Explainer: how do we make hydrogen from coal, and is it really a clean fuel?


Jessica Allen, University of Newcastle

Energy giant AGL this week unveiled plans to produce hydrogen power at its Loy Yang A coal station. But how do we transform coal, which is often thought of as simply made of carbon, into hydrogen – a completely different element?

In fact, coal is not just made of carbon. It also contains other elements, one of which is hydrogen. But to get a lot of hydrogen, the coal needs to be “gasified” rather than burned, creating compounds that can then be reacted with water to make hydrogen. This is where the majority of hydrogen comes from in this case – not from the coal itself.




Read more:
Why is hydrogen fuel making a comeback?


What is coal made of?

In simple terms, coal is a mixture of two components: carbon-based matter (the decayed remains of prehistoric vegetation) and mineral matter (which comes from the ground from which the coal is dug). The carbon-based matter is composed of five main elements: carbon, hydrogen, oxygen, nitrogen and sulfur.

You can think of coal’s formation process as a progression from biomass (newly dead plant matter) to charcoal (almost pure carbon). Over time, the oxygen and some hydrogen are gradually removed, leaving more and more carbon behind.

Brown coal thus contains slightly more hydrogen than black coal, although the biggest difference between the two is in their carbon and oxygen contents.

https://datawrapper.dwcdn.net/HUgdy/2/

What is gasification?

We can understand gasification by first understanding combustion. Combustion, or burning, is the complete oxidation of a fuel such as coal, a process that produces heat and carbon dioxide. Carbon dioxide itself cannot be further oxidised, and thus is the non-combustible end product of the burning process.

In gasification, however, the coal is not completely oxidised. Instead, the coal is reacted with a compound called a gasification agent. Gasification is endothermic, which means it doesn’t produce heat. Quite the opposite, in fact – it needs heat input to progress. Because the resulting gas is not fully oxidised, that means it can itself be burned as a fuel.

So how do we make hydrogen?

Now we know the key concepts, let’s start again at the start. To produce hydrogen from coal, the process begins with partial oxidation, which means some air is added to the coal, which generates carbon dioxide gas through traditional combustion. Not enough is added, though, to completely burn the coal – only enough to make some heat for the gasification reaction. The partial oxidation also makes its own gasification agent, carbon dioxide.

Carbon dioxide reacts with the rest of the carbon in the coal to form carbon monoxide (this is the endothermic gasification reaction, which needs heat input). No hydrogen yet.

Carbon monoxide in the gas stream is now further reacted with steam, generating hydrogen and carbon dioxide. Now we are making some hydrogen. The hydrogen can then be run through an on-site fuel cell to generate high-efficiency electricity, although the plan at Loy Yang A is to pressurise the hydrogen and ship it off to Japan for their Olympic showcase.

Making hydrogen from coal.
J. Allen

Brown coals are generally preferred for gasification over black coals for several reasons, which makes the brown coal of Victoria’s Latrobe Valley a good prospect for this process.

The main reason is that, because of the high oxygen content of this type of coal, it is less chemically stable and therefore easier to break apart during the gasification reaction. Plus there is a small boost from the hydrogen that is already present in the coal.

Hydrogen produced in this way is not a zero-emission fuel. Carbon dioxide is emitted through the combustion and thermal decomposition reactions, and is also a product of the reaction between carbon monoxide and water to make hydrogen and carbon dioxide.

So why bother making hydrogen?

When hydrogen is used as a fuel, it releases only water as a byproduct. This makes it a zero-emission clean fuel, at least at the point of use.

Producing hydrogen from coal in a large, central facility means pollution control can be put in place. Particulates, and potentially carbon dioxide, can be removed from the gas stream very efficiently.

This is not possible on a small scale, such as hanging off the back of your car. Road transport currently emits dangerous levels of pollutants in our cities every day.




Read more:
How protons can power our future energy needs


Gasification processes that use hydrogen fuel cells on site can substantially increase their efficiency compared with traditional coal-fired power. However, depending on the end-use of the hydrogen, and subsequent transport processes, you might be better off in terms of energy output, or efficiency (and therefore carbon emissions), just straight-up burning the coal to make electricity.

But by using gasification of coal to make hydrogen, we can start building much-needed infrastructure and developing consumer markets (that is, hydrogen fuel cell vehicles) for a truly clean future fuel.

