Four seismic climate wins show Big Oil, Gas and Coal are running out of places to hide

Jacqueline Peel, The University of Melbourne; Ben Neville, The University of Melbourne, and Rebekkah Markey-Towler, The University of MelbourneThree global fossil fuel giants have just suffered embarrassing rebukes over their inadequate action on climate change. Collectively, the developments show how courts, and frustrated investors, are increasingly willing to force companies to reduce their carbon dioxide pollution quickly.

A Dutch court ordered Royal Dutch Shell to slash its greenhouse emissions, and 61% of Chevron shareholders backed a resolution to force that company to do the same. And in an upset at Exxon Mobil, an activist hedge fund won two seats on the company’s board.

The string of wins was followed in Australia on Thursday by a court ruling that the federal environment minister, when deciding whether or not to approve a new coal mine, owes a duty of care to young people to avoid causing them personal injury from climate change.

The court rulings are particularly significant. Courts have often been reluctant to interfere in what is viewed as an issue best left to policymakers. These recent judgements, and others, suggest courts are more prepared to scrutinise emissions reduction by businesses and – in the case of the Dutch court – order them to do more.

Shell, Chevron and Exxon logos — The wins for climate action put big polluters on notice.
AP

Court warns of ‘irreversible consequences’

In a world-first ruling, a Hague court ordered oil and gas giant Shell to reduce CO₂ emissions by 45% by 2030, relative to 2019 levels. The court noted Shell had no emissions-reduction targets to 2030, and its policies to 2050 were “rather intangible, undefined and non-binding”.

The case was brought by climate activist and human rights groups. The court found climate change due to CO₂ emissions “has serious and irreversible consequences” and threatened the human “right to life”. It also found Shell was responsible for so-called “Scope 3” emissions generated by its customers and suppliers.

The Chevron upset involved an investor revolt. Some 61% of shareholders supported a resolution calling for Chevron to substantially reduce Scope 3 emissions generated by the use of its oil and gas.

And last week, shareholders of ExxonMobil, one of the world’s biggest corporate greenhouse gas emitters, forced a dramatic management shakeup. An activist hedge fund, Engine No. 1, won two, and potentially three, places on the company’s 12-person board.

Engine No. 1 explicitly links Exxon’s patchy economic performance to a failure to invest in low-carbon technologies.

oil rig — The court said Shell’s emissions reduction efforts were ‘rather intangible’.
Shutterstock

Climate-savvy shareholders unite

As human activity causes Earth’s atmosphere to warm, large fossil fuel companies are under increasing pressure to act.

A mere 20 companies have contributed 493 billion tonnes of CO₂ and methane to the atmosphere, primarily from the burning of their oil, coal and gas. This equates to 35% of all global greenhouse gas emissions since 1965.

Shareholders – many concerned by the financial risks of climate change – are leading the corporate accountability push. The Climate Action 100+ initiative is a leading example.

It involves more than 400 investors with more than A$35 trillion in assets under management, who work with companies to reduce emissions, and improve governance and climate-related financial disclosures. Similar movements are emerging worldwide.

Shareholders in Australia are also stepping up engagement with companies over climate change.

Last year, shareholder resolutions on climate change were put to Santos and Woodside. While neither resolution achieved the 75% support needed to pass, both received unprecedented levels of support – 43.39% and 50.16% of the vote, respectively.

And in May 2021, Rio Tinto became the first Australian board to publicly back shareholder resolutions on climate change, which subsequently passed with 99% support.

Rio Tinto executives — The Rio Tinto board backed a shareholder resolution on climate change.
Brendan Esposito/AAP

The litigation trend

To date, the question of whether corporate polluters can be legally forced to reduce greenhouse emissions has remained unanswered. While fossil fuel companies have faced a string of climate lawsuits in the United States and Europe, courts have often dismissed the claims on procedural grounds.

Cases brought against governments have been more successful. In 2019, for example, the Dutch Supreme Court affirmed the government has a legal duty to prevent dangerous climate change.

The decision against Shell is significant, and sends a clear signal that corporations can be held legally responsible for greenhouse pollution.

Shell has previously argued it can only reduce its absolute emissions by shrinking its business. The recent case highlights how such companies may have to quickly find new forms of revenue, or face legal liability.

It’s unlikely we’ll see identical litigation in Australia, because our laws are different to those in the Netherlands. But the Shell case is emblematic of a broader trend of climate litigation being brought to challenge corporate polluters.

This includes the case decided on Thursday involving young people opposed to a company’s coal mine expansion, and Australian cases arguing for greater disclosure of climate risk by corporations, banks and super funds.

teenagers involved in case — The case brought against the Australian government by a group of teenagers is part of a growing trend towards climate litigation.
Supplied

Change is nigh

Oil and gas companies often argue Scope 3 emissions are not their responsibility, because they don’t control how customers use their products. The Shell finding and shareholder action against Chevron suggest this claim may hold little sway with courts or shareholders in future.

