Targeting a less carbon intense energy future for Australia
Transcript of Targeting a less carbon intense energy future for Australia
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Peter Laver Vice-President
Academy of Technological Sciences and Engineering
Targeting a less carbon intense energy future for Australia
IEC 2011 Open Session Energy Efficiency and Renewable Technology
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Thursday, 25th March 2010, 1.00pm
1. Australia faces a major challenge if it is to drastically reduce the carbon intensity of its energy sector.
2. Over 90% of electricity generation is hydrocarbon based, including nearly 80% from coal.
3. Currently government policy rules out nuclear power and hydro resources in a dry continent are already fully utilised.
4. Long distances between major consumers present an additional challenge for a distribution grid which includes intermittent generation sources.
Overview
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• Australia consumes over 6,000 petajoules of energy annually.
• Australia produces over 18,000 petajoules which means allowing for oil imports nearly 70% of energy produced is exported.
• Energy exports are valued at around $80 billion per annum.
• Reducing CO2 emissions from coal is a national priority for the domestic power industry but also to maintain resources exports.
Energy Production, Consumption and Export
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Carbon Capture & Storage
Image reference: CO2 CRC
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3.2. Sources of Geothermal Energy
Reference: Australian Geothermal Energy Association Inc. http://www.agea.org.au/geothermal-energy/about-geothermal-energy/
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Department of Resources, Energy and Tourism Energy in Australia 2011 p13 http://www.ret.gov.au/energy/Documents/facts-stats-pubs/Energy-in-Australia-2011.pdf
Australian Energy Consumption by Source 1973 - 2009
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Department of Resources, Energy and Tourism Energy in Australia 2011 p1 http://www.ret.gov.au/energy/Documents/facts-stats-pubs/Energy-in-Australia-2011.pdf
Australian Energy Production by Source 1978 - 2009
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Department of Resources, Energy and Tourism Energy in Australia 2011 p1 http://www.ret.gov.au/energy/Documents/facts-stats-pubs/Energy-in-Australia-2011.pdf
Australian Energy Flows (Petajoules) 2008-09
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Department of Resources, Energy and Tourism Energy in Australia 2011 p21 http://www.ret.gov.au/energy/Documents/facts-stats-pubs/Energy-in-Australia-2011.pdf
Australian Electricity Generation by fuel 2008-09
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• Significant focus on renewable energy with target of 20% by 2020 through renewable energy certificate (REC) scheme.
• Carbon tax being introduced but is a matter of political contention. Initial price $23 per tonne.
• Plan is to move the tax to an emissions trading scheme within 3 years of commencement.
• Tax aims at inducing investment in low carbon technology and energy efficiency.
• Tax proceeds used to compensate disadvantaged and, to an extent, stimulate investment.
• Electricity prices will rise substantially.
Current Energy Policy Elements
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ATSE (2010) Low Carbon Energy Figure 5 p12
Australian wholesale electricity prices to 2050
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• In the short term there is likely to be a substitution of coal by gas while longer term solutions are sought.
• Wind and solar will continue to expand with some dispute as to maximum practical levels for grid security but probably no more than 30% without major investments in storage.
• Development efforts will continue for hot rock geothermal and carbon capture and storage
• Costs and learning curves can be debated but will see power costs increase by a factor of 2-3 by 2050.
Future Energy Supply Scenarios
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ATSE (2010) Low Carbon Energy Figure 6 p13
Levelised cost of electricity - 2020, 2030 & 2040 (ranked for 2040)
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Technology Leaning Curves
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2010 2015 2020 2025 2030
Capi
tal R
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PV
Wind
CST
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Optimising the Energy Portfolio • ATSE has attempted to asses the future relative
attraction of different energy technologies given the wide variation in – – Levelised cost – Carbon price – REC value – Learning curves
• An Option Value can be calculated for each technology for a particular year, the higher values justifying more preliminary development expenditure.
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Options Space Diagram
ATSE (2010) Low Carbon Energy Figure 11 p23
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Options for different technologies - 2040
ATSE (2010) Low Carbon Energy Figure 12c p26
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Options for gas based technologies showing trajectories from 2020 - 2040
ATSE (2010) Low Carbon Energy Figure 12c p26
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Investing in Energy Technologies • The Option Value approach can only act as a guide to a
future technology portfolio. • The approach allows different assumptions and
scenarios to be compared. • Actual investment will be determined by site
considerations – location, transmission costs, environmental approvals, etc.
• Intermittent generation sources will need to factor in reserve spinning capacity and/or storage.
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Conclusions • The challenge Australia faces in reducing its carbon
dioxide emissions is considerable, far greater than countries less reliant on fossil fuels and with nuclear power available.
• The historic competitive advantage the country has enjoyed from low energy costs will disappear.
• Large scale investment is required to develop and deploy the required new technologies.
• Ideally the proceeds from pricing carbon should be directed towards supporting the investment required to reduce emissions.