India’s wicked problem: how to loosen its grip on coal while not abandoning the millions who depend on it


Anupam Nath/AP

Vigya Sharma, The University of QueenslandIndia is the world’s third largest emitter of greenhouse gases, and its transition to a low-carbon economy is crucial to meeting the goals of the Paris Agreement. But unfortunately, the nation is still clinging firmly to coal.

Our new research considered this problem, drawing on a case study in the Angul district, India’s largest coal reserve in the eastern state of Odisha.

We found three main factors slowing the energy transition: strong political and community support for coal, a lack of alternative economic activities, and deep ties between coal and other industries such as rail.

India must step away from coal, while maintaining economic growth and not leaving millions of people in coal-mining regions worse off. Our research probes this wicked problem in detail and suggests ways forward.

people carry baskets filled with coal
India’s energy transition must ensure those living in poverty are not left behind.
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Why India matters

India’s population will soon reach 1.4 billion and this decade it is expected to overtake China as the world’s most populous nation. This, combined with a young population, growing economy and rapid urbanisation, means energy consumption in India has doubled since 2000.

The International Energy Agency (IEA) estimates India will have the largest increase in energy demand of any country between now and 2040.

An affordable, reliable supply of energy is central to raising the nation’s living standards. A recent World Bank analysis found up to 150 million people in India are poor.

Alongside its massive reliance on coal, India has one of the world’s most ambitious renewable energy plans, including an aim to quadruple renewable electricity capacity by 2030.

The IEA says coal accounts for about 70% of India’s electricity generation. And as the nation rebounds from the coronavirus pandemic this year, the rise in coal-fired electricity production is expected to be three times that from cleaner sources.

Coal-powered generation is anticipated to grow annually by 4.6% to 2024, and coal is expected to remain a major emitter of greenhouse gases to 2040.

While India’s energy trajectory remains aligned with its commitments under the Paris Agreement, the speed and readiness of its transition remains a complex, divisive issue. The World Economic Forum’s 2021 Energy Transition Index ranks India 87th out of 115 countries analysed.




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Even without new fossil fuel projects, global warming will still exceed 1.5℃. But renewables might make it possible


students hold lights
India’s young, growing population is fuelling the nation’s energy demand.
EPA

Bottlenecks in the transition

Our research involved visits to the Angul district in Odisha in 2018 and 2019, where we conducted focus groups and interviews. Angul is home to 11 coal mines.

We found three crucial bottlenecks to the energy transition, which arguably exist in India’s other coal belts and could derail the nation’s decarbonisation efforts.

First, the Odisha government has historically been very pro-business. Politicians across the spectrum support coal mining and seek to position it as the region’s primary economic lifeline.

The official pro-coal position receives little pushback from Angul residents, who are largely unaware of Odisha’s contribution to national greenhouse gas emissions. Any local opposition to coal usually stems from concern about environmental degradation such as air, water and land pollution.

Most of Angul’s residents felt a deep connection to coal because their livelihood depends on it. One participant told us:

even if all the water is polluted and five inches of dust settles on our well, we would prefer mining to continue as my family’s survival depends on (the contract with the mining company).

Most participants considered their farming land as an asset to be sold to the mining companies for a significant sum. The money would, in turn, allow them to start a business, buy a car or arrange a marriage in the family.

people sit in dark room
Coal is important to the livelihoods of millions of Indian people.
AP

Second, the heavy reliance on coal means efforts to diversify the region’s economy have been grossly neglected.

In Angul, mining zones and coal-dedicated railway lines passing through paddy fields mean agricultural productivity has declined over time. Rural development agendas have been short-lived, often set within six months of an election deadline then changed or abandoned.

Skill-development programs in non-coal vocations have also been limited. This lack of viable alternatives implicitly generates local support for coal.

And third, a suite of industries in Odisha – such as steel, cement, fertiliser and bauxite – depend on cheap coal for power. This is reflected across India, where coal has deep ties with other industries in ways not seen elsewhere.

For example, in 2016 Indian Railways earned 44% of its freight revenue from transporting coal. Indian Railways is India’s largest employer and coal revenue helps keep passenger fares low. So in this way, a potential coal phaseout in India would have far-reaching effects.

people look out train window
Coal revenue helps subsidise train fares in India.
EPA

The way forward

We offer these pathways to ensure a steady, just energy transition in India:

  • India must help its coal regions diversify their economic activities
  • bipartisan support for a coal-free India is needed. Transition champions such as Germany can show India’s leaders the way
  • a national taskforce for energy transition should be established. It should include representatives from across industry and academia, as well as climate policymakers and grassroots organisations
  • India’s coal regions are endowed with metals needed in the energy transition, including iron ore, bauxite and manganese. With improved regulatory standards, these offer economic alternatives to coal
  • concerns about the coal phase-out from communities in coal regions should be addressed fairly and in a timely way.

The world’s emerging economies are responsible for two-thirds of global greenhouse gas emissions. The energy transition in India, if done well, could show the way for other developing nations.

