In the wake of the South Australia blackouts, the Coalition has proposed changes to the Clean Energy Finance Corporation, which would allow it, or essentially force it, to invest in ultra-super critical coal-fired power stations.
But what is the CEFC anyway? And is coal-fired power part of its remit?
What is the CEFC?
The CEFC is a government-owned green bank created in 2012 under the Clean Energy Finance Corporation Act 2012 by the Gillard government to finance the clean energy sector. Tony Abbott tried and failed twice to get rid of the CEFC while he was prime minister.
What is the CEFC’s mission?
The main function of the CEFC is to invest directly (through partnerships, trusts, or joint ventures) or indirectly (through subsidiaries) in renewable and low-carbon technologies.
The CEFC invests in businesses and projects that develop or commercialise clean energy technology, and in businesses that supply the goods or services necessary to businesses that develop or commercialise clean energy.
The CEFC is directed under legislation to develop a diverse portfolio of investments and to only invest in projects with an acceptable, not excessive, level of risk.
The CEFC currently invests in solar, wind (after the ban on wind farm investment introduced by Tony Abbott was lifted in 2015) and bioenergy projects.
Where does the CEFC get its funding?
The CEFC Act created a CEFC Special Account, which receives $2 billion each July 1 for five years from July 2013 from the government. It is expected to be operationally self-funded at the end of those five years through investment returns.
What’s wrong with using the CEFC to fund new coal-powered plants?
Energy Minister Josh Frydenberg wants the CEFC to invest in “carbon capture and storage”. Carbon capture technology is one of two energy sources the CEFC is currently prohibited from investing in (the other is nuclear power). This is in part because the CEFC cannot invest in any project that doesn’t reduce emissions by 50% or more. The government would have to relax the CEFC’s 50% cap to allow investment in the proposed high-efficiency, low-emission coal-powered plants.
Isn’t ‘clean coal’ an oxymoron?
There are two main “clean coal” technologies. Carbon capture and storage is done by catching the carbon emissions before they are released into the atmosphere by forcing the exhaust through a liquid solvent that absorbs the carbon dioxide and then burying the compressed waste. Problems with the technology include high cost, unproven technology, and logistics of disposing of the waste.
High-efficiency, low-emission power stations are also labelled as “clean coal”, though “cleaner coal” is a more accurate term. These power stations operate by burning coal at ultra-high levels to increase efficiency and reduce carbon emissions. Malcolm Turnbull says they are essential to securing Australia’s energy future. Opposition environment spokesman Mark Butler says they’re twice as expensive as gas-fired power and more expensive than renewables.
Why does the government want to invest in carbon capture?
The government is planning to repeal the ban on carbon capture, as well as urging the CEFC to invest in ultra-super critical coal power plants. The CEFC has said that it would be resistant to investing in new coal-fired generators, meaning the government would have to change the CEFC’s investment rules if it wants that to happen. Frydenberg is considering doing just that, and says that it would be possible, since the CEFC is the Clean Energy Finance Corporation, not the Renewable Energy Finance Corporation. Frydenberg told ABC’s Insiders program that the goal was to lower emissions at the same time as stabilising baseload power so Australians don’t experience more blackouts.
CEFC chief executive Oliver Yates has said that it would be a risky move for taxpayers due to the fact that renewable energy costs are on a downward trend and the proposed ultra-super critical coal plants are unlikely to have a long-term path. Yates has also said that it would be difficult to find a private operator or commercial investor in the current market and there’s no point in building the coal stations, which are likely to provide energy at a higher cost.
Clearly it should not.
Not only are coal powered stations not clean, it surely represents too risky an investment?
Carbon capture and sequestration (CCS) has always been nonsense. Ask any geologist if it is possible to pump, every year, 40 gigatons of CO2 somewhere underground and keep it there for geological time? Of course the answer is no, there is far too much of the stuff. It can only ever be an excuse to continue emitting. It is an ostentatious token reduction.
However the left does not dismiss CCS out of hand, because they need the same excuse so they too can continue to consume gas, full blast. Both accept that gas can provide the heavy duty power that industry needs, and the reliability for homes to survive the extremes of weather that renewables cannot. Most of the energy in a maximum-renewables grid must be produced by its backup, gas. Gas is hostile to the greenhouse so it, too, is a token reduction, relative to coal.
All of the techniques that the CEFC is allowed to support, fail the 50% requirement. It is quite clear that both sides want to display token reductions.
However, our grandchildren will not be impressed – they need us to decarbonise, completely. Let’s put old ideology aside and ask the CEFC to tell us how.
Pounds of CO2 emitted per million British thermal units (Btu) of energy for various fuels:
Coal (anthracite) 228.6
Coal (bituminous) 205.7
Coal (lignite) 215.4
Coal (subbituminous) 214.3
Diesel fuel and heating oil 161.3
Gasoline 157.2
Propane 139.0
Natural gas 117.0
https://www.eia.gov/tools/faqs/faq.cfm?id=73&t=11
(Brown Coal is lignite, black coal is bituminous.)
This chart just shows the emissions per weight of the fuel burned. In the context of power stations, coal is burned to create steam. A high efficiency coal plant may be of the order of 45% efficient.
Natural gas can be burned in the same way, at roughly the same efficiencies. That way the
natural gas does not reduce emissions by 50%, but nearly so.
But natural gas can be burned in gas turbines, at similar efficiencies, or in combined cycle gas turbine plants (gas turbine + steam turbine) at greater than 50% efficiency.
But I am also not certain that the CEFC has ever helped fund a natural gas plant.
Regarding solar and wind generators, these will reduce the CO2 output by more than 50% over their life.
Coal is not clean, no matter how many time these deceitful bastards try to whitewash it. In fact, it is as black (just) than their principles and morals.
As we know, the technology that Just Fry-the-Burbs wants to steal Clean Energy Funds for is not proven and neither is Carbon capture a sane idea, in the book of anybody (with a passing understanding of science, finance and logic).
Clearly the Coal-ition is under the spell of the some black magic maestro, likely from the funding arm of the Filthy Fossil Fuel lobby.
Sophie – your explanation of “high efficiency, low emission power stations” is a little vague and inaccurate. Turnbull in this regard was referring to ultra supercritical (USC) coal fired plants: that is, plants that operate well above the supercritical point, or that combination of temperature and pressure where water liquid and vapour both act like fluids. The coal burning process is the same in supercritical and ultra plants, the difference is that efficiency climbs from about 36% to about 44% – actually lower than large diesel reciprocating plants and combined cycle gas turbine (CCGT) plants, so “high efficiency” is a misnomer, as is “low emissions”, since emissions are still well above CCGT. So not high efficiency or low emissions in reality.
You further quote Mark Butler as the source of the claim that they are twice as expensive as subcritical plant, but if you are looking for an authority to quote then better to quote the US Energy Information Administration Nov 2016 “Capital Cost Estimates for Utility
Scale Electricity Generating Plants” – USC at USD3,636 vs CCGT at USD978 or 3.7x for a plant of lower efficiency and higher emissions. Even with gas prices effectively resulting in SRMC for gas of AUD50/MWh higher, the USC is more expensive on a levelised basis, if you can find someone to take the risk that it will become a stranded asset in 10-15y time.
I am surprised that the clean coal concept is going around again. Former Queensland Premier Peter Beattie was enthusiastic about clean coal 10 years ago. see http://statements.qld.gov.au/Statement/Id/52942
He organised funding and support but what was achieved?