While the Gillard Government puts the finishing touches on the climate policy Prime Minister will apparently not unveil tomorrow at the Press Club, the prosaic reality of a carbon-addicted economy chugs away all around us.
The biggest source of CO2-equivalent emissions in Australia is our power generation industry, courtesy mainly of its reliance on coal. In 2008, according to National Greenhouse Gas Inventory figures, coal-fired power accounted for 31.4% of our entire CO2 emissions. Lower emissions-intensity gas-fired power accounts for another approximately 3.5%. The electricity sector’s share of our emissions has slowly grown over the decade. It was around 33% in 2003.
While we casually refer to the electricity industry, coal-fired power is an unusual sort of industry – one dominated by state governments.
By capacity, around 62% of our coal-fired power industry is owned by state governments. The biggest are the NSW Government’s Macquarie Generation and Delta Electricity, which between them control nearly 9GW of coal-fired generating capacity. The next biggest is Western Australia’s Verve Energy, which controls around 2.2 GW. The Queensland state-owned companies Stanwell, Tarong and CS Energy together control around 5.7 GW.
British company International Power, through ownership of Hazelwood Loy Yang B, controls 2.6 GW and Hong Kong-based CLP owns Yallourn (1480 GW). Alinta controls around 850 MW of coal-fired power out of its overall generation portfolio of about 3 GW. Loy Yang A in Victoria is controlled by a mix of foreign and local interests.
And it is state governments that are driving the growth in coal-fired power. Burning coal to make power is anything but a dying industry.
As Crikey revealed in March, there are plans for up to a dozen new coal-fired power stations across every state except Tasmania, which together would add 7% to our national emissions total from 2008.
In NSW the Bayswater 2 and Mt Piper 2 expansion projects – worth 2 GW each – are controlled respectively by Macquarie and Delta, and caught up in the NSW Government’s Sisyphean electricity privatization process. Both are ostensibly set to be either coal or gas-fired, but the chances of their being gas-fired are remote. The Mt Piper site doesn’t even have adequate access to gas supplies.
And on Monday the WA Government approved three projects involving new or redeveloped coal-fired plants. Resources company Aviva wants to build a 450 MW plant at Eneabba; the Bluewaters expansion plants (400 MW total) at Collie is, according to reports in today’s Fin Review, set to be sold to Verve Energy following the collapse of the Griffin Group, and Verve has also received approval to redevelop and bring back online the mothballed 240 MW Muja A and B plants.
The Queensland Government is also investing in new coal-fired power stations under the cover of as-yet unproven CCS technology. It is putting more than $100m into the Stanwell-owned Zerogen project for a 580 MW coal-fired plant, and Stanwell is working with GE on the Wandoan project, which will use coal from Xstrata’s Wandoan coal mine.
In fact, all new state government coal-fired projects have a thin coating of greenwash. WA Environment Minister Donna Faragher said the new coal-fired stations in WA would have “a greenhouse gas abatement program” that “will require the power stations to achieve continuous improvement in net greenhouse gas emissions.”
While public debate has been, and continues to be, focused on Federal Government climate change policies, state governments have been critical in driving the growth of coal-fired power. They’ve driven growth either directly through state-owned corporations developing new coal-fired power plants, or through subsidies for unproven technologies to mitigate the emissions of new coal-fired plants, or through environmental approvals of new coal-fired plants.
You could see the distraction at work in Faragher’s press release, in which she “re-confirmed that greenhouse gas abatement was best addressed through a national approach and the timing and details was a matter for the Federal Government.”
But it’s not the Federal Government that is driving the growth in coal-fired power. It’s state governments. They should no longer escape scrutiny as the key decision makers in our continuing addiction to coal.
You focus mostly on the domestic coal industry but it’s really the tip of the iceberg of the exapansion in production capacity and our contribution to global CO2 emissions.
The vast majority of the expansion projects on the books and the highest producing coal mines are in the export game, whether they sell thermal coal for power generation or coking coal.
But it’s all good because they’re not our emissions.
So what is industry to use instead of carbon-based fuel?
It is the Feds who are blocking industry’s access to nuclear, not the States. The Feds could quietly remove two pieces of obstructing legislation, and leave it to industry to win the hearts and minds.
In particular, NSW already has nuclear legislation in place, initially covering the Lucas Heights reactor, so energy suppliers there would be ready to begin the transition as soon as the State government gave the nod.
Roger Clifton has it right.
The states cannot determine national policy – they have enough difficulties just getting a train timetable to work.
The national government must remove legislative roadblocks to consideration of nuclear options on the same criteria as all other forms of energy. This, of course, includes cradle to grave, emissions, safety, environmental effects as well as the more readily understood business case of capital cost, operating cost and income projections.
However, at present, we have a hodge-podge of bits and pieces which fail to establish a CO2-e price, support extravagant but essentially tiny and doomed little 1kw solar PV schemes stuck on inaccessible rooftops across the land with hugely subsidised feed-in tarriffs, virtually no policy on gas turbines, long term viability of existing gas and liquid resources, and on and on.
Even the Greens, the only party with a semi-coherent energy policy has its head firmly up its a_se when it comes to nuclear options.
The sooner this country moves to a position where rational analysis of options for base load generation is possible, the sooner the states can support it. They might not like it, but they will fall in line. Imagine the screams if the carbon price was equivalent to the cost of removal of CO2 from the atmosphere… hundreds of dollars per tonne of coal. All bets would be off and the States’ proposals would very quickly be revised.
In closing, feel sorry for state ministers. They are the ones who will cop the brunt of voter dissatisfaction if the power supplies fail, not the private generators or the federal politicians. They are between a large rock and a very hard place.
@Roger Clifton and John Bennetts.
“The national government must remove legislative roadblocks to consideration of nuclear options on the same criteria as all other forms of energy.”
By all means. Of course that means there would never be a nuclear plant built, ever. This would be a rather neat way to simply kill the issue once and for all. There has never in the 50 years history of nuclear power ever been an unsubsidized or economic nuclear power plant built by the private sector. Just look at Obama’s $8B “loan guarantee” earlier this year just to pump-prime the building of a single (twin-reactor) nuclear site!
Luckily, just like the free market will kill nuclear power, it is also killing the building of new coal-fired generators. Finance will be extremely difficult to find when hardly anyone, including the denialists who examine the future energy scenarios carefully, would guarantee the operation of dirty coal plants for their 50 years life. So even without an ETS or a price on carbon, the market still has to factor it in.
I’m still hoping for Bernard Keane to risk proving his innumeracy by giving the figures which would show that Australia should act early to do anything that costs serious money – spent or foregone – (apart from some research which, for some reason, is not already being done better and faster in China or the US) to reduce our CO2 emissions.
In the meantime I applaud John Brumby’s enthusiasm for using as much of Victoria’s brown coal as quickly as possible. He would get a small extra hand from me for repealing the Cain government’s ridiculous early days PC legislation forbidding even research into nuclear power in Victoria.
I think John Bennetts and I could probably find something to agree about if we decided to spend money otherwise diverted to the prolongation of degraded life for demented elderly with self-inflicted illnesses (but not me of course) to preserving the wonders of Australia’s natural environment through nuclear power based provision of ample water supplies for native forest preservation and revegetation. Always interesting to consider what one’s own marginal dollar might be spent on without one just cursing vote buying politicians or PC ignoramuses ….