Hydrogen. The next step

On Friday last week, the Australian Energy Market Commission (AEMC) released a draft report outlining changes required to the gas and energy retail rules to allow hydrogen and renewable gases into the Australian market. This is the next critical step as Australia transitions from a carbon economy to a cleaner economy. The next step for the gas industry is the development of a national hydrogen and renewable gas industry with associated strategies, policies and procedures.  

The AEMC’s recommendations have been made to allow for the more efficient delivery of new services through the operation of markets that enable new entrants to emerge and for efficient investment to be undertaken. Other recommendations allow for: continued innovation in developing new services for customers, the implementation of recommendations that aim to be fit for purpose and proportionate to the issues they seek to address and achievable for market participants, provide clarity on the roles and responsibilities for the quality, safety, reliability, and security of supply of gas, to maintain operational safety of infrastructure and customer equipment and appliances, and allow existing consumer protections to be maintained during the transition to the increasing use of hydrogen and renewable gases.  

In its draft recommendations, the AEMC argue the importance of setting up a national regulatory framework to allow the blending of existing gas networks with low level hydrogen and renewable gases. This framework needs to cover pipelines and infrastructure all the way to the end users.  

Key draft recommendations are to:   

  • extend the economic regulatory framework   
  • extend the market transparency mechanisms of the Gas Statement of Opportunities (GSOO), the Gas Bulletin Board, the Victorian Gas Planning Report, new AER gas price reporting functions and reporting obligations for non-pipeline infrastructure   
  • streamline the arrangements for the Short-Term Trading Market (STTM)  
  • adapt the Victorian Declared Wholesale Gas Market (DWGM)   
  • allow new services and commodities to be priced or traded within the retail gas markets   
  • enable consumers to be informed about the transition to natural gas equivalents   
  • retain the new regulatory sandbox rules in their current form   
  • provide an exemption framework for minimum ring-fencing requirements, including the regulator’s power to impose additional requirements and the associated contract approvals process.  

We are all becoming more aware of the possible usages of Hydrogen, but this is only one gas that can be used as low carbon, low or zero-emissions fuel used in businesses and homes so the regulatory framework needs to accommodate for these possibilities.  

In the short term, the gases flowing through the pipes and infrastructure will be natural gas equivalents but, over time, different blends will be introduced.  

The natural gas equivalents mean that end users will not be required to change their appliances to utilise this new gas blend meaning the impact on end users will be minimal.  

As these recommendations are brought into law, the likes of AEMO will need to update procedures across the various gas markets including the Short-Term trading market (STTM) and the Declare wholesale gas market (DWGM).  

Although the government sees these reforms as a priority under the Australian Government’s National Hydrogen Strategy by providing the delivery of an efficient, safe, and secure network of gas to the benefit of consumers, the question needs to be asked, is gas the right direction to be going as Australia is currently moving away from gas towards electrifying many industrial processes.  

The AEMC and AEMO are currently running stakeholder consultations in parallel with relevant consultations which are open for submission until 19 May 2022.  

The final report will be published on 8 September 2022 with a set of rules for the Energy Ministers to approve by 14 November 2022. 

Let’s talk Energy Markets

 

In the past 2 years, the market has dropped from highs of over $75/MWh in August 2019 then following the events outlined on the chart below the market price dropped to historic lows of around $36/MWh. Following some volatility at the start of 2021 driven by a hot summer, the market firmed and increased further because of the catastrophic failure of Callide C4 and the tripping of many other power stations.

The chart below shows that the underlying spot price (light blue line) has continued to spike and trend up resulting in increases in the contract prices. Another interesting aspect of price curves is how market announcements such as the cost of coal and gas can impact the curve. In months, the curve softened but spiked due to conflicts in Ukraine causing coal and gas, a key input to thermal generation, to increase in price.

The spot price of these commodities is not directly linked to the fuel price used by generators in the next quarter, so the market has now softened.

Future years are also becoming cheaper year on year as renewable energy takes a larger share of the market and renewable energy is expected to continue to fall in price.

Having recently undertaken a few requests for proposals (RFP) for our clients, we are aware there is good value for companies willing to take up longer term renewable PPAs. More and more projects are becoming available post 2023/24.

