New report shows the world is awash with fossil fuels. It’s time to cut off supply



Australia’s coal production is expected to jump by 34% to 2030, undercutting our climate efforts.
Nikki Short/AAP

Peter Christoff, University of Melbourne

A new United Nations report shows the world’s major fossil fuel producing countries, including Australia, plan to dig up far more coal, oil and gas than can be burned if the world is to prevent serious harm from climate change.

The report found fossil fuel production in 2030 is on track to be 50% more than is consistent with the 2℃ warming limit agreed under the Paris climate agreement. Production is set to be 120% more than is consistent with holding warming to 1.5℃ – the ambitious end of the Paris goals.

Australia is strongly implicated in these findings. In the same decade we are supposed to be cutting emissions under the Paris goals, our coal production is set to increase by 34%. This trend is undercutting our success in renewables deployment and mitigation elsewhere.


productiongap.org

Mind the production gap

The United Nations Environment Program’s Production Gap report, to which I contributed, is the first to assess whether current and projected fossil fuel extraction is consistent with meeting the Paris goals.

It reviewed seven top fossil fuel producers (China, the United States, Russia, India, Australia, Indonesia, and Canada) and three significant producers with strong climate ambitions (Germany, Norway, and the UK).




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The production gap is largest for coal, of which Australia is the world’s biggest exporter. By 2030, countries plan to produce 150% more coal than is consistent with a 2℃ pathway, and 280% more than is consistent with a 1.5℃ pathway.

The gap is also substantial for oil and gas. Countries are projected to produce 43% more oil and 47% more gas by 2040 than is consistent with a 2℃ pathway.


productiongap.org

Keeping bad company

Nine countries, including Australia, are responsible for more than two-thirds of fossil fuel carbon emissions – a calculation based on how much fuel nations extract, regardless of where it is burned.

China is the world’s largest coal producer, accounting for nearly half of global production in 2017. The US produces more oil and gas than any other country and is the second-largest producer of coal.

Australia is the sixth-largest extractor of fossil fuels , the world’s leading exporter of coal, and the second-largest exporter of liquefied natural gas.




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Prospects for improvement are poor. As countries continue to invest in fossil fuel infrastructure, this “locks in” future coal, oil and gas use.

US oil and gas production are each projected to increase by 30% to 2030, as is Canada’s oil production.

Australia’s coal production is projected to jump by 34%, the report says. Proposed large coal mines and ports, if completed, would represent one of the world’s largest fossil fuel expansions – around 300 megatonnes of extra coal capacity each year.


productiongap.org

The expansion is underpinned by a combination of ambitious national plans, government subsidies to producers and other public finance.

In Australia, tax-based fossil fuel subsidies total more than A$12 billion each year. Governments also encourage coal production by fast-tracking approvals, constructing roads and reducing royalty requirements, such as for Adani’s recently approved Carmichael coal mine in the Galilee Basin.

Ongoing global production loads the energy market with cheap fossil fuels – often artificially cheapened by government subsidies. This greatly slows the transition to renewables by distorting markets, locking in investment and deepening community dependency on related employment.

In Australia, this policy failure is driven by deliberate political avoidance of our national responsibilities for the harm caused by our exports. There are good grounds for arguing this breaches our moral and legal obligations under the United Nations climate treaty.

Protestors locked themselves to heavy machinery to protest the Adani coal mine in central Queensland.
Frontline Action on Coal

Cutting off supply

So what to do about it? As our report states, governments frequently recognise that simultaneously tackling supply and demand for a product is the best way to limit its use.

For decades, efforts to reduce greenhouse gas emissions have focused almost solely on decreasing demand for fossil fuels, and their consumption – through energy efficiency, deployment of renewable technologies and carbon pricing – rather than slowing supply.

While the emphasis on demand is important, policies and actions to reduce fossil fuels use have not been sufficient.

It is now essential we address supply, by introducing measures to avoid carbon lock-in, limit financial risks to lenders and governments, promote policy coherence and end government dependency on fossil fuel-related revenues.

Policy options include ending fossil fuel subsidies and taxing production and export. Government can use regulation to limit extraction and set goals to wind it down, while offering support for workers and communities in the transition.




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Several governments have already restricted fossil fuel production. France, Denmark and New Zealand have partially or totally banned or suspended oil and gas exploration and extraction, and Germany and Spain are phasing out coal mining.

