It’s not easy being green

crucified_frogIt’s becoming increasingly clear that the only likely outcome of the current manoeuvrings over the Rudd government’s Emissions Trading Scheme is that it will either be rejected by the Senate or so drastically watered down as to be almost entirely useless.

If (like me) you accept that the likely correctness of the consensus of reputable climate scientists that human-generated global warming is a reality which is likely to have major real world impacts within the next 50 years, you would have to be worried.

Moreover, a new paper by the Australia Institute’s Richard Denniss suggests that, even without emasculation by Coalition amendments, the government’s current ETS model results in little or no reduction in greenhouse emissions from power stations (by far the largest source of Australia’s total greenhouse emissions) until at least 2033. And even then, as Glenn Milne observes in today’s Oz based on Denniss’s paper:

And the reason emissions from black and brown coal-fired power stations plummet in 2033 also has nothing to do with the CPRS. According to Denniss, Treasury has simply assumed that in 2033 we will invent clean coal and that, having invented it, it will turn out to be cheap. Further, it assumes that between 2033 and 2043 we can replace or retrofit every coal-fired power station in Australia. Despite the fact that it takes five years to plan and build a normal one, Treasury seems to think we can replace them all in 10 years.

Denniss’s paper is based on a close analysis of the calculations and assumptions underpinning Rudd/Wong’s ETS scheme projections, gleaned from FOI applications.

I’ve been wondering for a while how Rudd/Wong’s scheme could effect any meaningful reductions in existing greenhouse emissions from power generating plants, when permits to continue polluting at current levels are to be given away free.  Power utilities therefore have little or no commercial incentive to replace existing coal-fired generators with zero emission renewable alternatives (assuming that viable baseload alternatives can be found, other than nuclear which Rudd/Wong won’t countenance).  Even if they have to begin paying for their permits after the first few years, permit pricing would have to be very high to create a significant incentive for power utilities to decommission existing coal-fired generators and replace them with new low or zero emission ones.  Power companies have every incentive under Rudd’s ETS to continue operating their existing dirty coal-fired generators until they reach the end of their scheduled operating lives.  Hence the projections showing little reduction in greenhouse emissions before at least 2033.

Since Rudd’s ETS is a dud, with or without Turnbull’s additional emasculation, what can be done?

Power generation creates around 50% of Australia’s total greenhouse emissions, transport another 15%, agriculture another 15%, with the rest from a variety of smaller sources. It makes obvious sense in those circumstances to focus first on power generation, especially given that a significant proportion of power utilities are still government-owned in most States and Territories. Surely they can be induced by a combination of carrot and stick to convert to cleaner generation technologies much more quickly, and by a variety of strategies.

Current mandatory clean renewable energy targets (20% of the total by 2020) are a good start, but only deliver a total reduction of 5% by 2020 which is nowhere near enough to achieve anything meaningful.

We need a scheme to ensure that all new baseload power generators are fuelled by zero or low emissions sources, with short-term progressive retrofitting/conversion of existing coal-fired stations to natural gas to achieve even greater reductions. Natural gas is neither renewable nor a zero emission technology, but it emits less than 50% of the greenhouse gases of black coal and only about a third of brown coal so it’s an obvious and relatively painless way of reducing Australia’s greenhouse “footprint” quickly.

WA Premier Colin Barnett proposed a scheme recently for building a new gas pipeline from the North-West Shelf to the pipehead of the existing east coast gas network at Moomba.  The rapidly expanding Timor Sea gas fields could also easily and relatively cheaply be connected to that pipeline from the existing NT pipehead at Palm Valley near Uluru. Barnett argues that requiring 50% of new power generators built between now and 2030 to be gas-fired  would reduce Australia’s total greenhouse emissions by 5%.  Assuming his figures are correct, that presumably means that requiring ALL of them to be gas-fired (or better still fuelled by a zero emissions technology) would result in a 10% reduction.

Clearly even that is not enough but it’s a very good start, and embarking on progressive conversion of existing coal-fired stations to gas should allow Australia to reach a very respectable 25-30%  reduction in greenhouse emissions by 2030 without a general/broad-based ETS or carbon tax.  I’m in no sense an expert on the technology, but some quick Googling suggests that, for at least small-medium sized coal-fired power stations (say up to 500MW) conversion to gas can be effected for around $200-300 million.  Why not cancel some of the seemingly wasteful Stimulus Package expenditure on pink batts and unnecessary school assembly halls and divert the funds to subsidising conversion of coal-fired power stations to natural gas?  Why not compel power generators by federal legislation to embark on a progressive gas conversion programme, with punitive taxes as the penalty for non-compliance and generous subsidies and tax concessions as the reward?