Undertaking a renewable PPA will go towards meeting many companies’ sustainability targets through the procurement of renewable energy and environmental certificates.

Below are the contact details for Alex. He would be happy to discuss your company’s sustainability targets and how we can help the business reach them.

Alex Driscoll

Senior Manager Markets, Trading & Advisory

M: 0437 966 409

P: (07) 3905 9226

T: 1800 334 336

E: alex.driscoll@edge2020.com.au

Formula Sustainable

 

Formula sustainable

With the new F1 season on the weekend eve of re-starting, I wanted to look at the evolving platform this immense sport has and the new role it is taking in being vocal on many issues.

It is now a common sight at the start of the race to see Lewis Hamilton taking the knee and many wearing the #WeRaceAsOne messages on their front. Although the Silver Arrows are returning to Mercedes this year the Black coveralls remain, a sign that their quest for equality continues. This is in addition to the Mission 44 – Hamilton Commission promoting diversity and inclusion in motorsport and the Mercedes “ignite” program promoting better representation of diverse students studying STEM and engineering, as well as wider parts of the industry.

They are not the only vocal voice on the pit wall however, Sebastian Vettel has taken several, some would say controversial, I personally call them impassioned, stances this year. This varied from wearing rainbow colours ahead of the Hungarian Grand Prix to stand against the anti-LGBTQ+ legislation, to what was certainly the boldest stance following his organisation of a women’s only kart race ahead of the inaugural Saudi Arabia Grand Prix.

But as a wider sport, they are acknowledging the impact such a global sport has on climate. To try and be a global leader on this issue, in 2019, the F1 governing body announced an ambitious sustainability plan. Their aim is to cover the F1 cars on track activities, in addition to the rest of the operations’ carbon footprint, to achieve a net zero emissions target by 2030.

Further to this, they have guaranteed that by 2025 all events must be sustainable. This isn’t just in offsets but includes the use of only sustainable materials at events thus removing tonnes of single use plastics.

They are also looking to be able to improve the travel facilities to ensure fans can reach the circuits in more sustainable fashions. No one is suggesting we adopt the Zandvoort approach where nearly all cars were banned from journeying to the track and surrounding towns, and almost equal numbers of fans chose to bicycle, from the designated park and ride facilities where bikes were provided, as those who chose to take the train. Yet what it does show is with real co-operation there are alternatives to the status quo.

The cars themselves have always been at the forefront of technological changes with many facets of the car making it into your car on your drive. These range from the sat nav to energy recovery systems and aerodynamic innovations. So why should such an innovative industry not lead from the front again?

This year’s car has been adapted to take 10% ethanol into the fuel mix, yet its most ambitious target is yet to come. With the aim that by 2025 the new generation of the power unit will be there to take sustainable ‘drop-in’ fuel it is hoped this will be the same fuel which could be used in cars we drive and fill up at the servo without any modification.

This will be crucial with waitlists for electric cars going through the roof and the number of combustion cars on the road only increasing, if they can be run cost effectively and sustainably and deliver less than 65% emissions than current cars the benefits could be huge.

This would mean once again F1 has led the way to ensure not only has the sport become sustainable, but they have advanced the offerings so much that we can benefit from their excellence.

In the meantime, let’s see what this year’s raft of changes will bring as it is almost time to say “lights out and away we go”.

BUYING UP COAL BUSINESS TO CLOSE IT DOWN

In what has turned out to be an unsuccessful bid, Mike Cannon-Brookes and Canada’s Brookfield made an $8B bid for AGL. The consortium ensured they would invest a further $10B to replace its coal fired generators by 2030. Mike Cannon-Brookes is a well known investor in renewable energy through his involvement in the $20B Sun Cable project.  

This latest move comes days after Origin Energy’s announcement to shut down Earring Power Station in 2025 and AGLs earlier announcement about the early retirement of Bayswater and Loy Yang Power Stations in the 2030s.  

Over the weekend the AGL board met but rejected the $7.50 per share offer. As expected, this first approach was a lowball offer with room for the offer to increase.  