But as new industrial sectors emerge and clean energy jobs grow, India must ensure those in coal-dependent regions are not left behind.




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South Korea’s Green New Deal shows the world what a smart economic recovery looks like


The Conversation


Vigya Sharma, Senior Research Fellow, Sustainable Minerals Institute, The University of Queensland

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

Three weeks without electricity? That’s the reality facing thousands of Victorians, and it will happen again


James Ross/AAP

Anthony Richardson, RMIT UniversityLast week’s storm system wreaked havoc across Victoria. Some 220,000 households and businesses lost power, and residents in the hills on Melbourne’s fringe were warned yesterday it might not be restored for three weeks.

The extreme weather severely damaged the poles and powerlines that distribute electricity, particularly in the Mount Dandenong area. Senior AusNet official Steven Neave said of the region this week, “we basically have no network left, the overhead infrastructure is pretty much gone. It requires a complete rebuild”.

That leaves about 3,000 customers without electricity for weeks, in the heart of winter. The loss of power also cut mobile phone and internet services and reportedly allowed untreated water to enter drinking supplies.

So, could this disaster have been avoided? And under climate change, how can we prepare for more events like this?

fallen tree on powerlines
Fallen trees brought down power lines across Melbourne.
Daniel Pockett/AAP

An uncertain future

The Mount Dandenong area is heavily forested, and the chance of above-ground power infrastructure being hit by falling trees is obviously high.

Without electricity, people cannot turn on lights, refrigerate food or medications, cook on electric stoves or use electric heaters. Electronic banking, schooling and business activities are also badly disrupted. For vulnerable residents, in particular, the implications are profound.

Such disruptions are hard to avoid, at least while the electricity network is above ground. Good management, however, can prevent some trees coming down in storms.

The more pertinent question is: how can we prepare for such an event in the future?

Scientists warn such extreme weather will increase in both frequency and severity as climate change accelerates. The Australian Energy Market Operator is acutely aware of this, warning climate change poses “material risks to individual assets, the integrated energy system, and society”.

However, it’s challenging to predict exactly how future heatwaves, storms, bushfires and floods will affect the power network. As AEMO notes, many climate models related to storms and cyclones involve an element of unpredictability. So, plans to make the electricity system more resilient must address this uncertainty.

As researchers have noted, there is no “one future” to prepare for – we must be ready for many potential eventualities.




Read more:
Victoria’s wild storms show how easily disasters can threaten our water supply


tree fallen on house
Under climate change, extreme weather is predicted to become more severe.
Daniel Pockett/AAP

Yallourn – the bigger problem?

Meanwhile, in Victoria’s LaTrobe Valley, a situation at the Yallourn coal-fired power station which may have even greater consequences for electricity supplies.

A coal mine wall adjacent to the station is at risk of collapse after flooding in the Morwell River caused it to crack. If the wall is breached and the mine is flooded, as happened in 2012, there will be no coal to power the station and almost a quarter of Victoria’s power supply could be out for months.

Victoria’s energy needs are increasingly supplied by renewables. However, losing Yallourn’s generation capacity would reduce the capacity of the network to adapt to other possible disruptions.

If further disruptions seem unlikely, it’s worth noting the Callide Power Station in Queensland is still operating at reduced capacity after a recent fire.




Read more:
An act of God, or just bad management? Why trees fall and how to prevent it


power plant with chimneys
A wall adjacent to the Yallourn power plant may collapse.
Julian Smith/AAP

Look beyond the immediate crisis

The Victorian government has offered up to A$1,680 per week, for up to three weeks, to help families without power buy supplies and find alternative accommodation.

Welfare groups say the assistance could be improved. They have called for changes to make it quicker and easier for people to access money, cash injections to frontline charities and more temporary accommodation facilities for displaced people and their pets.

While no doubt needed, these are all reactive responses targeted at those without electricity. When any system is disrupted, however, the effects can be widespread and felt long after the initial problem has been addressed.

Take dairy farmers in Gippsland, for example, who could not milk their cows without electricity. Cows must be milked regularly or else they stop producing milk – they cannot be “switched back on” when electricity is restored. Longer-term assistance may well be required for farmers facing such ripple effects.

And as welfare groups have noted, power companies should support affected customers over the long-term, with electricity discounts, deferrals and payment plans.




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Sign reading 'power and shower'
Relief centres offer affected residents a hot shower and electricity access, but longer-term solutions are also needed.
Daniel Pockett/AAP

A call for backup

So, what else can be done to prepare for future power disruptions? Those with backup options, such as portable fuel-powered generators, or off-grid household batteries connected to solar panels, will undoubtedly be more resilient in such events.

These are examples of “system redundancy”, providing alternative electricity until the network is restored.

But it costs money to invest in household batteries or a generator that may never be used. Resilience is often a function of wealth, and the less well-off risk being left behind.

Certainly, governments can act to make society as a whole more resilient to power outages. For example, mobile phone towers have backup battery life of just 24 hours. As Victoria’s Emergency Management Commissioner Andrew Crisp said this week, extending that is something authorities “need to look at”.

