ANU Energy Update
The ANU energy update was held on Tuesday 29th November 2016 in front of a packed house at the Manning Clarke Theatre. In an unfortunate opening to proceedings Josh Frydenburg began by calling form more gas (read: fracking) to be supplied to the Australian energy market and for export overseas. Thankfully there was some spirited heckling from the crowd.
Part One: 2016 world energy outlook – Ian Cronshaw, International Energy Agency (IEA)
The first properly credentialed speaker of the day was Ian Cronshaw from the International Energy Agency. Ian spoke of the massive transformation required from the energy sector to stick to <2 degrees warming. Carbon pricing mechanisms are now universally acknowledged by economists as the most effective form of achieving decarbonisation. In order to stay below 2 degrees warming, it is estimated that the price of carbon must reach $140/ tonne in developed countries by 2040.
Oil has seen a massive reduction in investment, with low uptake of new oil projects. The Middle East’s share in world production will continue to increase under this scenario. A demand-supply gap in the oil market could open up in a few years due to subdued upstream investment. This sets the stage for another boom and bust cycle for oil. Projecting to 2040, the aviation, freight, and petrochemical sectors will continue to increase their demand for oil, as there are few alternative options at this stage. Prior 2040 India and China are set to become the world’s major oil importers.
The outlook for LNG is rosy if you’re a gas producer or investor, not so much if your species relies on climate stability for survival. A 30% rise in LNG production is predicted by the year 2040, with most of this increase in production coming from the USA. 2040 will see a still growing gas market, with LNG taking a larger proportional share in production than gas pipeline gas soon after 2030.
In promising news, 2014 saw Chinese coal use peak. This peak looks to be permanent, however, Chinese coal use is only forecast to decline at 0.5% per annum, with decrease in total demand not overly substantial by 2040. Coal demand in India and South-East Asia is set to continue to grow until at least 2040, with most coal infrastructure in these regions being that of the low efficiency type.
Overall, under current scenarios, and the new policy scenarios, coal, oil, and gas demand continue to grow.
On a brighter note, 2015 saw the additions of renewable capacity into the power sector outweigh the additions of new coal, gas, and oil combined. Under 2040 scenarios, electricity is set to make up most of the gains in renewables production, with renewable infiltration into heat and transport not as highly developed and therefore contributing less. Unfortunately, some scenarios place renewable and nuclear into the same category of ‘low carbon’ production.
The central scenario played out by the IEA is that energy sector carbon emissions will continue to increase. Under a <2 degree scenario carbon emission produced by the energy sector have to reduce by 50% by 2040, and reach zero by 2100. Our current pledges under the Paris Treaty fall well short of even a two degree target. Under a 1.5 degree warming scenario, which is still no gift to humanity, energy sector emissions have to be net zero by 2040.
Electricity demand is set to grow by 66% by 2040. Under the business as usual scenario, a 66% increase in demand will result in an estimated 50% increase in emissions; whilst under the new policy scenario stipulated by the Paris agreement, the increase in demand will still result in a 10% increase in emissions. It is worth noting here that both of these scenarios still place us way above 450ppm atmospheric carbon dioxide; levels which ice-core data shows that the atmosphere has not even come close to in the last 800,000 years, and which boron and carbon isotope ratios suggest haven’t been present in the atmosphere since 20-30 million years ago (before humans evolved).
Renewables based power additions continue to grow. The two main factors in this growth are a reduction in costs, and the implementation of enabling policy measures. Stable policy incentives are identified as the most important factor. Renewables are quite capital intensive to construct but have low and stable running costs which is a huge advantage. This makes them desirable and more achievable for developed countries, whereas developing nations, such as India, struggle to attract capital and therefore struggle to attract renewables as coal is currently a far cheaper for them.
Addressing a question from the crowd as to ‘why the IEA’s projections stated that nuclear ‘has’ to be part of the long term mix’ Ian responded that in some places we might ‘max out’ on renewables without meeting demand, and predicted high carbon prices into the future will see an incentive for nuclear. He also touched on the massive amount of water use which is needed to cool nuclear reactors, a retort from the crowd was that ‘we can cool the nuclear power plants with large solar plants’, unfortunately Ian missed the joke.
Not that it was expected but it should be noted that there was absolutely no mention of curtailing economic growth and overall energy demand in order to lower emissions.
