously glistening stone on the banks of the Orange river in South Africa.
At that time the British genius colonizing South Africa was Cecil Rhodes and he was astute enough to realise that diamonds would only hold their value if they remained rare. In 1888 Rhodes founded De Beers, the company that persuaded diamond miners to channel their product through this venue so that the quantity going to market could be controlled.
Diamonds are amongst the oldest minerals on earth. They formed more than a billion years ago between the crust and the molten interior of the planet where the pressure was high enough and the temperature low enough for carbon to form into the stone that gives light its brilliance.
For more than a century De Beers was the controlling force in the diamond trade. It carefully regulated the flow of these gems to the cutters and polishers who predominated in Antwerp and London and its hand on the flow pipeline was legendary. Buyers were ushered into a sealed room and handed a velvet envelope containing precisely the stones that D Beers was offering for sale - and the price that they would charge for each stone. They were free to reject individual stones, but they also realised that De Beers totally controlled supply and should they offend, next time they may be offered far fewer stones - or none at all.
De Beers used its monopoly wisely. Its advertising linked this glistening stone with the world of romance. Its marketers created the image of the diamond riding on the finger of the left hand of young women consenting to become someone's wife - and even a rigid protocol was established as to the cost. It became accepted that such a ring should cost two months pay to be acceptable and the memorable slogan " Diamonds are Forever " came into vogue. This custom swept the western world and by 1939 ten percent of brides received a diamond engagement ring on betrothal - and by the end of the century this had increased to eighty percent.
By the 1990's De Beers grip had began to loosen. More was understood about how Diamonds are formed and new strikes were occurring in Canada, Angola, the Soviet Union and Australia. The natural gem was also under pressure from commercially produced diamonds, which were fast reaching similar quality. Diamonds were also finding an increasing market in industrial uses and a huge scandal in Africa tarnished its image. Rebel armies were enslaving villagers to mine diamonds and selling them on the open market to finance their wars. The movie " Blood Diamond " caused some people to distance themselves from these precious gems.
Today, the former control levered by De Beers has disappeared. More diamonds are finding their way to market and obviously that old maxim of over supply is causing prices to drop. Unemployment and a lowering of wages may change many interests, but it still seems that many young women dream of that sparkling stone that they hope one day may adorn a finger on their left hand.
How De Beers orchestrated a custom that spread across the western world - and which may yet find resonance in a fast emerging Asia - is probably the classic example of a great marketing strategy. It also illustrates how linking a product with romance created a custom that has survived for more than a century. Something that today's marketing people may ponder !
At that time the British genius colonizing South Africa was Cecil Rhodes and he was astute enough to realise that diamonds would only hold their value if they remained rare. In 1888 Rhodes founded De Beers, the company that persuaded diamond miners to channel their product through this venue so that the quantity going to market could be controlled.
Diamonds are amongst the oldest minerals on earth. They formed more than a billion years ago between the crust and the molten interior of the planet where the pressure was high enough and the temperature low enough for carbon to form into the stone that gives light its brilliance.
For more than a century De Beers was the controlling force in the diamond trade. It carefully regulated the flow of these gems to the cutters and polishers who predominated in Antwerp and London and its hand on the flow pipeline was legendary. Buyers were ushered into a sealed room and handed a velvet envelope containing precisely the stones that D Beers was offering for sale - and the price that they would charge for each stone. They were free to reject individual stones, but they also realised that De Beers totally controlled supply and should they offend, next time they may be offered far fewer stones - or none at all.
De Beers used its monopoly wisely. Its advertising linked this glistening stone with the world of romance. Its marketers created the image of the diamond riding on the finger of the left hand of young women consenting to become someone's wife - and even a rigid protocol was established as to the cost. It became accepted that such a ring should cost two months pay to be acceptable and the memorable slogan " Diamonds are Forever " came into vogue. This custom swept the western world and by 1939 ten percent of brides received a diamond engagement ring on betrothal - and by the end of the century this had increased to eighty percent.
By the 1990's De Beers grip had began to loosen. More was understood about how Diamonds are formed and new strikes were occurring in Canada, Angola, the Soviet Union and Australia. The natural gem was also under pressure from commercially produced diamonds, which were fast reaching similar quality. Diamonds were also finding an increasing market in industrial uses and a huge scandal in Africa tarnished its image. Rebel armies were enslaving villagers to mine diamonds and selling them on the open market to finance their wars. The movie " Blood Diamond " caused some people to distance themselves from these precious gems.