The idea of the takeover will likely cause a headache for the federal government as we approach an election. Cannon-Brookes has indicated as well as a business plan he has a $20 billion war chest to spend on renewable energy to replace retiring coal-fired plants. The other headache is for the consortium partner, Brookfield which is currently procuring AusNet Services, the owner of electricity and gas transmission and distribution assets in Victoria.  

AGL Energy’s board rejected the offer, telling shareholders to stick to a proposed demerger, which will separate the company’s coal fired generators from its retail business and investments in renewable energy projects.  

The federal energy minister has been tight lipped on the offer but is likely to remind Australians of the increased risk to energy security if the Cannon-Brookes plan to accelerate the retirement of AGL’s coal fleet occurs.  

If the proposal is eventually accepted it would allow a truly integrated business with Brookfields stake in AusNet, the group would control gas transmission, generation, electricity transmission, retailing and electricity distribution. This is likely to flag competition issues with the ACCC and the foreign investment board.  

Following the rejection of the offer Cannon-Brookes said “AGL shareholders would be worse off if they stick with the power company’s demerger rather than if they accept his $5 billion joint bid with Brookfield to take the company private and get out of coal by 2030”.  

Despite the offer being below the valuation of the whole AGL business, it is in line with the value of the retail arm of AGL.  

Is AGL waiting for a counteroffer from another group such as Iberdrola or Ampol or do they believe coal fired generation will form an important part of the NEM for many years to come? 

 

2022 Clean Energy Regulator (CER) liability targets are set, what now?

Last week the Clean Energy Regulator (CER) released its targets for liable entities to meet their Large scale Generation Certificate (LGC) and the Small scale Technology Certificate (STC) obligations for 2022.

The 2022 Renewable Power Percentage (RPP) was set at 18.64%, up marginally from 18.54% in 2021.

The 2022 Small scale Technology Percentage (STP) was set at 27.26%, down marginally from 28.80% in 2021.

What are these targets?

These targets are set under the Renewable (Electricity) Energy Act to stimulate and support the development of renewable electricity production in Australia.

Liable entities are individuals or companies who make relevant acquisitions (mostly the purchase of wholesale electricity) from a grid with an installed capacity greater than 100MW. Liable entities are most commonly electricity retailers. Under the Renewable Energy Target (RET) legislation, liable entities are required to surrender a specified volume of certificates equivalent to a set percentage of their relevant acquisitions across the year.

There are two types of certificates under the RET, LGCs and STCs. The percentage of LGCs required to offset relevant acquisitions is set by the RPP, and for STCs it is set by the STP. Retailers produce or procure certificates and surrender them to the CER to meet their liabilities. They then pass on the costs associated with meeting these liabilities to retail customers based on their proportional contribution to the relevant acquisitions.

What do these targets mean for large users?

The key point to understand is that in most situations the liable entities are the retailers. But a retailer’s liability is directly derived from what is consumed by the retail customers. Each user’s contribution to a retailer’s liability can be calculated utilising the relevant liability percentages, and the consumer’s loss adjusted gross consumption.

The higher the RPP and STP the greater the percentage of a customer’s usage needs to be covered by the relevant certificates. Assuming a customer’s annual consumption remains on par from one year to the next, higher liability percentages result in more certificates being required to offset that user’s contribution to a retailer’s liability.

Can large users control the costs associated with these targets?

Short of reducing consumption, users cannot control the number of certificates that their retailer will need to cover their contribution to the retailer’s liability. These percentages are regulated.

Emissions Intensive and Trade Exposed (EITE) users can apply for exemptions through the CER. These are issued in the form of Partial Exemption Certificates (PECs) that when provided to the liable entity can be used to directly offset the liability.

Large commercial and industrial users can negotiate electricity sale agreements with their retailers that allow them to proactively work with retailers to determine how and when certificates are obtained by the retailer to meet the liabilities associated with that user. This can involve the user having the ability to instruct the retailer when to purchase or price a set quantity of certificates, or to self-surrender certificates acquired or produced elsewhere by the user to the retailer, or to ask the retailer to sleeve third-party agreements (such as renewable power purchase agreements – PPAs) negotiated by the user to facilitate the provision of certificates at prices and terms negotiated by the user.

