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Energy security and climate change commitments

What are we doing?

At the 2015 climate change talks in Paris, Australia committed to reduce its greenhouse gas emissions by 26-28 per cent on 2005 levels by 2030. Some say it’s not enough; nevertheless, it’s a significant reduction to be achieved in less than 13 years.

Over this past summer, Australia was hit by heatwaves that sent demand soaring. In South Australia, supply could not keep up with demand and blackouts ensued.

They might have been averted had a gas-fired power plant at Pelican Point been brought on line, but it wasn’t. It lay idle because gas had become too expensive for domestic generation, much of it diverted for the more lucrative export market.

In early March, Prime Minister Turnbull declared Australia had ‘an energy crisis’. This was in response to a report by the Australian Energy Market Operator (AEMO) that warned of further blackouts unless something was done to secure gas supplies.

Meanwhile, Chief Scientist Alan Finkel was working on his security review into Australia’s national electricity market (NEM). In his preliminary report in December, he referred to South Australia’s previous blackout in September, caused by massive storms that brought down transmission lines.

“The blackout in South Australia reminds us that our national electricity grid is under pressure and in need of urgent attention,” said Dr Finkel. He added: “The goal is to ensure we have a secure electricity supply, at an affordable price for all Australian consumers, while meeting our international obligations to lower emissions.”

This has been referred to since as the “trilemma”.

Hugh Saddler
Hugh Saddler

The Bulletin sat down over coffee recently with leading energy expert Assoc. Prof Hugh Saddler to discuss whether this trilemma was achievable.  He believed it was, but stressed that the necessary reduction in emissions would have to come predominantly from the electricity sector.

“There must be an orderly closure of the high-emission generating plants,” said Saddler. “Many are very old; Hazelwood, for instance is over 50 years old.”

Hazelwood in Victoria’s Latrobe valley was the biggest power plant in Australia, fuelled by brown coal, which closed at the end of April. Calls by former Prime Minister Tony Abbott to keep it open were rejected by the French owner Engie.

Something has to replace these old generators, of course, to maintain supply.

“Open cycle gas generators would be an option though the price of gas has now become an issue,” Saddler said.

He quickly dismissed the idea of new super-critical coal-fired generators for three reasons: one, they only partially reduce emissions; two, they take too long to build, and three, they have a life of about 40 years.

“In 40 years time we will we will be past the point where we have to have zero net emissions,” said Saddler.

“Unlike large coal-fired generators, wind and solar farms of 200-300MW can be built within a year,” he said. “We need grid-scale storage to complement them though this can be achieved with off-river pumped hydro, as in the Snowy Mountains.

Labor’s commitment to have 50 per cent of electricity coming from renewables by 2030 is quite realistic, according to Saddler.

“There is wind and solar, but also concentrated solar thermal (CST) which has the added advantage of storage,” he said.  A CST plant has been on the drawing board for Port Augusta for a while now, though without a firm commitment by the state government to proceed.

Saddler was confident that Australia could meet its international commitments but the rules needed to be updated. These are made by the Australian Energy Market Commission (AEMC).

“For instance, small scale power generation needs to be supported and accommodated,” he said.

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