It’s the states that drive our coal addiction, not the federal government
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While the Gillard Government puts the finishing touches on the climate policy Prime Minister will apparently not unveil tomorrow at the Press Club, the prosaic reality of a carbon-addicted economy chugs away all around us. The biggest source of CO2-equivalent emissions in Australia is our power generation industry, courtesy mainly of its reliance on coal. In 2008, according to National Greenhouse Gas Inventory figures, coal-fired power accounted for 31.4% of our entire CO2 emissions. Lower emissions-intensity gas-fired power accounts for another approximately 3.5%. The electricity sector’s share of our emissions has slowly grown over the decade. It was around 33% in 2003. While we casually refer to the electricity industry, coal-fired power is an unusual sort of industry – one dominated by state governments. By capacity, around 62% of our coal-fired power industry is owned by state governments. The biggest are the NSW Government’s Macquarie Generation and Delta Electricity, which between them control nearly 9GW of coal-fired generating capacity. The next biggest is Western Australia’s Verve Energy, which controls around 2.2 GW. The Queensland state-owned companies Stanwell, Tarong and CS Energy together control around 5.7 GW. British company International Power, through ownership of Hazelwood Loy Yang B, controls 2.6 GW and Hong Kong-based CLP owns Yallourn (1480 GW). Alinta controls around 850 MW of coal-fired power out of its overall generation portfolio of about 3 GW. Loy Yang A in Victoria is controlled by a mix of foreign and local interests. And it is state governments that are driving the growth in coal-fired power. Burning coal to make power is anything but a dying industry. As Crikey revealed in March, there are plans for up to a dozen new coal-fired power stations across every state except Tasmania, which together would add 7% to our national emissions total from 2008. In NSW the Bayswater 2 and Mt Piper 2 expansion projects – worth 2 GW each – are controlled respectively by Macquarie and Delta, and caught up in the NSW Government’s Sisyphean electricity privatization process. Both are ostensibly set to be either coal or gas-fired, but the chances of their being gas-fired are remote. The Mt Piper site doesn’t even have adequate access to gas supplies. And on Monday the WA Government approved three projects involving new or redeveloped coal-fired plants. Resources company Aviva wants to build a 450 MW plant at Eneabba; the Bluewaters expansion plants (400 MW total) at Collie is, according to reports in today’s Fin Review, set to be sold to Verve Energy following the collapse of the Griffin Group, and Verve has also received approval to redevelop and bring back online the mothballed 240 MW Muja A and B plants. The Queensland Government is also investing in new coal-fired power stations under the cover of as-yet unproven CCS technology. It is putting more than $100m into the Stanwell-owned Zerogen project for a 580 MW coal-fired plant, and Stanwell is working with GE on the Wandoan project, which will use coal from Xstrata’s Wandoan coal mine. In fact, all new state government coal-fired projects have a thin coating of greenwash. WA Environment Minister Donna Faragher said the new coal-fired stations in WA would have “a greenhouse gas abatement program” that “will require the power stations to achieve continuous improvement in net greenhouse gas emissions.” While public debate has been, and continues to be, focused on Federal Government climate change policies, state governments have been critical in driving the growth of coal-fired power. They’ve driven growth either directly through state-owned corporations developing new coal-fired power plants, or through subsidies for unproven technologies to mitigate the emissions of new coal-fired plants, or through environmental approvals of new coal-fired plants. You could see the distraction at work in Faragher’s press release, in which she “re-confirmed that greenhouse gas abatement was best addressed through a national approach and the timing and details was a matter for the Federal Government.” But it’s not the Federal Government that is driving the growth in coal-fired power. It’s state governments. They should no longer escape scrutiny as the key decision makers in our continuing addiction to coal. |
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13 Comments
You focus mostly on the domestic coal industry but it’s really the tip of the iceberg of the exapansion in production capacity and our contribution to global CO2 emissions.
The vast majority of the expansion projects on the books and the highest producing coal mines are in the export game, whether they sell thermal coal for power generation or coking coal.
But it’s all good because they’re not our emissions.
So what is industry to use instead of carbon-based fuel?
It is the Feds who are blocking industry’s access to nuclear, not the States. The Feds could quietly remove two pieces of obstructing legislation, and leave it to industry to win the hearts and minds.
In particular, NSW already has nuclear legislation in place, initially covering the Lucas Heights reactor, so energy suppliers there would be ready to begin the transition as soon as the State government gave the nod.
Roger Clifton has it right.
The states cannot determine national policy - they have enough difficulties just getting a train timetable to work.
The national government must remove legislative roadblocks to consideration of nuclear options on the same criteria as all other forms of energy. This, of course, includes cradle to grave, emissions, safety, environmental effects as well as the more readily understood business case of capital cost, operating cost and income projections.
