Published: 12 September 2011

Environmental bankers helping with environmental and social risk

A new Risk Committee within the Environmental Bankers Association of Australasia (EBAA) is focusing the organisation’s advice to financial institutions on how they can address environmental and social issues when financing high-risk or sensitive industries.

A coal-fired power station at the head of Spencer Gulf, South Australia. The EBAA is helping institutions with guidance on financing scenarios around environmentally-sensitive projects, including those in carbon-intensive sectors.

Credit: Credit: CSIRO/Willem van Aken

The member-based association represents the interests of organisations involved in the banking and finance sector and is working to improve approaches to managing the environmental and financial risks posed by some industries. This includes giving guidance on how and why financial institutions should carry out environmental and social investigations, and providing reference materials to help assess the environmental and social aspects of a transaction or customer.

The right approaches can help institutions find and develop new product opportunities, and also enable their customers to better manage any environment and social-related risks.

The Risk Committee includes representatives from NAB, ANZ, GE Capital, legal firm Minter Ellison, and environmental remediation consultancy firm OTEK Australia. It is focusing work on how financial institutions can best assist clients in sensitive industries, while still managing their own risks.

With the carbon pricing legislation as background consideration, the committee has seen a significant need for the finance industry to work together, and with environmental experts, to help establish an effective financing framework that will deliver benefits for companies in high risk sectors, for the environment and for financial institutions generally. It sees the four most important risks to address as Credit Risk, Property Risk, Regulatory Risk and Compliance Risk.

Chairperson of the Risk Committee and GE Capital’s Environmental Risk Programs Leader, Nicole Bradford, says the committee was established ‘to ensure members can learn from the most effective approaches and latest developments in the dynamic environmental risk management and legislative space, to enable them to positively impact their risk profile and that of their clients.’

The EBAA also has an independent advisory panel, headed by Dr Paul Vogel, Chairman of the Environmental Protection Authority Western Australia. He said, ‘As regulators, we welcome the opportunity the EBAA presents to discuss issues with the finance industry to help achieve better outcomes for the environment and the community, as well as industry and financial institutions.’

The EBAA’s CEO, Grant Scott, says the organisation has no lobbying objectives but works to provide practical assistance on members’ and their associated entities’ environmental projects and policies.

Mr Scott said, ‘The advisory panel in particular provides an environment for finance companies to get a deeper understanding of the expectations set by different regulatory regimes in the region.’

Source: Environmental Bankers Association of Australia.

Published: 26 September 2011

Renewable energy sector to benefit from wind-speed research

Craig Macaulay

While some recent international studies have shown a decrease in wind speeds in several parts of the globe, including Australia, more recent results from CSIRO show that Australia’s average wind speed is actually increasing.

The ability to accurately quantify long-term variations in wind speeds is essential to the viability of Australia’s wind power sector.

Credit: Gregory Heath

CSIRO scientists have analysed wind speed observations to understand the causes of variations in near-ground-level wind and explore long-term wind speed trends.

Accurate estimates of long-term trends provide a useful indicator for circulation changes in the atmosphere and are invaluable for the planning and financing of sectors such as wind energy, which need to map risk management under a changing climate.

‘We have a good picture of wind energy availability across Australia from previous CSIRO wind mapping and, with the growth of wind farms, there is an emerging need to understand how climate change can affect the wind resource,’ says Dr Alberto Troccoli, lead author of a recent paper published in Journal of Climate. ¹

‘Wind power production is expected to increase greatly over the coming years and the associated electricity system will be subject to variations of several hundred megawatts – depending on wind availability.

‘The ability to quantify with accuracy these long-term variations is essential to the sector from an economic point of view.’

Dr Troccoli said that, averaged across Australia over 1989–2006, wind speeds measured at a height of 10 metres had increased by 0.69 per cent per annum, compared to a decline of 0.36 per cent per annum for wind speeds measured at 2m height.

‘The potential for increasing the efficiency of energy operations by using quality weather and climate information is therefore apparent and one of the first steps is the standardisation of wind recording stations.

‘Wind observations, like other meteorological variables, are sensitive to the conditions in which they are observed – for example, where the instrumentation sits relative to topographical features, vegetation and urban developments.’

The team found that the wind speed trends over Australia are sensitive to the height of the station, with winds measured at 10m displaying an opposite and positive trend to those reported by a previous study, which analysed only winds measured at 2m.

Light winds measured at 10m, a height that represents better the free atmospheric flow, tend to increase more rapidly than the average, whereas strong winds increase less rapidly than the average winds. Light and strong wind measured at a height of 2m tend to vary in line with the average winds.

‘Our work shows a number of challenges with the consistency of the observations during their period of operation and between sites across Australia,’ adds Dr Troccoli.

‘The quality of future wind observational datasets will depend on having consistency between sites, particularly with respect to measurement procedure, maintenance of instrumentation, and detailed records of the site history.’

He said the work has implications for a variety of sectors beyond wind energy including building construction, coastal erosion, and evaporation rates.

The conjunction of energy and meteorology is the central theme of the International Conference Energy & Meteorology on the Gold Coast in November.

Read Dr Troccoli’s thoughts on What’s the energy forecast? Bringing meteorology and generation together in the online forum, The Conversation.

¹ A. Troccoli, K. Muller, P. Coppin, R. Davy, C. Russell and A. Hirsch (2011) Long-term wind speed trends over Australia. Journal of Climate, doi: 10.1175/2011JCLI4198.1

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