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.

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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.

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What do we tell kids about the climate change future we created for them?


Marc Hudson, University of Manchester

Over the past two years The Conversation has published my analyses on a range of topics related to climate change and politics, including climate denial in the Liberal Party, 25-year-old cabinet papers (not once but twice), coal industry PR campaigns and much else besides.
Finally comes a topic I can cheerfully say I know nothing about (at first hand, at least): raising children.

Apologies for oversharing, but I had a vasectomy in 2004. The columnist Andrew Bolt spotted this, via an article in Britain’s Daily Mail which clearly stated that I was the one who had been under the knife. Bolt claimed that my wife had “sterilised herself”. (She does a lot of yoga, but she’s not that flexible. We have pointed this out but Bolt has kept at it, repeating the claim almost six years later).

Despite what the Daily Mail article says (and what is within the quotes was never said), our decision not to have kids wasn’t based on concern for what our hypothetical children would do to the planet, but rather what the planet would do to them. My wife copped some online abuse, and I was once disinvited to appear on the BBC after explaining my actual position.

I first switched on to climate change in about 1989, and have become convinced that the second half of the 21st century will probably make the first half of the 20th look like a golden age of peace and love. There have been 30 years of promises and pledges, protocols and agreements, while atmospheric greenhouse gas levels have climbed remorselessly due to humanity’s emissions. I suspect that the reported recent flatlining in emissions growth could well turn out to be as illusory as the so-called global warming “hiatus”.

Writing recently in the Sydney Morning Herald, climate scientist Sophie Lewis eloquently asked:

Should we have children? And if we do, how do we raise them in a world of change and inequity? Can I reconcile my care and concern for the future with such an active and deliberate pursuit of a child? Put simply, I can’t.

While I would never presume to tell anyone what to do with their genitals, I must confess my personal amazement that climate activists who do have children – and who I know have read the same scientific research as me and drawn the same conclusions – aren’t freaking out more. (Perhaps they are just very tired.)

As the Manic Street Preachers sagely warned, our children will have to tolerate whatever we do, and more besides.

Be prepared?

So how do we prepare tomorrow’s adults for the world bequeathed to them by the adults of yesterday and today? Even the mainstream media is beginning to ask this question.

Some studies say young people don’t care enough about climate change; others claim they do. The Australian picture seems to be mixed.

As the environmental writer Michael McCarthy has lamented:

A new edition of the Oxford Junior Dictionary was published in 2007 with a substantial group of words relating to nature – more than 50 – excised: they included acorn, adder, ash, beech, bluebell, buttercup, catkin, conker, cowslip and dandelion. Their replacements included terms from the digital world such as analogue, blog, broadband, bullet-point, celebrity, chatroom, cut-and-paste, MP3 player and voicemail.

Might we be more adaptive than we think? The social demographers Wolfgang Lutz and Raya Muttarak, in their snappily titled paper Forecasting societies’ adaptive capacities through a demographic metabolism model, think so, describing how “the changing educational composition of future populations” might help societies adapt to climate change.

But not everyone thinks our brains will get us out of the mess that they and our opposable thumbs have got us into. As an editor at the Daily Climate pointed out:

A substantial portion of the human population lives on coasts. Much of their protein comes from fish. What happens when ocean acidification turns all of that to slime?

So what should we tell kids about climate?

It always helps to be open to advice from different settings. For instance, I stumbled on this good advice on a blog aimed at military spouses, but it strikes me that it holds just as true for the climate-concerned:

It is okay to show sadness around your kids; in fact, it is probably healthy. However, it is not okay to dump your emotions on them. Save rants and deep conversations for trusted adults.

If you are feeling overwhelmed (and you will), don’t turn to your kids. Children are usually helpless to offer advice and it can cause them to experience anxiety. Seek help from an adult friend … extended family, a neighbor, your church, or a counselor.

Sophie Lewis sensibly hopes that the next generation(s) “can be more empathetic, more creative and more responsive than we have been”. It’s a noble hope, but it will only happen if we behave differently.