The ConversationI predict that hydrogen power will be zero-emission one day. It can be made in a variety of ways through pure water splitting (including electrolysis, or through solar thermochemical and photoelectrochemical technologies, to name a few). It’s not there yet in terms of price or practicality, but it is certainly on its way. Boosting development of the hydrogen economy through production from coal in the meantime is, in my book, not a terrible idea overall.

Jessica Allen, Researcher and Lecturer in Low and Zero Emission Energy, University of Newcastle

This article was originally published on The Conversation. Read the original article.

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The Nationals should support carbon farming, not coal


Andrew Hopkins, Australian National University

National Party MP George Christensen has invited other Nationals to join the recently formed pro-coal “Monash Forum”. But is coal in the best interests of their rural constituents, particularly farmers?




Read more:
The pro-coal ‘Monash Forum’ may do little but blacken the name of a revered Australian


Farmers stand to lose from any weakening of the government’s climate change policies. That is why farmers and their political representatives should be concerned about a current review of the government’s greenhouse gas reduction policy.

What is at stake here is the strange-sounding idea of carbon farming. To explain this idea takes several steps, so bear with me.

The policy under review is a legacy of the Abbott era. As prime minister, Tony Abbott abolished the carbon tax and replaced it with an Emissions Reduction Fund (ERF). The ERF was to be used to pay businesses to reduce their carbon emissions, or to capture and sequester (store) carbon dioxide already in the atmosphere.




Read more:
Carbon tax axed: how it affects you, Australia and our emissions


As it turns out, most of the funding has gone to rural enterprises that have developed various farming projects that qualify for funding – hence the term, carbon farming.

For example, these projects include:

  • regenerating native forest on previously cleared land
  • changed farming practices to allow for crop stubble retention
  • capturing and destroying the methane from effluent waste at piggeries.

How does carbon farming work?

To make it all work, the government first created the system of Australian Carbon Credit Units (ACCUs). This system commodifies the outputs of carbon farming, so these can be traded.

In this system, a carbon farmer must show either a reduction in emissions, or carbon sequestration (or ideally both), according to clearly specified criteria. The government will then issue (free of charge) one credit for every tonne of carbon dioxide (CO₂) – or CO₂ equivalent – abated in this way. Farmers can then sell these credits, thus receiving a direct financial return for their efforts.

The primary buyer of ACCUs at the moment is the government, via its Emissions Reduction Fund. Farmers (individually or as collectives) who want to embark on carbon farming projects are asked to nominate a price they would need to make it profitable for them to go ahead with the project. Through a reverse auction, the fund selects the lowest-price proposals.




Read more:
Explainer: how does today’s Direct Action reverse auction work?


In this way, the government gets the greatest carbon abatement for the least money. Successful bidders embark on their projects knowing that they have a guaranteed price for their carbon abatement outcomes. There is nothing magical or mystical about it. It is simply the price at which the buyer and sellers of carbon credits find it mutually advantageous to do business.

The average price paid at the last auction round was A$12 per tonne of CO₂ abated. This is the current carbon price in this particular market.

The Safeguard Mechanism

A second potential set of buyers of carbon credits was created by the Safeguard Mechanism, introduced by the Abbott government. This caps emissions from big industrial emitters in order to to ensure that abatement achieved by the ERF is not offset or cancelled out.

The cap is set at whatever the maximum emission rate from the emitter has been. So it is not designed to reduce emissions from these big emitters, but simply to hold them to current levels.

The scheme covers just over 150 facilities, which are responsible for about half of Australia’s emissions. Emitters that go over their limit can remain in compliance by buying enough carbon credits to compensate for their “excess” emissions and surrendering these to government.




Read more:
Australia’s biggest emitters opt to ‘wait and see’ over Emissions Reduction Fund


This policy is now beginning to bite. The government has just announced that in the first period for which the policy has been in effect, some 16 large emitters were in excess and had to buy 448,000 carbon credits to remain in compliance. Among the biggest buyers were:

  • Anglo Coal’s Capcoal mining operations
  • Glencore’s Tahmoor Coal
  • Rio Tinto’s Alcan Gove aluminium operations
  • BHP Billiton Mitsubishi Coal/BM Alliance.

These companies bought their credits from carbon farmers who abated more carbon then they had calculated, and so had a surplus left over for sale.

But what is most interesting is the price that excess emitters were willing to pay for the surplus credits. Most of the sales were in the region of $14-15 per tonne (T), but the price rose to $17-18/T as the deadline approached.