Power and communications infrastructure could be moved underground to protect it from storms. While such a move would be expensive, it has been argued not doing so will lead to greater long-term costs under a changing climate.

The recent challenges at Yallourn and Callide show the risks inherent in a centralised electricity network dominated by coal.

Certainly, integrating renewable energy sources into the power network comes with its own challenges. However, expanding energy storage such as batteries, or shifting to small, community-level microgrids will go a long way to improving the resilience of the system.

This story is part of a series The Conversation is running on the nexus between disaster, disadvantage and resilience. It is supported by a philanthropic grant from the Paul Ramsay Foundation. Find the series here.The Conversation

Anthony Richardson, Researcher and Teacher, Centre for Urban Research, RMIT University

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

Check your mirrors: 3 things rooftop solar can teach us about Australia’s electric car rollout


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Bjorn Sturmberg, Australian National University; Kathryn Lucas-Healey, Australian National University; Laura Jones, Australian National University, and Mejbaul Haque, Australian National UniversityGovernments and car manufacturers are investing hundreds of billions of dollars on electric vehicles. But while the electric transport revolution is inevitable, the final destination remains unknown.

The electric vehicle transition is about more than just doing away with vehicles powered by fossil fuels. We must also ensure quality technology and infrastructure, anticipate the future and avoid unwanted outcomes, such as entrenching disadvantage.

In Australia, the electric vehicle rollout has been slow, and federal action limited. But some state governments are working to electrify bus fleets, roll out public charging networks and trial smart vehicle charging in homes.

Australia’s world-leading rollout of rooftop solar power systems offers a guide to help navigate the transition. We’ve identified three key lessons on what’s gone well, and in hindsight, what could have been done differently.

solar panels on roofs
Australia’s rooftop solar boom offers insights into the electric vehicle revolution.
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1. Price isn’t everything

Solar systems and electric vehicles are both substantial financial investments. But research into rooftop solar has shown financial considerations are just one factor that guides purchasing decisions. Novelty, concerns about climate change and a desire for self-sufficiency are also significant – and electric vehicle research is producing similar findings.

When considering the electric vehicle rollout, understanding these deeper motivators may help avoid a race to the bottom on price.

About one in four Australian homes has rooftop solar, with almost three million systems installed. Solar companies have often sought to highlight the low price of rooftop systems over other considerations. This has created consumer demand for low-priced, lower-quality products – and led to potentially hundreds of thousands of substandard installations across Australia.




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So what are the lessons here for the electric vehicle rollout? First, when planning public infrastructure where electric vehicles can be charged, construction costs should not be the only consideration. Factors such as night-time safety and disability access should be prioritised. Shortcuts today will reinforce barriers for women and people with disabilities and create complex problems down the track.

Like rooftop solar, the point of sale of electric vehicles offers a unique opportunity to teach customers about the technology. Companies, however, can only afford to invest in customer education if they aren’t too stressed about margins.

“Smart” charging is one measure being explored to ensure the electricity network can handle future growth in electric vehicle uptake. Smart chargers can be remotely monitored and controlled to minimise their impact on the grid.

The point of sale is a pivotal moment to tell new owners of electric vehicles that their charging may at times be managed in this way.

EVs on charge
Electric vehicle charging infrastructure should be safe and accessible.
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2. Plan ahead

The uptake of rooftop solar in Australia has been a raging success. In fact, rooftop solar is now the largest generator in the national power system.

This raises issues, such as how rooftop solar systems will respond to a major disturbance, such as the failure of a transmission line. A large amount of solar power feeding into the grid can also challenge electricity network infrastructure.

In response, electricity networks have implemented changes such as limiting solar exports and therefore, returns to solar system owners, and charging fees for exporting solar.

Such retrospective changes have been unpopular with solar owners. So to maintain reliable electricity supplies, and avoid angering consumers, it’s vital to plan where and when electric vehicles are charged.

If every vehicle in Australia was electric, this would add about a quarter to national power demand. The rise in demand would be greatest near bus and logistics depots and ultra-fast highway chargers.




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Timing is key to maximising the use of a network connection without overloading it. For example, if everyone charged their vehicle in the evening after they get home from work, as this would put further pressure on electricity supplies at this peak time.

Governments and electricity providers should encourage electric vehicle charging during the day, when demand is lower. This might mean, for example, providing vehicle charging facilities at workplaces and in public areas.

Until Australia’s power grid transitions to 100% renewables, the use of solar energy should be strongly encouraged. This would ensure the vehicles were charged from a clean, cheap energy source and would help manage the challenges of abundant solar.

The question of road user charges for electric vehicles drivers is another example where it’s best to avoid retrospective changes. Such charges are necessary in the long run and best introduced from the outset.

woman's arm holds EV charger on car
Vehicle charging during the day, when power demand is lowest, should be encouraged.
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3. Coordination is key

Electric vehicle policy spans many government portfolios: transport, infrastructure, energy, planning, environment and climate change. Nationally, and from state to state, different ministers are in charge.