However, at present, we have a hodge-podge of bits and pieces which fail to establish a CO2-e price, support extravagant but essentially tiny and doomed little 1kw solar PV schemes stuck on inaccessible rooftops across the land with hugely subsidised feed-in tarriffs, virtually no policy on gas turbines, long term viability of existing gas and liquid resources, and on and on.
Even the Greens, the only party with a semi-coherent energy policy has its head firmly up its a_se when it comes to nuclear options.
The sooner this country moves to a position where rational analysis of options for base load generation is possible, the sooner the states can support it. They might not like it, but they will fall in line. Imagine the screams if the carbon price was equivalent to the cost of removal of CO2 from the atmosphere… hundreds of dollars per tonne of coal. All bets would be off and the States’ proposals would very quickly be revised.
In closing, feel sorry for state ministers. They are the ones who will cop the brunt of voter dissatisfaction if the power supplies fail, not the private generators or the federal politicians. They are between a large rock and a very hard place.
@Roger Clifton and John Bennetts.
“The national government must remove legislative roadblocks to consideration of nuclear options on the same criteria as all other forms of energy.”
By all means. Of course that means there would never be a nuclear plant built, ever. This would be a rather neat way to simply kill the issue once and for all. There has never in the 50 years history of nuclear power ever been an unsubsidized or economic nuclear power plant built by the private sector. Just look at Obama’s $8B “loan guarantee” earlier this year just to pump-prime the building of a single (twin-reactor) nuclear site!
Luckily, just like the free market will kill nuclear power, it is also killing the building of new coal-fired generators. Finance will be extremely difficult to find when hardly anyone, including the denialists who examine the future energy scenarios carefully, would guarantee the operation of dirty coal plants for their 50 years life. So even without an ETS or a price on carbon, the market still has to factor it in.
I’m still hoping for Bernard Keane to risk proving his innumeracy by giving the figures which would show that Australia should act early to do anything that costs serious money - spent or foregone - (apart from some research which, for some reason, is not already being done better and faster in China or the US) to reduce our CO2 emissions.
In the meantime I applaud John Brumby’s enthusiasm for using as much of Victoria’s brown coal as quickly as possible. He would get a small extra hand from me for repealing the Cain government’s ridiculous early days PC legislation forbidding even research into nuclear power in Victoria.
I think John Bennetts and I could probably find something to agree about if we decided to spend money otherwise diverted to the prolongation of degraded life for demented elderly with self-inflicted illnesses (but not me of course) to preserving the wonders of Australia’s natural environment through nuclear power based provision of ample water supplies for native forest preservation and revegetation. Always interesting to consider what one’s own marginal dollar might be spent on without one just cursing vote buying politicians or PC ignoramuses ….
@Michael R James spoke of a “loan guarantee” for up to $8 billion (for 2.2 GW of nukes)
“A loan guarantee” is not a subsidy. It seems that you have given an example of an unsubsidised reactor and disproved your own argument.
A loan guarantee is eminently sensible planning on the part of government. Without public monies changing hands, the lender is reassured that there will be no political interference in the lifetime of the repayments. The community is assured of long-term, cheap electricity up to a century ahead.
No one can say that gas ensures cheap electricity for a century ahead. We do know that as global demand increases ahead of supply, the price of gas will go up and up, while mass production is going to bring the price of nuclear electricity down and down.
@ Michael R James Posted Wednesday, 14 July 2010 at 4:13 pm:
I don’t follow your logic. I have made a few assumptions:
+ Coal will fall from favour and/or carry substantial CO2 emission charges;
+Even natural gas (GT’s, CCGT) will either run out of fuel or similarly be priced out of the market by C)2 emission charges, which will still be of the order of half of that relating to coal or 1/3rd of those for brown coal).
+ Nuclear will be available at a price (Type 3+ or better) and that this price will reduce due to standardisation of design, economies of scale, construction experiebnce, familiarity with the product and through not having to carry CO2 emission charges.
+ Current renewables are unable to be scaled up in line with market growth and public expectations, physical, social and tecnological constraints;
+ Unproven renewable technologies will not arrive like the cavalry riding over the hill to save us all;
CCS is a pipe dream;
+ Electricity growth will continue nationally at 2 to 3 percent per annum regardless of the wishes of the Greens who want to base their policies on somewhere between 75 and 40 percent drop in per capita consumption by 2020.
Forget the history of state subsidies, whatever it may be - nuclear will be the last man standing and the money will be found.
@Julius, Posted Wednesday, 14 July 2010 at 4:57 pm:
Apparently Julius still lives in a parallel universe, where the IPCC3 report is still being challenged, the University of East Anglia is still accused of fraud and anthropogenic climate change is not an issue.
BK’s numeracy may or may not be open to challenge. The need for immediate and urgent action to control and reduce greenhouse gases is not… the only three questions are (1) How fast? (2) What technology? (3) What cost?
Everything else is just fiddling around the edges.