Today, the former control levered by De Beers has disappeared. More diamonds are finding their way to market and obviously that old maxim of over supply is causing prices to drop. Unemployment and a lowering of wages may change many interests, but it still seems that many young women dream of that sparkling stone that they hope one day may adorn a finger on their left hand.
How De Beers orchestrated a custom that spread across the western world - and which may yet find resonance in a fast emerging Asia - is probably the classic example of a great marketing strategy. It also illustrates how linking a product with romance created a custom that has survived for more than a century. Something that today's marketing people may ponder !
Sunday, 5 March 2017
The Right To Know !
It seems that " Privacy " is no longer a right for the average citizen. The moment we attract the interest of the news media because we become the victim of a road accident or we witness an incident that involves the police both our name and picture may appear in a newspaper report or on the television news - and that information will include our age.
Many people - and specially women - are sensitive about their age and yet whenever we are called upon to provide our identity that age question seems to automatically be part of the process and in many cases it becomes part of the judgement people make in evaluating the story.
Should a seventy year old pedestrian become the victim of a street attack by a drunken reveller most people will feel sympathy, but should the victim be a twenty-two year old many will wonder if he did something to provoke that attack. We do tend to evaluate the seriousness of incidents by considering age as a contributing factor.
Another area of sensitivity is the salary we earn. That is part of the image we project in the society in which we live and it further manifests itself in the house we occupy and the car we drive. Various levels of seniority in the workplace deliver a mix of pay levels and to most families their earnings are a very private matter. Pay and bonuses have become common conjecture in the media as the subject has become part of political debate.
Recently, the dignity of a man charged with bringing a government entity into the black from a calamitous financial position had his salary publicly questioned and compared with holders of similar job levels. That man saw fit to tender his resignation and will no doubt seek new challenges in the commercial world. Wherever he settles, the salary he negotiates will undoubtedly be of interest to the media and will be discussed in a public forum.
It seems that what we considered our right to secrecy is now " public information " but the wheels have turned when it comes to delving into our past. We have gained " the right to be forgotten " when it comes to the searches made by information providers such as Google.
The power of an Internet search engine to minutely search old records makes it easy to dredge up details that are no longer relevant, but which could impose a degree of embarrassment. Perhaps a messy divorce action. All manner of traffic infringements from a long time ago. Details that are not pertinent to the lifestyle that person is living today. Any computer search could continue to divulge this unnecessary detail endlessly.
Citizens now have the right to have that past detail " forgotten ", but they need to lodge such a quest with the company undertaking such searches. It would help if we had a statute to safeguard private information such as age and salary earned from public disclosure, without our permission !
Many people - and specially women - are sensitive about their age and yet whenever we are called upon to provide our identity that age question seems to automatically be part of the process and in many cases it becomes part of the judgement people make in evaluating the story.
Should a seventy year old pedestrian become the victim of a street attack by a drunken reveller most people will feel sympathy, but should the victim be a twenty-two year old many will wonder if he did something to provoke that attack. We do tend to evaluate the seriousness of incidents by considering age as a contributing factor.
Another area of sensitivity is the salary we earn. That is part of the image we project in the society in which we live and it further manifests itself in the house we occupy and the car we drive. Various levels of seniority in the workplace deliver a mix of pay levels and to most families their earnings are a very private matter. Pay and bonuses have become common conjecture in the media as the subject has become part of political debate.
Recently, the dignity of a man charged with bringing a government entity into the black from a calamitous financial position had his salary publicly questioned and compared with holders of similar job levels. That man saw fit to tender his resignation and will no doubt seek new challenges in the commercial world. Wherever he settles, the salary he negotiates will undoubtedly be of interest to the media and will be discussed in a public forum.
It seems that what we considered our right to secrecy is now " public information " but the wheels have turned when it comes to delving into our past. We have gained " the right to be forgotten " when it comes to the searches made by information providers such as Google.
The power of an Internet search engine to minutely search old records makes it easy to dredge up details that are no longer relevant, but which could impose a degree of embarrassment. Perhaps a messy divorce action. All manner of traffic infringements from a long time ago. Details that are not pertinent to the lifestyle that person is living today. Any computer search could continue to divulge this unnecessary detail endlessly.