This makes coordination difficult, and creates the risk of policies undermining each other. For example, one policy might encourage the charging of electric vehicles from rooftop solar, to reduce carbon emissions. But because solar energy is so cheap, this might encourage more private vehicle use, which worsens road congestion.

So policies to encourage electric vehicle uptake should not come at the cost of creating more attractive and efficient public transport networks.

And new technologies can entrench societal disadvantage. For example, the rooftop solar rollout often excluded people who could not afford to buy the systems. Without policies to address this, the electric vehicle transition could lead to similar outcomes.

traffic queues in Sydney
Encouraging electric vehicle use could worsen road congestion, if not well managed.
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Lessons in the rear-view mirror

As Australia’s experience with rooftop solar has shown, successful technology transitions must be carefully planned and attentively steered.

In the case of electric vehicles, this will ensure the benefits to owners, society and the environment are fully realised. It will also ensure a smooth-as-possible transition, the gains from which all Australians can share.




Read more:
The US jumps on board the electric vehicle revolution, leaving Australia in the dust


The Conversation


Bjorn Sturmberg, Research Leader, Battery Storage & Grid Integration Program, Australian National University; Kathryn Lucas-Healey, Research Fellow, Australian National University; Laura Jones, Senior Analyst – Economics and Business models, Australian National University, and Mejbaul Haque, Research Fellow, Battery Energy Storage and Grid Integration Program, Research School of Engineering, Australian National University

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

The idea of ‘green growth’ is flawed. We must find ways of using and wasting less energy


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Michael (Mike) Joy, Te Herenga Waka — Victoria University of WellingtonAs countries explore ways of decarbonising their economies, the mantra of “green growth” risks trapping us in a spiral of failures. Green growth is an oxymoron.

Growth requires more material extraction, which in turn requires more energy. The fundamental problem we face in trying to replace fossil energy with renewable energy is that all our renewable technologies are significantly less energy dense than fossil fuels.

This means much larger areas are required to produce the same amount of energy.

Earlier this year, data from the European Union showed renewable electricity generation has overtaken coal and gas in 2020. But previous research argued that to replace the total energy (not just electricity) use of the UK with the best available mix of wind, solar and hydroelectricity would require the entire landmass of the country. To do it for Singapore would require the area of 60 Singapores.

I am not in any way denying or diminishing the need to stop emitting fossil carbon. But if we don’t focus on reducing consumption and energy waste, and instead fixate on replacing fossil fuels with renewable energy, we are simply swapping one race to destruction with another.




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The carbon causing our climate problem today came from fossilised biology formed through ancient carbon cycles, mostly over the 200 million years of the Mesozoic era (ending 66 million years ago).

We must stop burning fossil fuels, but we must also understand that every technology to replace them, while attempting to maintain our current consumption, let alone allowing for consumption growth, requires huge amounts of fossil energy.

Environmental impact of renewables

Carbon reduction without consumption reduction is only possible through methods that have their own massive environmental impacts and resource limitations.

To make renewable energy, fossil energy is needed to mine the raw materials, to transport, to manufacture, to connect the energy capture systems and finally to produce the machines to use the energy.

The new renewable infrastructure requires rare earth minerals, which is a problem in itself. But most of the raw materials required to produce and apply new energy technology are also getting harder to find. The returns on mining them are reducing, and the dilemma of declining returns applies to the very fossil fuels needed to mine the declining metal ore.




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Globally, despite building lots of renewable electricity infrastructure, we have not yet increased the proportion of renewable energy in our total energy consumption.

Electricity is only 20% of our total energy use. Renewable electricity has not displaced fossil energy in most countries because our consumption increases faster than we can add renewable generation.

The problems with wanting to maintain industrial civilisation are many, but the starkest is that it is the actual cause of our climate crisis and other environmental crises.

If we carry on with life as usual — the underlying dream of the “green growth” concept — we will end up destroying the life-supporting capacity of our planet.

What happened to environmentalism?

The green growth concept is part of a broader and long-running trend to co-opt the words green and environmentalist.

Environmentalism emerged from the 1960s as a movement to save the natural world. Now it seems to have been appropriated to describe the fight to save industrial civilisation — life as we know it.

This shift has serious implications because the two concepts — green growth and environmentalism — are inherently incompatible.

Traditionally, environmentalists included people like Rachel Carson, whose 1962 book Silent Spring alerted Americans to the industrial poisons killing birds and insects and fouling drinking water, or environmental organisations like Greenpeace saving whales and baby seals.

In New Zealand, being green had its roots in movements like the Save Manapouri campaign, which fought to save ancient native forests from inundation when a hydropower dam was built. Environmentalism had a clear focus on saving the living world.

Now environmentalism has been realigned to reducing carbon emissions, as if climate change was our only impending crisis. Parliamentary Greens seem set to want to reach net zero carbon by 2050 at any cost.

The word “net” allows champions of industry-friendly environmentalism to avoid considering the critical need to reduce our energy consumption.