The Shell case may also set off a global avalanche of copycat litigation. In Australia, legal experts have noted the turning tide, and warned is it’s only a matter of time before directors who fail to act on climate change face litigation.

Clearly, a seismic shift is looming, in which corporations will be forced to take greater responsibility for climate harms. These recent developments should act as a wake-up call for oil, gas and coal companies, in Australia and around the world.

Jacqueline Peel, Professor of Environmental and Climate Law, The University of Melbourne; Ben Neville, Senior Lecturer and Program Director of the Master of Commerce, The University of Melbourne, and Rebekkah Markey-Towler, Research fellow, Melbourne Climate Futures, The University of Melbourne

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

This $1 billion energy deal promises to cut emissions and secure jobs. So why on earth is gas included?

Samantha Hepburn, Deakin UniversityIn case you missed it, a major A$1 billion energy deal between the Morrison and the South Australian government was revealed recently.

The bilateral deal represents a key driver for the national economic recovery from COVID. It promises to provide jobs in the energy sector and contribute to South Australia achieving net 100% renewables by 2030.

But there’s a big caveat: the agreement involves a joint commitment to accelerate new gas supplies into the east coast market.

With so much money on the table and other nations recently doubling down on climate commitments, let’s look at the good and bad bits of this landmark deal in more detail.

A gas-led economic recovery

The agreement was announced ahead of US President Joe Biden’s climate summit last week, which saw Australia spruik technology growth to cut emissions instead of committing to new climate targets.

In total, the federal government will contribute A$660 million and the South Australian government A$422 million towards the new deal.

Both governments have also agreed to a gas target of an additional 50 petajoules of energy per year by the end of 2023, and 80 petajoules by 2030. Their rationale is the need to improve energy security and reliability.

This focus on gas in the agreement stems from the federal government’s much-criticised, gas-led economic recovery plan, which argues new gas supplies are vital for future energy security.

In February, the Australian Competition and Consumer Commission outlined a potential shortfall of 30 petajoules of gas for the east-coast market leading up to 2024. This shortfall could impact energy supply, and the federal government has used this to help justify opening new gas reserves.

However, nothing is certain — COVID has reduced global demand for gas so any shortfall will likely be deferred. Meanwhile, renewable technology and hydrogen production and use are rapidly advancing.

Bad: investing in gas

With the seismic shift in the economics of renewables over the past decade, investing in new gas supply is unnecessary and retrograde. In fact, it’s now more expensive to transition from coal to gas than from coal to renewables.

For example, the cost of lithium ion batteries used for battery storage has fallen over the past decade by nearly 90%. But the cost of gas — both economically and environmentally — has steadily risen. This inevitably means means its role in the energy market will diminish.

Eventually, gas generators will be retired without replacement. Victoria’s March quarter data, for example, shows black coal generation volumes dropped by 9.5% and gas generation dropped by 43%. Meanwhile, rooftop solar went up 25%, utility solar up by 40% and wind power by 24%.

Solar farm in the desert at sunset — Up to $110 million will be spent on solar thermal and other storage projects in South Australia.
Shutterstock

And at the end of the day, gas is still a fossil fuel. There are approximately 22 major gas production and export projects proposed for Australia. A report from The Australia Institute in September 2020 suggested that, if produced, these projects could lead to about half a billion tonnes of emissions.

If all potential gas resources in Australia were tapped, the report indicates it could result in emissions equivalent to three times the current annual global emissions.

Good: investing in critical infrastructure

The energy deal sets aside $50 million towards the new $1.5 billion electricity interconnector between South Australia and NSW. This is critical infrastructure that will allow South Australia, Victoria and NSW to share energy reserves.

Indeed, the Australian Energy Market Operator has reported in excess of 5,000 megawatts of renewable energy projects near the proposed interconnector. This means South Australian wind and solar could contribute more significantly to electricity generation in both Victoria and NSW.

In turn, this will have a positive effect on pricing. Forecasts suggest the proposed new interconnector could reduce power bills by up to $66 a year in South Australia and $30 in NSW.

The energy deal also reserves funding for “investment priority areas”, which include carbon capture storage, electric vehicles and hydrogen. For example, $110 million is allocated for energy storage projects. This level of funding will help develop a world-class hydrogen export industry in South Australia.

The verdict

The energy deal is a funding win for renewable energy and technology, with energy technology advancing much faster than anticipated. However, its focus on gas is environmentally and economically regressive.

It’s completely inconsistent with the powerful climate plan announced by the Joe Biden administration at the Climate Summit last week, which includes a pause and review of oil and gas drilling on US federal land and doubling energy production from offshore windfarms by 2030.

In March, the European Union’s parliament voted in favour of a Carbon Border Adjustment Mechanism. This will impose a tariff on products being sold into the EU according to the amount of carbon involved in making them. The Biden administration in the US has announced a similar plan.

What’s more, the European Union and the US, as outlined at the recent Climate Summit, are planning to impose fees or quotas on goods from countries failing to meet their climate and environmental obligations. This may mean Australian manufacturers will end up paying for the governments failure to take rapid action to drive down emissions.

