Archive for July, 2015

The carbon task

I conducted a small experiment in the past week, asking people without connection to the energy supply industry what share of Australian carbon emissions they thought comes from electricity generation?

Not one in 31 asked came even close. Answers ranged from “most” to “half” and variations thereof.

The actual position is that fossil fuel power stations contribute almost 180 million tonnes of carbon dioxide annually at present, equating to 33.1 per cent of the national total. Non-electricity stationary energy contributes another 93 Mt (17.2 per cent). This may account for why half the people I asked about electricity said “half.”

Two other activities deliver another third — transport (our cars as well as our trucks, trains and buses) emits 92 Mt or 17 per cent and our farms account for almost 88 Mt or 16.2 per cent.

The rest of the total comes from factories (nearly 32 Mt and 5.8 per cent), waste 13 Mt and 2.4 per cent and so-called fugitive emissions (eg mining) 45 Mt and 8.3 per cent.

The vast bulk of the public discourse, however, is focused on power stations.

When media persons want to illustrate a story or commentary about greenhouse gases, they reach for pictures of “smoking” coal-fired power stations; actually, of course, what all these illustrations show is water vapor rising from giant cooling towers.

Context may not be everything, but it gets darned close in my opinion and there are two aspects of context worth attention here.

The first is that we are using less coal to make electricity now than in the past seven years.

Black coal consumption has fallen 17.7 per cent since 2007-08 and brown coal use has dropped 14.6 per cent since 2008-09.

These declines represent a reduction of almost nine million tonnes a year in black coal use and just over 10 million tonnes annually in brown coal use.

Only seven of the 31 people to whom I spoke about the carbon issue knew we are now using less coal than before; another seven believed we are using more — and three of them volunteered that this is why the Great Barrier Reef “is in trouble,” a view not shared by the UNESCO World Heritage Committee this week despite a massive attempt by the radical environment movement to brainwash them in to so believing.

The second bit of context is how dependent we are in eastern Australia on fossil  fuels for our power supply.

In  2013-14 the coal and gas plants contributed 86 per cent of energy sent out (the source of emissions) of which gas turbines accounted for 11 per cent.

Looked at in terms of plant capacity, in the three States where the majority of demand and supply is to be found, black coal accounts for 87 per cent in New South Wales and 75 per cent in Queensland while brown coal is 86 per cent in Victoria.

(Capacity, blog readers will know but few in a wider Australian audience comprehend, does not equate to energy production.)

As every petshop galah does know, our role in fossil fuels does not end there.

Radical greens are desperate in  their efforts to change this, but today we are a source for the rest of the world of 10 per cent of its coal and two per cent of its gas — and our share (as well as our export revenues) will rise when the $60 billion coal seam gas to LNG developments in Queensland start production in the financial year now beginning.

Minerals Council of Australia data show that, in the case of black coal (in all its forms), exports in 2013-14 delivered $40 billion in revenue and the mining industry paid out $3.6 billion in royalties to host State governments.

Despite the current state of global markets, the MCA is projecting — I’m using a presentation to last month’s NEM Future Forum — that our thermal coal exports will rise in volume from around 200 Mt a year now to north of about 230 Mt by 2019-20. To which you can add a small-ish increase in metallurgical coal to around 200 Mt by the decade’s end.

The MCA mantra,looking forward is: (1) the outlook for coal use remains strong, (2) coal will “continue to underpin Australia’s economic comparative advantage and energy security,” and (3) emerging low-emission technologies (both carbon capture and storage and new high-efficiency power station technology) mean that “Australia does not have to choose between coal and a low-emissions future.”

I think I would probably render that last point “lower emissions” but the general thrust of the miners’ perspective is clear albeit contested (hysterically so in some quarters).

Looked at more pragmatically than the ideologues choose to do, what’s the way forward to the desired lower-emissions future?

Speaking to the NEM Future Forum, AGL Energy’s Tim Nelson made some interesting suggestions.

Accepting, he told an audience of about 150 in Sydney in late June, that carbon pricing is a politically contentious topic, could we look at a three-legged attempt to address our situation.

First, he suggested, introduce emissions standards for all new power stations.

Second, bring in regulations that drive the progressive closure of older emissions-intensive generators or their retrofitting with CCS.

Third, increase the scope of incentives for new technology (confined in the main to the RET today) to include all zero and near-zero emissions power sources.

As Nelson explained in his presentation, this needs to be viewed against today’s chronically-imbalanced NEM where, on AGL’s estimates, the market 10,162 megawatts “overweight” in baseload capacity, 2,379 MW “overweight” in intermediate capacity and 5,807 MW “underweight” in peaking power.

To state the blindingly obvious, at least to some of us, what’s not needed are more patchwork fixes in policy but a well-crafted approach (accepted by at least the two major political forces) that can disentangle the mess that is now the NEM, resolve the mess that is now domestic east coast gas policy and set in place a credible plan for economic (not just electricity) decarbonization over a realistic time frame.

One of the key factors in pursuing this approach is a far better informed community and, unfortunately, this is an environment that really is worsening.