Where do these certificates come from?

LGCs are created by accredited power stations that produce electricity from renewable energy sources. For every megawatt hour (MWh) of electricity produced from renewable sources equals one LGC.

STCs are created by eligible energy systems.  Like the LGC an STC is equivalent to 1 MWh of renewable electricity produced, however, the number of STCs a system can produce is calculated over a period of 1 to 10 years based on the technology. STCs can be produced by rooftop PV systems, small scale wind and hydro and even the electricity displaced by a solar water heater or heat pump over its lifetime.

How are these certificates traded?

LGCs can be acquired by purchasing them directly from renewable energy power producers or through the secondary market. The price of LGCs can vary depending on if the certificates are acquired via the market or directly from the project, and if they are settled and transferred upon entering a transaction (spot) or at some time in the future (forward contracts). Currently, the spot LGC price is around $46 per certificate, and the forward curve for LGCs falls away year on year.

Once an STC is created it can be traded through the STC market or through the STC clearinghouse. The STC clearinghouse is operated by the CER with a set price of $40 per certificate. It’s operated on a first in first served basis, which means sellers need to join the end of the queue and wait for their turn to sell. The market is more liquid and affords sellers the ability to sell certificates once a deal is negotiated.  The price of a certificate is based on the supply/demand balance, with STCs currently trading around $39.40 per certificate.

What can I do to reduce my costs associated with LGCs and STCs?

Like many large users that aren’t already managing these components, your costs are no doubt going up. This doesn’t have to be the case. If you’re a large energy user, reach out to our team. We can assess your portfolio and certificate requirements, how you currently get charged for these components, and advise how you can be better manage this with your retailer.

Edge2020 traded over 1.75 million LGCs and 1.17 million STCs in 2021 for our portfolio of large users. These were either managed through retail sale agreements or directly with renewable producers through power purchase agreements (or similar).

Our team are specialists in ensuring large users minimise their costs utilising products and strategies that deliver value. These products may be a pass-through cost for retailers, but that doesn’t mean they shouldn’t be managed and minimized. We work closely with retailers, in a collaborative and positive manner to achieve outcomes that reduce their costs whilst not impacting their operational processes or retail returns.

Send us a message or contact us through Lolita at lolita.rainsbury@edge2020.com.au.

We look forward to talking with you.

Yesterday was a BIG day in the market 

 You may have heard it has been hot in Queensland over the last couple of days. Yesterday this all came to a head with the market showing some cracks.  

 At a high level, the spot price averaged $1,607/MWh for the day. Prices were less than $300/MW for most of the day when solar generation was high but as we moved to the evening the spot price spiked to between $10,000/MWh to $15,100/MWh for a few hours as coal, gas fired generation and pumped hydro set price.  

Yesterday and again today the market is under pressure on both the supply and demand sides. For the last couple of days, the hot weather has been influencing consumption. The second part of the equation is the supply side. At the start of yesterday Queensland’s largest generator, Kogan Creek was offline as well as Callide B2. All other “baseload” units were online.  

High temperatures and particularly high humidity impact the output from coal and gas fired generation. Coal units generally vacuum unload over the evening peak if they have not been proactively managed by the operators, which AEMO is fully aware of and is built into the contingency. Another issue with Kogan Creek being offline is that it reduces the flow across the QLD to NSW Interconnector (QNI), the result flows from NSW and is generally capped at ~600MW.  

The final issue is the bidding behaviour of participants. The previous days’ bid stack indicated prices would stay below $300/MWh during the daylight hours then jumped to $900/MWh where CleanCos cap price with its Wivenhoe Hydro generator, but once through that price band the spot price jumped to $10,000/MWh then again to $15,100/MWh.  

Adding to the already tight supply balance, the Tarong Power Station Unit 2 tripped at 15:15, returning to service at 18:50. Tarong 2 was ramping up at the time of the trip and from the trip profile, it does not look like a tube leak. From 18:50 the unit ramped up over the next couple of hours and is now running normally. Shell also had plant issues at the 78MW Condamine Power Station, taking the unit offline. Tarong, Millmerian, Stanwell and Gladstone Power Stations also had one or more issues over the evening peak.  