Bilateral agreements provide critical planning and funding for Australia’s energy progression. However, they should not prolong the use of fossil fuels under the guise of energy security. To do so undermines global climate change imperatives and hinders Australia’s progress in a new energy era.

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

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

Australia’s Gas Future?

Electricity has become a jigsaw. Coal is unable to provide the missing pieces

Peter Martin, Crawford School of Public Policy, Australian National University

There’s something the energy minister said when they announced the early closure of Victoria’s second-biggest coal-fired power station last week that was less than complete.

Yallourn, in the Latrobe Valley, provides up to 20% of Victoria’s power. It has been operating for 47 years. Since late 2017 at least one of its four units has broken down 50 times. Its workforce doubles for three to four months most years to deal with the breakdowns. It pumps out 3% of Australia’s carbon emissions.

On Wednesday Energy Australia gave seven years notice of its intention to close it in mid-2028, four years earlier than previously announced, a possibility for which regulators had been preparing.

In what might have been a rhetorical flourish, Energy Minister Angus Taylor warned of “price spikes every night when the sun goes down”.

Then he drew attention to what had happened when two other coal-fired power stations closed down — Victoria’s Hazelwood and South Australia’s Northern (South Australia’s last-remaining coal-fired generator).

He said “wholesale prices skyrocketed by 85%”.

And there he finished, without going on to detail what really mattered. South Australia and Victoria now have the lowest wholesale power prices in the National Electricity Market — that’s right, the lowest.

Coal-fired plants close, then prices fall

Before Northern closed, South Australia had Australia’s highest price.

Five years after the closure of Northern in 2016, and four years after the closure of Hazelwood in 2017, South Australia and Victorian have wholesale prices one-third lower than those in NSW and two-fifths lower than those in Queensland.

Something happened after the closure (largely as a result of the closure) that forced prices down.

South Australia became a renewables powerhouse.

South Australian wind projects congregate around power lines.
AEMO

The Australian National University’s Hugh Saddler points out that renewable-sourced power — wind and grid solar — now accounts for 62% of power supplied to the South Australian grid, and at times for all of it.

Much of it is produced near Port Augusta, where the Northern and Playford coal-fired power stations used to be, because that’s where the transmission lines begin.

Being even cheaper than the power produced by the old brown-coal-fired power stations, there is at times so much it that it sends prices negative, meaning generators get paid to turn off in order to avoid putting more power into the system than users can take out.

It’s one of the reasons coal-fired plants are closing: they are hard to turn off. They are just as hard to turn on, and pretty hard to turn up.

Coal can’t respond quickly

There are times (when the wind doesn’t blow and there’s not much sun, such as last Friday in South Australia) when prices can get extraordinarily high.

But coal-fired plants, especially brown-coal-fired plants such as Victoria’s Hazelwood and Yallourn and Victoria’s two remaining big plants, Loy Yang A and B, are unable to quickly ramp up to take advantage of them.

Although “dispatchable” in the technical meaning of the term used by the minister, coal-fired stations can’t fill gaps quickly.

Batteries can respond instantly to a loss of power from other sources (although not for very long), hydro can respond in 30 to 70 seconds, gas peaking plants can respond within minutes.

But coal can barely move. As with nuclear power, coal-fired power needs to be either on (in which case it can only slowly ramp up) or off, in which case turning it on from a standing start would be way too slow.

What was a feature is now a bug

That’s why coal-fired generators operate 24-7, to provide so-called base-load, because they can’t really do anything else.

Snowy Hydro generators can be turned on and off at will.
Alex Ellinghausen/AAP

Brown coal generators are the least dispatchable. Brown coal is about 60% water. To make it ignite and keep boiling off the water takes sustained ultra-high temperatures. Units at Yallourn have to keep burning coal at high output (however low or negative the prices) or turn off.

In the days when the other sources of power could be turned on and off at will, this wasn’t so much of a problem.

Hydro or gas could be turned on in the morning when we turned on our lights and heaters and factories got down to business, and coal-fired power could be slowly ramped up.

At night, when there was less demand for coal-fired power, some could be created by offering cheap off-peak water heating.

But those days are gone. Nationwide, wind and solar including rooftop solar supplies 20% of our needs. It turns on and off at will.

Wind often blows strongly at night. What was a feature of coal — its ability to provide steady power rather than fill gaps – has become a bug.

Gas and batteries can fill gaps coal can’t

It’s as if our power system has become a jigsaw with the immovable pieces provided by the wind and the sun. It’s our job to fill in the gaps.

To some extent, as the prime minister says, gas will be a transition fuel, able to fill gaps in a way that coal cannot. But gas has become expensive, and batteries are being installed everywhere.

Energy Australia plans to replace its Yallourn power station with Australia’s first four-hour utility-scale battery with a capacity of 350 megawatts, more than any battery operating in the world today. South Australia is planning an even bigger one, up to 900 megawatts.

Australia’s Future Fund and AGL Energy are investing $2.7 billion in wind farms in NSW and Queensland which will fill gaps in a different way — their output peaks at different times to wind farms in South Australia and Victoria.