This means that the price spiked at 50% higher than the most recent ERF auction price of $12/T.

Commentators describe this as a secondary market, and the price in this market is exciting news for carbon farmers. According to Australian Carbon Market Institute CEO Peter Castellas, “Australia now has a functioning carbon market.” Carbon farmers – who make up an increasing proportion of the Nationals’ constituency – will do well if this market expands.

One way to develop the market would be to slowly lower the caps on big emitters so they must either buy more carbon credits or find ways to reduce their own emissions.

From this point of view, there is good reason to progressively and predictably reduce the emissions allowed under the Safeguard Mechanism.

The current review

Here’s where we get to the current review. As already noted, the Safeguard Mechanism does not seek to reduce emissions from big emitters. In fact, it allows for an increase in emissions to accommodate business growth. Nevertheless, big emitters are still unhappy.

The government’s review is a response to business concerns. An initial consultation paper has proposed making it easier to raise the cap on a company’s emissions as its activity grows.




Read more:
An Emissions Reduction Fund could work, if well designed


If the rules are altered in this way, the demand for carbon credits may stall, and even decline, bringing to an end to this promising new source of revenue for farmers.

That is why members of parliament with rural constituencies should take note. Rural MPs should not sit by and allow the government to respond to the interests of the coal industry and other lobby groups.

The ConversationCarbon farming depends on reducing the caps under the Safeguard Mechanism, not raising them. This would also be a step in the direction of achieving the emissions reduction target to which Australia agreed at the Paris meetings in 2015.

Andrew Hopkins, Emeritus Professor of Sociology, Australian National University

This article was originally published on The Conversation. Read the original article.

Latest twist in the Adani saga reveals shortcomings in environmental approvals



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Adani faces court over allegations of concealing the amount of coal water released in Caley Valley Wetlands last year.
Ian Sutton/flickr, CC BY-NC-SA

Samantha Hepburn, Deakin University

It was reported this week that the federal Environment Department declined to prosecute Adani for failing to disclose that its Australian chief executive, Jeyakumar Janakaraj, was formerly the director of operations at a Zambian copper mine when it discharged toxic pollutants into a major river. Under the federal Environmental Protection Biodiversity Conservation Act, Adani is required to reveal the environmental history of its chief executive officers, and the federal report found Adani “may have been negligent”.

The revelations come as Adani faces down the Queensland government in the planning and environment court, over allegations the company concealed the full amount of coal-laden water discharged into the fragile Caley Valley Wetlands last year.

These concerns highlight some fundamental problems with the existing regulatory framework surrounding the long term utility and effectiveness of environmental conditions in upholding environmental protections for land impacted by mining projects.

How effective are environmental conditions?

In 2016, the federal government granted Adani a 60-year mining licence, as well as unlimited access to groundwater for that period.

These licences were contingent on Adani creating an environmental management plan, monitoring the ongoing impact of its mining activities on the environment, and actively minimising environmental degradation.

But are these safeguards working?

In 2015 Advocacy group Environmental Justice Australia reported several non-compliance issues with the Abbott Point Storm Water Dam, such as pest monitoring, weed eradication, establishing a register of flammable liquids, and implementation of the water monitoring plan.

More recently, in late 2017, significant amounts of black coal water were discovered in the fragile Caley Valley Wetlands next to the mine. Adani stands accused of withholding the full extent of the spill, redacting a laboratory report showing higher levels of contamination.

Adani seems to have released coalwater into the wetland despite it being a condition of its environmental approval that it takes sufficient care to avoid contamination. Its A$12,000 penalty for non-compliance is relatively small compared with the company’s operating costs.

In this instance, the environmental conditions have provided no substantive protection or utility. They have simply functioned as a convenient fig leaf for both Adani and the government.

Who is responsible for monitoring Adani?

Adani’s proposed mine falls under both state and federal legislation. Queensland’s Environmental Protection Act requires the holder of a mining lease to plan and conduct activities on site to prevent any potential or actual release of a hazardous contaminant.

Furthermore, the relevant environmental authority must make sure that hazardous spills are cleaned up as quickly as possible.

But as a project of “national environmental significance” (given its potential impact on water resources, threatened species, ecological communities, migratory species, world heritage areas and national heritage places), the mine also comes under the federal Environmental Protection Biodiversity Conservation Act.

Federal legislation obliges Adani to create an environmental management plan outlining exactly how it plans to promote environmental protection, and to manage and rehabilitate all areas affected by the mine.

