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a burning issue for renewable energy

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    A burning issue for renewable energyKeith Orchison

    Published 4:20 PM, 19 Jul 2011 Last update 4:20 PM, 19 Jul 2011


    The green energy bubble has taken on new life since Carbon Sunday, but the facts are that the real issues in electricity supply are still mostly about fossil-fuelled energy.

    The facts ? or at least the numbers ? behind the debate are to be found in the new yearbook of the Energy Supply Association.

    In the financial year 2009-10, Australia burned almost 55 million tonnes of black coal and more than 70 million tonnes of brown coal to deliver 78.9 per cent of the electricity sent out from power stations.

    The production total was 230,000 gigawatt hours and emissions ? including those from gas-fired plants ? were about 200 million tonnes.

    When it comes to emissions, what matters is the power sent out rather than the amount consumed.

    The difference is line losses during the delivery process and the energy used by the plants themselves, and it amounted to 26,000Gwh in 2009-10, equal to the consumption of Western Australia and Tasmania combined.

    The federal government (and the Coalition) has set 2000 as the benchmark year for abatement.

    Back then, the power plants sent out 193,000GWh and burned 48 million tonnes of black coal and 68 million tonnes of brown coal.

    Given the government target of driving emissions down to 5 per cent below 2000 levels by 2020, a real question is what volume of greenhouse gases will be emitted by power stations in 2020?

    The ESAA yearbook tells us that the amount of power sent out in 2019-20 can be expected to exceed 273,000GWh.

    In other words, the supply requirement at the end of the decade will be 18.6 per cent higher than in 2009-10 (which was a bit depressed against the long-term growth trend because of the impact of the global financial crisis on demand).

    Assuming we achieve the present renewable energy scheme target, the fossil-fuelled segment of supply at the end of the decade will be similar to that today ? less perhaps production from Victoria?s Hazelwood and/or Yallourn and Playford facilities in South Australia plus emissions from the gas-fuelled power stations that replace them.

    The domestic abatement shown in Julia Gillard?s ?Carbon Sunday? announcement reflects this ? 29 million tonnes gained from closing down coal power stations, plus 29 million tonnes achieved through the RET, gives the 58Mt the government is projecting.

    (The balance is expected to be gained by buying emissions credits overseas, with the big assumption that there will be a genuine international market to provide them.)

    So the Greens and their media fellow-travellers can ramp up the rhetoric on renewable energy ? in New South Wales, the Greens are now calling for Liddell power station to be shut down and replaced with renewable generation ? but there is little likelihood of the supply mix suddenly changing in the decade ahead, given the voters? fixation on power prices and the government having already pushed the compensation barrow about as far as it will travel.

    Liddell, which sits alongside Bayswater power station in the Macquarie Generation complex in the Hunter Valley, produces about 10,000Gwh of electricity per year.

    It would take 25 Moree solar farms ? the project just approved for federal subsidy in north-west NSW ? to replace this output and require the outlay of about $23 billion in capital compared with a seventh the cost for a combined cycle gas plant able to deliver Liddell?s energy.

    The gigantic solar complex would also need to cover the equivalent of 37,500 soccer fields or 30,000 hectares.

    The Greens may wish to see ?renewables ramped up as hard and fast as possible? and may decry the ?unnerving prospect? of gas replacing a large amount of coal as a fuel for generation, but it is a dream.

    Investors understand the prospects better.

    While the government announcements may fuel a media fuss about new renewable energy ? although spending the entire amount the government has allocated to promoting green power would deliver about only half Liddell?s annual output ? the private sector is lining up gas developments.

    Apart from the Origin Energy project at Mortlake in western Victoria that is nearing completion, investors have almost 7,500MW of new gas-fired capacity planned for construction in New South Wales, more than 3,000MW in Victoria and more than 4,000MW in Queensland, the three States (plus the ACT) that make up 79 per cent of Australian electricity consumption.

    How much of this will be commissioned this decade, where, and when depends on a range of factors ? such as the proposed government buy-out of old, coal-fired plants in Victoria ? but the direction is set in concrete as much as any wind turbine tower.

    Absent a political change of heart on nuclear power, the trend between now and 2030 will be for most of these gas plants to be built.

    The federal government?s national energy resource assessment says that gas will be providing 37 per cent of electricity supply in 2030 versus 20 per cent for renewables and 43 per cent for coal.

    There is another angle to this scenario: while all the present public focus on carbon capture and sequestration is on coal generation, a large shift to gas may well see investors confronted beyond about 2025 with an environmental requirement to include CCS in gas projects and to retrofit some of the later developments.

    The multi-billion dollar, longer-term question is: What will replace the coal fleet when what?s left of it reaches the end of its working life around 2030?

    Perhaps one of the reasons the Greens are so strident now is that they appreciate that, having had gas eat renewables? lunch in the decade ahead, they may see dinner devoured in the following decade by the next iteration of nuclear plants.

    Keith Orchison, director of consultancy Coolibah Pty Ltd and editor of Powering Australia yearbook, was chief executive of two national energy associations from 1980 to 2003. He was made a Member of the Order of Australia for services to the energy industry in 2004.

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