So as previously in this column, it’s over to you, the readers. I have a couple of questions for you:

First, how do those of you who are parents (and grandparents, aunts and uncles) talk to your children about the climate change impacts that will happen in their lifetimes? Avoidance? Sugar-coating? The “straight dope”? Do you slip books from the burgeoning fields of dystopian fiction and “cli-fi” into their Christmas stockings? Besides The Hunger Games, there is Tomorrow, When the War Began, the excellent Carbon Diaries and, more recently, James Bradley’s The Silent Invasion. Do you worry about scaring the kids? What do the youngsters themselves say?

The ConversationSecond, what steps are you taking to help young people develop the (practical and interpersonal) skills required to survive as times get tougher? What are those skills? How do we make sure that it isn’t just the few (children of the rich and/or the “switched on”) who gain these skills?

Marc Hudson, PhD Candidate, Sustainable Consumption Institute, University of Manchester

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

The Sydney Barrier Reef: engineering a natural defence against future storms


Rob Roggema, University of Technology Sydney

The risk of more severe storms and cyclones in the highly urbanised coastal areas of Newcastle, Sydney and Wollongong might not be acute, but it is a real future threat with the further warming of the southern Pacific Ocean. One day a major storm – whether an East Coast Low or even a cyclone – could hit Sydney. The Conversation

With higher ocean temperatures killing and bleaching coral along the Great Barrier Reef to the north, we could also imagine where the right temperatures for a coral reef would be in a warmer climate. Most probably, this would be closer to the limits of the low latitudes, hence in front of the Sydney metro area.

We should then consider whether it is possible to help engineer a natural defence against storms, a barrier reef, should warming oceans make conditions suitable here.

Ocean warming trend is clear

The oceans are clearly warming at an alarming rate, with the unprecedented extent and intensity of coral bleaching events a marker of rising temperatures. After the 2016-2017 summer, coral bleaching affected two-thirds of the Great Barrier Reef.

On the other side of the Pacific, sea surface temperatures off Peru’s northern coast have risen 5-6℃ degrees above normal. Beneath the ocean surface, the warming trend is consistent too.

The East Australian Current keeps the waters around Lord Howe Island warm enough to sustain Australia’s southernmost coral reef. The waters off Sydney are just a degree or two cooler.

With the East Australian Current now extending further south, the warming of these south-eastern coastal waters might be enough in a couple of decades for Nemo to swim in reality under Sydney Harbour Bridge.

This shift in ocean temperatures is expected to drive strong storms and inland floods, according to meteorologists.

On top of this, when we plot a series of maps since 1997 of cyclone tracks across the Pacific, it shows a slight shift to more southern routes. These cyclones occur only in the Tasman Sea and way out from the coast, but, still, there is a tendency to move further south. The northern part of New Zealand recently experienced the impacts this could have.

Think big to prepare for a big storm

If we would like to prevent what Sandy did to New York, we need to think big.

If we don’t want a storm surge entering Parramatta River, flooding the low-lying areas along the peninsulas, if we don’t want flash-flooding events as result of river discharges, if we don’t want our beaches to be washed away, if we want to keep our property along the water, and if we want to save lives, we’d better prepare to counter these potential events through anticipating their occurrence.

The coast is the first point where a storm impacts the city. Building higher and stronger dams have proven to be counterproductive. Once the dam breaks or overflows the damage is huge. Instead we should use the self-regenerating defensive powers nature offers us.

Thinking big, we could design a “Sydney Barrier Reef”, which allows nature to regenerate and create a strong and valuable coast.

The first 30-40 kilometres of the Pacific plateau is shallow enough to establish an artificial reef. The foundations of this new Sydney Barrier Reef could consist of a series of concrete, iron or wooden structures, placed on the continental shelf, just beneath the water surface. Intelligently composed to allow the ocean to bring plants, fish and sand to attach to those structures, it would then start to grow as the base for new coral.

This idea has not been tested for the Sydney continental flat yet. But in other parts of the world experiments with artificial reefs seem promising. At various sites, ships, metro carriages and trains seem to be working as the basis for marine life to create a new underworld habitat

The Sydney Barrier Reef will have the following advantages:

  1. Over decades a natural reef will grow. Coral will develop and a new ecosystem will emerge.

  2. This reef will protect the coast and create new sandbanks, shallow areas and eventually barrier islands, as the Great Barrier Reef has done.