Consequently, assessment of the environmental impact of the mine was conducted under a bilateral agreement between the both the federal and state regulatory frameworks. This means that the project has approval under both state and federal frameworks.

The aim is to reinforce environmental protection however in many instances there are significant problems with a lack of clear delineation with respect to management, monitoring and enforcement.

Does the system work?

Theoretically, these interlocking frameworks should work together to provide reinforced protection for the environment. The legislation operates on the core assumption that imposing environmental conditions minimises the environmental degradation from mining. However, the bilateral arrangement can often mean that the responsibility for monitoring matters of national environmental significance devolves to the state and the environmental conditions imposed at this level are ineffectively monitored and enforced and there is no public accountability.

Arguably, some environmental conditions hide deeper monitoring and enforcement problems and in so doing, actually exacerbate environmental impacts.

For example, it has been alleged that Adani altered a laboratory report while appealing its fine for the contamination of the Caley Valley Wetlands, with the original document reportedly showing much higher levels of contamination. The allowable level of coal water in the wetlands was 100 milligrams. The original report indicated that Adani may have released up to 834 milligrams. This was subsequently modified in a follow-up report and the matter is currently under investigation.

If established, this amounts to a disturbing breach with potentially devastating impacts. It highlights not only the failure of the environmental condition to incentivise behavioural change, but also a fundamental failure in oversight and management.

If environmental conditions are not supported by sufficient monitoring processes and sanctions, they have little effect.

Environmental conditions are imposed with the aim of managing the risk of environmental degradation by mining projects. However, their enforcement is too often mired by inadequate andopaque enforcement and oversight procedures, a lack of transparency and insufficient public accountability  

The ConversationWhile the Queensland Labor government considers whether to increase the regulatory pressures on Adani, by subjecting them to further EPBC Act triggers such as the water resource trigger or the implementation of a new climate change trigger, perhaps the more fundamental question is whether these changes will ultimately improve environmental protection in the absence of stronger transparency and accountability and more robust management and enforcement processes for environmental conditions attached to mining projects.

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

This article was originally published on The Conversation. Read the original article.

Nothing but truthiness: Adani and Co’s post-truth push for the Carmichael mine


Benedetta Brevini, University of Sydney and Terry Woronov, University of Sydney

This article is part of an ongoing series from the Post-Truth Initiative, a Strategic Research Excellence Initiative at the University of Sydney. The series examines today’s post-truth problem in public discourse: the thriving economy of lies, bullshit and propaganda that threatens rational discourse and policy.

The project brings together scholars of media and communications, government and international relations, physics, philosophy, linguistics and medicine, and is affiliated with the Sydney Social Sciences and Humanities Advanced Research Centre (SSSHARC), the Sydney Environment Instituteand the Sydney Democracy Network.


“Post-truth”, defined as “relating to or denoting circumstances in which objective facts are less influential in shaping public opinion than appeals to emotion and personal belief”, was the Oxford Dictionary’s 2016 Word of the Year, selected as a hallmark of the times in the US and UK. (Macquarie Dictionary chose “fake news” as its 2016 Word of the Year.)

Yet post-truth politics and “truthiness”, a term Stephen Colbert coined in 2005, are not solely British and American phenomena. “Truthiness” is rampant in Australia too. The debate about the proposed Adani Carmichael mine in central Queensland shows how truthiness has become part of Australian political discourse.

How can a coal mine be subject to a regime of “truthiness”? A decision to build a greenfield megamine would appear to come down to the facts, with the known harms weighed against the potential benefits. Yet we can identify three distinct traits in official discourses around the Adani mine that show truthiness at work.

Appeal to emotion and ‘gut feelings’

First, “truthiness” replaces a reliance on facts with appeals to emotion and a logic of “gut feelings”.

One of the champions of this form of logic is Tony Abbott. As prime minister, he faced criticism from environmentalists after opening a coal mine and declaring:

Coal is good for humanity, coal is good for prosperity, coal is an essential part of our economic future, here in Australia, and right around the world.

Earlier in 2014, he had said that “it is our destiny in this country to bring affordable energy to the world”.

In addition to the feel-good narrative of coal as national saviour, politicians have argued that Australia’s coal will help the world solve environmental problems, rather than making them worse.

An excellent example of this reasoning comes again from the former prime minister on his visit to India in September 2014. There, echoing the Adani chief executive, Abbott argued that the Carmichael mine could improve Indian living standards and cut carbon emissions by providing “clean coal”.