Hugh Sadler spoke about the relevancy of the IEA report to Australia. As the world begins to decarbonise, is Australia following suit? Well, not really. Unfortunately Australia’s emissions are rising faster than most other OECD countries. We are severely lacking on policy leadership on a national level. New policies will certainly be needed to meet the commitments made under the Paris Treaty. Australia is predicted to remain the world’s largest coal exporter until at least 2040. However, Australia can no longer point to continued growth in coal demand as an excuse for digging more and more of it out of the ground. There is great opportunity for Australia to lead innovation in the renewables sector, given our strong wind and solar resources.
Part Two: Progress in thermonuclear fusion energy and the construction of ITER (the international experimental reactor) – Jean Jacquinot, ITER
Jean Jacquinot gave an update on nuclear fusion (not fission) and the construction of ITER. ITER is a collaborative project of numerous nations with support from CERN. Jean stressed that ITER is still very much a scientific experiment, with a realistic delivery date not until after 2050.
The aim of ITER is to produce energy massively without producing CO2 and to be a large baseload supplier of energy. To date, $13 billion euros have been invested into the project by participating countries. The main incentive of nuclear fusion technology is that some countries are not blessed with great renewable resources, and the potential of ITER to have a baseload lifetime far superior to any existing systems.
Business as usual scenarios put us between 3.2-5.4 degrees of average temperature increases globally. The Paris agreement is only a first minor step towards ensuring a safe climate, and we need to be far more ambitious; for instance, we will need negative net emissions after 2060 in order for <2 degrees warming.
Modern day nuclear energy is based on nuclear fission, which starts with large stable nuclei, which are then split to produce energy and radioactive fission products. This also produces a chain reaction which needs to be (and sometimes isn’t) controlled, but enough of that.
Nuclear fusion, which I must reiterate we do not yet have a functioning model of, occurs when two light atomic nuclei (hydrogen isotopes) are accelerated to extremely high temperatures of up to 200 million degrees and fused to produce helium, a neutron, and energy. In effect ITER will be a small scale sun machine on Earth. One problem at the moment is that a lot of energy is spent in order to produce the reaction. The other problem is that nuclear fusion still produces radioactive waste; this is infinite times the amount of radioactive waste than that which is produced by wind and solar. This fusion produced radio toxicity does decay far quicker than that produced by fission machines, but the fact remains that radioactive materials are highly dangerous pollutants. Maybe nuclear fission is best left to the sun?
Part Three: Climate Change Response Post Paris Climate Agreement – Nerelie Abram – ANU Climate Change Institute
Climate Change Update – Mark Howden, ANU Climate Change Institute
We are receiving varied, numerous, and powerful Earth-system signals which tell us that our climate is changing. Fortunately climate science has reached a point where we can now tell what levels of carbon emissions will keep us below certain levels of global average temperature increases. Unfortunately these recommendations are largely ignored. Recently we (planet Earth) had 16 months running of record breaking high temperatures. 16 world records set back-to-back! If we single out just the land component of global temperature increases since industrialisation we are already at 1.5 degrees; in fact globally, including oceans, we were at 1.5 degrees for large parts of this year.
Closer to home, Southern Australia’s average hot years in the 1960’s are now equal to our present-day average cold years. We are venturing outside of our historical climate envelope. Rainfall zones are rapidly moving south while our atmosphere is becoming a bigger bucket of water (water vapour is a very powerful greenhouse gas). The severity of cyclones and storms are increasing, and climate related insurance events are on the rise, as are extreme fires. Sea level is rising, and the sea water that is rising is far more acidic than ideal. Civil disturbance, migration, food insecurity, pest and disease problems, natural systems impacts etc. etc. they are all on the rise. The list goes on and on. Despite all of this, only 46% of Australians consider climate change is happening and is human influenced, 38% say it is happening but is natural; while 8% say that climate change is not happening (there was no indication as to the thoughts of the other 8%). Climate change is a wicked problem, it enables psychological distancing all too easily (where the problem is seen as too far away in the future, or space). Encouragingly, climate adaptation is now supported by ¾ of Australians; and the last three years has seen a marked increase in the support for both climate action and a price on carbon.
Australia’s commitments under the Paris agreement equate to approximately 3 degrees of warming. Not good enough. Encouragingly, through a ratchet mechanism, any new targets have to be more stringent. Targets are to be re-evaluated every five years, with far better monitoring and verification of compliance with these targets being implemented.
