This opinion piece written by GREG EVANS, EXECUTIVE DIRECTOR – COAL appeared in The Australian on 25 January 2018.
The development of new energy policies by government creates economic and social effects that can
last many decades.Australia’s history shows that when we get it right, we can improve our
competitiveness — delivering productivity benefits and boosting our standard of living.
One of the first labour productivity benefits from electricity in Australia was in 1879, when premier
Henry Parkes pushed for arc lighting to be installed at Sydney’s Garden Palace to allow work to
continue at night.
This early adoption led to towns such as Tamworth and Young becoming among the first locations in
the world where distributed electricity provided street lighting and power to shops and businesses. In
1949 the federal government decided on the Snowy Mountains Scheme, supporting our peak
electricity requirements for more than 60 years. Thermal coal-fired power stations built from the 1960s
until a decade ago still account for about three-quarters of the national electricity market’s generation
output.
These investments facilitated growth in manufacturing, minerals processing and the chemicals
industry, and provided affordable and reliable power for industry and households. Industry structures
and ownership have changed. But the role of government in developing the appropriate rules within
which efficient markets deliver the continuity of an affordable, reliable and lower emissions energy
supply has not.
A technology-neutral approach to future energy provision is strongly supported by the Australian
minerals industry. All fuel sources should compete on cost, performance and emissions reductions.
Under this approach, modern coal-fired power generation technology can be an important part of the
energy mix.
The coal sector in particular has been a strong advocate for the take up of high efficiency, low
emissions coal-fired power generation plants — the lowest-cost energy option, which is able to reduce
carbon dioxide emissions by up to 40 per cent compared with older technology coal-fired generators.
The adoption of HELE technology also provides a pathway to carbon capture and storage, which can
reduce CO2 emissions by up to 90 per cent from a coal-fired power plant.
It makes sense on economic and technical grounds that if we are to pursue CCS, it should be fitted to
a modern, longer-lived and more efficient plant.
Energy choices made today can affect the affordability and flexibility of electricity supply into the
future, and specifically the unfolding opportunities CCS can support. CCS captures CO2 at a power
station or industrial facility such as a steel, LNG or cement plant and stores it in deep underground
geological structures.
The CCS process is used widely overseas, with 21 large-scale CCS facilities in operation or under
construction. At the global level, the UN Intergovernmental Panel on Climate Change says if the world
is to succeed in constraining CO2 emissions to levels consistent with a 2C rise in global
temperatures, then CCS will need to contribute about one-sixth of CO2 emission reductions in 2050. It
estimates that without CCS the cost of climate mitigation would increase by 138 per cent.
The head of the International Energy Agency, Fatih Birol, has said CCS “will not be optional in
implementing the Paris Agreement” and “without CCS the cost of the energy transition under Paris
would be $US3.5 trillion higher”.
In Australia the COAL 21 industry fund, which has invested over $300 million in low-emission coal
technology including CCS, has recently renewed its mandate for the next decade. COAL 21 is
committed to identifying suitable geological storage sites.
The costs of implementing CCS are falling in the same way as costs are falling for renewable energy
technology. A report from Solstice Development Services and GHD found that HELE coal power
generation plants with CCS operating in Australia are estimated to produce electricity from $69 per
MWh — cheaper than dispatchable wind or solar firmed by baseload power generation.
As government finalises the crucial details of its National Energy Guarantee, it is clear our energy
future must be suffused with the same optimism that our forebears had in the country’s ingenuity to
solve problems.
Playing favourites with technologies will handicap our future and greatly limit flexibility to consider
viable and attractive options such as CCS. We welcome the acknowledgment by Environment and
Energy Minister Josh Frydenberg that CCS can play a significant role in enhancing energy security
while providing better environmental outcomes. The former Labor government’s 2012 energy white
paper also stated that commercialising CCS was critically important to meeting long-term emission
reduction goals.
Ignoring the opportunities of CCS in combination with hi-tech coal-fired generation would overlook the
tremendous competitive advantage we have thanks to abundant, high-quality and accessible coal
resources.
Greg Evans is the Minerals Council of Australia’s executive director, coal.
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