Citizens now have the right to have that past detail " forgotten ", but they need to lodge such a quest with the company undertaking such searches. It would help if we had a statute to safeguard private information such as age and salary earned from public disclosure, without our permission !
Saturday, 4 March 2017
Musical Chairs !
The OECD has given an unusually blunt warning that a lot of people are going to be seriously economically hurt when the housing price bubble comes to an end. The logic of ever increasing house prices is unsustainable. In Sydney they increased by a further 4.5% in the three months ending in February, making an increase of 18.4 % for a full year.
What we are seeing in the housing market is reminiscent of that old children's party game - Musical chairs. More children than chairs continue to circle while the music plays, and when it stops those unable to be seated are eliminated.
We have vast numbers of potential first home buyers locked out of the housing market because they lack the deposit required by the banks to finance a mortgage and in many cases their earnings are insufficient to service the required monthly repayments. Unfortunately, many have borrowed from parents to pad the deposit and are just keeping the mortgage payments current by sacrificing living standards. Their finances are on a knife edge as a consequence.
They justify this entry into the market with the thought that if things get too tough they can place their new home back on the market and reap a handsome profit because of these ever rising prices. Some existing home owners have used the equity in their present dwelling to upgrade to a better suburb and increased their mortgage payments accordingly.
All those with mortgage payments above their comfort level are vulnerable to the inevitable increase in interest rates. Interest rates run in cycles and at present we are at the absolute depth of the present cycle. A tenuous upward movement has started by the American Fed and when increases take hold they may move with surprising rapidity. The housing market may tank the first time a panic headline appears in the financial press.
We should be warned by what happened when the last recession broke back in 2008. The people who rushed to put their property back on the market found that there were no longer buyers interested and asking prices collapsed. Many found that their equity was " under water " - they owed more on their mortgage than the dwelling would bring on the market. The banks were merciless - and foreclosed immediately payments went into arrears.
The survivors were the people with years of equity in mortgage reduction and who purchased way back in the inflation bubble, and those with earnings that could accommodate an increase in mortgage rates caused by higher interest rates. The losers were the people with an unsustainable mortgage and a home that could not realise the expected asking price because of this downturn. Like the children playing "Musical Chairs "- they found themselves stranded when the music stopped.
The message coming from the OECD is loud and clear. An increase in interest rates is inevitable - and we have a recession again looming - and it is coming fast ! The wise will act accordingly, or they will share the fate of many who expect this entrancing price increase music to keep playing forever !
What we are seeing in the housing market is reminiscent of that old children's party game - Musical chairs. More children than chairs continue to circle while the music plays, and when it stops those unable to be seated are eliminated.
We have vast numbers of potential first home buyers locked out of the housing market because they lack the deposit required by the banks to finance a mortgage and in many cases their earnings are insufficient to service the required monthly repayments. Unfortunately, many have borrowed from parents to pad the deposit and are just keeping the mortgage payments current by sacrificing living standards. Their finances are on a knife edge as a consequence.
They justify this entry into the market with the thought that if things get too tough they can place their new home back on the market and reap a handsome profit because of these ever rising prices. Some existing home owners have used the equity in their present dwelling to upgrade to a better suburb and increased their mortgage payments accordingly.
All those with mortgage payments above their comfort level are vulnerable to the inevitable increase in interest rates. Interest rates run in cycles and at present we are at the absolute depth of the present cycle. A tenuous upward movement has started by the American Fed and when increases take hold they may move with surprising rapidity. The housing market may tank the first time a panic headline appears in the financial press.
We should be warned by what happened when the last recession broke back in 2008. The people who rushed to put their property back on the market found that there were no longer buyers interested and asking prices collapsed. Many found that their equity was " under water " - they owed more on their mortgage than the dwelling would bring on the market. The banks were merciless - and foreclosed immediately payments went into arrears.
The survivors were the people with years of equity in mortgage reduction and who purchased way back in the inflation bubble, and those with earnings that could accommodate an increase in mortgage rates caused by higher interest rates. The losers were the people with an unsustainable mortgage and a home that could not realise the expected asking price because of this downturn. Like the children playing "Musical Chairs "- they found themselves stranded when the music stopped.
The message coming from the OECD is loud and clear. An increase in interest rates is inevitable - and we have a recession again looming - and it is coming fast ! The wise will act accordingly, or they will share the fate of many who expect this entrancing price increase music to keep playing forever !
Friday, 3 March 2017
The " Franchise " System !