However, I haven’t been able to find any examples of conversion to gas of a large coal-fired power station (1000MW  or more).  This rather suggests that the only viable way of reducing emissions from these large power stations, which comprise the bulk of power generation in the larger States, will be to completely replace them with brand new low or zero emission facilities. Given that the need for reliable baseload power appears to mean that the maximum proportion of clean renewable sources like wind and solar in any network is around 20% of the total, that unavoidably implies nuclear power in the current state of technological knowledge.  Solar thermal or geothermal may have some promise but aren’t yet at a large-scale commercial development stage, and “clean coal” may or may not ever reach that point.  Thus nuclear power must be embraced as a matter of urgency.  It takes around 5-10 years for any new large power station to reach production, and perhaps even longer for a large nuclear station.

I don’t understand why Malcolm Turnbull isn’t out there pushing this sort of message aggressively right now, instead of trying to negotiate amendments to make a fatally flawed scheme even weaker because he’s  scared of being decimated in a double dissolution election in which Rudd and Wong get away with cynically pretending that their own ETS is going to have any meaningful effect at all on greenhouse gases.

About Ken Parish

Ken Parish is a legal academic, with research areas in public law (constitutional and administrative law), civil procedure and teaching & learning theory and practice. He has been a legal academic for almost 20 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in the early 1990s.
This entry was posted in Environment, Politics - national. Bookmark the permalink.
Notify of

Newest Most Voted
Inline Feedbacks
View all comments
14 years ago

what can be done?

End nuclear power prohibition.

France gets about 80% of it’s electricity from nuclear (10% from hydro). Electricity is Frances fourth biggest export. Nuclear is safe. Historically much safer than many of Australias existing energy sources.

Nuclear produces less nuclear waste and less nuclear fallout than our existing coal fired power plants.

Fast Breeder reactors can be powered using depleted uranium. There is enough depleted uranium currently in storage (ie nuclear waste) to fuel the worlds entire electricity needs (using existing nuclear technology) for 700 years. In the process we would be reducing the worlds stock pile of nuclear waste. That’s right we could power the world using nuclear for 700 years whilst reducing the nuclear waste stockpile. Using existing technology not future technology. Wind farms and solar can’t reduce nuclear waste stock piles.

Nuclear is cheap. Or at least it can be if the regulatory structure is done right.

Nuclear provides 24×7 baseload power with a capacity factor around 95%.

Nuclear is emission free.

Why does Australis prohibit nuclear power? Why are we considering more imposts on our liberties when the removal of one prohibition could ultimately achieve the objectives of elliminating all electricity related CO2 emissions cheaply and safely.

Antonios Sarhanis
14 years ago

I’ll make a limited comment as I work for the AEMC and we recently put out a major report on the impacts of climate change policies on the electricity systems and markets.

I understand that the CPRS would allow the importation of carbon permits – so it might be expected that a firm that needed to have carbon permits would import them if that was cheaper than buying the australian carbon permits. A carbon permit from overseas would effectively represent “carbon reduction activity” (of whatever form) overseas rather than in Australia. This could impact whether Australia meets a particular carbon reduction target.

derrida derider
derrida derider
14 years ago

what can be done?

Just raise the bloody price of carbon-emitting electricity!

Pretty well all the short and medium term reduction in carbon emissions needed will come from conservation measures. People miss this – we don’t actually need to ban coal plants, etc. In the long run those same prices will indeed favour non-emitting forms of energy (quite likely nuclear), but precisely because the adjustment is long run it will be pretty painless.

And you can use the money you raise with your ETS to cut taxes/ raise benefits for poorer consumers facing the higher electricity prices – the whole deal is highly progressive.

But of course telling the punters they have to pay more for their power is precisely what governments don’t want to do. They’d rather pick those same punters’ pockets for taxes to “compensate” some very undeserving industries.

14 years ago

DD what is undeserving about supporting industries with a strong unionised workforce?

Chris Lloyd
14 years ago

Ken said: Permits .. are to be given away free. Power utilities therefore have little or no commercial incentive to replace existing coal-fired generators with zero emission renewable alternatives. I am afraid that I am not on top of any of the detail of the scheme, but is it not true that after creation of the permits the amount of carbon each permit entitles you to emit is reduced over time? I thought this was how the real reductions actually occur. The trading of the permits is a method of concentrating the reductions in those industries that can do it most easily, so it is an economically cheap way of getting there.

Over time then, the permits would be worth big money and the industries that held them would be foregoing the cash they could get from selling them so there is the incentive right there. The market value of emitting carbon rises over time and the rising tide picks up the most flexible industries first.