Using this same emotional logic, the government later told parliament that opening the southern hemisphere’s largest coalmine would actually cut carbon pollution.

Create doubt about facts – or make them up

A second component of “truthiness” is the practice of deliberately presenting empirical facts as debatable, uncertain or political – or simply lying. The best examples of lying are the claims of the mine’s benefits to Queensland and Australia.

Most common are references to the number of jobs the Carmichael mine will provide to the Queensland economy, where the employment situation is portrayed as desperate.

For instance, Queensland federal MP Michelle Landry claimed:

The Adani Carmichael coalmine offers up to 10,000 new jobs, mainly in Queensland; A$20 billion of investment in Australia; and power, to build the living standards of 100 million people in India.

In fact, Jerome Fahrer, who prepared an economic assessment of the Carmichael mine for Adani, admitted in court that it will create an average of 1,464 direct and indirect jobs over the life of the project. Yet virtually every mine supporter has since 2014 repeated an incorrect figure of 10,000 new jobs. They include the prime minister, the attorney-general and federal and state Liberal and National Party MPs.

Another prominent tactic used to cast unwanted facts as debatable or doubtful is to generate oxymorons that promote contradictory messages.

Mining corporations in Australia – and globally – use the term “sustainable mining” to describe projects that provide jobs. Politicians have adopted this; Anthony Lynham, Queensland’s minister for natural resources and mines, declared:

This government strongly supports the sustainable development of the Galilee Basin for the jobs and economic development that it will provide for regional Queensland.

Perhaps the most pernicious oxymoron used by mine supporters is “clean coal”. To counter the claim that Galilee Basin coal is “clean”, The Australia Institute cites estimates by Adani and India’s Ministry of Coal that it “is only 10% above the average quality of domestic Indian thermal coal in terms of energy content”. This is because “the ash content of Carmichael coal is estimated to be 26% – more than double the average of 12% for Australian thermal coal”.

The institute also notes that transporting the coal inevitably creates extra pollution.

Smear without evidence

Third, to construct truthiness, statements that are not scientific, logical or fact-based have proliferated in the political debate about the Adani mine. Politicians have constantly reframed the term “activist” to connote an enemy of both the mine and the national interest. MPs have called members of green groups economic saboteurs, “vigilantes”, “terrorists” and “extremists”.

This narrative casts environmentalists not only as economic enemies of Australia, but opposition to the mine as a form of terrorism. In parliament, Queensland LNP MP George Christensen described legal action to stop the mine as “an act of ecoterrorism”. He continued:

Their lies, misinformation, slander and the frivolous legal action attacking a company for the sake of furthering an ideological cause can only be described as terrorism if you look at the criminal code.

The accusations of “eco-terrorism” and “sabotage” had no foundation in fact whatsoever. These claims were not linked to actual illegal activities by environmental groups opposed to the mine.

Queensland Premier Annastacia Palaszczuk summarised perhaps the most pernicious claim by mine proponents when she told parliament:

Queensland taxpayers will not be funding any infrastructure for this project. Stringent conditions will be enforced to safeguard landholders’ and traditional owners’ interests.

To keep Queensland taxpayers from funding the mine’s infrastructure, the burden will fall instead on Australian taxpayers via the Commonwealth government’s proposed $1 billion loan from the Northern Australia Infrastructure Facility to Adani. This will fund rail lines from the mine to the coast.

Nor have the rights of the traditional owners of the mine site been respected or upheld. The state and federal governments and courts have denied all legal challenges from the Aboriginal people most affected by it.

The primary purpose of dissecting the arguments in favour of the Carmichael mine is to demonstrate the complexity of “truthiness” regimes. None of these discursive forms – gut feelings, spin and the politicisation of unwanted facts, or even outright lies – are enough on their own. Rather, these strategies overlap, intersect and reinforce each other.

The effect is to create an overarching “truthiness” regime that presents new megamines as desirable, inevitable and essential to maintain Australia’s national destiny. In response, a more complex and multi-pronged approach will be needed to convince the voting public that coal mining is not good for Australia, its economy, or the globe.


The ConversationYou can read other articles in the series here.

Benedetta Brevini, Senior Lecturer in Communication and Media, University of Sydney and Terry Woronov, Senior Lecturer in Anthropology, University of Sydney

This article was originally published on The Conversation. Read the original article.

