Climate change

August 13, 2010

Energy in Australia in 2030

By Barry Brook

On Aug 4th I hit the road once again, this time to take the great American road trip for 13 hours, from Sacremento to Idaho Falls, with Tom Blees, leaving bright and early. I had a fantastic visit to UC Berkeley and the lab of Prof Per Peterson, and will have lots more to say about this, and my upcoming Argonne National Lab visit, in some ‘diary’ entries once I get back to Australia.

For now, I’d like to present an essay I wrote for COSMOS magazine for their issue ‘Seven Visions of the Future‘ (No. 33). To get your copy of the 2030 special issue, and to read the other great articles in this future gazing exercise, order it from here:

WHAT WILL THE WORLD BE LIKE IN 2030? Leading thinkers – including Jeffrey Sachs, Sir David King and Alan Trounson – forecast the next 20 years of medicine, energy, transport, cities, food, and communications. From driverless cars to regenerative organs, the world of the next 20 years may look very different from today.

My sincere thanks to COSMOS editor Wilson da Silva for allowing me to reproduce this article.

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ENERGY: A REAL TURN ON

The time has come for society to face up to the true cost of our energy consumption, says Barry Brook. By 2030, nuclear may be leading the march.

In a modern society like Australia in 2010, we take energy for granted. Whether it be flicking on the light switch and television in your house at night, cranking up the air conditioner to take the edge off a hot day, or turning on the cooking hotplates, your invisible energy slave is always there. More pervasively, it is working behind the scenes to deliver you food, clothing, and manufactured goods. It allows you to travel rapidly from place to place, by car, rail or plane. It is no exaggeration to say that cheap and readily available energy constitutes the most fundamental basis of our economy.

Yet, in many respects, we are living in a transitory dream world. The reason is simple. The way we are generating our energy is unsustainable – both environmentally and economically. Fossil fuels – coal, oil and natural gas – provided the concentrated sources of energy we required to build our great industrial and information enterprises. But this was a Faustian bargain, and the devil’s due. With the looming threats of dangerous climate change, oil shortages as demand exceeds supply, and rapidly growing demand for an increased quality of life from the developing world (that 80% of humanity – more than 5 billion people – who live on less than $10 a day), a new energy revolution must begin. By the year 2030, it will need to be in full swing, or there’ll be serious consequences.

The next 20 years marks a defining moment in world history. I don’t say this flippantly. Global society must make the choice to set itself on the path to a secure and non-polluting energy future, or it will stumbles and regress. Either way, by 2030, we’ll very likely know whether we’ve collectively been able to chart the right course. Now is certainly the time to make the difference.

Worldwide, a variety of important energy choices will be made during this next decade. In Asia, especially the rapidly industrialising mega-economies of China and India, a huge amount of coal-based electricity infrastructure is being built. This must be phased out. Aside from global warming, it causes chronic regional air and water pollution that consigns millions to an early death each year. Developing countries can see that an ongoing dependence on coal, gas and oil is not in their long-term interest, and are vigorously pursuing alternative options such as nuclear and hydro power. Thanks to clean energy credits from the developed world, they are also deploying wind and solar. In the medium- to long-term, it difficult to know which technologies will come to dominate in these new economies, but cost and scalability will be amongst the most important determinants.

What of Australia? I want to focus in this essay on ‘stationary energy’, which is predominantly delivered in the form of electricity, this being a particularly convenient and flexible ‘energy carrier’. Clearly, the energy replacement problem is broader, but even for transportation and agriculture, it is likely that we will eventually have to ‘electrify’ most of their operations in a world beyond oil, even if it involves using electrical power plants to generate synthetic fuels such as ammonia and methanol.

Today, in 2010, the majority of Australia’s electricity is generated by burning black (55%) and brown (22%) coal, with smaller contributions from natural gas (14%), hydro dams (7%) and wind (1%). Our installed capacity adds up to about 50 gigawatts of power and this stationary energy production results in the release of 200 million tonnes of carbon dioxide each year.

Under the ‘business as usual’ scenario outlined by the Garnaut Climate Change Review, demand for electricity is expected to rise by a further 60% by 2030. In a recent statement by the federal resources and energy minister in March 2010, it was projected that Australia will need to invest a whopping $100 billion over the next decade in electricity generation and transmission infrastructure – just to keep pace with escalating demand and to replace old, worn out power plants that are due for retirement. This is policy area that has stagnated for too long, and the situation has now become urgent, if we wish to avoid rolling blackouts and much higher energy prices due to unmet demand.