  3. It will increase the beach area, because the conditions behind the reef will allow sediments to settle.

  4. It creates new surfing conditions as a result of the sandbanks.

  5. It will protect Sydney from the most severe storm surges as it breaks the surge.

  6. It will present a new tourist attraction of international allure.

Let’s create a pilot project as a test. Let’s start to design and model the pilot to investigate what happens in this particular location. Let’s simulate the increase of temperature over time and model the impact of a cyclone.

Let’s create, so when Sandy hits Sydney, we will be better protected.

Rob Roggema, Professor of Sustainable Urban Environments, University of Technology Sydney

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

Was Tasmania’s summer of fires and floods a glimpse of its climate future?


Alistair Hobday, CSIRO; Eric Oliver, University of Tasmania; Jan McDonald, University of Tasmania, and Michael Grose, CSIRO

Drought, fires, floods, marine heatwaves – Tasmania has had a tough time this summer. These events damaged its natural environment, including world heritage forests and alpine areas, and affected homes, businesses and energy security.

In past decades, climate-related warming of Tasmania’s land and ocean environments has seen dozens of marine species moving south, contributed to dieback in several tree species, and encouraged businesses and people from mainland Australia to relocate. These slow changes don’t generate a lot of attention, but this summer’s events have made people sit up and take notice.

If climate change will produce conditions that we have never seen before, did Tasmania just get a glimpse of this future?

Hot summer

After the coldest winter in half a century, Tasmania experienced a warm and very dry spring in 2015, including a record dry October. During this time there was a strong El Niño event in the Pacific Ocean and a positive Indian Ocean Dipole event, both of which influence Tasmania’s climate.

The dry spring was followed by Tasmania’s warmest summer since records began in 1910, with temperatures 1.78℃ above the long-term average. Many regions, especially the west coast, stayed dry during the summer – a pattern consistent with climate projections. The dry spring and summer led to a reduction in available water, including a reduction of inflows into reservoirs.

Left: September-November 2015 rainfall, relative to the long-term average. Right: December 2015-February 2016 temperatures, relative to the long-term average.
Bureau of Meteorology, Author provided

Is warmer better? Not with fires and floods

Tourists and locals alike enjoyed the clear, warm days – but these conditions came at a cost, priming Tasmania for damaging bushfires. Three big lightning storms struck, including one on January 13 that delivered almost 2,000 lightning strikes and sparked many fires, particularly in the state’s northwest.

By the end of February, more than 300 fires had burned more than 120,000 hectares, including more than 1% of Tasmania’s World Heritage Area – alpine areas that had not burnt since the end of the last ice age some 8,000 years ago. Their fire-sensitive cushion plants and endemic pine forests are unlikely to recover, due to the loss of peat and soils.

Meanwhile, the state’s emergency resources were further stretched by heavy rain at the end of January. This caused flash flooding in several east coast towns, some of which received their highest rainfall ever. Launceston experienced its second-wettest day on record, while Gray recorded 221 mm in one day, and 489 mm over four days.

Flooding and road closures isolated parts of the state for several days, and many businesses (particularly tourism) suffered weeks of disruption. The extreme rainfall was caused by an intense low-pressure system – the Climate Futures for Tasmania project has predicted that this kind of event will become more frequent in the state’s northeast under a warming climate.

Warm seas

This summer, an extended marine heatwave also developed off eastern Tasmania. Temperatures were 4.4℃ above average, partly due to the warm East Australian Current extending southwards. The heatwave began on December 3, 2015, and was ongoing as of April 17 – the longest such event recorded in Tasmania since satellite records began in 1982. It began just days after the end of the second-longest marine heatwave on record, from August 31 to November 28, 2015, although that event was less intense.

