SA Mines and Energy Journal : April-May 2010
APRIL/MAY 2010 SA MINES & ENERGY JOURNAL 23 OPINION Areport by Vivid Economics places Australia last out of the developed nations of the G20 in our ability to compete in a low carbon global economy. Isn't coming last against the rules of being Australian? We didn't come last at the 1976 Montreal Olympics, but our lacklustre performance spurred us to build a sports institute, support it with sustained funding and enthusiasm, and re-emerge as a powerhouse in international sport, with a model that other nations have since sought to replicate. That was a matter of pride. This is a matter of quite a bit more. But it's precisely that fervour and determination Australia needs to channel if we are to get to the front of the global economy this century. The issues behind the figures are straightforward. A high- carbon domestic energy supply, an over-dependence on cars and liquid fossil fuels, and seriously carbon-intensive exports means every other developed nation makes more per unit of CO2e than we do. Australia needs to put in some serious work to get a lot trimmer with its emissions intensity. Firstly, we must realise that just because we've got a lot of coal, doesn't mean the world has to keep buying it. Former Saudi Arabian oil minister Shiek Zaki Yamani once commented that "the Stone Age didn't end because the world ran out of stone, and the Oil Age will end long before the world runs out of oil" . The coal age will end when other energy sources become more attractive for a range of reasons. That time is looming. When we talk about coal we hear a lot about China. It surprised me to learn that only 1 per cent of Australia's coal exports go to China. It is the industrialised nations of Japan (46.3 per cent), Korea (12.8 per cent) and the European Union (12 per cent) that buy the most. These nations are first in line for cuts in emissions. As for China, it has committed to providing 15 per cent of its energy from renewable sources by 2020, a target just 5 per cent below our own. If carbon capture and storage from coal can be shown to work, so much the better. The Carbon Capture and Storage Research Institute is the world's most focussed group for developing this technology. It has a goal of 20 large-scale carbon capture and storage projects worldwide by 2020. That'll be 20 down, 597togointheUSalone.Iam not opposed to this technology outright, but I think it has to put up pretty quickly if coal is going to have anything like the future Australia currently seems to hope it will. Assuming large-scale CCS could become a reality in Australia, there is no avoiding the cost. Lamenting the expense of lower carbon or renewable energy sources misses the point. The days of cheap power with CO2 pouring from the stack are numbered, and it's time to plan around higher power prices. This stone may not have run out, but its age could be coming to an end. It may be South Australia that leads the developed world in cleaning the energy supply. Here, the successful integration of 48 per cent of Australia's total wind-power capacity has led to a renewed push for an increased state target of 33 per cent renewable energy generation for the state by 2020. This will exploit SA's generous endowment of wind, ocean, geothermal and solar resources. Energy from biomass from our significant agricultural industries may provide opportunities for decentralised production of heat and power in regional centres. At the same time, South Australian gas giant Santos is imploring the Government to accelerate away from coal and instead employ natural gas as a baseload power source. Combined with the revised renewable target, this could halve the emissions intensity of our local energy supply by 2020. Don't look now, but that's starting to sound very competitive indeed. Energy generation from natural gas also requires less than one third of the water required for equivalent coal generation. Given that we seem committed to consuming energy to make water through desalination, it would seem sensible to consume less water to make energy in the first place. The energy of the future will come from a suite of low or no-carbon sources, varying from region to region. But whatever the mix of large and small-scale renewable, natural gas, nuclear (if it is ever accepted) or that still-hopeful vision of clean coal, there is a massive investment required in the research and development of energy sources themselves, the market and regulatory conditions to support their deployment, and the infrastructure required to capture and move energy to where we need it, when we need it. The alternative for Australia? Languishing in last place. Just not our style. Governments need space for this ambition to be realised. Every organisation must measure its carbon footprint, pinpoint the areas for attention and aggressively manage energy as a variable cost with scope for savings, rather than an overhead to be accepted. There remains massive scope for reaping additional profits from aggressively pursuing efficiency. From one gold medal in the Montreal, we ran rampant in Sydney in 2000, winning more gold per capita than any other developed nation bar Norway. We've got a bigger challenge on our hands here, but victory will be all the sweeter. It's time to leave the Stone Age behind and embrace a new future in which we can -- yet again -- punch above our weight in the global arena. Leaving the Stone Age Australia needs to go for gold when it comes to reducing carbon emissions and increasing its energy mix, writes Ben Heard, Director of ThinkClimate Consulting. Times have changed ... and the end of the coal age is looming.