Filling the gaps won’t be easy, and had we not gone down this road there might still have been a role for coal, but the further we go down it the less coal can help.

As cheap as coal-fired power is, it is being forced out of the system by sources of power that are cheaper and more dispatchable. We can’t turn back.

Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University

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

San Francisco just banned gas in all new buildings. Could it ever happen in Australia?

Madeline Taylor, University of Sydney and Susan M Park, University of Sydney

Last week San Francisco became the latest city to ban natural gas in new buildings. The legislation will see all new construction, other than restaurants, use electric power only from June 2021, to cut greenhouse gas emissions.

San Francisco has now joined other US cities in banning natural gas in new homes. The move is in stark contrast to the direction of energy policy in Australia, where the Morrison government seems stuck in reverse: spruiking a gas-led economic recovery from the COVID-19 pandemic.

Natural gas provides about 26% of energy consumed in Australia — but it’s clearly on the way out. It’s time for a serious rethink on the way many of us cook and heat our homes.

Cutting out gas

San Francisco is rapidly increasing renewable-powered electricity to meet its target of 100% clean energy by 2030. Currently, renewables power 70% of the city’s electricity.

The ban on gas came shortly after San Francisco’s mayor London Breed announced all commercial buildings over 50,000 square feet must run on 100% renewable electricity by 2022.

Buildings are particularly in focus because 44% of San Franciscos’ citywide emissions come from the building sector alone.

Following this, the San Francisco Board of Supervisors unanimously passed the ban on gas in buildings. They cited the potency of methane as a greenhouse gas, and recognised that natural gas is a major source of indoor air pollution, leading to improved public health outcomes.

From January 1, 2021, no new building permits will be issued unless constructing an “All-Electric Building”. This means installation of natural gas piping systems, fixtures and/or infrastructure will be banned, unless it is a commercial food service establishment.

Switching to all-electric homes

In the shift to zero-emissions economies, transitioning our power grids to renewable energy has been the subject of much focus. But buildings produce 25% of Australia’s emissions, and the sector must also do some heavy lifting.

A report by the Grattan Institute this week recommended a moratorium on new household gas connections, similar to what’s been imposed in San Francisco.

The report said natural gas will inevitably decline as an energy source for industry and homes in Australia. This is partly due to economics — as most low-cost gas on Australia’s east coast has been burnt.

There’s also an environmental imperative, because Australia must slash its fossil fuel emissions to address climate change.

While acknowledging natural gas is widely used in Australian homes, the report said “this must change in coming years”. It went on:

This will be confronting for many people, because changing the cooktops on which many of us make dinner is more personal than switching from fossil fuel to renewable electricity.

The report said space heating is by far the largest use of gas by Australian households, at about 60%. In the cold climates of Victoria and the ACT, many homes have central gas heaters. Homes in these jurisdictions use much more gas than other states.

By contrast, all-electric homes with efficient appliances produce fewer emissions than homes with gas, the report said.

A yellow triangle sign that says 'no coal or coal seam gas' on a wooden fence. — Natural gas produces methane, a greenhouse gas that’s far more potent than carbon dioxide.
Shutterstock

Zero-carbon buildings

Australia’s states and territories have much work to do if they hope to decarbonise our building sector, including reducing the use of gas in homes.

In 2019, Australia’s federal and state energy ministers committed to a national plan towards zero-carbon buildings for Australia. The measures included “energy smart” buildings with on-site renewable energy generation and storage and, eventually, green hydrogen to replace gas.

The plan also involved better disclosure of a building’s energy performance. To date, Australia’s states and territories have largely focused on voluntary green energy rating tools, such as the National Australian Built Environment Rating System. This measures factors such as energy efficiency, water usage and waste management in existing buildings.

But in 2020, just 2% of buildings in Australia achieved the highest six-star rating. Clearly, the voluntary system has done little to encourage the switch to clean energy.

The National Construction Code requires mandatory compliance with energy efficiency standards for new buildings. However, the code takes a technology neutral approach and does not require buildings to install zero-carbon energy “in the absence of an explicit energy policy commitment by governments regarding the future use of gas”.

An economically sensible move

An estimated 200,000 new homes are built in Australia each year. This represents an opportunity for states and territories to create mandatory clean energy requirements while reaching their respective net-zero emissions climate targets.

Under a gas ban, the use of zero-carbon energy sources in buildings would increase, similar to San Francisco. This has been recognised by Environment Victoria, which notes

A simple first step […] to start reducing Victoria’s dependence on gas is banning gas connections for new homes.

Creating incentives for alternatives to gas may be another approach, such as offering rebates for homes that switch to electrical appliances. The ACT is actively encouraging consumers to transition from gas.

Banning gas in buildings could be an economically sensible move. As the Grattan Report found, “households that move into a new all-electric house with efficient appliances will save money compared to an equivalent dual-fuel house”.