Why are we still pursuing the Adani Carmichael mine?


Michael West, University of Sydney

Why, if Adani’s gigantic Carmichael coal project is so on-the-nose for the banks and so environmentally destructive, are the federal and Queensland governments so avid in their support of it?

Once again the absurdity of building the world’s biggest new thermal coal mine was put in stark relief on Monday evening via an ABC Four Corners investigation, Digging into Adani.


Read more: Adani gives itself the green light, but that doesn’t change the economics of coal


Where the ABC broke new ground was in exposing the sheer breadth of corruption by this Indian energy conglomerate. And its power too. The TV crew was detained and questioned in an Indian hotel for five hours by police.

It has long been the subject of high controversy that the Australian government, via the Northern Australia Infrastructure Facility (NAIF)that is still contemplating a A$1 billion subsidy for Adani’s rail line, a proposal to freight the coal from the Galilee Basin to Adani’s port at Abbot Point on the Great Barrier Reef.

But more alarming still, and Four Corners touched on this, is that the federal government is also considering using taxpayer money to finance the mine itself, not just the railway.

No investors in sight

As private banks have walked away from the project, the only way Carmichael can get finance is with the government providing guarantees to a private banking syndicate, effectively putting taxpayers on the hook for billions of dollars in project finance.

The prospect is met with the same incredulity in India as it is here in Australia:

FOUR CORNERS: “Watching on from Delhi, India’s former Environment Minister can’t believe what he is seeing.”

JAIRAM RAMESH: “Ultimately, it’s the sovereign decision of the Australian Government, the federal government and the state government.

FOUR CORNERS: “But public money is involved, and more than public money, natural resources are involved.

JAIRAM RAMESH: “I’m very, very surprised that the Australian government, uh, for whatever reason, uh, has uh, seen it fit, uh, to all along handhold Mr Adani.”

Here we have a project that does not stack up financially, and whose profits – should it make any – are destined for tax haven entities controlled privately by Adani family interests. Yet the Queensland government has shocked local farmers and environmentalists by gifting Adani extremely generous water rights, and royalties concessions to boot.

Why are Australian governments still in support?

The most plausible explanation is simply politics and political donations. There is no real-time disclosure of donations and it is relatively easy to disguise them, as there is no disclosure of the financial accounts of state and federal political parties either. Payments can be routed through opaque foundations, the various state organisations, and other vehicles.

Many Adani observers believe there must be money involved, so strident is the support for so unfeasible a project. The rich track record of Adani bribing officials in India, as detailed by Four Corners, certainly points that way. But there is little evidence of it.

In the absence of proof of any significant financial incentives however, the most compelling explanation is that neither of the major parties is prepared to be “wedged” on jobs, accused of being anti-business or anti-Queensand.

There are votes in Queensland’s north at stake. Furthermore, the fingerprints of Adani’s lobbyists are everywhere.

Adani lobbyist and Bill Shorten’s former chief of staff Cameron Milner helped run the re-election campaign of Premier Annastacia Palaszczuk. This support, according to The Australian, has been given free of charge:

Mr Milner is volunteering with the ALP while keeping his day job as director and registered lobbyist at Next Level Strategic Services, which counts among its clients Indian miner Adani…

The former ALP state secretary held meetings in April and May with Ms Palaszczuk and her chief of staff David Barbagallo to negotiate a government royalties deal for Adani, after a cabinet factional revolt threatened the state’s lar­gest mining project.

Adani therefore enjoys support and influence on both sides of politics. “Next Level Strategic Services co-director David Moore — an LNP stalwart who was Mr Newman’s chief of staff during his successful 2012 election campaign — is also expected to volunteer with the LNP campaign.”

So it is that Premier Palaszczuk persists with discredited claims that Carmichael will produce 10,000 jobs when Adani itself conceded in a court case two years ago the real jobs number would be but a fraction of that.

If the economics don’t stack up, why is Adani still pursuing the project?

The Adani group totes an enormous debt load, the seaborne thermal coal market is in structural decline as new solar capacity is now cheaper to build than new coal-fired power plants and the the government of India is committed to phasing out coal imports in the next three years.

Why flood the market with 60 million tonnes a year in new supply and further depress the price of one of this country’s key export commodities?

The answer to this question lies in the byzantine structure of the Adani companies themselves. Adani already owns the terminal at Abbot Point and it needs throughput to make it financially viable.