It seems to me that the cost of the permits at creation as well as compensatory cash hand outs are irrelevant to the environmental outcome. Or am I speaking rubbish? – I come to Troppo to learn from my betters ;)

Tony Harris
14 years ago

Ken, you had better hope that the sceptics are correct and we are not approaching the end of the world. In any case, wake up and go nuclear!

14 years ago

Ken, there are a number of issues here.

1. If and when a real global carbon market appears (and there’s reason to believe it will happen well before 2030) the fate of Australia’s particular coal-fired power stations becomes moot.

2. What dd said.

3. Even if the actual replacement of current coal-fired capacity mostly doesn’t happen until 2030 (and, frankly, that’s doubtful; Hazelwood’s owners are fishing around for a government payout to shut themselves down), once carbon pricing is in place companies will have to start planning for it. So, around 2020 or so, if CCS technology isn’t looking promising, they will have plenty of time to scope out the alternatives.

4. Chris, in a nutshell, there will be fewer permits available over time, so the price goes up. That’s the whole point. At some point, it becomes cheaper to either convert existing plant to CCS, or shut it down and replace it with non-emitting plant.

Yes, in terms of emissions outcomes, conventional economic theory suggests that who gets the permits and what compensation is paid won’t affect actual emissions. You’ll get passionate arguments from some disputing this point, though, and there is also the issue of maintaining public support; I think a lot of people might get cranky when they figure out just how much we will be subsidizing the big emitters.

5. There will be large-scale demonstrations of solar thermal, and hopefully geothermal, up and running by 2015, certainly 2020. So a lot of the uncertainty surrounding their viability should be removed by then.

6.There is also the interesting possibility that by 2020 or so small, factory-built nukes may be rolling off the production lines. When it comes to power generation, big is usually beautiful; however, for various engineering reasons (not least you build them in a factory, rather than on-site) there’s reason to believe that they might be cost-competitive. If such things come to exist, they’re game changers. The time to installation goes down radically, the costs are largely fixed, and it might just be possible to use them to convert existing coal-fired plants. Some of them are also radically more efficient in their use of uranium, avoid a lot of proliferation issues, and could even be used to get rid of existing nuclear waste. But – I hasten to add – until they’re actually built and demonstrated, there’s no point getting too excited.

14 years ago

Robert – The AP-1000 Westinghouse nuclear reactor will be modular and partially built in a factory. However at 1000MW it isn’t exactly a small power plant.

Chris Lloyd
14 years ago

The AP-1000 Westinghouse modular nuclear reactor….sounds great! What colours does it come in? Can I buy it from Good Guys?? Actually, the worst dish-washer I ever bought was a Westinghouse. It didn’t wash dishes and leaked all over the place.

Chris Fryer
Chris Fryer
14 years ago

I’m quite disillusioned with Kevin Rudd’s so-called green credentials. I thought with Peter Garrett on the front bench they would actually be a lot more environmentally sensitive, but instead we will probably get a carbon trading scheme that is a waste of time, money and will probably make the problem worse.

I think with the stimulus package a massive opportunity was wasted. They could have done things like subsidise green vehicles, solar panels, windfarms and energy efficiency. This would have killed two birds with one stone.

One thing I would like to see more of is tapping the methane emissions of landfills and using it to power generators. Maybe we could also do they do in China and use rotting human waste to generate power.

I wish our politicians had a little more imagination.

14 years ago

The Toshiba 4S (Super Safe, Small and Simple) is only 10 Megawatt and fully automated “appliance” design. For areas in remote Australia that currently run on diesel (and require more diesel to truck in the diesel), this would have some attraction.

Might be just a coincidence that Toshiba owns a bunch of Westinghouse shares :-)

The 4S uses metal fuel, but I can’t find details of the required enrichment level. It is supposedly capable of “breeding” its own fuel to some extent, thus improving efficiency and running 30 years with the same fuel. It runs at ordinary atmospheric pressure and all the nasty bits are buried in a pit 30 meters deep. The only bad thing is the liquid sodium (a fire hazard) but possibly also a strong discouragement to anyone considering cutting their way into the core with a mind to borrow the fuel rods.

Given that it uses steam turbines, it probably also needs a water supply, not sure how much.

The final major hurdle imposed by the NRC is the fact that their new, streamlined licensing timeline imposes a 42-60 month delay from the time that the application is filed until it is approved. Very few businesses can afford to finance projects that require almost five years of frequent government interaction – at an ever inflating rate of $200 per bureaucrat hour – before they are even allowed to break ground to build their revenue generation equipment. The only way that even enormous companies like General Electric or Westinghouse have been able to do it is to obtain Department of Energy grants to pay Nuclear Regulatory Commission fees.

There must be potential for research into an economic theory explaining the efficient giving of grants so they can be taken away again in fees.