Meanwhile, ARENA confirmed electricity from solar and wind provide the lowest levelised cost of electricity, due to the increasing cost of east coast gas in Australia.

Future-proofing new buildings will require extensive work, let alone replacing exiting gas inputs and fixtures in existing buildings. Yet efficient electric appliances can save the average NSW homeowner around A$400 a year.

Learning to live sustainability, and becoming resilient in the face of climate change, is well worth the cost and effort.

Should we be cooking with gas?

Recently, a suite of our major gas importers — China, South Korea and Japan — all pledged to reach net-zero emissions by either 2050 or 2060. This will leave our export-focused gas industry possibly turning to the domestic market for new gas hookups.

But continuing Australia’s gas production will increase greenhouse gas emissions, and few Australians support an economic recovery pinned on gas.

The window to address dangerous climate change is fast closing. We must urgently seek alternatives to burning fossil fuels, and there’s no better place to start that change than in our own homes.

Madeline Taylor, Lecturer, University of Sydney and Susan M Park, Professor of Global Governance, University of Sydney

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

No, Prime Minister, gas doesn’t ‘work for all Australians’ and your scare tactics ignore modern energy problems

Samantha Hepburn, Deakin University

The federal government today announced it will build a new gas power plant in the Hunter Valley, NSW, if electricity generators don’t fill the energy gap left by the Liddell coal-fired station when it retires in 2023.

The government says it’s concerned that when the coal plant closes, there’ll be insufficient dispatchable power (that can be used on demand) because the energy sector is focused on accelerating renewable energy at the expense of reliability. So electricity generators are required to come up with a plan to inject 1,000 megawatts of new dispatchable energy into the national grid.

This is tantamount to an ultimatum: if we must have renewables, then prove they generate the same amount of electricity as fossil fuel or we will go back to fossil fuel.

The government’s joint media release has this to say:

This is about making Australia’s gas work for all Australians. Gas is a critical enabler of Australia’s economy.

But under a rapidly changing climate, the issue is not just about keeping the lights on. We not only want energy, we also want to breathe clean air, have enough food, have clean and available water supplies, preserve our habitat and live in a sustainable community. So no, gas doesn’t “work for all Australians”.

Adapting to a new energy future is a complex process our national government must not only support, but progress. It should not be hijacked by fossil fuel politics.

Scare-tactics won’t resolve the climate emergency

The government’s scare tactic completely ignores the two fundamental imperatives of modern energy.

The first is the critical importance of decarbonisation. Energy production from fossil fuels is the most carbon intensive activity on the planet. If we are to reach net zero emissions by 2050 and stay within 2℃ of global warming, we cannot burn fossil fuels to produce energy.

The government shouldn’t revert to outdated fossil fuel rhetoric about “reliable, dispatchable power” during an accelerating climate emergency.

The second is it’s in the public interest to support and invest in energy that’s not only environmentally sustainable for the future, but also economically sustainable. Demand for fossil fuels is in terminal decline across the world and investing in new fossil fuel infrastructure may lead to stranded assets.

We need to address the ‘energy trilemma’

The question the government should instead focus on is this: how can the government continue to supply its citizens with affordable, reliable electricity but also maintain a reduction in greenhouse gas emissions and high air quality standards?

Answering this question involves addressing a three-part set of tensions, known as the “energy trilemma”:

sustainable generation that is not emission intensive
infrastructure reliability and
affordability.

The energy trilemma is a well-known tool in the sector that powerfully communicates the relative positioning of each tension. No single axis is necessarily more important than the other two. The aim is to try to balance all three.

Constructing a new gas plant seeks to address the second pillar at the expense of the first. This isn’t good enough in the face of the climate emergency.

Gas fired electricity can emit methane. Over a 20-year period, methane is 84 times more effective than carbon dioxide in trapping heat, and 28 times more effective over 100 years.

The affordability pillar is also important. Morrison says constructing the plant will prevent energy price spikes. But research clearly confirms renewable energy generation is cheapest.

What is it with the federal government and gas?

After first informing us gas will help bolster the economy after the COVID-19 pandemic, this new announcement makes it clear the federal government is firmly wedded to gas.

This may be because the federal government regards adherence to gas as a compromise between the renewable sector and the demands of the fossil fuel industry.

In any case, we cannot and must not revert to fossil fuel energy generation. We must abandon past behaviours if we’re to adapt to a changing climate, which is set to hit the economy much harder than this pandemic.

Most Australians have derived their assumptions about energy security from fossil fuel dependency, because this is what they have known. The good news is this is changing.

Increasingly, the global community understands it’s not sustainable to burn coal or gas to generate energy just because we want to be “sure” we can turn the lights on. Consumer preference is shifting.

This is something BP recognises in its 2020 Energy Outlook report, which outlines three scenarios for the global energy system in next 30 years.

Each scenario shows a shift in social preferences and a decline in the share of hydrocarbons (coal, oil and natural gas) in the global energy system. This decline is matched by an increase in the role of renewable energy.

I’ll say it again: renewable energy is the future

The technology underpinning renewable energy production from clean, low-cost generation such as wind, solar, hydro-electricity, hydrogen and bio-mass is advancing.