Anatomy of a marine heatwave. Top left: summer sea surface temperatures relative to seasonal average. Top right: ocean temperature over time; red shaded region shows the ongoing heatwave. Bottom panels: duration (left) and intensity (right) of all recorded heatwaves; the ongoing event is shown in red.
Eric Oliver

As well as months of near-constant heat stress, oyster farms along the east coast were devastated by a new disease, Pacific Oyster Mortality Syndrome, which killed 100% of juvenile oysters at some farms. The disease, which has previously affected New South Wales oyster farms, is thought to be linked to unusually warm water temperatures, although this is not yet proven.

Compounding the damage

Tasmania is often seen as having a mild climate that is less vulnerable to damage from climate change. It has even been portrayed as a “climate refuge”. But if this summer was a taste of things to come, Tasmania may be less resilient than many have believed.

The spring and summer weather also hit Tasmania’s hydroelectric dams, which were already run down during the short-lived carbon price as Tasmania sold clean renewable power to the mainland. Dam levels are at an all-time low and continue to fall.

The situation has escalated into a looming energy crisis, because the state’s connection to the national electricity grid – the Basslink cable – has not been operational since late December. The state faces the prospect of meeting winter energy demand by running 200 leased diesel generators, at a cost of A$43 million and making major carbon emissions that can only exacerbate the climate-related problems that are already stretching the state’s emergency response capability.

Is this summer’s experience a window on the future? Further study into the causes of climate events, known as “detection and attribution”, can help us untangle the human influence from natural factors.

If we do see the fingerprint of human influence on this summer, Tasmania and every other state and territory should take in the view and plan accordingly. The likely concurrence of multiple events in the future – such as Tasmania’s simultaneous fires and floods at either end of the island and a heatwave offshore – demands that governments and communities devise new strategies and mobilise extra resources.

This will require unprecedented coordination and cooperation between governments at all levels, and between governments, citizens, and community and business groups. Done well, the island state could show other parts of Australia how to prepare for a future with no precedent.

The Conversation

Alistair Hobday, Senior Principal Research Scientist – Oceans and Atmosphere, CSIRO; Eric Oliver, Postdoctoral Fellow (Physical Oceanography and Climate), University of Tasmania; Jan McDonald, Professor of Environmental Law, University of Tasmania, and Michael Grose, Climate Projections Scientist, CSIRO

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

19th century weather data is helping climate scientists predict the future


Linden Ashcroft, Universitat Rovira i Virgili; Howard Bridgman, University of Newcastle, and Ken Thornton, University of Newcastle

The 19th-century English historian Lord Acton famously advised people to live in both the future and the past, and said “those who do not live in the past cannot live in the future”.

It may seem a stretch to apply this famous quotation to climate research, but we can’t possibly understand how the climate will change in the future without first understanding how it changed in the past.

Australia’s official climate record, kept by the Bureau of Meteorology, begins in 1910. But historical climate records kept before the development of national meteorological organisations are valuable tools for improving our understanding of what has happened in the past.

They also put the present into a long-term context, and improve climate models used to predict the future.

What can old numbers really tell us?

One thing historical records can help us understand is extreme weather events – the aspect of climate change that has people most concerned. How can we prepare cities and buildings for storms in the future without understanding what previous storms have done?

It is true that historical observations have reliability issues and are sometimes hard to compare to modern observations, which are recorded in a standard way. However, old weather records can still tell us a lot about year-to-year changes, and there are many ways to minimise reliability problems.

There are several climate and weather analysis products that recreate how the atmosphere behaved over time. In the Southern Hemisphere, these climate tools are generally uncertain until the mid-20th century, due to a lack of – you guessed it — long-term data.

Historical records can also help us hone climate models for predicting the future. Some of the atmospheric and oceanic features that dominate our climate have cycles that can last several decades. This means that modern climate data starting in the 20th century may only capture one or two cycles of a particular feature, making it hard to train climate models on the full range of our climate variability.

Historical weather records are also important for past climate analysis. Extracting the climate signal from tree rings, ice cores, or documentary data, requires instrumental climate records for comparison. The longer the climate records are, the better this comparison will be.

What exists for Australia?

In the past few years, concerted efforts at the Bureau of Meteorology and several universities have been able to recover and analyse a large amount of historical climate data for Australia. Most of these observations come from Australia’s southeast, as this is the region that was first colonised by Europeans.