An Intervention Event was triggered as a result of Reliability and Emergency Reserve Trader (RERT) being implemented in Qld. This took effect from 17:00 01/02/22 until 21:30. Intervention pricing took effect from 17:00.  

A Lack of Reserve (LOR3) is still active for today as RERT has not been extended to manage today’s evening peak. If RERT is extended or reinstated today the LOR3 will be cancelled.  

As part of RERT, Powerlink was asking for industry to reduce consumption if safe. Large mines in Queensland have historic agreements with Ergon to reduce consumption and on this occasion, they reduced load as requested.  

In the build-up to the evening peak, the Minister for Energy, Renewables and Hydrogen and Minister for Public Works and Procurement, the Honourable Mick de Brenni made the statement “It is possible that Queensland’s previous record demand of 10,044MW will be exceeded on either today or tomorrow.”  

Queensland’s demand peaked at 16:40 as a result of the demand side management.  

At 21:30 AEMO published a market notice letting the market know that the intervention event had ended and as a result, RERT and Intervention pricing was not continuing.  

So what is ahead for us today?  

  • Demand forecast is looking to peak close to 10,000MW today, this is forecast to occur at 17:00.  
  • Pre dispatch spot pricing is again forecast to be at $15,100/MWh between 14:00 and 23:00.  
  • RERT may be needed again today and AEMO will currently be exploring their options. 

Written by Alex Driscoll Senior Manager Markets, Trading & Advisory

ROOF TOP SOLAR LEADING THE WAY

As we all focus on buying STC’s to meet our quarterly liabilities it is interesting to see how the rooftop PV installations have performed this past year. My weekly reports always show that states like Queensland and NSW are pumping loads of unconstrained renewable energy into the NEM but how much?

Australian individuals and businesses installed a record number of rooftop solar panels last year reaching 3GW of new capacity.

Despite Covid 19 slowing economies around the world, the global solar market continues to be strong. Strong overseas demand for solar panels and inverters continues to cause supply chain constraints in Australia.

The latest data shows residential and industrial rooftop systems, which are below the commercial solar size of 100kW, grew by 300MW in December alone.

The growth in the residential and industrial sector is starting to slow with monthly volumes in 2021 not surpassing previous installation records. Last year the rooftop PV market only grew by 10%. The growth may have been higher however, installation dropped in Q3 possibly caused by supply issues or increases in the price of systems. The fourth quarter growth was also lower than the previous year.

Due to the supply chain issues, commercial scale projects have not helped with the cost of the smaller residential and industrial systems. Supply issues have pushed up the cost per kW for all projects.

The largest growth segment in the market was the 75kW to 100kW installations, these are primarily larger companies using their existing roof space to reduce their consumption and claim they are using renewable energy as part of their sustainability targets. Commercial installations grew in all sectors greater than 15kW systems.

NSW continues to grow the quickest installing 85MW in December, with Queensland next with 70MW installed followed by Victoria at 59MW, SA at 27MW, with the remainder of the states and territories adding 12MW.

With rooftop PV systems now accounting for 17GW of installed capacity, 2022 will likely see a growth in the installed capacity at a slower rate due to the impacts of COVID. Supply chain constraints and saturation of the rooftop market as fewer new houses are built, and existing houses are not being fitted with solar.

As part of the rooftop PV installations, STC’s are produced which are then used by liable entities to meet their obligations. STC obligations are linked to the number of STC’s projected to be produced in the following year. As the rooftop PV market grows the liability for obligated entities also grows. In 2022 it is expected large electricity users will be required to procure 22.4% of their consumption in the form of STCs.

The article was written by Alex Driscoll Senior Manager Markets, Trading & Advisory

All eyes are now on Kazakhstan?

Whilst some were still tending hangovers from new year celebrations, January 2nd was the start of rallies in a Southwestern oil town of Zhanaozen in Kazakhstan and this unrest soon spread to most major towns and cities across the country.

To understand the country of 19 million and its enormous wealth you need to go back to the fall of the Soviet Union in 1991 when the country gained its “independence,” I am using the term independence lightly!!

