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Australia nailing its colours to coal mast, despite call to halt its use for power generation by 2050

STUTTERING SUPPLY Electricity demand from the East Coast is outstripping supply

Photo by Bloomberg

LION’S SHARE The bulk of Australia’s grid power is sourced from brown and black coal

Photo by Bloomberg

22nd February 2019

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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Amid rising electricity costs and flailing power supplies across the East Coast of Australia, the country’s government is standing firm on its decision to keep coal as one of its main sources of electricity generation.

Australia’s East Coast is facing a plethora of electricity issues, with electricity prices having soared to become some of the highest in the world, while much of the natural gas produced in the country is exported instead of being sold domestically.

Several domestic gas producers have stepped up to the plate, reserving a larger chunk of their production for the domestic market. However, despite these efforts, the East Coast market is still struggling in the face of the closure of several coal-fired energy generators and the inability of renewable-energy sources to cover the baseload void left by these fossil-fuel-fired generators.

The Australian government has launched an Underwriting New Generation Investment programme as one of its primary responses to the failing grid. The programme aims to increase firm electricity supply and improve wholesale market competition to reduce electricity prices.

The programme will provide financial support to facilitate the development of new firm generation capacity, and will be technology neutral, providing a level playing field and ensuring there are options for the best and lowest-cost generation options to be supported.

Federal Energy Minister Angus Taylor recently revealed that government had received 66 expressions of interest in the programme, with the proposals extending across the national electricity market and featuring a balanced mix of sources of generation, including coal, gas and hydropower.

Australia’s continued reliance on coal-fired electricity seems to fly in the face of the recommendations of the United Nations’ Intergovernmental Panel on Climate Change’s (IPCC’s) report, released in October, which urges governments to phase out coal use by 2050 to avoid overshooting the targets set out in the Paris Agreement on climate change.

Scientists have warned that there are only about 12 years left for global warming to be kept to a maximum of 1.5 ºC above preindustrial levels, beyond which even a 0.5 ºC increase will worsen the risks of drought, floods and extreme heat, ultimately leading to poverty for a significant portion of the global population.

To keep the increase in global warming below 1.5 ºC, global emissions will have to be cut by 45% by 2030.

Australian Environment Minister Melissa Price says the IPCC report is of particular concern to Australia, given its implications for its coral reefs; one of the report’s findings is that climate change will impact on reefs across the globe.

Despite the environmental concerns around the continued use of coal for electricity generation, the Australian government has said it would be “irresponsible” to comply with the IPCC recommendations to stop using coal as a source of electricity generation.

“To say that [coal] has to be phased out by 2050 is drawing a very long bow,” Price was quoted as saying by local media following the release of the report.
“I just don’t know how you could say that, by 2050, you’re not going to have the technology that’s going to enable good, clean technology when it comes to coal. That would be irresponsible of us.”

As it stands, coal and gas account for about 85% of electricity generation in Australia, with most of the country’s grid powered by black and brown coal.


Australia, which ships 80% of the thermal coal it mines to foreign markets, is the world’s second-largest exporter of the fuel. In 2017/18, it exported some 203-million tonnes of thermal coal, valued at about A$22.6-billion.

In 2018/19, Australia’s thermal coal export earnings are forecast to grow to a record A$26-billion, before declining to A$20-billion in 2019/20, according the Office of the Chief Economist.

This office has conceded that technology would play a critical role in the outlook for thermal coal demand; potential game changers consist in the operational flexibility of coal-fired power to complement the variable nature of wind and solar energy supplies, as well as the development of commercially viable carbon capture and storage (CCS) facilities.

As a signatory to the Paris Agreement on climate change, Australia is actively pursuing a reduction in its emissions, despite its continued reliance on coal.

Price notes that the country remains on track to beat its 2020 emissions target.

The latest report from Australia’s National Greenhouse Gas Inventory shows that the country’s total emissions, which comprise 1.3% of global emissions, were 2.4% below 2000 levels and 11.7% below 2005 levels in the year to June 2018.

“Our Paris commitment requires Australia to be 26% to 28% below 2005 levels, and this demonstrates solid progress in meeting that target in 2030,” Price says.

Both emissions per capita and the emissions intensity of the economy were at their lowest levels in 28 years in the year to June 2018. Since peaking in 2009, electricity-sector emissions have declined by 13.8%.

“This continued decline is being driven by the unprecedented uptake of renewable energy. The Clean Energy Finance Corporation has invested A$6.6-billion in projects worth A$19-billion.

“There was a 14% increase in renewable-energy generation in the national electricity market to September [2018]. This will continue to grow, with solar and wind generation projected to increase by 250% in the next three years,” Price highlights.


Since 2013, the Australian government has committed over A$220-million to support energy storage technologies, while also pledging to spend a baseline A$108-million on research and development under the global Mission Innovation banner, focusing on renewable energy, energy storage, fuel cells, smart grids, energy efficiency, nuclear and CCS.

The World Coal Association has backed plans for the development of CCS, stating that the IPCC report does not emphasise the importance of CCS.

“About 75% of the world’s energy still comes from fossil fuels and, with the world’s energy demand set to rise, fossil fuels – including coal – will continue to power up many economies,” the industry body says.

“Given the continued role of fossil fuels, it’s essential that we support countries to use zero-emission technologies like CCS, which allows them to meet climate targets, while, at the same time, meeting economic imperatives.

“We’ll be more successful in meeting climate targets if we focus on addressing emissions instead of trying to get rid of a fuel that many rely on for economic development.”

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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