Renewable energy generation is sustainable, better for the environment, low in emissions, and affordable. Reliability is improving at a rapid rate. A recent report indicates electricity generated by solar photovoltaic (PV) and onshore wind farms from 2026 will overtake the combined power production from coal and gas.

The combined solar and wind capacity will grow to an estimated 41.4 gigawatts in 2023 from 26.4 gigawatts this year. By contrast, coal and gas capacity will shrink to 35.3 gigawatts in 2023 from 39.1 gigawatts this year.

The report is based on the Australian Energy Market Operator (AEMO) Step Change Scenario, which models a shift to renewables. It includes rapid adjustments in technology costs and a “well below 2℃” scenario as part of its 20-year planning blueprint.

Yes, there are challenges in shifting from a centralised grid and developing new transmission capacity.

But these are the challenges we need to be investing in. Not a new gas plant that’s likely to be a stranded asset in the not-too-distant future.

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

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

Morrison government threatens to use Snowy Hydro to build gas generator, as it outlines ‘gas-fired recovery’ plan

Michelle Grattan, University of Canberra

The Morrison government has threatened to use Snowy Hydro to build a gas generator in the Hunter Valley if the electricity sector fails to fill the gap left by the scheduled closure of the Liddell power plant in 2023.

The threat comes as the government released its plan to place gas at the centre of Australia’s economic recovery, with a package of measures to “reset” the east coast market and “unlock” supply.

Scott Morrison and Energy Minister Angus Taylor said the electricity sector had to deliver 1,000 megawatts of new dispatchable energy to replace the Liddell power station before it closed.

“The Government will step up and back a new gas power plant in the Hunter Valley if the sector doesn’t replace Liddell’s capacity,” they said in an ultimatum to the sector.

“Snowy Hydro Limited is developing options to build a gas generator in the Hunter Valley at Kurri Kurri should the market not deliver what consumers need.”

The government had a long running battle with AGL over its determination to close the Liddell coal-fired power station, trying unsuccessfully to force it to abandon the decision.

Morrison and Taylor said the government’s Liddell taskforce had found closing the plant without adequate dispatchable replacement capacity could mean a 30% price rise over two years, or $20 per megawatt hour to $80 in 2024 and up to $105 per MWH by 2030.

Morrison said such rises were unacceptable – they would be a huge hit to families, businesses and job creating industries in NSW if the energy generated by Liddell wasn’t replaced.

“We won’t risk the affordability and reliability of the NSW energy system and will step in unless the industry steps up.

“To ensure we do not have a scenario without replacement, the government is giving the private sector until the end of April 2021 to reach final investment decisions on 1000 MW of dispatchable capacity, with a commitment for generation in time for summer 2023-24.”

In its announcement of its gas plan, the government says its proposed multiple initiatives will deliver affordable and reliable energy for households, business and industry, and shore up the energy grid’s reliability as renewables form an increasingly larger part of the energy market.

One part of the plan is the creation of an Australian Gas Hub at Wallumbilla in Queensland to bring users and suppliers closer together, delivering a transparent liquid gas trading system.

This is modelled on the Henry Hub located in Louisiana which is a distribution point on a natural gas pipeline system. It serves as the official delivery location for futures contracts.

The concept of a gas-led recovery is highly controversial. It has been strongly pushed by the chair of the government’s national COVID-19 commission Nev Power, and the government argues that gas is much lower in emissions than coal fired power.

But the promotion of gas is resisted by environmentalists, given it is a fossil fuel, and questioned by some in the investment community who doubt it will be possible to achieve gas prices low enough to make a major economic difference.

Outlining the “gas-fired recovery” plan Morrison, Taylor and Resources Minister Keith Pitt said: “The government wants the private sector to step-up and make timely investments in the gas market.”

But “if the private sector fails to act, the government will step in – as it has done for electricity transmission – to back these nation building projects. This may include through streamlining approvals, underwriting projects or the establishment of a special purpose vehicle with a capped government contribution”.

The government says the east coast market needs change because it is not delivering internationally competitive prices for Australian businesses and households.

International prices have fallen but this has not been reflected in lower long term contract offers for Australian customers.
There are also fears of a supply shortfall in the medium term.

Under the measures, new gas supply targets will be set with states and territories and a potential “use it or lose it” requirement will be enforced on gas licences.

The government aims to unlock five new gas basins beginning with the Beetaloo Basin in the Northern Territory and the North Bowen and Galilee Basis in Queensland. This will cost $28.3 million for the plans.

To avoid supply shortfalls, there will be new agreements with the three east coast LNG exporters with strengthened commitments on price.

The government will also “explore options” for a prospective gas reservation scheme “to ensure Australian gas users get the energy they need at a reasonable price”.

To improve the gas transport network the government will identify priority pipelines and critical infrastructure for a National Gas Infrastructure Plan (NGIP) worth $10.9 million . This will also highlight where the government will step in if private investors do not.