There are now studies that explore temperature, rainfall and atmospheric pressure variability in southeastern Australia back to the 1860s. Several studies have even rescued data from 1788.

With these newly recovered observations, we have learned a lot about Australia’s climate in the 19th century, as well as the early years of English colonisation. But there is still a lot we don’t know.

In particular, the majority of our old weather data come from coastal locations, where the weather is more sensitive to local factors rather than large-scale features such as the El Niño–Southern Oscillation (ENSO).

A rare opportunity

In 2011, some weather diaries were donated to the University of Newcastle and University of New England. The diaries contain 45 years of daily handwritten weather observations of a Mr Algernon Belfield taken on his 8,000-hectare property, Eversleigh, near Armidale in northern New South Wales.

A H Belfield at Eversleigh
Belfield Family

A pastoralist, amateur meteorologist and astronomer, Belfield took these meticulous weather observations every morning at 9am from June 1877 until August 1922, a month before his death.

His observations continued through the period of the 1891 shearers’ strike, the Boer War, Australia’s Federation, the First World War and the Centennial and Federation droughts.

Belfield’s diaries also span the period that inspired Dorothea Mackellar’s famous ode to Australia, My Country.

The last few decades of the 19th century were indeed times of “droughts and flooding rains”, thanks to a string of La Niña and El Niño phases of ENSO.

Belfield weather diaries
Ken Thornton (Author)

Belfield’s steady hand captured the weather at Eversleigh during a time of dramatic variability before the impact of human-induced climate change, in a region where the climate is highly correlated with ENSO.

His detailed records, therefore, provide us with a unique opportunity to uncover more about this period in our climate history than ever before.

The handwritten records are scanned but need to be transcribed into a digitised format. We are looking for volunteers to help us with this important task of recovering our climate history. If you are interested, please contact us here, to help shed light on Australia’s past, present and future climate.

The Conversation

Linden Ashcroft, Senior Researcher, Universitat Rovira i Virgili; Howard Bridgman, Conjoint Professor, University of Newcastle, and Ken Thornton, Affiliate, Cultural Collections, University of Newcastle

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

After Paris, the future of Australian coal is downhill


Gary Ellem, University of Newcastle

The ink is barely dry on the Paris climate agreement and the debate has already started on how the deal will affect the future of fossil fuels, particularly coal.

Following the deal on Sunday, the mining industry has responded that Australian coal will remain an important provider of affordable energy to developing countries. The industry argues new low emissions technologies will keep coal in business as the world cuts carbon.

Foreign minister Julie Bishop echoed the sentiment in Paris last week, stating “coal-fired power generation is here to stay.”

The agreement aims to limit global temperature rise to less than 2℃, with an aspiration of 1.5℃. So what is the future of coal in a world that meets these temperature limits?

Who’s going to build the new coal infrastructure?

Keeping warming “well below 2℃ above preindustrial levels and pursuing efforts to limit the temperature increase to 1.5℃” essentially means all new electricity generation from now on must be zero emissions or have a short amortisation life. Current emissions-intensive generation will also have to be phased out in line with the end of its initial design life.

Most coal in Australia is mined to be exported. For Australian coal exports to continue to play a significant role in our balance of trade, we must have international customers.

Australia produces both thermal coal for electricity and metallurgical coal for manufacturing, which is exported mainly to countries in Asia. Some of these customers, such as China and India, have their own coal production sectors, which produce significantly more coal than Australia. Others, such as Japan, are completely import dependent.

Whichever way the coal is used, it will add to the amount of greenhouse gases in the atmosphere unless these emission are captured by carbon capture and storage (CCS) technologies.

The infrastructure that will power our international customers’ electricity grids, steel and cement plants in 2050 largely hasn’t been built yet. In a less than 2℃ world, all of this infrastructure will have to be close to zero emissions. In a 1.5℃ world, any remaining emissions will have to be offset.

This means that if our customers decide to stay with coal, they will have to replace their existing infrastructure with new infrastructure incorporating carbon capture and storage, and even further offset emissions for a 1.5℃ future with the use of biomass.

