Government-owned firms like Snowy Hydro can do better than building $600 million gas plants


Arjuna Dibley, The University of MelbourneThe Morrison government today announced it’s building a new gas power plant in the Hunter Valley, committing up to A$600 million for the government-owned corporation Snowy Hydro to construct the project.

Critics argue the plant is inconsistent with the latest climate science. And a new report by the International Energy Agency has warned no new fossil fuel projects should be funded if we’re to avoid catastrophic climate change.

The move is also inconsistent with research showing government-owned companies can help drive clean energy innovation. Such companies are often branded as uncompetitive, stuck in the past and unable to innovate. But in fact, they’re sometimes better suited than private firms to take investment risks and test speculative technologies.

And if the investments are successful, taxpayers, the private sector and consumers share the benefits.

Wind farm
If government-owned firms led the way in clean energy technologies, society would benefit.
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Lead, not limit

Federal energy minister Angus Taylor announced the funding on Wednesday. He said the 660-megawatt open-cycle gas turbine at Kurri Kurri will “create jobs, keep energy prices low, keep the lights on and help reduce emissions”.

Experts insist the plan doesn’t stack up economically and may operate at less than 2% capacity.

But missing from the public debate is the question of how government-owned companies such as Snowy Hydro might be used to accelerate the clean energy transition.

Australian governments (of all persuasions) have not often used the companies they own to lead in clean energy innovation. Many, such as Hydro Tasmania, still rely on decades-old hydroelectric technologies. And others, such as Queensland’s Stanwell Corporation and Western Australia’s Synergy, rely heavily on older coal and gas assets.

Asking Snowy Hydro to build a gas-fired power plant is yet another example – but it needn’t be this way.




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gas plant
Snowy Hydro has been funded to build a $600 million gas plant, but it could do better.
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The burning question

Globally, more than 60% of electricity comes from wholly or partially state-owned companies. In Australia, despite the 20-year trend towards electricity privatisation, government-owned companies remain important power generators.

At the Commonwealth level, Snowy Hydro provides around 20% of capacity to New South Wales and Victoria. And most electricity in Queensland, Tasmania and Western Australia is generated by state government-owned businesses.

But political considerations mean government-owned electricity companies can struggle to navigate the clean energy path.

For example in April this year, the chief executive of Stanwell Corporation, Richard Van Breda, suggested the firm would mothball its coal-powered generators before the end of their technical life, because cheap renewables were driving down power prices.

Queensland’s Labor government was reportedly unhappy with the announcement, fearing voter backlash in coal regions. Breda has since stepped down and Stanwell is reportedly backtracking on its transition plans.

Such examples beg the question: can government-owned companies ever innovate on clean energy? A growing literature in economics, as well as several real-world examples, suggest that under the right conditions, the answer is yes.




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desk showing Stanwell logo
State-owned Stanwell Corporation is reportedly back-tracking on plans to mothball its coal plants early.
Stanwell Corporation

Privatised is not always best

Economists have traditionally argued state-owned companies are not good innovators. As the argument goes, the absence of competitive market forces makes them less efficient than their private sector peers.

But recent research by academics and international policy institutions such as the OECD has shown government ownership in the electricity sector can be an asset, not a curse, for achieving technological change.

The reason runs contrary to orthodox economic thinking. While competition can lead to firm efficiency, some economists argue government-owned firms can take greater risks. Without the pressure for market-rate returns to shareholders, government enterprises may be freer to invest in more speculative technologies.

My ongoing research has shown the reality is even more complex. Whether state-owned electric companies can drive clean energy innovation depends a great deal on government interests and corporate governance rules.

For example, consider the New York Power Authority (NYPA) which, like Snowy Hydro, is wholly government owned.

New York Governor Andrew Cuomo has deliberately sought to use NYPA to decarbonise the state’s electricity grid. The government has managed the company in a way that enables it to take risks on new transmission and generation technologies that investor-owned peers cannot.

For instance, NYPA is investing in advanced sensors and computing systems so it can better manage distributed energy sources such as solar and wind. The technology will also simulate major catastrophic events, including those likely to ensue from climate change.

These investments are likely to contribute to greater grid stability and greater renewables use, benefiting not just NYPA but other electricity generators and ultimately, consumers.

Such innovation is nothing new. Also in the US, the state-owned Sacramento Municipal Utility District built one of the first utility-scale solar projects in the world in 1984.