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We must somehow drag ourselves away from our growth paradigm to tackle the multiple crises coming at us. Our only future is one where we consume less, do less, waste less and stop our obsession with accumulating.

If we keep trying to maintain our current growth trajectory, built on a one-off fossil bonanza, we will destroy the already stressed life-supporting systems that sustain us. Protecting these and their essential biotic components is true environmentalism — not attempting to maintain our industrial way of life, just without carbon.The Conversation

Michael (Mike) Joy, Senior Researcher; Institute for Governance and Policy Studies, Te Herenga Waka — Victoria University of Wellington

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

A ‘100% renewables’ target might not mean what you think it means. An energy expert explains


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James Ha, Grattan InstituteIn the global effort to transition from fossil fuels to clean energy, achieving a “100% renewables” electricity system is considered ideal.

Some Australian states have committed to 100% renewable energy targets, or even 200% renewable energy targets. But this doesn’t mean their electricity is, or will be, emissions free.

Electricity is responsible for a third of Australia’s emissions, and making it cleaner is a key way to reduce emissions in other sectors that rely on it, such as transport.

So it’s important we have clarity about where our electricity comes from, and how emissions-intensive it is. Let’s look at what 100% renewables actually implies in detail.

Is 100% renewables realistic?

Achieving 100% renewables is one way of eliminating emissions from the electricity sector.

It’s commonly interpreted to mean all electricity must be generated from renewable sources. These sources usually include solar, wind, hydro, and geothermal, and exclude nuclear energy and fossil fuels with carbon capture and storage.

But this is a very difficult feat for individual states and territories to try to achieve.

The term “net 100% renewables” more accurately describes what some jurisdictions — such as South Australia and the ACT — are targeting, whether or not they’ve explicitly said so.

These targets don’t require that all electricity people use within the jurisdiction come from renewable sources. Some might come from coal or gas-fired generation, but the government offsets this amount by making or buying an equivalent amount of renewable electricity.

A net 100% renewables target allows a state to spruik its green credentials without needing to worry about the reliability implications of being totally self-reliant on renewable power.

Solar panels on roofs
East coast states are connected to the National Electricity Market.
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So how does ‘net’ 100% renewables work?

All east coast states are connected to the National Electricity Market (NEM) — a system that allows electricity to be generated, used and shared across borders. This means individual states can achieve “net 100% renewables” without the renewable generation needing to occur when or where the electricity is required.

Take the ACT, for example, which has used net 100% renewable electricity since October 2019.

The ACT government buys renewable energy from generators outside the territory, which is then mostly used in other states, such as Victoria and South Australia. Meanwhile, people living in ACT rely on power from NSW that’s not emissions-free, because it largely comes from coal-fired power stations.

This way, the ACT government can claim net 100% renewables because it’s offsetting the non-renewable energy its residents use with the clean energy it’s paid for elsewhere.

SA’s target is to reach net 100% renewables by the 2030s. Unlike the ACT, it plans to generate renewable electricity locally, equal to 100% of its annual demand.

At times, such as especially sunny days, some of that electricity will be exported to other states. At other times, such as when the wind drops off, SA may need to rely on electricity imports from other states, which probably won’t come from all-renewable sources.




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More coal-fired power or 100% renewables? For the next few decades, both paths are wrong


So what happens if all states commit to net 100% renewable energy targets? Then, the National Electricity Market will have a de-facto 100% renewable energy target — no “net”.

That’s because the market is one entire system, so its only options are “100% renewables” (implying zero emissions), or “less than 100% renewables”. The “net” factor doesn’t come into it, because there’s no other part of the grid for it to buy from or sell to.

How do you get to “200% renewables”, or more?

It’s mathematically impossible for more than 100% of the electricity used in the NEM to come from renewable sources: 100% is the limit.

Any target of more than 100% renewables is a different calculation. The target is no longer a measure of renewable generation versus all generation, but renewable generation versus today’s demand.

Gas plant
Australia could generate several times more renewable energy than there is demand today, but still use a small and declining amount of fossil fuels during rare weather events.
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Tasmania, for example, has legislated a target of 200% renewable energy by 2040. This means it wants to produce twice as much renewable electricity as it consumes today.

But this doesn’t necessarily imply all electricity consumed in Tasmania will be renewable. For example, it may continue to import some non-renewable power from Victoria at times, such as during droughts when Tasmania’s hydro dams are constrained. It may even need to burn a small amount of gas as a backup.

This means the 200% renewable energy target is really a “net 200% renewables” target.

Meanwhile, the Greens are campaigning for 700% renewables. This, too, is based on today’s electricity demand.

In the future, demand could be much higher due to electrifying our transport, switching appliances from gas to electricity, and potentially exporting energy-intensive, renewable commodities such as green hydrogen or ammonia.

Targeting net-zero emissions

These “more than 100% renewables” targets set by individual jurisdictions don’t necessarily imply all electricity Australians use will be emissions free.

It’s possible — and potentially more economical — that we would meet almost all of this additional future demand with renewable energy, but keep some gas or diesel capacity as a low-cost backstop.