As an oil rich nation (it is estimated it produces 1.6 million barrels of oil per day), a government, despite locationally placed between Russia and China, being one which is firmly in the Russian pocket and for nearly thirty years being run by one man, Nursultan Nazarbayev (a close ally of Vladimir Putin), you imagine significant wealth being distributed to the small population of this huge wealthy country (which is larger than Western Europe), but this is not the case.

Nazarbayev focused on economic reform over democracy. He erected statues of himself all over the country and created a new capital which although originally named Astana (literally translated as “Capital”) was re-named Nur-Sultan after himself until the end of his term when it reverted to Astana. He stood down in 2019, however, continued to hold a significant stronghold over the country as the head of Kazakhstan’s Security Council and “Father of the Nation”.

His successor was President Tokayev. He was a protégé of Nazarbayev and is also close to Putin, however, unlike his peers he doesn’t seem to have any business interest in or outside of Kazakhstan. There are no corruption scandals surrounding him, his diplomatic skills and manners are irrefutable and as a speaker of five languages and a successful diplomatic career, including serving in the USSR embassy in Beijing during the Tiananmen Square massacre in 1989, he is seen to be a quiet, interim holder of the position until it was assumed Nazarbayev’s daughter takes the reigns. However, he is now, for the first time, able to show his real intentions. This is due to Nazarbayev supposedly fleeing the country following this latest unrest.

The small oil town of Zhanaozen, which has a history of riots, with deadly clashes 10 years ago starting in the town, which led to legislation stating public protests are now illegal without government permits, once again on January 2nd took centre stage for the start of the latest situation.

What started as peaceful protests around the removal of the price cap on liquified petroleum gas (which many Kazakhs converted their vehicles to due to it being a cheaper alternative) was hijacked and has led to many asking if this really is the end of the Nazarbayev era?

The removal of the price cap doubled the price of the fuel overnight and is no doubt driven by the opportunity to re-coup greater value of the fuel abroad, especially in western Europe which is currently suffering from a lack of supply and record high prices.

But soon many others, mainly young, disillusioned Kazakhs who wanted to protest against the mass corruption within the country and the chasm of disparity in the country’s socio-economic situation, joined the protests. Although illegal these protests were peaceful and were mainly unorganised gatherings of unemployed countryside youths who wanted to express their feelings of social injustice.

This changed on January the fifth.  At this point, thousands of armed mercenaries joined the protests in the city of Almaty. They seized the airport, police stations and administrative buildings and were protesting Mr Tokayev’s government and the former president Mr Nazarbayev.

To quell the violence and restore order to what was once seen to be one of the most stable states in central Asia, Mr Tokayev called in Russian led “peacekeepers” from the Collective Security Treaty Organisation (CSTO, made up of Russia, Belarus, Armenia, Kazakhs, Kyrgyzstan and Tajikistan forces) who had the right to fire without warning and although reports are varying the clashes led to 225 protesters and law enforcement personnel being killed.

Curfews were declared and mass gatherings were banned. Even China has declared they would help increase “law enforcement and security” to avoid the influence of the “foreign militants” and “terrorists”. President Tokayev stated that over “20,000 bandits” hijacked these protests with many being Islamic Militants, groups which although not named were said to have trained outside of the country.

By the time Ash Barty took to the final of the Adelaide open to face the Russian born Kazakh, Elena Rybankina, on Sunday 9th the fires were dampening and riots calming. The Kazakh government, after a short period of dissolution, now firmly back in place, are disclosing they have arrested around 12,000 people for participation in the protests however in a state where the cards are held so close to their chests the death toll and arrest numbers could be significantly higher.

But the reason so many eyes are centred on this oil-rich nation is that for the first time in thirty years the deep reforms necessary and old elitist viewpoints can be addressed. No one expects Mr Tokayev to become a man of the people and completely disassemble the economic and political power his close associates hold, no matter how many CEOs, who happen to be sons-in-law of Nazarbayev, are asked to leave their positions. But he does have the opportunity to step out of Nazarbayev’s huge shadow and become his own figure.

