MELBOURNE — The Australian Government’s Clean Energy Future plan is to meet the emission reduction target of five per cent below 2000 levels in 2020, and 80 per cent below 2000 levels in 2050 while the economy continues to grow. In an effort to reduce Australia’s pollution emissions, the Australian Government is investing more than (AUS)$5 billion in developing and commercialising clean energy technologies.
The Grattan Institute, an independent public policy think-tank, has released a report which assesses the technical and economic viability of seven prospect technologies which generate electricity with near-zero emission. They are wind, solar PV, concentrating solar thermal, geothermal, carbon capture and storage, nuclear and bioenergy.
The report, No easy choices: which way to Australia’s energy future (download pdf 664 KB) looks at the current performance and future potential of each of the seven technologies, and the changes that are needed for each to be deployed at a large scale and at a sufficiently low cost.
Below are some key points for the seven technologies from the Technology Analysis (download pdf 12.7 MB) which accompanies the main report.
1. Wind Power
- Wind power is the only low emission power technology available to Australia today that could be ready for rapid scale-up within a short period of time at a cost within our key benchmark of (AUS)$100 to (AUS)$150 per megawatt-hour.
- The low correlation between wind energy and electricity demand means it faces limitations which require Australia to develop system integration capabilities and/or other low carbon electricity options to complement it over the longer term (beyond 2030).
2. Solar Photovoltaic Power (PV)
- Solar PV is taking on a larger role in Australia’s energy mix, generally as packages of solar cells combined into systems small enough to be mounted on a household rooftop. Falling costs combined with government support have seen PV installations jump dramatically: by 360% in 2008-2009 and a further 500% in the following year.
- Using off-the-shelf technology, PV is already capable of generating enough electricity to exceed Australia’s foreseeable needs. PV is modular – meaning it can be rolled out in small units – so it can be located in many places at once, and is easily upgraded with technological improvements.
3. Concentrating Solar Power (CSP)
- CSP has great potential in Australia. The technology makes use of the component of sunshine that is known as Direct Normal Irradiance, of which Australia has a vast resource, and the flat land needed for CSP. In theory, a solar farm measuring 50 square kilometres could meet all Australia’s energy needs.
- At present, CSP costs more than many other low-emissions generation technologies. But engineering and new manufacturing capability assisted by deployment and learning-by-doing could significantly reduce costs.
4. Geothermal Power
- Fundamental engineering challenges remain for the underground operations of geothermal energy, particularly for resources in deep granite (Hot Rocks). The key issues are repeatedly creating effective heat reservoirs, improving drilling practices and equipment and enhancing flow rates.
- As the geothermal sector expands, there is the potential for community concern regarding the technologies being applied and any potential environmental impact. This has been the experience with coal seam gas developments in recent years. Active government attention to community concerns and development of appropriate regulatory frameworks are needed to provide certainty for all stakeholders
5. Carbon Capture and Storage (CCS)
- CCS could contribute significantly to reducing global and Australian emissions. It is the only technology that can address CO2 emissions from the coal and gas-fired power stations that will be in service over the next 40 years and beyond.
- Lack of information about geological storage options for CO2 is a significant barrier, both globally and in Australia. CCS cannot be deployed in Australia without greater knowledge of potential storage sites, and the lead times to produce such information will be long. The fact that the information will become public may discourage the private sector from investing in it, so government support for acquiring information to identify and describe potential storage sites may be justified.
6. Nuclear Power
- Nuclear power has the technical potential to meet a very large proportion of Australia’s electricity needs. The economics of nuclear power in Australia are uncertain. New, safer and more efficient reactor designs are on the market. Yet new-build, commercial nuclear power is still subject to economic and technical performance uncertainties. For Australia, the scope to draw on experience from overseas is limited.
- Nuclear power could be very cost-competitive with other low-emissions technologies. But the private sector may struggle to finance nuclear power plants without government support. The long-run cost estimates for nuclear power broadly match current estimates for several other low-emissions technologies. However, major credit analysts consider that private companies are, at present, unlikely to accept the full risk of building a new nuclear plant. If they do, finance is likely to be high cost.
- The available energy from biomass globally and within Australia is large and the technology to exploit it for electricity is available and well understood. Bioenergy is similar to fossil fuels in that the energy supply and output can be readily controlled with less susceptibility to diurnal weather variation (although seasonal variation can be a potential issue).
- For biomass to represent a significant source of electricity supply (10% or greater) will require usage of agricultural residues and dedicated Bioenergy crops (that do not substantially compete with food and fibre production) for which there is little experience in Australia. These sources could enable Bioenergy to provide more than 10%, but probably less than 20%, of Australia’s electricity supply.
According to the report, “each of these technologies might materially contribute to Australia’s future energy mix but all face obstacles to achieving their full potential.” Furthermore, none of the technologies, alone or together, can produce power at a scale and at cost similar to today’s electricity.
The Grattan Institute calls for governments to reduce the costs of low-emission technologies, and to remove barriers to deployment, such as transmission connection hurdles and subsidies to incumbent technologies.
Mr Tony Wood, Grattan Institute’s Energy Policy Program Director, said that while markets must be a primary mechanism by which Australia transforms it electricity supply, governments had to introduce new policies to support the carbon pricing scheme.
“There are no quick fixes or easy choices for Australia’s energy future,” Mr Wood said. “How governments should step in is an acute intellectual and policy challenge. Yet Australia’s move to a low-carbon future will be too expensive unless they do.”
The Grattan report was written by the Grattan Institute team: Tony Wood, Program Director, Tristan Edis, Research Fellow, Helen Morrow, Associate, and Daniel Mullerworth, Associate.
Photo: Charles Cook