Australia is clearly a major contributor in the world’s fossil fuel supply problem. We must urgently set targets, and take actions, that align our future fossil fuel production with global climate goals.The Conversation

Peter Christoff, Associate Professor, School of Geography, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Enough ambition (and hydrogen) could get Australia to 200% renewable energy



Hydrogen infrastructure in the right places is key to a cleaner, cheaper energy future.
ARENA

Scott Hamilton, University of Melbourne; Changlong Wang, University of Melbourne; Falko Ueckerdt, Potsdam Institute for Climate Impact Research, and Roger Dargaville, Monash University

The possibilities presented by hydrogen are the subject of excited discussion across the world – and across Australia’s political divide, notoriously at war over energy policy.




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On Friday Australia’s chief scientist Alan Finkel will present a national strategy on hydrogen to state, territory and federal energy ministers. Finkel is expected to outline a plan that prioritises hydrogen exports as a profitable way to reduce emissions.

It is to be hoped the strategy is aggressive, rather than timid. Ambition is key in lowering the cost of energy. Australia would do better aiming for 200% renewable energy or more.

It’s likely the national strategy will feature demonstration projects to test the feasibility of new technology, reduce costs, and find ways to share the risk of infrastructure investment between government and industry.

There are still a number of barriers. Existing gas pipelines could be used to transport hydrogen to end-users but current laws are prohibitive, mechanisms like “certificates of origin” are required, and there are still key technology issues, particularly the cost of electrolysis.

These issues raise questions of what a major hydrogen economy really looks like. It may prompt suspicions this is just the a latest energy pipe dream. But our research at the Australian-German Energy Transition Hub argues that an ambitious approach is better than a cautious one.

Aggressively pursing hydrogen exports will reduce costs of domestic energy supply and provide a basis for new export industries, such as greens steel, in a carbon-constrained world.




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Optimal systems cost less

We used optimisation modelling to examine how a major hydrogen industry might roll out in Australia. We wanted to identify where major plants for electrolysis could be built, asked whether the existing national electricity market should supply the power, and looked at the effect on the cost of the system and, ultimately, energy affordability.

Australian Hydrogen export locations.

Our results show the locations for future hydrogen infrastructure investment will be mainly determined by their capital costs, the share of wind and solar generation and the capacity of electrolysers to responsively provide energy to the system, and the magnitude of hydrogen production.




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We also identified potential demonstration projects across Australia, such as:

  • large-scale production of liquid hydrogen and export from the Pilbara in Western Australia
  • hydrogen to support steel manufacturing in South Australia
  • injecting hydrogen into the gas networks in Victoria and support industry and electricity generation
  • hydrogen to supply transport fuel for major users such as trucks, buses and ferries in New South Wales, and
  • hydrogen to produce ammonia at an existing plant in Queensland.

An export-oriented economy

If we assume electrolysers remain expensive, around A$1,800 per kilowatt, and need to run at close to full-load capacity all the time, the result is large hydrogen exporting hubs across the country, built near high quality solar and wind power resources. Ideal locations tend to be remote from the national energy grid, such as in Western Australia and Northern Territory, or at relatively small-scale in South Australia or Tasmania.

There is much debate around the current cost of electrolysis, but consensus holds that economies of scale will substantially reduce these costs – by as much as an order of magnitude. This is akin to the cost reductions we have seen in solar power and batteries.

200 per cent renewables scenario

This infrastructure requires some major investment. However, our modelling shows that if Australia produces 200% of our energy needs by 2050, exporting the surplus, we see major drops in system costs and lower costs of energy for all Australia. If Australia can produce 400 Terrawatt-hours of hydrogen energy for export, modelling results show the average energy cost could be reduced by more than 30%.

Hydrogen ambition reduces costs of electricity supply.

The driving factor is our level of ambition. The more we lean into decarbonising our economy with green energy, the further the costs fall. The savings from the integrated and optimised use of electrolysers in a renewable-heavy national electricity market outweigh the cost of building large renewable resources in remote locations.

A large hydrogen export industry could generate both substantial export revenue and substantial benefits to the domestic economy.

Hydrogen export economy versus true RE economy

To sum up, the picture above shows two possible hydrogen futures for Australia.

In the first, Australia lacks climate actions and electrolyser costs remain high with limited economies of scale, and we export from key remote hubs such as the Pilbara.




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In the other, ambition increases and costs drop, and the hydrogen export industry connects to the national grid, providing both renewable exports and benefits to the grid. This also promotes the use of hydrogen in the domestic market. Australia embraces a true renewable economy and a new chapter of major energy exports begins.

Either way, Australia is primed to become a hydrogen exporting superpower.The Conversation

Scott Hamilton, Strategic Advisory Panel Member, Australian-German Energy Transition Hub, University of Melbourne; Changlong Wang, Researcher, The Energy Transition Hub, University of Melbourne; Falko Ueckerdt, , Potsdam Institute for Climate Impact Research, and Roger Dargaville, Senior lecturer, Monash University

This article is republished from The Conversation under a Creative Commons license. Read the original article.