This is already starting with an unprecedented attack on Nazarbayev, saying his mentor had failed to share the country’s vast wealth with ordinary Kazakhs and announcing wide ranging reforms which are aimed at winning popular support amongst ordinary Kazakhs, including setting up a new fund for the public good to which oligarchs and wealthy businessman will be forced to contribute.

The injustice in the resource distribution outside of the oligarchy and corruption that follows is not part of Mr Tokayev’s makeup and this could be critical now, especially whilst those loyal to Nazarbayev are still holding many economic reigns in Kazakhstan.

Mr Tokayev, although now in a stronger position, is at a tipping point of shifting the country towards democracy or continuing down his predecessor’s path. Either way as a country rich in oil reserves and one crying out for structural reform, this is no doubt an opportunity and one many across the world are watching very closely.

Article was written by Kate Turner Senior Manager Markets, Analytics & Sustainability

I Looked Up

* Spoiler Alert – Do not read if you have not yet seen “Don’t Look Up.” *

Like many over the Christmas period, I settled down to Netflix and scrolled through hours of TV without settling on anything in particular. However, after a few days of passing over the satirical dark comedy about climate change called Don’t Look Up, I thought well why not, I will see if it lives up to the hype. Now I admit I was a bit sceptical; I had some significant issues with An Inconvenient Truth so wasn’t hopeful a dark comedy on climate change would hit the mark.

If you haven’t seen it the film is directed by Adam McKay, you think he sounds familiar well he used to write for Saturday Night Live and has in his last two outings to the big screen he looked at the 2008 financial crash (The Big Short) and the USAs ex vice president Dick Cheney, who has a penchant for warmongering and starting “Forever Wars” under false pretences (Vice). Think they sound pretty dark well Don’t look up is on a whole new level.

The overarching theme is that a giant comet is hurtling towards Earth but the scientists who discovered it struggle to convince society to act on such an existential threat, are an absurd but depressingly accurate disaster satire of actual current events around Climate Change.

The depiction of a culture that has dissolved into soundbites and 280 character tweets (I confess I had to google that) is more of a 2 x 4 to the head than a subtle interpretation of a generation of social media and celebrity. Yet the film has sparked enormous discussion (ironically mainly online) some focused on the power of storytelling.

It is no secret that the messaging from Environmental and Governmental groups around climate change are dense and don’t convey the message in a way to engage the largely disengaged public. I studied Climate and had a professor who had input to the IPCC report and can honestly say I have not read the whole of one of their reports.

However, does that mean we should reduce the messaging to metaphorical tales? Of course not, but its effectiveness has long been questioned. In 2019 James Cameron spoke to variety magazine and doubted the effect movies could have.

“Frankly [audiences] don’t want to hear about climate change,” Cameron stated. “We did a [documentary] show called ‘Years of Living Dangerously.’ We won an Emmy and got cancelled. … Does [storytelling] do that much good?”

No one can answer that question accurately but ultimately some lessons can be learned around how to communicate with a new generation, and I think everyone can agree it doesn’t include bombarding them with facts and figures over and over with the aforementioned 2 x 4.

The movie ends with the cast sat around the dinner table having a heartfelt and candid conversation before the end of the world (sorry if you got this far and didn’t realise the Comet destroyed nearly everything on earth). But what if this movie does one thing, what if it increases these discussions? It makes people listen and ask how do they connect their own values with climate action?

Don’t get me wrong one movie will not lead to dramatic re-conventions of COP parties to sign a net-zero treaty today. But it could spark individual conversations, if we realise (as said by Leonardo DiCaprio) “we may not stop this comet, but we can stop the climate crisis.” Could a collective shift be enough to bypass the self-aggrandising powers depicted by Meryl Streep and instead of denying there is a solvable crisis take the necessary steps to stop it from occurring?

Whether it be the dark comedy aspect, the stellar cast line-up or just the general herd mentality of click-bate the fact that a movie about Climate Change can hold the top spot of #1 most watched on Netflix worldwide (especially over the Christmas period) is nothing to sniff at and it certainly has me looking up!

Article written by Kate Turner Senior Manager Markets, Analytics & Sustainability.

#edge2020 #climatechange #lookup