This would ensure continued electricity supply during rare, sustained periods of low wind, low sun, and high demand, such as during a cloudy, windless week in winter.




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The energy transition is harder near the end — each percentage point between 90% and 100% renewables is more expensive to achieve than the previous.

That’s why, in a recent report from the Grattan Institute, we recommended governments pursue net-zero emissions in the electricity sector first, rather than setting 100% renewables targets today.

For example, buying carbon credits to offset the small amount of emissions produced in a 90% renewable NEM is likely to be cheaper in the medium term than building enough energy storage — such as batteries or pumped hydro dams — to backup wind and solar at all times.

The bottom line is governments and companies must say what they mean and mean what they say when announcing targets. It’s the responsibility of media and pundits to take care when interpreting them.The Conversation

James Ha, Associate, Grattan Institute

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

We could be a superpower: 3 ways Australia can take advantage of the changing geopolitics of energy


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Christian Downie, Australian National UniversityThe International Energy Agency confirmed last week what many already knew: the world is undergoing a huge transformation in global energy markets. Fossil fuels are dying and renewables are on the rise.

Much of the focus has been on what this means for Australia, given the IEA declared there can be no new fossil fuel projects if global temperature rise is to be kept below 2℃.

But what the discussion has missed is how the shift to renewable energy is also set to transform Australia’s geopolitical environment. For a country that likes to think of itself as an energy superpower, it’s time we started paying attention.

Australia should embrace the opportunity to become a renewable energy power. If we don’t act now, with the global energy transition gathering pace, Australia could be exposed to a hostile international energy environment with profound economic, security and diplomatic consequences.

The new geopolitics of energy

The IEA’s declaration that new fossil fuel projects have to end now sits at odds with the federal government’s plans for a gas-led economic recovery, and its recent announcement of A$600 million to fund a major new gas-fired power plant.

But the IEA isn’t the only authoritative body making this claim. Most global energy transition scenarios project a peak in fossil fuel demand this decade and exponential growth in renewables, before a long decline in fossil fuel demand in the decades thereafter.

Recent commitments by Australia’s major trading partners to net-zero emissions, including China, Japan and South Korea, will only accelerate this process.

The IEA set out a roadmap to bring the planet to net-zero emissions by 2050. Indeed, under this net-zero scenario, oil demand peaked in 2019 and will fall by almost 75% between now and 2050. Demand for coal has peaked, too, and will fall even faster by 90%. The prospects for gas are only slightly better, with a decline of 55% out to 2050.

It’s no wonder Australian financial regulators keep warning about stranded assets.




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


The geopolitical consequences of this transition will be profound. To varying degrees, the changes taking place in energy markets will reorder patterns of cooperation and conflict between states.

At one end of the spectrum, some states will emerge as renewable powers — think Chile with its large solar resources in the Atacama Desert, or China with its superiority in renewable technologies.

Aerial view of solar panels in the desert
A solar energy power plant in the Atacama desert, Chile.
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At the other end of the spectrum, some states will experience political instability from the decline of fossil fuel revenues — think countries such as Saudi Arabia and Kuwait, where oil and gas revenues comprise more than 40% of their GDP.

Transitioning to clean energy will have huge upsides for Australia. But let’s start with the downsides, because the IEA has just put them up in lights.

Our international leverage will soon disappear

Successive federal governments have declared Australia to be an energy superpower.

One reason is our exports of coal and gas. Take LNG (liquefied gas) for example. In 2019 Australia overtook Qatar to become the largest exporter of LNG in the world, with total exports valued at A$48 billion, representing a 22% share of global exports.

The IEA says this must end if the world is to have any hope of avoiding the worst effects of climate change. If the gas industry hasn’t got the message yet, the IEA had some chilling news.

As the graph below shows, Australia’s gas exports will have to peak by 2025 and then fall off a cliff in the decades after, under a net-zero-by-2050 emissions scenario. The picture for coal is even worse.

The economic repercussions are obvious. As a political leader might say, it’s “jobs and growth” that’ll be hit hardest.

But this also has geopolitical implications. Australia has long relied on the economic strength we derive from being a dominant exporter of coal and gas to shape our bilateral relationships with countries, such as Japan and South Korea.

This leverage will soon disappear and it will force Australia to rethink how it engages with many nations and international organisations.

For example, potential disruptions to oil shipping lanes will likely become less of a concern. Nations may also compete to control the supply of rare minerals that are vital for a range of technologies needed for a clean energy transition, such as batteries and wind turbines.

What should Australia do?

First, Australia should harness its renewable resources. Australia’s solar radiation per year is around 10,000 times larger than our total energy consumption. If these resources are exploited, Australia can become energy self-sufficient and, at the same time, reduce its vulnerability to energy supply disruptions, such as from international conflicts.

Second, Australia should pursue export dominance. The rise of renewables will open up significant opportunities for Australia to become one of the primary exporters of clean electricity, hydrogen and critical minerals.

For example, growing demand for electricity in Asia combined with improvements in high-voltage direct current cables could see Australia export electricity to countries in our region, such as Indonesia and Singapore.