Andrew Cuomo in front of flag
NY Governor Andrew Cuomo is using a state-owned company to aid the clean energy transition.
Mary Altaffer/AP

The way forward

More could be done to ensure Australian government-owned corporations are clean energy catalysts.

Clean energy technologies can struggle to bridge the gap from invention to widespread adoption. Public investment can bring down the price of such technologies or demonstrate their efficacy.

In this regard, government-owned companies could work with private technology firms to invest in technologies in the early stages of development, and which could have significant public benefits. For instance, in 2020, the Western Australian government-owned company Synergy sought to build a 100 megawatt battery with private sector partners.

But many problems facing state-owned companies are the result of ever-changing government policy priorities. The firms should be reformed so they are owned by government, but operated at arm’s length and with other partners. This might better enable clean energy investment without the politics.




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The Conversation


Arjuna Dibley, Visiting Researcher, Climate and Energy College, The University of Melbourne

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

International Energy Agency warns against new fossil fuel projects. Guess what Australia did next?


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Samantha Hepburn, Deakin UniversityEven if every country meets its current climate targets, Earth’s temperature will still rise by a dangerous 2.1℃ this century, according to sobering findings from a new International Energy Agency report.

The IEA found the route to net-zero greenhouse gas emissions by 2050 was “narrow and extremely challenging”, and electricity grids in developed economies such as Australia must be zero emissions by 2053. The IEA was abundantly clear: no new fossil fuel projects should be approved.

The report couldn’t come at a worse time for the Morrison government. This week, it announced A$600 million for a major new gas-fired power plant at Kurri Kurri in New South Wales, claiming it was needed to shore up electricity supplies.

The IEA’s findings cast serious doubt on this decision, and put even more pressure on Australia ahead of crucial international climate talks in Glasgow in November. So let’s take a look at the report in more detail, and see how Australia measures up.

What the report said

The IEA report sets out a comprehensive roadmap to achieve net-zero emissions by 2050. The good news is this is still achievable. But it’ll take a lot money and enormous effort.

There must be what the report describes as a “total transformation of the energy systems that underpin our economies”. Put simply, the world’s energy economy must be grounded in solar and wind — not coal, gas and oil.

The report works from a basic principle: even if the climate pledges countries have made under the Paris agreement are fully achieved, there will still be 22 billion tonnes of global carbon dioxide emissions in 2050.

This is well short of net zero.

So the IEA set out more than 400 milestones to achieve the global energy transformation. And these absolutely must be complied with if we’re to stop catastrophic global warming and limit temperature rise to 1.5℃.

The milestones include:

Massive investment in electricity networks

Enormous amounts of money are needed to shift away from fossil fuels and meet the global electricity demand doubling over the next 30 years. Existing networks took 130 years to build — we need to build the same again in about one-sixth the time. This includes investing in hydrogen and bio-energy (energy made from organic material), which the report calls a “pillar of decarbonisation”.




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Transport

Electric vehicles need to rapidly expand to 65% of the global fleet by 2030, and 100% by 2050. This will require an enormous increase in public electric vehicle charging units and hydrogen refuelling units. To facilitate this shift, petrol and diesel will be phased out. Many countries around the world, including the United Kingdom and Japan, have already introduced a ban on new fossil fuel cars by 2030.

Building and industry

We need to urgently retrofit homes and buildings to make them more energy efficient. Steel, cement and chemical industries, primary emitters, must shift to carbon capture and sequestration and hydrogen.

Electric vehicle
Petrol and diesel will need to be phased out by 2030, according to the International Energy Agency.
Shutterstock

But the biggest take-home message for Australia is there must be no new development in fossil fuel beyond 2021.

No new fossil fuel development

The report states:

Beyond projects already committed as of 2021, there are no new oil and gas fields approved for development in our pathway, and no new coal mines or mine extensions are required.

Global demand for oil peaked in 2019, and has declined since then, largely due to COVID-19 lockdowns. Under the roadmap, this decline will continue and reach 75% by 2050. Any growth in demand during this period will be met by growing emergent markets in renewables, green hydrogen and bio-energy.

And of course, the report states no new coal plants should be financially supported unless equipped with carbon capture and sequestration. Inefficient coal plants must be phased out by 2030.