It’s clear that China has already opted for an anything but coal policy. The policy future for India is not so clear, but they are clearly planning to be more self sufficient in coal production regardless of climate objectives. Neither of these look good for the future of Australian coal exports in either the short or long term.

The competition is heating up

The Australian coal export sector is threatened by both the rise of competing technologies and other suppliers.

Competing technologies in the electricity generation space are numerous and include nuclear as well as a swathe of renewable energy technologies that are becoming cheaper and more practical.

It’s clear that carbon capture and storage technologies have failed in the current competition environment as a cheap alternative to the other low and zero-emissions technologies such as renewables. Coal has rapidly ceded ground to gas, wind, hydro and solar in key markets such as the US and China.

The long-term outlook for coal for electricity then, is shaky at best. Australia is competing for market share in a shrinking market. The International Energy Agency report quoted by the Minerals Council for a rosy coal future is very clear that the modelling is based on the continuation of pre-Paris trends rather than the Paris agreement.

Even the well-trodden claims that intermittent renewables can’t supply the baseload power normally supplied by coal are looking flaky. Energy storage in the form of batteries in particular is rapidly getting cheaper and building in production capacity. A number of different battery types including lithium ion, sodium ion, aluminium ion and liquid metal batteries are all in development with on grid storage markets in mind.

The outlook for metallurgical coal may be more promising, simply because there are fewer technologies to compete.

Coal is used predominantly in blast furnaces to convert iron ore into metallic iron. Blast furnaces use coking coal to hold iron ore in place, while cheaper Pulverised Coal Injection (or PCI) coal is used to remove oxygen from the iron.

PCI coal can be replaced by charcoal from plants, reducing emissions by 18% to 40%. But there’s no current replacement for coking coal used in a blast furnace.

The Hismelt process from Rio Tinto can convert iron ore to new iron without the need for coking coal. But this technology is in its commercial infancy.

Should we rely on the Australian coal industry?

The coal industry has played an important role in the development of Australia as a modern industrialised economy. It has formed the basis for energy security in the Australian electricity sector and our domestic steel sector.

In more recent times, coal has been a major export commodity for Australia and has also powered the export-focused aluminium sector. Despite all of these great achievements, it’s hard to see a long-term positive future for the industry in a global marketplace looking for competitive solutions to their 2℃ and 1.5℃ needs.

Innovation is borne of constraint however, and it will be good for all of us if carbon capture and storage could be made cheap enough and deployable enough for widespread use. There are reasons for pursuing this technology besides coal. Carbon capture and storage can be combined with bioenergy in the form of BECCS to develop one of the few large-scale ways in which we may actively remove greenhouse gases from the atmosphere.

Given the likely demise of this substantial national export industry over the next few decades, we would be wise to think about what other innovative opportunities we can draw from the sector while it still has scale. Our coal miners are in the energy industry, but we would be foolish and simplistic if we think the only replacement industries emerging from coal is renewable energy.

We have a coal export industry simply because we have an area of natural advantage in coal i.e. high quality coal resources with rail and port access. We are yet to identify an equivalent area of natural advantage in renewables that could power a similarly scaled export industry. Yes we have sun and wind in abundance, but there is no real mechanism yet to export that to an international market.

But all is not lost. Mines are large consumers of energy and technology resources and have management responsibilities for significant tracts of the Australian landscape.

With the right guidance and incentives, the industry may yet lay the foundations for a sustainable legacy for our national economy and local communities in exportable products such as an innovative approach to professional services, transport technology and high intensity food production.


Gary will be on hand for an Author Q&A between 10 and 11am AEST on Wednesday, December 16, 2015. Post your questions in the comments section below.

The Conversation

Gary Ellem, Conjoint Academic in Sustainability, University of Newcastle

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

The Paris Agreement won’t stop coal, but future climate talks might


Luke Kemp, Australian National University

The global climate deal reached at the Paris climate talks has left a big question unanswered: what do to about coal? It isn’t even mentioned in the agreement text.