@John Bennetts: “by 2020 it is entirely practical to envisage 10 or 15 GW of nuclear” and a “perhaps optimistic 5 GW” of solar thermal and wind, for 50% of our current generating capacity.
By my calculations that amounts to increasing our capacity at 3.4% pa, without retiring plant. Is that enough? Anyone who is reaching for a calculator right now should have a chill running down his/her spine…
A more likely figure for Aust current expansion rate is 6% pa, including population growth. Add to that further new capacity to retire old generating plant. Not just the unfashionable coal-fired plant of BK’s article, but also worn out gas turbines and their steam stages.
Then we have to consider the electrification of industry. That involves such things as giant mine trucks crawling along under tram wires, electrolytic extraction of metals and even oil refineries adding hydrogen to carbon.
And of course we must not forget the electrification of transport. All of the railway lines, public buses and so on. Did I mention the family car?
Currently, Australians have a total usage of somewhere between 5 and 7 kW, including all the above. If we were to somehow achieve zero population growth, we would still have to replace the current carbon-fueled consumption of approximately 140 GW. That is just consumption, for which capacity has to be a lot more, depending on the extremes of supply and demand. How is your chill?
If the world is to achieve zero emissions somewhere around 2100, the world’s heavy industry has to “great leap forward” between now and then. But it has been done before.
@ Roger Clifton Posted Wednesday, 14 July 2010 at 9:23 pm:
Roger and I are not comparing like with like. The total installed capacity of fossil fuel generating plant is the starting point. Currently, this is nowhere near 170 GW. NSW installed coal fired generation is about 10 GW. Guesstimate 7 GW for Vic, 5 GW for QLD and another 5 GW for the rest - say 30GW. Allowing for GT’s and private generation, I guess that 35GW is an overestimate.
Where 170GW comes from, I do not know. As soon as I complete this comment, I will look on-line for a more accurate figure. Perhaps EngineeringReality can help out here. Is it possible that Roger has counted all energy sources, including liquid and gas?
NSW experience for about 30 years has been close enough to 3% pa compound increase in electrical power consumption. I expect that the same will do as a first approximation for the country as a whole. Again, 6% seems on the high side, but I may well be wrong.
So, at 3% pa increase over 10 years, the fossil fuel electricity target for 2020 on a business as usual model is something like 47 GW. Allow for an arbitrary 30% of plant to be retired during the decade and we start with 35GW and end with 44 to 50GW in 2020. I have ignored the 5% hydro - too difficult to include in a thumbnail guesstimate such as this after a couple of reds.
Given the rough nature of my data and the pure guesses as to load growth, I am confident that we could make it - just - if we threw everything, including the kitchen sink, at nuclear and renewables together. The only form of demand management I see being effective on this scale is for massive price hikes to be the driver. Soft words and feeling good will not do it. 1kV photovoltaic trophies on rooftops will come to symbolise the pee-ing in the ocean approach of the 2000 - 2010 era of political correctness.
From 2020 the whole picture may have changed. If the urgency has ratcheted up through the roof, there will be awful supply constraints world wide on key manufactured chunks as everybody races to commission Type 3+ nukes.
Remember too, please, that the electrification of passenger rail outside of capital cities was done during the 30 years mentioned above, as has most of the aluminium industry and electric arc steel furnaces, so the additional new loads might (just) not overload the system.
@John Bennetts: where did Roger get 170 GB?
John is quite right. I have mixed up “thermal” consumption with “electricity” consumption. The amount of energy or energy intensity (in manufactured goods) entering Australia averages out to somewhere between 5 and 7 kW per person, totalling (6 kW*22 Mx) ~ 170 GW. That is the measure of the chemical energy in the fuel ultimately used, usually labelled “thermal”.
If all of Australia’s carbon consumers were resupplied with electricity, approx 170 GW of thermal energy would have to flow into generating plant, emerge as (say, 0.4*170) ~70 GW electricity and re-enter manufacturing and transport etc to supply the equivalent of their previous needs. There, I have corrected my error.
John’s message is loud and clear: Even the most conservative estimate of our needs requires a great leap forward in Australia’s generating capacity. And we need to go nuclear to achieve it.
Most of my previous argument still holds true, that is to say, being conservative doesn’t give us half the bad news. Worldwide, an industrial revolution is needed.
Oops. It was 140 GW I supposed to explain, not 170. How about (7 kW * 20 Mx) =140 GW. Heck, we are just talking ballparks here. The point is that it is a very big quantity. Replacing Australia’s carbon is gunna be one heck of a big job.
Roger and I now sing from the same sheet.
The main thrusts are:
Get the impediments, including legal ones, out of the way.
Do what you can or get out of the way.
There’s plenty of real work to be done, in all areas - including renewables.
Renewables will not, by themselves, save the planet; what is needed on commercial and engineering grounds to meet the climate imperative must include nuclear generation.
Or be prepared to sit in the dark and shiver.