This morning The Australian has front page: Climate target to cost $75bn.
AUSTRALIA’S best hope of making affordable but deep cuts in greenhouse gas emissions by 2030 to reach global targets is by using clean coal, nuclear and gas technologies rather than renewable energy sources.
It’s interesting to note that first paragraph includes clean coal and nuclear as solutions to reach that target. Neither of these technologies are available today. Clean coal is still just a dream (as the article says further down “Capturing and storing emissions from coal-fired power stations, if viable” – emphasis mine).
Nuclear will take at least 10 years to be introduced, even if the decision was made today to start down that path. That means that it will be 2015 at least before we’ll see the benefits. In fact the report suggests 2020 as the year.
The Australian goes on to report that the infrastructure cost for these technologies “could double the cost of electricity generation”. I’m sure that’s the high-end figure (thus the “could”). I’d like to know how they came to that conclusion – but it’s fairly well understood and accepted, by both the government, business and the public, that the cost of shifting our energy infrastructure is going to cost more.
Higher infrastructure costs present a two pronged problem: 1) it’s more expensive to create clean energy infrastructure than existing coal technologies, so the market is reluctant to invest unless there is clear incentives to do so; and 2) it’s going to cost more at the point of use (i.e. our bills will be higher.
Point 1 can be addressed by the introduction of a carbon tax, which is being considered by the government at the moment (I suspect as a result of the nuclear energy inquiry). This brings the cost of coal into line with competing clean technologies, by taking into consideration the environmental cost of burning coal.
Tim Flannery presents an interesting solution to point 2. He suggests that with though prices increase with the introduction of a carbon tax, the government can reduce PAYG tax by roughly the same amount. The government continues to receive the same revenue through the carbon tax. Tax the bad, not the good is the basic principle. The net result, he suggests, is that we, as consumers, will not notice the difference. Our bills will be higher, but the tax breaks would ease, if not neutralise the pain.
But there’s another measure that can be taken, one that often seems to be ignored: efficiency. If we use less, the overall cost to us is less.
When I started reading the article, the main question I had was who produced the report? The Energy Supply Association of Australia. From their homepage: “The Energy Supply Association of Australia represents Australia’s electricity and downstream gas businesses.” So in other words, the electricity industry. The industry has a vested interest in protecting their existing practices, which I suspect is why clean coal features prominently.
The article goes on to point out this interesting tid-bit: “The report uses lower cost estimates for clean-coal technology than the Switkowski review of nuclear energy in Australia and also assumes that nuclear technology is not available until 2020.”
Perhaps the Switkowski review used an inflated figure (which is plausible); or the electricity industry is citing deflated figures (which is also plausible). So, if clean coal technology does become possible, the actual cost is probably some where in between those two reports.
I think the chief of the ESAA hit the nail on the head with this quote:
ESAA chief executive Brad Page said the report, based on best available estimates of costs and technology changes, demonstrated the need to develop the widest portfolio of technologies possible to minimise the cost of greenhouse emissions cuts.
He also said that “Over the next 25 years, if you are seeking to achieve fairly deep cuts in emissions, then polices that favour a particular renewable technology are probably poor choices,” which I also agree with.
This is where a carbon tax can be effective – let the market decide the best solution. The government is pushing nuclear, but it shouldn’t push any one technology. However, where there is a significant public interest in not pursuing a particular technology (like dirty coal, or I would argue nuclear) the government should intervene, in my view.
WWF CEO Greg Bourne was quoted saying much the same thing: “WWF chief executive Greg Bourne remained opposed to nuclear energy and called for market mechanisms to accelerate the development of lower-emissions technologies.”
At least the Oz got WWF’s and Greg’s position on nuclear right this time 😉
As an aside, I wonder if a report was released showing that renewable energy could meet that need, would it be front page? Or do only controversial findings make the cut?
Reason I ask is that the Clean Energy Future reports, released a few years back by WWF, show how our energy requirements can be met with renewable energy and gas-fired power (for base load – not renewable, but with much lower CO2 emissions than coal-fired power). Is that not newsworthy?
Polls show that the public wants renewable energy, and believes that they are the way forward. Yet it seems practical solutions that exist today are ignored. Sigh…
Disclosure: I am an employee of WWF-Australia. The views expressed here are my own, and not necessarily those of my employer.