Both the financial structures behind the port and the proposed railway are ultimately controlled in tax havens: the Cayman Islands, the British Virgin Islands and Singapore. Even if Adani Mining and its related Indian entities upstream, Adani Enterprises and Adani Power, lose money on Carmichael, the Adani family would still benefit.


Read more: Australia’s $1 billion loan to Adani is ripe for High Court challenge


The port and rail facilities merely “clip the ticket” on the volume of coal which goes through them. The Adani family then still profits from the privately-controlled infrastructure, via tax havens, while shareholders on the Indian share market shoulder the likely losses from the project.

As the man who used to be India’s most powerful energy bureaucrat, E.A.S. Sharma, told the ABC: “My assessment is that by the time the Adani coal leaves the Australian coast the cost of it will be roughly about A$90 per tonne.

“We cannot afford that, it is so expensive.”

More questions than answers remain

This renders the whole project even more bizarre. Why would the government put Australian taxpayers on the hook for a project likely to lose billions of dollars when the only clear beneficiaries are the family of Indian billionaire Gautam Adani and his Caribbean tax havens.

The ConversationMy view is that this project is a white elephant and will not proceed. Given the commitment by our elected leaders however, it may be that some huge holes in the earth may still be dug before it falls apart.

Michael West, Adjunct Associate Professor, School of Social and Political Sciences, University of Sydney

This article was originally published on The Conversation. Read the original article.

Renewables will be cheaper than coal in the future. Here are the numbers


Ken Baldwin, Australian National University

In a recent Conversation FactCheck I examined the question: “Is coal still cheaper than renewables as an energy source?” In that article, we assessed how things stand today. Now let’s look to the future.

In Australia, 87% of our electricity generation comes from fossil fuels. That’s one of the highest levels of fossil fuel generation in the world.

So we have important decisions to make about how we’ll generate energy as Australia’s fleet of coal-fired power stations reach the end of their operating lives, and as we move to decarbonise the economy to meet our climate goals following the Paris agreement.

What will the cost of coal-fired and renewable energy be in the coming decades? Let’s look at the numbers.

Improvements in technology will make renewables cheaper

As technology and economies of scale improve over time, the initial capital cost of building an energy generator decreases. This is known as the “learning rate”. Improvements in technology are expected to reduce the price of renewables more so than coal in coming years.

The chart below, produced by consulting firm Jacobs Group and published in the recent Finkel review of the National Electricity Market, shows the projected levelised cost of electricity (LCOE) for a range of technologies in 2020, 2030 and 2050.

The chart shows a significant reduction in the cost of solar and wind, and a relatively static cost for mature technologies such as coal and gas. It also shows that large-scale solar photovoltaic (PV) generation, with a faster learning rate, is projected to be cheaper than wind generation from around 2020.

Notes: Numbers in Figure A.1 refer to the average.
For each generation technology shown in the chart, the range shows the lowest cost to the highest cost project available in Jacobs’ model, based on the input assumptions in the relevant year. The average is the average cost across the range of projects; it may not be the midpoint between the highest and lowest cost project.
Large-scale Solar Photovoltaic includes fixed plate, single and double axis tracking.
Large-scale Solar Photovoltaic with storage includes 3 hours storage at 100 per cent capacity.
Solar Thermal with storage includes 12 hours storage at 100 per cent capacity.
Cost of capital assumptions are consistent with those used in policy cases, that is, without the risk premium applied.
The assumptions for the electricity modelling were finalised in February 2017 and do not take into account recent reductions in technology costs (e.g. recent wind farm announcements).

Independent Review into the Future Security of the National Electricity Market

Wind prices are already falling rapidly. For example: the graph above shows the 2020 price for wind at A$92 per megawatt-hour (MWh). But when the assumptions for the electricity modelling were finalised in February 2017, that price was already out of date.

In its 2016 Next Generation Renewables Auction, the Australian Capital Territory government secured a fixed price for wind of A$73 per MWh over 20 years (or A$56 per MWh in constant dollars at 3% inflation).

In May 2017, the Victorian renewable energy auction set a record low fixed price for wind of A$50-60 per MWh over 12 years (or A$43-51 per MWh in constant dollars at 3% inflation). This is below the AGL price for electricity from the Silverton wind farm of $65 per MWh fixed over five years.

These long-term renewable contracts are similar to a LCOE, because they extend over a large fraction of the lifetime of the wind farm.