Still, the pressing need for major investment in electricity supply in the period 2010 to 2030 can also be grasped as the perfect opportunity to launch a revolutionary change in the way we go about generating our power. As I see it, there are four possible energy ‘storylines’ that could be written for Australia over the next two decades:

1. Coal-for-coal, whereby we simply replace our old coal-fired power stations with newer, slightly more efficient models, which then continue to pump out carbon dioxide for another 40 to 60 years.

2. Gas-for-coal substitution, using combined cycle gas turbines to replace baseload (24 × 7) coal, with some minor contributions from renewable energy such as wind and solar.

3. A large renewable energy expansion, with open cycle gas turbines used to provide backup.

4. Nuclear power rollout for baseload, with support from renewables and peaking power gas.

It’s clear that these alternatives are not equally likely. From an economic perspective, as a coal-rich nation which exports hundreds of millions of tonnes of the stuff each year, it would be tempting to take the ‘easy’ short-term course of action and simply build more coal-fired power stations. But this is totally unacceptable in terms of climate change impacts, and further, will become an increasingly uneconomic proposition if a national or global carbon price comes into force at some point in the future. To a lesser degree, the same is true of option 2 – as natural gas prices rise internationally due to burgeoning demand (especially when gas is used to replace oil), energy prices will escalate. Also, in terms of carbon dioxide, a complete coal-to-gas swap out will reduce our stationary energy emissions by less than half, which is way short of the mark required to mitigate global warming.

These problems with the coal and gas storylines would be reduced if it can be demonstrated that carbon dioxide from fossil fuels can be captured, compressed and buried underground in a commercial plant at a competitive price. But right now, that’s pure speculation – no industrial-scale facility is operating anywhere in the world, and almost certainly won’t be within the next 20 years.

The feasibility of option 3, a large push towards renewable energy, is difficult to assess. The current government target has Australia aiming to derive 20% of its electricity from wind, solar, wave and geothermal (hot rock) energy by 2020, driven by legal mandates and large financial subsidies. These policy interventions will inevitably drive up energy prices – at least in the short term – until and unless these alternative energy sources can compete economically with the price of fossil fuels.

Beyond this modest market penetration, there are huge uncertainties. No country anywhere in the world has non-hydro renewables contributing more than a consistent 20% of supply (whereas, by comparison, France derives 80% of its electricity from nuclear energy). Denmark has the highest, per capita, based largely on wind power. Yet even the Danes still rely on domestic coal and imported nuclear and hydro to meet their reliable baseload power needs, and they have the highest power prices in Europe. If Australia is to push significantly beyond the 20% barrier for renewables, to 40 or 60% by 2030 and still further by 2050, we would truly be charting a new, world-leading frontier – one underpinned by stunning advancements in large-scale energy storage, significant overall cost reductions, and some serious ‘smart grid’ technologies to better balance supply and demand and improve the efficiency with which we manage energy use. Anything is possible, but whether renewables can win out in the cost-benefit equation remains a big, unanswered question.

The final alternative is for Australia to become energy copy cats, duplicating the deployment of those technologies that have proven to be economic internationally. This is the most likely way we would move into nuclear power. Although atomic energy has stagnated for the last few decades, this is changing rapidly, with more than 50 new large reactors now under construction worldwide in 2010, and many hundreds more in the late stages of planning and approval. If this next-generation ‘renaissance’ of nuclear power turns out to be as cost-effective as the Asian tiger nations are banking on it being, then it could also turn out to be the clean energy game changer for Australia. But expect plenty of socio-political clashes and economic wrangling before the dust settles!

Only time will tell – both with respect to the final costs of new nuclear, and the ultimate economic viability and scalability of non-hydro renewables with energy storage. Even if the nuclear option is eventually pursued in Australia, I don’t expect a serious decision to be made before about 2016 (that is, two more Federal election cycles). Yet, under such a time-frame, it is conceivable that we could have a dozen reactors operating here by 2030, with many more in the construction pipeline.

Australia’s electricity generation system in 2020 will not be all that different to today. One decade is too short a period to make major changes to critical infrastructure. We will probably have more gas-fired power stations, and may also have retired a few coal plants without replacement. We’ll also have more renewable energy installed – mostly wind – but also some desert-based solar. By 2030, however, things could be shaping up quite differently. My bet is that nuclear power, on economic and logistical grounds, will be the technology most on-track to replace coal.

But then again, as atomic physicist Niels Bohr once observed: “Prediction is very difficult, especially about the future”.

Barry Brook is Sir Hubert Wilkins Professor of Climate Change at the University of Adelaide’s Environment Institute

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