Your intrepid hosts consider the Contracts For Difference increasingly used to promote clean energy development, and whether they increase burdens on the poorest households.
We start with a quick summary of the High Court of Australia’s decision in Vanderstock v Victoria, which struck down as unconstitutional the State of Victoria’s Distance Based Charge on Zero and Low Emissions Vehicles (aka the EV Tax). But we rapidly descend into an unqualified but compelling fiesta of legal speculation - is State-based EV taxation really dead, and what other unrelated taxes and charges might now be unsound?
Our main paper
More and more governments have been making use of Contracts for Difference as a tool of energy and climate policy - first to drive clean electricity generation investment, and now for hydrogen and low-emissions industry. These contracts guarantee project revenue per unit of output won’t fall below an agreed price. But who pays, and are any costs fairly distributed?
A new paper from Tim Nelson and Tracey Dodd, Contracts-for-Difference: An assessment of social equity considerations in the renewable energy transition, provides a preliminary look based on applying hypothetical costs of the NSW variation on CFDs to hardship customer data from a major retailer. They think the results indicate current CFDs may be highly inequitable, putting the most cost on those least able to afford it. But are they right - and what is the whole picture of CFD impacts? We had thoughts!
One more things
Alison’s One More Thing is the CEFC’s annual report, featuring some big numbers (and big context) for the capital needed for clean industry.
Tennant’s One More Thing is: “The momentum of the solar energy transition” by Nijsse et al, in Nature Communications - which offers updated Business As Usual projections for how the world’s energy systems would evolve without new policy.
Luke’s One More Thing is the Careers for Net Zero Campaign, a big national effort to highlight the urgent need to ramp up the capability and capacity of the clean economy workforce – featuring our very own Francesca Muskovic!
Equitably share the wealth of your thoughts and paper suggestions with mailbag@letmesumup.net or @LukeMenzel, @TennantReed, @alison_reeve (or @tennantreed.bsky.social and @reevealison.bsky.social for hipsters) and @FrankieMuskovic.