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Third, Australia should leverage its energy advantage. States with significant renewable resources that become energy self-sufficient and attain export dominance are likely to be “geopolitical winners”.

In other words, the economic power derived from Australia’s renewable energy advantage will open up opportunities to influence other countries and shape intergovernmental arrangements, such as those governing the future of international trade in hydrogen.

Being energy self-sufficient will also insulate Australia from the risk that other countries will seek to coerce it by disrupting energy supplies.

This opportunity won’t last forever. Countries that move first will gain an advantage in new industries, technologies and export markets. Those that wait may never catch up.




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The Conversation


Christian Downie, Associate professor, Australian National University

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

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.

Climate explained: is natural gas really cheaper than renewable electricity?


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Ralph Sims, Massey University


CC BY-ND

Climate Explained is a collaboration between The Conversation, Stuff and the New Zealand Science Media Centre to answer your questions about climate change.

If you have a question you’d like an expert to answer, please send it to climate.change@stuff.co.nz


The government wants us to phase out fossil fuels. Yet natural gas is much cheaper for households to buy per kWh than electricity. Why?

Natural gas is often touted as a transition fuel to use while we move away from coal and oil and as renewable energies continue to mature technologically and economically.

But the key point to note is that we simply cannot continue to produce greenhouse gases and the demand for natural gas, as for coal and oil, will soon have to decline rapidly.

In its draft package of recommendations to the government, New Zealand’s Climate Change Commission has called for a stop to new connections to the natural gas grid for commercial and residential buildings after 2025.

In that context, comparing the retail price of gas with electricity is not useful unless all other costs and likely future trends are considered.




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The natural gas grid

Natural gas is extracted from gas fields and processed to “scrub” out other gases and condensates. The resulting gas, mainly methane, is then distributed through pipelines.

In New Zealand, natural gas is reticulated around much of the North Island, but it is not available in the South Island, where bottled liquid petroleum gas (LPG) is the alternative.

LPG is pressurised butane and propane that come from the scrubbed natural gas condensates as well as from oil refineries. A few cars such as taxis still use LPG, as do gas barbecues.

Natural gas is also combusted in gas-fired power stations to generate electricity. In New Zealand, this accounts for around 15% of total generation. Large volumes of gas are purchased relatively cheaply by power-generating companies and the electricity is then distributed through the grid to homes and businesses.

Cost comparison

The retail cost of electricity varies but is typically around 25 cents per kWh (also known as “c/unit”) for domestic users. Some retailers offer cheaper rates during “off-peak” times (to heat water for example).

The retail price for natural gas also varies and can be around 8c/kWh in Auckland or 5c/kWh in Wellington. If used for cooking, it can be cheaper than electricity. But to heat a building, an electric heat pump can be a cheaper option than a gas heater.

A heat pump concentrates the heat taken from the outside air and “pumps” it into the house very efficiently. One kWh of electricity consumed to run a heat pump can produce 3-4kWh of heat energy inside the house. It can also run the process in reverse and cool the air inside during hot summer days.

When comparing the cost of gas with electricity, two other cost factors must be considered. Under New Zealand’s Emissions Trading Scheme, there is a cost on the carbon dioxide produced when the gas is combusted because, like LPG, it is a fossil fuel and produces greenhouse gases.




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The current cost per tonne of carbon dioxide emitted is around NZ$35 (or around 1c per kWh of gas), but it is likely to increase significantly over the next few years. This will be added to domestic gas bills. Electricity bills are less affected by carbon price rises because (more than 80% of electricity) in New Zealand is generated from low-carbon renewable resources.

The other cost to consider is the fixed connection charge for having a gas pipeline coming into the house. This cost also varies, but in Auckland some customers pay $1.15 per day. In Wellington, some pay $1.60 per day.

A house running fully on electricity will avoid this fixed cost. There will be a fixed daily supply charge for the electricity connection but most homes have to pay this anyway in order to have lighting and electrical appliances.

Additional risks

When gas is combusted inside a building to provide heat, the process consumes oxygen and produces water vapour. If ventilation is poor, oxygen levels drop and carbon monoxide is also produced, which can lead to poisonous air.

The water vapour results in condensation, obvious on windows at certain times of the day. That, too, can lead to unhealthy mould in poorly ventilated homes.

And there are further risks with gas. As exemplified by an explosion last year in a Christchurch home, natural gas (methane) is volatile as well as toxic.
Of course there are also risks with using electricity, though fairly rare, such as getting an electric shock or vermin eating through plastic cable coverings and shorting the wires, which can start fires.

While gas may appear cheaper, this applies only to certain energy uses (such as cooking). Overall, the cost of gas is likely to rise significantly in the near future.