Gas plant
The federal government just announced over a half billion dollars for a new gas-fired power plant in NSW.
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If the roadmap is followed, renewable energy will overtake coal by 2026, and oil and gas by 2030.

For this to happen, annual additions of 630 gigawatts of solar and 390 gigawatts of wind power will be required by 2030. This means the world needs to install the equivalent of “the world’s largest solar park roughly every day”, according to the report.

Australia, are you listening?

Australia’s gas-fired recovery plans are directly inconsistent with the IEA roadmap. The government has argued expanding fossil fuel supply is critical for energy security.

Not only did the federal government just announce over a half a billion dollars for a new gas-fired power plant in NSW, it’s also spending a further $173 million to develop the Beetaloo basin in the Northern Territory, another gas reserve.




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Experts, advisers and Energy Security Board chair Kerry Schott have all disagreed with these moves. They argue, in line with the IEA report, that cheaper, cleaner alternatives to gas generation, such as wind and solar, can easily provide the dispatchable power required.

The government’s stubborn fossil fuel funding will make it more difficult than it already is to stop global warming beyond 1.5℃.

Australia must immediately stop investing in new fossil fuel projects. While this may be a difficult transition to accept given the enormous scope of gas reserves in Australia, there’s no point spending vast amounts of money on new infrastructure to extract a resource that will be commercially unviable in a decade.

Australia is ignoring the economic and environmental imperatives of transitioning to a low carbon framework. This is reckless, and unfair to other countries. We have the resource capacity and economic strength to transition our energy sector, unlike many developing countries. But we choose not to.

A national embarrassment

John Kerry, the US special presidential envoy for climate, says the next round of international climate talks in Scotland is the “last best chance the world has” to avoid a climate crisis.

But Australia’s investment in new gas development stands in stark contrast to the increasingly ambitious energy commitments of other developed countries. We shouldn’t come empty-handed, with no new targets, to yet another international climate summit.




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US President Joe Biden has vowed to cut greenhouse gas emissions by 50-52% compared with 2005 levels. He has banned new oil and gas leases on federal land, removed fossil fuel subsidies and plans to double wind capacity by 2030.

Likewise, the European Commission seeks to stop funding oil and gas projects. Denmark recently implemented a ban on future gas extraction in the North Sea. And Spain has done the same.

Australia is ignoring its global responsibilities. As a result, we’ll be hit hard by the so-called “Carbon Border Adjustment” policies from the US and European Union, which tax imported goods according to their carbon footprint.

Ultimately, our actions will leave us economically and environmentally isolated in a rapidly emerging new energy world order.




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The Conversation


Samantha Hepburn, Director of the Centre for Energy and Natural Resources Law, Deakin Law School, Deakin University

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

We sliced open radioactive particles from soil in South Australia and found they may be leaking plutonium


National Archives of Australia

Barbara Etschmann, Monash University; Joel Brugger, Monash University, and Vanessa Wong, Monash UniversityAlmost 60 years after British nuclear tests ended, radioactive particles containing plutonium and uranium still contaminate the landscape around Maralinga in outback South Australia.

These “hot particles” are not as stable as we once assumed. Our research shows they are likely releasing tiny chunks of plutonium and uranium which can be easily transported in dust and water, inhaled by humans and wildlife and taken up by plants.

A British nuclear playground

After the US atomic bombings of Hiroshima and Nagasaki in 1945, other nations raced to build their own nuclear weapons. Britain was looking for locations to conduct its tests. When it approached the Australian government in the early 1950s, Australia was only too eager to agree.

Between 1952 and 1963, Britain detonated 12 nuclear bombs in Australia. There were three in the Montebello Islands off Western Australia, but most were in outback South Australia: two at Emu Field and seven at Maralinga.

British nuclear tests left behind a radioactive legacy.
National Archives of Australia

Besides the full-scale nuclear detonations, there were hundreds of “subcritical” trials designed to test the performance and safety of nuclear weapons and their components. These trials usually involved blowing up nuclear devices with conventional explosives, or setting them on fire.

The subcritical tests released radioactive materials. The Vixen B trials alone (at the Taranaki test site at Maralinga) spread 22.2 kilograms of plutonium and more than 40 kilograms of uranium across the arid landscape. For comparison, the nuclear bomb dropped on Nagasaki contained 6.4 kilograms of plutonium, while the one dropped on Hiroshima held 64 kilograms of uranium.

