What Julia Gillard wants you to take home from her “clean energy future” spiel is the images of geothermal energy, wind power and solar generation.
However her message, shorn of all the hyperbole, is that we are stuffed in pursuing a 2050 target driving emissions 80 per cent below 2000 levels without two critical developments: a global emissions trading scheme and large-scale domestic development of carbon capture and storage.
It is an indictment of the way the media commentariat deals with political announcements that no one, except for economic analysts like Henry Ergas and News Limited’s Terry McCrann, as well as her former political colleague, Gary Johns, once a Labor minister and now a very critical commentator in The Australian, has tackled Gillard on two of the three issues central to making her carbon pledge work.
The first is her claim that renewable generation will provide 40 per cent of supply in 2050 – and I seem to be alone in pointing out that this requires investment in non-nuclear, zero emission power to treble between 2030 and 2050.
McCrann and Ergas have been hammering Gillard on the fact that her entire pitch to the nation rests on there being a global emissions trading scheme – and, as McCrann has been pointing out over the weekend, if there is, Australia, on Treasury modelling, will be giving $57 billion a year to overseas peddlers of credits in 2050 without compensatory material gain on the ground at home.
The big third issue is the government’s reliance on carbon capture and storage in this new scenario.
As I have pointed out in posts, Gillard’s 40 per cent renewables by 2050 pledge is actually a 60 per cent reliance on fossil fuels mid-century because she refuses to countenance nuclear energy. This supply, mainly gas-fired, must incorporate CCS.
So great a reliance on carbon capture is a huge punt even for a nation that loves a bet.
Whether or not it is an irrational bet is one of the biggest issues of this debate, not that you would ever know this from reading the local media commentaries.
Paraphrased, the Wall Street Journal last week summed up the negative situation like this: carbon capture and storage will take too long to expand on a large scale, solar power is “comically expensive” and onshore wind energy faces both geographical limitations and community resistance.
Leaving the renewables situation aside, and also the debate about how nuclear power could address the zero emission ambition efficiently, the Gillard government, in effect, now says it expects something like 240,000 gigawatt hours a year of electricity supply – a bit more than is currently being produced – to be sourced from fossil fuelled plants using CCS by mid-century.
This is based on the Treasury’s new and low estimate of demand.
If my view that consumption in 2050 is more likely to be about 550,000 gigawatt hours a year on current trends is right, then the government’s fossil-fuelled target will be about 330,000 GWh annually, 50 per cent higher than production today.
All of it must incorporate carbon capture.
Despite this, there is no additional funding in the recent policy for further pursuit of CCS.
The government’s $12 million advertising campaign doesn’t highlight any of this, but it is critical to Gillard’s energy strategy – and goes way beyond the official (until now) government position about 2030 electricity supply, as expressed by the national energy resource assessment, that sees generation in 19 years’ time being 43 per cent conventional coal, 37 per cent conventional gas, 12 per cent wind and the balance mainly hydro-electric supply that has been available for years and years.
A critical issue for successful CCS implementation is scale.
While there are demonstration carbon dioxide capture technologies being used at present to catch tens to hundreds of tonnes of CO2 a day, the major baseload suppliers (here and overseas) are emitting 20,000 to 50,000 tonnes daily.
Another big issue is dealing efficiently with the impurities found in emissions from coal-based generation.
The next obviously is cost, which is an especially large issue for coal-burning generators with narrow commercial margins – all of our plants, in other words.
Here it is important to understand that carbon dioxide after capture must be compressed for transport and injection underground – and this effort, on the basis of overseas studies, can increase the cost of electricity from coal generators by as much as 50 to 80 per cent.
There is also another local factor: community acceptance of CO2 transport, not least in New South Wales, the biggest black coal burning State in the largest electricity consumption region, using 30 million tonnes a year, with no obvious destination for sequestration at this time.
In a nutshell, for Gillard’s grand plan to be realised, Australia needs to achieve CCS on a large scale at commercially acceptable costs and win public support for its use.
Now she isn’t the first prime minister to talk up the technology (not that she is doing so overtly). John Howard was arguing in 2006 that Australia should aspire to be a world leader in CCS development.
Nonetheless, the federal government has so far committed little more than 10 per cent of its original CCS flagship program budget. In turn, it believes that the coal industry is not doing enough to drive the technology’s development.
This is not just a local issue, of course.
Alstom’s global director of carbon dioxide business development puts things in perspective world-wide by saying: “Even with the most optimistic projections of renewable and nuclear energy use, we will still have 60 per cent fossil fuels in 2030 with massive emissions. If CCS technology is not accepted by the public, we will not be able to arrive at the necessary levels of emission reductions by 2050.”
The Alstom view underscores a key point: international focus on CCS research and development is a very important factor in our domestic chances of success with this technology.
The most recent estimate by Pike Research, an American market research firm that focuses on clean energy technology, is that CCS, if commercially viable, could represent a world-wide market of $128 billion to $220 billion annually by 2030.
Faced with revenue prospects of this size, major technology companies pull out the stops.
This doesn’t excuse us from making a substantial contribution, given our domestic needs and our large-scale role in the global coal trade.
For governments, the situation was perhaps best summed up by Ed Miliband, then energy minister in Britain and now leader of the opposition: “There is no alternative to CCS if we are serious about fighting climate change and retaining a diverse mix of energy sources for the economy,” he told the House of Commons in 2009. “With a solution to the problem of coal, we greatly increase our chances of stopping dangerous climate change. Without it, we will not succeed.”
Is it possible for Gillard, hag-ridden by the Greens, to say the same today?
Do she and her advisers actually understand what she has pledged or are they deafened and blinded by the “clean energy future” rhetoric?