The regulations on pipeline infrastructure will be reformed to increase competition and transparency; competition will be further promoted by kick starting work on a secondary pipeline capacity market.

The government will work with the Australian Competition and Consumer Commission to review the calculation of the LNG netback price which provides a guide on the export parity prices.

It will also use the NGIP to develop customer hubs to boost competition and transparency for customers.

HERE ARE THE GOVERNMENT’S DETAILED MEASURES.

It will get more gas into the market by:

Setting new gas supply targets with states and territories and enforce potential “use-it or lose-it” requirements on gas licenses
Unlocking five key gas basins starting with the Beetaloo Basin in the NT and the North Bowen and Galilee Basin in Queensland, at a cost of $28.3 million for the plans
Avoiding any supply shortfall in the gas market with new agreements with the three east coast LNG exporters that will also strengthen price commitments
Supporting CSIRO’s Gas Industry Social and Environmental Research Alliance with $13.7 million
Exploring options for a prospective gas reservation scheme to ensure Australian gas users get the energy they need at a reasonable price.

It will boost the gas transport network by:

Identifying priority pipelines and critical infrastructure as part of an inaugural National Gas Infrastructure Plan (NGIP) worth $10.9 million that will also highlight where the government will step in if the private sector doesn’t invest
Reforming the regulations on pipeline infrastructure to promote competition and transparency
Improving pipeline access and competition by kick-starting work on a dynamic secondary pipeline capacity market.

To better empower gas consumers, it will:

Establish an Australian Gas Hub at our most strategically located and connected gas trading hub at Wallumbilla in Queensland to deliver an open, transparent and liquid gas trading system
Level the negotiating playing field for gas producers and consumers through a voluntary industry-led code of conduct, to be delivered by February 2021
Ensure Australians are paying the right price for their gas by working with the ACCC to review the calculation of the LNG netback price which provides a guide on the export parity prices
Use the NGIP to develop customer hubs or a book-build program that will give gas customers a more transparent and competitive process for meeting their needs.

Michelle Grattan, Professorial Fellow, University of Canberra

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

5 big environment stories you probably missed while you’ve been watching coronavirus

Rod Lamberts, Australian National University and Will J Grant, Australian National University

Good news: COVID-19 is not the only thing going on right now!

Bad news: while we’ve all been deep in the corona-hole, the climate crisis has been ticking along in the background, and there are many things you may have missed.

Fair enough – it’s what people do. When we are faced with immediate, unambiguous threats, we all focus on what’s confronting us right now. The loss of winter snow in five or ten years looks trivial against images of hospitals pushed to breaking point now.

As humans, we also tend to prefer smaller, short-term rewards over larger long-term ones. It’s why some people would risk illness and possible prosecution (or worse, public shaming) to go to the beach with their friends even weeks after social distancing messages have become ubiquitous.

But while we might need to ignore climate change right now if only to save our sanity, it certainly hasn’t been ignoring us.

So here’s what you may have missed while coronavirus dominates the news cycle.

Heatwave in Antarctica

Antarctica is experiencing alarmingly balmy weather.
Shutterstock

On February 6 this year, the northernmost part of Antarctica set a new maximum temperature record of 18.4℃. That’s a pleasant temperature for an early autumn day in Canberra, but a record for Antarctica, beating the old record by nearly 1℃.

That’s alarming, but not as alarming as the 20.75℃ reported just three days later to the east of the Antarctic Peninsula at Marambio station on Seymour Island.

Bleaching the reef

The Intergovernmental Panel on Climate Change has warned a global average temperature rise of 1.5℃ could wipe out 90% of the world’s coral.

As the world looks less likely to keep temperature rises to 1.5℃, in 2019 the five-year outlook for Australia’s Great Barrier Reef was downgraded from “poor” to “very poor”. The downgrading came in the wake of two mass bleaching events, one in 2016 and another in 2017, damaging two-thirds of the reef.

And now, in 2020, it has just experienced its third in five years.

Of course, extreme Antarctic temperatures and reef bleaching are the products of human-induced climate change writ large.

But in the short time since the COVID-19 crisis began, several examples of environmental vandalism have been deliberately and specifically set in motion as well.

Coal mining under a Sydney water reservoir

The Berejiklian government in New South Wales has just approved the extension of coal mining by Peabody Energy – a significant funder of climate change denial – under one of Greater Sydney’s reservoirs. This is the first time such an approval has been granted in two decades.

While environmental groups have pointed to significant local environmental impacts – arguing mining like this can cause subsidence in the reservoir up to 25 years after the mining is finished – the mine also means more fossil carbon will be spewed into our atmosphere.

Peabody Energy argues this coal will be used in steel-making rather than energy production. But it’s still more coal that should be left in the ground. And despite what many argue, you don’t need to use coal to make steel.

Victoria green-lights onshore gas exploration

In Victoria, the Andrews government has announced it will introduce new laws into Parliament for what it calls the “orderly restart” of onshore gas exploration. In this legislation, conventional gas exploration will be permitted, but an existing temporary ban on fracking and coal seam gas drilling will be made permanent.