The tables and graph below show a selection of renewable energy long-term contract prices across Australia in recent years, and illustrate a gradual decline in wind energy auction results (in constant 2016 dollars), consistent with improvements in technology and economies of scale.

https://datawrapper.dwcdn.net/R1bBY/3/

https://datawrapper.dwcdn.net/IXtHg/3/

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But this analysis is still based on LCOE comparisons – or what it would cost to use these technologies for a simple “plug and play” replacement of an old generator.

Now let’s price in the cost of changes needed to the entire electricity network to support the use of renewables, and to price in other factors, such as climate change.

Carbon pricing will increase the cost of coal-fired power

The economic, environmental and social costs of greenhouse gas emissions are not included in simple electricity cost calculations, such as the LCOE analysis above. Neither are the costs of other factors, such as the health effects of air particle pollution, or deaths arising from coal mining.

The risk of the possible introduction of carbon emissions mitigation policies can be indirectly factored into the LCOE of coal-fired power through higher rates for the weighted average cost of capital (in other words, higher interest rates for loans).

The Jacobs report to the Finkel Review estimates that the weighted average cost of capital for coal will be 15%, compared with 7% for renewables.

The cost of greenhouse gas emissions can be incorporated more directly into energy prices by putting a price on carbon. Many economists maintain that carbon pricing is the most cost-effective way to reduce global carbon emissions.

One megawatt-hour of coal-fired electricity creates approximately one tonne of carbon dioxide. So even a conservative carbon price of around A$20 per tonne would increase the levelised cost of coal generation by around A$20 per MWh, putting it at almost A$100 per MWh in 2020.

According to the Jacobs analysis, this would make both wind and large-scale photovoltaics – at A$92 and A$91 per MWh, respectively – cheaper than any fossil fuel source from the year 2020.

It’s worth noting here the ultimate inevitability of a price signal on carbon, even if Australia continues to resist the idea of implementing a simple carbon price. Other policies currently under consideration, including some form of a clean energy target, would put similar upward price pressure on coal relative to renewables, while the global move towards carbon pricing will eventually see Australia follow suit or risk imposts on its carbon-exposed exports.

Australia’s grid needs an upgrade

Renewable energy (excluding hydro power) accounted for around 6% of Australia’s energy supply in the 2015-16 financial year. Once renewable energy exceeds say, 50%, of Australia’s total energy supply, the LCOE for renewables should be used with caution.

This is because most renewable energy – like that generated by wind and solar – is intermittent, and needs to be “balanced” (or backed up) in order to be reliable. This requires investment in energy storage. We also need more transmission lines within the electricity grid to ensure ready access to renewable energy and storage in different regions, which increases transmission costs.

And, there are additional engineering requirements, like building “inertia” into the electricity system to maintain voltage and frequency stability. Each additional requirement increases the cost of electricity beyond the levelised cost. But by how much?

Australian National University researchers calculated that the addition of pumped-hydro storage and extra network construction would add a levelised cost of balancing of A$25-30 per MWh to the levelised cost of renewable electricity.

The researchers predicted that eventually a future 100% renewable energy system would have a levelised cost of generation in current dollars of around A$50 per MWh, to which adding the levelised cost of balancing would yield a network-adjusted LCOE of around A$75-80 per MWh.

The Australian National University result is similar to the Jacobs 2050 LCOE prediction for large-scale solar photovoltaic plus pumped hydro of around A$69 per MWh, which doesn’t include extra network costs.

The AEMO 100% Renewables Study indicated that this would add another A$6-10 per MWh, yielding a comparable total in the range A$75-79 per MWh.

This would make a 100% renewables system competitive with new-build supercritical (ultrasupercritical) coal, which, according to the Jacobs calculations in the chart above, would come in at around A$75(80) per MWh between 2020 and 2050.

This projection for supercritical coal is consistent with other studies by the CO2CRC in 2015 (A$80 per MWh) and used by CSIRO in 2017 (A$65-80 per MWh).

So, what’s the bottom line?

The ConversationBy the time renewables dominate electricity supply in Australia, it’s highly likely that a price on carbon will have been introduced. A conservative carbon price of at least A$20 per tonne would put coal in the A$100-plus bracket for a megawatt-hour of electricity. A completely renewable electricity system, at A$75-80 per MWh, would then be more affordable than coal economically, and more desirable environmentally.

Ken Baldwin, Director, Energy Change Institute, Australian National University

This article was originally published on The Conversation. Read the original article.