The Climate Change Commission’s final advice to government is due at the end of May and will provide a time frame for the end of new gas connections — but there is no intention to disconnect existing gas supplies to buildings at this stage.The Conversation

Ralph Sims, Professor, School of Engineering and Advanced Technology, Massey University

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

Paying Australia’s coal-fired power stations to stay open longer is bad for consumers and the planet


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Daniel J Cass, University of Sydney; Joel Gilmore, Griffith University, and Tim Nelson, Griffith UniversityAustralian governments are busy designing the nation’s transition to a clean energy future. Unfortunately, in a misguided effort to ensure electricity supplies remain affordable and reliable, governments are considering a move that would effectively pay Australia’s old, polluting coal-fired power stations to stay open longer.

The measure is one of several options proposed by the Energy Security Board (ESB), the chief energy advisor to Australian governments on electricity market reform. The board on Friday released a vision to redesign the National Electricity Market as it transitions to clean energy.

The key challenges of the transition are ensuring it is smooth (without blackouts) and affordable, as coal and gas generators close and are replaced by renewable energy.

The redesign has been two years in the making. The ESB has done a very good job of identifying key issues, and most of its recommendations are sound. But its option to change the way electricity generators and retailers strike contracts for electricity, if adopted, would be highly counterproductive – bad both for consumers and for climate action.

Electricity lines at sunset
One proposed reform to Australia’s electricity market would be bad for consumers and climate action.
Shutterstock

The energy market dilemma

The National Electricity Market (NEM) covers every Australian jurisdiction except Western Australia and the Northern Territory. It comprises electricity generators, transmission and distribution networks, electricity retailers, customers and a financial market where electricity is traded.

Electricity generators in the NEM comprise older, polluting technology such as gas- and coal-fired power, and newer, clean forms of generation such as wind and solar. Renewable energy, which makes up about 23% of our electricity mix, is now cheaper than energy from coal and gas.

Wind and solar energy is “variable” – only produced when the sun is shining and the wind is blowing. Technology such as battery storage is needed to smooth out renewable energy supplies and make it “dispatchable”, meaning it can be delivered on demand.

Some say coal generators, which supply dispatchable electricity, are the best way to ensure reliable and affordable electricity. But Australia’s coal-fired power stations, some of which are more than 40 years old, are becoming more prone to breakdowns – and so less reliable and more expensive – as they age. This has led to some closing suddenly.

Without a clear national approach to emissions targets, there’s a risk these sudden closures will occur again.




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Wind farm near coast
Wind and solar energy is variable.
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So what’s proposed?

To address reliability concerns, the ESB has proposed an option known as the “physical retailer reliability obligation”.

In a nutshell, the change would require electricity retailers to negotiate contracts for a certain amount of “dispatchable” electricity from specific generators for times of the year when reliability is a concern, such as the peak weeks of summer when lots of people use air conditioning.

Currently, the Australian Energy Market Operator has reserve electricity measures it can deploy when market supply falls short.

But under the new obligation, all retailers would also have to enter contracts for dispatchable supply. This would likely require buying electricity from the coal generators that dominate the market. This provides a revenue source enabling these coal plants to remain open even when cheaper renewable energy makes them unprofitable.

The ESB says without the change, the closure of coal generators will be unpredictable or “disorderly”, creating price shocks and reliability risks.

hand turns off light switch in bedroom
The ESWB says the recommendation would address concerns over electricity reliability.
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A big risk

Even the ESB concedes the recommendation comes with considerable risks. In particular, the board says it may:

  • impose increased barriers to retail competition and product innovation
  • lead to possible overcompensation of existing coal and gas generators.

In short, the policy could potentially lock in increasingly unreliable, ageing coal assets, stall new investment in new renewable energy storage such as batteries and pumped hydro and increase market concentration.

It could also push up electricity prices. Electricity retailers are likely to pass on the cost of these new electricity contracts to consumers, no matter how much energy that household or business actually used.

The existing market already encourages generators to provide reliable supply – and applies strong penalties if they don’t. And in fact, the NEM experiences reliability issues for an average of just one minute per year. It would appear little could be added to the existing market design to make generators more reliable than they are.

Finally, the market is dominated by three large “gentailers” – AGL, Energy Australia and Origin – which own both generators and the retail companies that sell electricity. The proposed change would disadvantage smaller electricity retailers, which in many cases would be forced to buy electricity from generators owned by their competitors.

Australia’s gentailers are heavily invested in coal power stations. The proposed change would further concentrate their market power while propping up coal.




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warning sign on fence
The proposed change brings a raft of risks to the electricity market.
Kelly Barnes/AAP

What governments should do

If coal-fired power stations are protected from competition, it will deter investment in cleaner alternatives. The recommendation, if adopted, would delay decarbonisation and put Australia further at odds with our international peers on climate policy.

The federal and state governments must work together to develop a plan for electricity that facilitates clean energy investment while controlling costs for consumers.

The plan should be coordinated across the states. Without this, we risk creating a sharper shock later, when climate diplomacy requires the planned retirement of coal plants. Other nations have acknowledged the likely demise of coal, and it’s time Australia caught up.




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The Conversation


Daniel J Cass, Research Affiliate, Sydney Business School, University of Sydney; Joel Gilmore, Associate Professor, Griffith University, and Tim Nelson, Associate Professor of Economics, Griffith University

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