Current temperature projections for Australia range from 2-6 degrees. Six degrees would be like moving the climate of Roma in central QLD to Melbourne. Drastic. Models show that under the Paris targets scenario the frequency of heat stress days will increase significantly. Every day of the year will be a heat stress day in Darwin; while heat stress days in southern Australia could increase to 30% of the year. Predictions of runoff show that runoff could be reduced by up to -25% per degree Celsius of warming. Unfortunately these predictions seem to be very much inadequate, as Perth has already experienced a 90% reduction in water runoff into their dams.
This goes to show that climate change adaption is increasingly more important. At the moment we are almost entirely reactive. Australia has actually de-invested in climate adaptation research and delivery.
Frank Yotzo – decarbonisation of the world economy
Over the last three years CO2 emissions have increased by 0.6% while the world economy grew at an average of 3%; we are starting to see an effective decoupling. The previous decade saw 3% and 4% growth respectively. These numbers have come from a structural change in the world economy, growth in low emissions sectors, greater efficiency, and the decarbonisation of energy supply. For Australia to achieve similar results we must transition from coal. The minority of coal produced in Australia is actually used in Australia, it is paramount that we move away from exportation.
Anna Scarbeck – net zero emissions targets
It is promising to know that pathways do exist to limiting global average temperature increases to <2 degrees and also to transition to net zero emissions by the middle of the century. More than half of Australia’s emissions are now covered by net zero emissions goals. This could move to ¾ pending Queensland’s commitments. Corporations are also joining in, with numerous companies publicly committing to net zero emissions.
Part Four – Dominantly Renewable Energy Futures – Kylie Catchpole
The departing champion of renewable energy policy, Simon Corbell, spoke of Canberra’s Journey to 100% renewables, as well as the importance of leadership in demonstrating results. As we all know, the ACT has set targets of 100% renewables by 2020, and carbon neutrality by 2050. It is important to note that these are economy wide statutory targets, not just government based.
The 100% renewable by 2020 goal is well on track; the two main mechanisms which have enable this goal to come to fruition have been a large-scale feed in tariff, and reverse auctioning.
Reverse solar auctioning led to an effective price discovery of $186/MWh, which was lower than economist predicted was possible. This then becomes the new ceiling, as bidders don’t tend to come in and bid higher prices. The second reverse solar auction came in at $178/MWh. This caused the government to lift their ambitions and gave cabinet the confidence to do more, thereby launching large scale reverse auctions for wind three years ago. 2013 saw stalling over renewable policy and targets on a national level, which led to very strong pricing competition with the first reverse auction on wind coming out at $81/MWh.
Most solar and wind projects are outside of the ACT region and its jurisdiction. Generation from interstate has not been problematic, and respective energy ministers have always welcomed projects in their jurisdictions.
Additional benefits from the move to 100% renewables have come from securing local investment in the ACT community. In bidding in the respective reverse auctions, companies had to demonstrate how they would add value to the Canberra community. As a result of this, four wind operation centres have been established in the ACT- managing interstate and overseas wind farms; there has been investment in renewable research and trades training; and a $25 million renewable energy innovation fund has been established. In all over $500 million in total has been invested in the ACT economy. Investment from a reverse auction on wind power has also resulted in a 36MW in battery storage across Canberra as a result of the next gen energy storage initiative.
ACT policy innovation is helping to shape the national debate on renewables and carbon neutrality; they also helped support the wind industry during a time of national policy uncertainty. As a result the ACT government’s actions Victoria has now committed to a large scale reverse auction process. There is strong public support for policy, while long-term contracts and policy certainty have helped drive down costs.
PV and wind have been the runaway winners in the renewables game, and will come to dominate the electricity market. The pricing curve for silicon PV keeps marching down, dropping from 62c to 38c in last year alone. There is also additional infrastructure required on top of the wind and solar farms, such as high voltage DC and AC transmission. Of the 100% renewables planned for the ACT an estimated 90% will come from wind and PV, with the remaining 10% coming from pumped energy storage. This storage will be in the form of off-river closed-loop pumped storage. This is a daily, not a seasonal storage method. In addition, being off-river means there is no need to pay for expensive flood control. This storage will require approximately 0.3% of Murray Darling basin allotment, and storage will not occur in national parks. Pumped energy storage turns a variable PV and wind system into a stable system. The cost of balancing this system turns out to be less than 3c/kWh, with improvements to come.
To aggregate the benefits of 100% renewables and storage the near future will see smart meters control PV and storage, with the potential of having a power plant in the cloud from combined domestic solar PV arrays. Under the 100% renewables target the ACT is set to offset four million tonnes per annum of CO2 equivalent.
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