Possibly one of the best known business logos in the world would be the McDonalds " Golden Arches ". They can be found in just about every country on planet earth, and this form of " franchising " is spreading into all avenues of trading because of the obvious advantages it delivers .
" Franchising " is a way of doing business that has expanded into so many areas of the business world that it now represents a significant proportion of paid employment figures. Often this is a small number of permanent employees and a floating population of " casuals " who supply the numbers to cater for peak demand periods.
Franchising also offers a low risk way for entrepreneurs to establish their own business by taking up a franchise with a nationally known brand name. By paying a fee they get to use the brand logo and the national company provides the plan for the store layout, signage, uniforms for staff and even dictates the actual stock on offer. Usually franchise owners and their staff are trained by the logo owner so that the chain of shops presents a degree of uniformity to their customers.
Some franchise arrangements require the franchise holder to provide an approved premise while others extract rent for a company owned venue. The appeal for most franchise holders is that this proven trading formulae virtually guarantees that the venture will be successful. Over recent decades franchising has spread from fast food chains to all manner of merchandising and now encompasses everything from lawn mowing and gardening to the marketing of petrol.
Unfortunately, it now appears that many franchising plans deliver skimpy profits. In some cases, the achievement of an operating profit relies on keeping staff payrolls below what is legally required by law and some operators have resorted to what is called " the black economy ". The employer tampers with wage receipts to lower the hours the employee is supposed to have worked and the pay received is sub-standard, In other cases, pay is " cash in hand " and without record, but seriously below the rate per hour stipulated by law. Under employment ensures that many desperate people are forced to accept such arrangements.
In the past, the big holding companies have been able to shrug their shoulders and ignore this problem because employee pay is a responsibility of the franchise holder. Some franchise holders in the petrol retailing industry claim that the franchise arrangement deliberately short changes them into using unpaid family members or gouging paid staff to go past the break even stage of profitability.
Recent public scandals involving national brand name franchise stores cheating on employee pay in ways that suggest that this is becoming part of the logo operating procedures has induced the government to prepare legislation to make the logo holder equally responsible with its franchisee for pay fraud.
The business world warns that this will discourage investment in franchise networks. It will certainly throw the spotlight on franchise offers which are unrealistic on returns to the operator unless pay levels are maintained below legal levels. The entire franchise system will need to be reworked to ensure the offer to new franchise applicants can be examined by accountants with the expectation that it is commercially feasible.
The franchise industry has become so integral in the business world that a tightening of control is long overdue !
" Franchising " is a way of doing business that has expanded into so many areas of the business world that it now represents a significant proportion of paid employment figures. Often this is a small number of permanent employees and a floating population of " casuals " who supply the numbers to cater for peak demand periods.
Franchising also offers a low risk way for entrepreneurs to establish their own business by taking up a franchise with a nationally known brand name. By paying a fee they get to use the brand logo and the national company provides the plan for the store layout, signage, uniforms for staff and even dictates the actual stock on offer. Usually franchise owners and their staff are trained by the logo owner so that the chain of shops presents a degree of uniformity to their customers.
Some franchise arrangements require the franchise holder to provide an approved premise while others extract rent for a company owned venue. The appeal for most franchise holders is that this proven trading formulae virtually guarantees that the venture will be successful. Over recent decades franchising has spread from fast food chains to all manner of merchandising and now encompasses everything from lawn mowing and gardening to the marketing of petrol.
Unfortunately, it now appears that many franchising plans deliver skimpy profits. In some cases, the achievement of an operating profit relies on keeping staff payrolls below what is legally required by law and some operators have resorted to what is called " the black economy ". The employer tampers with wage receipts to lower the hours the employee is supposed to have worked and the pay received is sub-standard, In other cases, pay is " cash in hand " and without record, but seriously below the rate per hour stipulated by law. Under employment ensures that many desperate people are forced to accept such arrangements.
In the past, the big holding companies have been able to shrug their shoulders and ignore this problem because employee pay is a responsibility of the franchise holder. Some franchise holders in the petrol retailing industry claim that the franchise arrangement deliberately short changes them into using unpaid family members or gouging paid staff to go past the break even stage of profitability.
Recent public scandals involving national brand name franchise stores cheating on employee pay in ways that suggest that this is becoming part of the logo operating procedures has induced the government to prepare legislation to make the logo holder equally responsible with its franchisee for pay fraud.