There is growing recognition that continued expansion of fossil fuels is incompatible with stopping dangerous climate change. If the international community wishes to limit global warming to a maximum of 2℃, only 886 billion tonnes of carbon dioxide (CO₂) can be emitted between 2000 and 2050. Locked in the ground is 2,795 billion tonnes, 65% of which is coal.

Given this simple maths, only one-fifth of these fossil fuels can be dug up. Most fossil fuel reserves cannot be used. Creating new coal mines or searching for new sources is not compatible with avoiding dangerous climate change. It is simply wasted investment.

This has provided the basis for the “no new coalmines” campaign. It is an idea that has gained traction around the world. So is it legally possible to undertake such a drastic international action?

Growing support

A global moratorium on new coal mines is rapidly gaining international support. The idea has even passed the lips of world leaders. On the summit’s opening day, Kiribati’s president Anote Tong told the assembled heads of state:

I have issued a call for a global moratorium on new investments on coal mines as endorsed by my fellow Pacific Leaders and I invite you all to join this call.

The climate talks have traditionally focused on tackling fossil fuel demand by attempting to limit countries’ overall greenhouse gas emissions. Beyond the negotiations, restricting the supply of fossil fuels is becoming the centre of attention.

The divestment movement has experienced considerable success in persuading concerned citizens and institutions to pull their money out of fossil fuel companies. The Obama administration recently rejected the Keystone XL pipeline, partly on the rationale that it undercuts US climate leadership.

Political support is increasing rapidly and could soon reach a tipping point that leads to international legal action either through, or outside of, the UN climate negotiations.

Through the climate convention

While Paris will not deliver a global moratorium on new coal mines, or even a dialogue about it, it could still happen in the near future. There are climate conferences every year and each one adopts a set of new decisions.
Countries could decide in the future to develop further rules for the pledging process, including putting forward what national actions are being taken to limit fossil fuel extraction.

Another option would be simply to amend the text of the United Nations Framework Convention on Climate Change (UNFCCC), or the Paris agreement at a later date. For the UNFCCC this could be done by a three-quarter majority vote (although the changes would only apply to countries who vote for and ratify the amendment).

The UNFCCC’s subsidiary body for science and technology could also be empowered to make recommendations on fossil fuel extraction, given a 2℃ carbon budget. This body has looked at carbon budget issues previously and has reviewed the temperature target.

Looking at the implications of fossil fuel extraction would be a logical step forward, and well within the body’s abilities. This could provide the basis for recommendations to the wider negotiations on what reaching 2℃ means for coal. Spoiler: new coal reserves are not compatible with the 2℃ threshold.

A political problem

The UN is not the only game in town. Some of the most powerful international institutions, such as the World Bank and World Trade Organisation (WTO), operate outside of the UN.

It’s feasible that a small group of countries could forge ahead to create their own semi-global agreement outside of the UN. This is not without precedence. The WTO was originally the General Agreement on Trades and Tariffs (GATT) with only 34 members.

Such an agreement could involve a group of countries pledging to ban the creation or expansion of coal infrastructure within their own sovereign borders, and to encouraging others to do so. They could even create regulations to forbid the purchase of coal from specific sources (new coal mines), although this would probably face technical issues and be challenged as arbitrary discrimination under the WTO, as has previously happened for Venezuelan gas exports.

At the very least, an agreement could establish a ruling for governments to divest from projects or companies involved in the expansion and creation of coal mines, or of fossil fuels in general.

Such a move may seem fruitless given that it would be taken by a coalition of the willing and would probably not involve major coal exporters. But as pointed out above, agreements rarely stay frozen in time. If designed correctly they can grow in membership and influence.

A multi-country agreement on no new coal mines could help to create a powerful new international norm, and help to signal a market push away from new coal mines and coal in general.

Stopping the creation and expansion of coal mines is not a legal problem. Numerous legal avenues to implement a moratorium on new coal exist. It is a purely political problem.

The world appears to be awakening to the simple fact that limiting warming to 2℃ means we cannot use existing coal reserves, let alone seek out new ones. The question is who will act first: the UN climate talks, or a critical mass of willing countries?

The Conversation

Luke Kemp, Lecturer and PhD Candidate in International Relations and Environmental Policy, Australian National University

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