Australia’s energy transition
Have emissions peaked? If so it’s the end of gas and coal exports
Carcoar New South Wales
The ABC’s Jo Lauder has a tantalizing post: The rise of solar power and China's staggering EV growth may have pushed global emissions into decline.
Her sources appear to be sound:
Both independent research firm Bloomberg NEF and the international Climate Analytics institute say it is possible we will see global emissions fall in 2024 and 2023 will have been the peak of global emissions. We will know if these predictions have come true at the end of the year.
This has come about through the simple power of a market reaction to the availability of low-cost technologies:
Even if climate change and emissions weren't a problem, it's predicted the world would still be switching to solar and wind energy because it makes economic sense.
On Radio National’s Drive program, Andy Park interviews Leonard Quong of Bloomberg NEF – Global emissions could be trending down – who explains how a combination of technologies, innovation, investment and changed consumer behaviour has brought about this rapid adjustment.
Specifically the tumbling cost of photovoltaic power has been the main contributor to this development. In 1975, the price per watt capacity of solar power was $US 120.00. It is now $US 0.26. The other technology to have taken off is electric cars.
Developments like this always take us by surprise. Planners tend to assume cost and market penetration functions are linear, but the cost of renewable generation and storage has tended to follow a hyperbolic function, and market penetration has tended to follow a logistic function. In other words they are stronger than linear.
Lauder is quick to remind us that even though emissions may be peaking, we will still be pumping greenhouse gases into the atmosphere for many years to come, and even once the world reaches net zero the gases we have emitted up to that time will still be there, warming the planet, for many, many years. And Quong warns us that even though the curve may be turning, it is still not headed for net zero by 2050.
If emissions are peaking, or even just flattening, the argument that if we don’t export others will falls apart. Even though there may be continuing demand for coal and gas it’s almost always cheaper to extract resources from existing sites than to develop new ones. Australian companies seeking to develop new gas fields would do well to look at their demand projections.
Dutton’s nuclear plan – idiocy or clever politics?
Dutton said it himself in his speech to the Committee for Economic Development of Australia (CEDA) on Monday, when he suggested he could easily bring state governments alongside:
I think with South Australia, we could strike a deal very quickly. The only reservation Peter Malinauskas has expressed about nuclear is in relation to cost, and I believe that we can deal with those concerns.
The only reservation?
In fact the cost of nuclear energy is the overwhelming reservation. We now have two highly credible reports, one by our CSIRO (the GenCost report), the other by the US-based Institute for Energy Economics and Financial Analysis, confirming that electricity produced by nuclear energy would be much more costly than electricity generated by renewables and backed up with storage. According to the latter report “the cost of electricity generated from nuclear plants would likely be 1.5 to 3.8 times the current cost of electricity generation in eastern Australia”, and “typical Australian households could see electricity bills rise by AUD665/year on average under the opposition Coalition’s plans to introduce nuclear to the country’s energy mix”.
No wonder Dutton isn’t providing any costings, and in true Trumpian style is making up stuff about the cost of our present path to renewables: $1.3 trillion, or was that gadzillions? Doesn’t matter, as long as it carries the impression that the government – the “Labor” government – is engaged in some extravagant “act of economic self-harm”.
There are a few more reservations. One is the time: it would take decades to have nuclear plants up and running. What do we do in those fifteen to twenty years? Wring some more life out of our ancient coal-fired stations? Build some new ones?
Another problem is compatibility with renewables. Nuclear plants are hugely expensive to build, but their running costs are low. To be commercial they have to run even when the wind is blowing and the sun is shining. How do we cope with that – rip out the renewable generation and storage capacity in which companies have already invested? Tell 3 million households that they have to disconnect their panels so that they can buy electricity from the Dutton nuclear plants? Matt Kean – former Energy Minister and former Treasurer in the New South Wales Liberal government, and now head of the Climate Change Authority – dealt with this on Monday night on the ABC’s 730 program. (Also covered in a post by Laura Tingle.)
In his CEDA speech Dutton conjured up another argument for nuclear: nuclear reactors have an 80-year lifespan, renewables have to be replaced every 25 years. Really? Would a nuclear plant built in 2040 go through an 80-year life without even requiring a major overhaul? And, yes photovoltaic panels have a life of around 25-30 years, but so what if they have to be replaced after 25 years? As any accountant could confirm, the present value of a dollar in 25 years at a real discount rate of 6 percent (a conservative estimate of the opportunity cost of capital) is about 23 cents. In other words we don’t have to worry too much about those future replacement costs.
Dutton will get this running agan (Yallourn)
Dutton also talks about the cost of transmission lines associated with renewables. But whatever systems we install, we need more transmission capacity. The transmission lines radiating out from our old coal-fired stations, where Dutton’s nuclear replacements would be built, are barely coping with our present electricity demand.
These, and even a few more reservation, are covered in a Grattan Institute post by Tony Wood: Six problems with the Coalition’s nuclear plan. In a separate post on The Conversation Alison Reeve of the Grattan Institute points out that Dutton’s nuclear plan would mean propping up coal for at least 12 more years – and we don’t know what it would cost.
I almost forgot to mention safety as another reservation. As an electrical engineer I know that nuclear power is a lot safer than coal and even hydro: it shouldn’t be of much concern. But Dutton hasn’t forgotten about safety: it comes into his political strategy, as ANU’s Mark Kenny explains in a short Radio National interview. Dutton is hoping that a noisy anti-nuclear protest movement will develop, distracting from the major issue of the Coalition’s bad economics and bad engineering.
Dutton’s strategy is clever, and it may just work if the Greens and the kindergarten left fall into the trap.
Joseph Stiglitz on gas, and more
Hosted by the Australia Institute, Nobel Prize winner Joseph Stiglitz, on the Perth leg of his Australian speaking tour, addressed the question Is Australia getting its fair share from gas?.
The short answer is “no”, we’re not getting our fair share. The even shorter answer is that we’re getting nothing: we’re giving it away, as Stiglitz explains.
He goes on to describe the opportunities Australia is missing through its failure to collect its share of returns in royalties and taxation from exported natural resources. By giving away our resources we’re impoverishing ourselves.
From around halfway through his presentation he moves into a general outline of economic policy, particularly the way neoliberal economics has robbed countries like America and Australia of their prosperity and personal freedom.
Stiglitz’s economic credentials and his contributions to economic ideas are outstanding. He has been Chief Economist of the World Bank and Chair of the US Council of Economic Advisors. But he is able to describe economic concepts and practical economic issues, including the local and global economics of the gas industry, in clear ways that assume no economic knowledge.
His most recent book is The road to freedom: economics and the good society.
Seize the sun – the case for more rooftop solar
One in three households have rooftop solar. When supplemented with battery storage – household and community batteries – there is scope for much greater use of rooftop solar, with big savings for households.
That’s the message in the Climate Council’s report Seize the sun: how to supercharge Australia’s rooftop solar.
We are missing out on opportunities. Two-thirds of new houses are being built without a solar system. And only one in ten small businesses have solar systems. This represents a significant lost opportunity, because most businesses operate in daylight hours.
Perhaps that’s because many small businesses rent their premises – much of our small business sector operates on a feudal landlord-tenant system. Or it may reflect the politics of small business, the Coalition and the anti-renewable lobby having worked so hard among their key constituencies to make renewable energy an issue in identity politics rather than a good investment.