The business world warns that this will discourage investment in franchise networks. It will certainly throw the spotlight on franchise offers which are unrealistic on returns to the operator unless pay levels are maintained below legal levels. The entire franchise system will need to be reworked to ensure the offer to new franchise applicants can be examined by accountants with the expectation that it is commercially feasible.
The franchise industry has become so integral in the business world that a tightening of control is long overdue !
Thursday, 2 March 2017
The Arms Race !
The American armed forces have shown time and again that their military power is a juggernaut capable of crushing opposition. It is not fire power that they lack. What they are not good at is restoring peace after the battle has been won and in what is termed " nation building " - creating civil order from the debris of war.
Donald Trump's first budget as United States president will increase military spending by $ 70 billion - and that is on top of the six hundred billion regular allocation to the American armed forces. The president claims that his country's military have been allowed to run down during the Democrats time in the oval office and this deficiency is putting the country at risk.
What will worry many people is how this seventy billion will be financed. It seems inevitable that there will be a vast cutback in foreign aid and that is often the margin of survival for some small nation states. It is highly likely that if America reduces foreign aid the gap will quickly be filled by China and that will tilt the balance of trade power.
Trump has promised that the two areas that will remain sacrosanct within the American economy are welfare and health, but it is reasonable to expect that there will be a spending trim to divert money to the military across the broader spending spectrum - and that will happen at a time when the entire American infrastructure of roads and bridges is sheeted for renewal.
The danger is that this plan looks like exacerbating the already out of control deficit budget situation where America spends more than it earns. It is only the fact that the mighty dollar is the worlds reserve currency that allows this to continue. The currency of lesser nations is subjected to fiscal discipline - as both Argentina and Venezuela discovered, and even countries enmeshed in a common currency such as the Euro need to meet standards.
There is no doubt that this increase in American military spending will cause an upsurge in the world arms race. It will certainly alarm both China and Russia and competing nations finance their own arms spending by selling weapons to third world countries. It will also stiffen negotiating attitudes. There is nothing like having massive fire power at your disposal to harden demands at the negotiation table.
President Trump would be wise to reflect on recent history - and it is said that those who fail to learn from history are destined to repeat those same mistakes. Ronald Reagan's " Star Wars " agenda panicked Russia into trying to duplicate what it saw as a threat and this was beyond its economic capacity.. The Soviet Union simply collapsed, bringing about the end of the cold war.
The patience of creditor nations is finite ! It would be a grave mistake to over estimate the power of the mighty American economy to forever maintain a deficit balance.
Donald Trump's first budget as United States president will increase military spending by $ 70 billion - and that is on top of the six hundred billion regular allocation to the American armed forces. The president claims that his country's military have been allowed to run down during the Democrats time in the oval office and this deficiency is putting the country at risk.
What will worry many people is how this seventy billion will be financed. It seems inevitable that there will be a vast cutback in foreign aid and that is often the margin of survival for some small nation states. It is highly likely that if America reduces foreign aid the gap will quickly be filled by China and that will tilt the balance of trade power.
Trump has promised that the two areas that will remain sacrosanct within the American economy are welfare and health, but it is reasonable to expect that there will be a spending trim to divert money to the military across the broader spending spectrum - and that will happen at a time when the entire American infrastructure of roads and bridges is sheeted for renewal.
The danger is that this plan looks like exacerbating the already out of control deficit budget situation where America spends more than it earns. It is only the fact that the mighty dollar is the worlds reserve currency that allows this to continue. The currency of lesser nations is subjected to fiscal discipline - as both Argentina and Venezuela discovered, and even countries enmeshed in a common currency such as the Euro need to meet standards.
There is no doubt that this increase in American military spending will cause an upsurge in the world arms race. It will certainly alarm both China and Russia and competing nations finance their own arms spending by selling weapons to third world countries. It will also stiffen negotiating attitudes. There is nothing like having massive fire power at your disposal to harden demands at the negotiation table.
President Trump would be wise to reflect on recent history - and it is said that those who fail to learn from history are destined to repeat those same mistakes. Ronald Reagan's " Star Wars " agenda panicked Russia into trying to duplicate what it saw as a threat and this was beyond its economic capacity.. The Soviet Union simply collapsed, bringing about the end of the cold war.
The patience of creditor nations is finite ! It would be a grave mistake to over estimate the power of the mighty American economy to forever maintain a deficit balance.