These tests resulted in long-lasting radioactive contamination of the environment. The full extent of the contamination was only realised in 1984, before the land was returned to its traditional owners, the Maralinga Tjarutja people.

Hot potatoes

Despite numerous cleanup efforts, residual plutonium and uranium remains at Maralinga. Most is present in the form of “hot particles”. These are tiny radioactive grains (much smaller than a millimetre) dispersed in the soil.

Plutonium is a radioactive element mostly made by humans, and the weapons-grade plutonium used in the British nuclear tests has a half life of 24,100 years. This means even 24,100 years after the Vixen B trials that ended in 1963, there will still be almost two Nagasaki bombs worth of plutonium spread around the Taranaki test site.

Plutonium emits alpha radiation that can damage DNA if it enters a body through eating, drinking or breathing.




Read more:
Dig for secrets: the lesson of Maralinga’s Vixen B


In their original state, the plutonium and uranium particles are rather inactive. However, over time, when exposed to atmosphere, water, or microbes, they may weather and release plutonium and uranium in dust or rainstorms.

Until recently, we knew little about the internal makeup of these hot particles. This makes it very hard to accurately assess the environmental and health risks they pose.

Monash PhD student Megan Cook (the lead author on our new paper) took on this challenge. Her research aimed to identify how plutonium was deposited as it was carried by atmospheric currents following the nuclear tests (some of it travelled as far as Queensland!), the characteristics of the plutonium hot particles when they landed, and potential movement within the soil.

Nanotechnology to the rescue

Previous studies used the super intense X-rays generated by synchrotron light sources to map the distribution and oxidation state of plutonium inside the hot particles at the micrometre scale.

To get more detail, we used X-rays from the Diamond synchrotron near Oxford in the UK, a huge machine more than half a kilometre in circumference that produces light ten billion times brighter than the Sun in a particle accelerator.

Studying how the particles absorbed X-rays revealed they contained plutonium and uranium in several different states of oxidation – which affects how reactive and toxic they are. However, when we looked at the shadows the particles cast in X-ray light (or “X-ray diffraction”), we couldn’t interpret the results without knowing more about the different chemicals inside the particles.

To find out more, we used a machine at Monash University that can slice open tiny samples with a nanometre-wide beam of high-energy ions, then analyse the elements inside and make images of the interior. This is a bit like using a lightsaber to cut a rock, only at the tiniest of scales. This revealed in exquisite detail the complex array of materials and textures inside the particles.

Plutonium and uranium show up as bright lumps embedded in darker iron-aluminium alloy in this electron microscope image.
Cook et al (2021), Scientific Reports, Author provided

Much of the plutonium and uranium is distributed in tiny particles sized between a few micrometres and a few nanometres, or dissolved in iron-aluminium alloys. We also discovered a plutonium-uranium-carbon compound that would be destroyed quickly in the presence of air, but which was held stable by the metallic alloy.

This complex physical and chemical structure of the particles suggests the particles formed by the cooling of droplets of molten metal from the explosion cloud.

In the end, it took a multidisciplinary team across three continents — including soil scientists, mineralogists, physicists, mineral engineers, synchrotron scientists, microscopists, and radiochemists — to reveal the nature of the Maralinga hot particles.

From fire to dust

Our results suggest natural chemical and physical processes in the outback environment may cause the slow release of plutonium from the hot particles over the long term. This release of plutonium is likely to be contributing to ongoing uptake of plutonium by wildlife at Maralinga.

Even under the semi-arid conditions of Maralinga, the hot particles slowly break down, liberating their deadly cargo. The lessons from the Maralinga particles are not limited to outback Australia. They are also useful in understanding particles generated from dirty bombs or released during subcritical nuclear incidents.




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There have been a few documented instances of such incidents. These include the B-52 accidents that resulted in the conventional detonation of thermonuclear weapons near Palomares in Spain in 1966, and Thule in Greenland in 1968, and the explosion of an armed nuclear missile and subsequent fire at the McGuire Air Force Base in the USA in 1960.

Thousands of active nuclear weapons are still held by nations around the world today. The Maralinga legacy shows the world can ill afford incidents involving nuclear particles.The Conversation

Barbara Etschmann, Research officer, Monash University; Joel Brugger, Professor of Synchrotron Geosciences, Monash University, and Vanessa Wong, Associate Professor, Monash University

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