Wednesday, 1 March 2017
Clean Coal ?
We came perilously close to rolling power blackouts earlier this month when ever increasing summer temperatures saw air conditioning use rise to a peak. What is absolutely certain is that between now and next summer a lot more Australian homes are going to install air conditioning and next summer's usage peak is going to be even higher.
It seems that the Clean Energy Finance Corporation ( CEFC ) is struggling with a dilemma. It has received an application from an unnamed source to finance a $ 1.2 billion coal fired power station - at an undisclosed location. What is so contentious is that this seems to be a new approach to the " clean coal " question. The proposal proposes that the carbon release be mitigated by use of capture and storage technology.
By law, the CEFC is required to reject this capture and storage component and for the proposal to proceed it would require a law change. Labor and the Greens oppose such a move and it is therefore unlikely. Unfortunately, burning coal seems to be the only available short term method of creating a reliable base energy source that can be created in time to prevent an energy disaster next summer.
Financing such a new power station with money from private sector sources would be out of the question unless the government was prepared to indemnify the owner for the life of the plant. Without that, neither the banks of other forms of finance would accept the risk because capture and store technology has yet to be proven viable.
There seems to be a degree of confusion about our electricity needs colouring this debate. We certainly need a secure base load capacity to meet demand when the sun is not shining and the wind is not blowing to power existing renewable energy sources, but the danger of blackouts seems restricted to a mere handful of peak demand days scattered across the months of summer.
That would seem better handled by the use of small natural gas powered electricity generators which provide quick response capacity and are much cleaner in their carbon output than burning coal. They are expensive to run, but that expense is negligible when compared to the safety factor of ensuring power maintenance over that short period of peak demand.
The question of how we secure our base load needs on a permanent basis then becomes a question to be debated and the long term answer is undoubtedly nuclear. Chernobyl and that Japanese tsunami caused a world panic, but there are many nuclear power reactors operating safely in many world countries - and have been for many decades. The advance of technology is making nuclear power generation a safer and cheaper option.
Right now, our needs are to even out the load on those days when the summer sun sends the temperature into the forties and Australians flick on the air conditioning switch. Small, gas fired generators are quick to install and their higher running costs provide an incentive for the politicians to stop bickering and seriously tackle the long term generating problem.
Investing in capture and store is not a viable option when the technology has not been reliably proven !
It seems that the Clean Energy Finance Corporation ( CEFC ) is struggling with a dilemma. It has received an application from an unnamed source to finance a $ 1.2 billion coal fired power station - at an undisclosed location. What is so contentious is that this seems to be a new approach to the " clean coal " question. The proposal proposes that the carbon release be mitigated by use of capture and storage technology.
By law, the CEFC is required to reject this capture and storage component and for the proposal to proceed it would require a law change. Labor and the Greens oppose such a move and it is therefore unlikely. Unfortunately, burning coal seems to be the only available short term method of creating a reliable base energy source that can be created in time to prevent an energy disaster next summer.
Financing such a new power station with money from private sector sources would be out of the question unless the government was prepared to indemnify the owner for the life of the plant. Without that, neither the banks of other forms of finance would accept the risk because capture and store technology has yet to be proven viable.
There seems to be a degree of confusion about our electricity needs colouring this debate. We certainly need a secure base load capacity to meet demand when the sun is not shining and the wind is not blowing to power existing renewable energy sources, but the danger of blackouts seems restricted to a mere handful of peak demand days scattered across the months of summer.
That would seem better handled by the use of small natural gas powered electricity generators which provide quick response capacity and are much cleaner in their carbon output than burning coal. They are expensive to run, but that expense is negligible when compared to the safety factor of ensuring power maintenance over that short period of peak demand.
The question of how we secure our base load needs on a permanent basis then becomes a question to be debated and the long term answer is undoubtedly nuclear. Chernobyl and that Japanese tsunami caused a world panic, but there are many nuclear power reactors operating safely in many world countries - and have been for many decades. The advance of technology is making nuclear power generation a safer and cheaper option.
Right now, our needs are to even out the load on those days when the summer sun sends the temperature into the forties and Australians flick on the air conditioning switch. Small, gas fired generators are quick to install and their higher running costs provide an incentive for the politicians to stop bickering and seriously tackle the long term generating problem.
Investing in capture and store is not a viable option when the technology has not been reliably proven !
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