The announcement followed a three-year investigation led by Victoria’s lead scientist, Amanda Caples. It found gas reserves in Victoria “could be extracted without harming the environment”.

Sure, you could probably do that (though the word “could” is working pretty hard there, what with local environmental impacts and the problem of fugitive emissions). But extraction is only a fraction of the problem of natural gas. It’s the subsequent burning that matters.

Trump rolls back environmental rules

Meanwhile, in the United States, the Trump administration is taking the axe to some key pieces of environmental legislation.

One is an Obama-era car pollution standard, which required an average 5% reduction in greenhouse emissions annually from cars and light truck fleets. Instead, the Trump administration’s “Safer Affordable Fuel Efficient Vehicles” requires just 1.5%.

The health impact of this will be stark. According to the Environmental Defense Fund, the shift will mean 18,500 premature deaths, 250,000 more asthma attacks, 350,000 more other respiratory problems, and US$190 billion in additional health costs between now and 2050.

And then there are the climate costs: if manufacturers followed the Trump administration’s new looser guidelines it would add 1.5 billion tonnes of carbon dioxide to the atmosphere, the equivalent of 17 additional coal-fired power plants.

And so…

The challenges COVID-19 presents right now are huge. But they will pass.

The challenges of climate change are not being met with anything like COVID-19 intensity. For now, that makes perfect sense. COVID-19 is unambiguously today. Against this imperative, climate change is still tomorrow.

But like hangovers after a large celebration, tomorrows come sooner than we expect, and they never forgive us for yesterday’s behaviour.

Rod Lamberts, Deputy Director, Australian National Centre for Public Awareness of Science, Australian National University and Will J Grant, Senior Lecturer, Australian National Centre for the Public Awareness of Science, Australian National University

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

Victoria quietly lifted its gas exploration pause but banned fracking for good. It’s bad news for the climate

Samantha Hepburn, Deakin University

Amid coronavirus chaos, the Victorian government announced its decision earlier this week to lift the ban on onshore gas exploration, but also to make the temporary state-wide ban on fracking permanent.

This decision was made three years after an investigation found gas reserves in the state could be extracted without any environmental impacts, and new laws will be introduced to parliament for drilling to start in July next year.

The state government first introduced the moratorium (temporary ban) on onshore conventional and unconventional gas production in 2017, enshrined in the Mineral Resources (Sustainable Development) Act 1990. It effectively made it an offence to either conduct coal seam gas exploration or hydraulic fracturing (fracking) until June 2020.

The ban was originally imposed amid strong concerns about the environmental, climate and social impacts of onshore gas expansion. But lifting the ban to allow conventional gas exploration while banning fracking and unconventional gas (coal seam gas), doesn’t remove these concerns.

The fracking ban isn’t so permanent

The new laws seek to do two things: lift the ban on conventional onshore gas production, and to entrench a ban on fracking and coal seam gas exploration into the state constitution.

The government has stated it wants to make it difficult for future governments to remove the fracking ban. But this is highly unlikely to be legally effective. Unlike the federal constitution, the Victorian constitution is an ordinary act, and so it can be amended by another legal act.

The only way entrenching an amendment in the state constitution so that it is permanent and unchangeable is if it relates to the operation and procedure of parliament. And fracking does not do this.

This raises the spectre of a future government removing the fracking ban in line with an accelerating onshore gas framework.

Conventional vs unconventional gas

The main difference between conventional gas and unconventional gas (coal seam gas) lies in their geology.

Conventional gas can generally be extracted without the need to frack, as gas can move to the surface through gas wells. To release unconventional gas, particularly shale gas, fracking is always required.

Fracking technologies risk water quality from ground disturbances, spills, the release of chemicals and other fluids, and the underground migration of gases and chemicals.

So lifting the conventional onshore gas ban while keeping the fracking ban will mean less risk to the environment. But extracting conventional gas is still risky.

Greenhouse gas leaks

Extracting conventional gas risks fugitive emissions. This refers to greenhouse gases, such as methane, that can escape into the atmosphere during mining fossil fuels, such as from equipment leaks, deliberate or accidental venting, or from gas flaring.

Precise measurements of the fugitive emissions from onshore conventional gas production are difficult to predict, but their effect on climate change is alarming.

The latest estimates indicate fugitive emissions account for approximately 6% of Australia’s national greenhouse gas emissions. Fugitive emissions also have about 27 times the greenhouse harming potential of carbon dioxide.

In 2017, the Australian Gas Industry argued well managed sites produce little fugitive emissions, and poorly managed sites were responsible for 75% of fugitive emissions.

This means any expansion of onshore conventional gas must be accompanied by strict management and regulation. But there’s no industry-wide code of practice in Victoria focused on reducing this emissions risk.

Increasing annual emissions

Even in the unlikely scenario of zero or limited fugitive emissions, expanding conventional gas exploration will still add to Victoria’s annual greenhouse gas emissions.

The proposed laws follow the conclusions of a three-year study that reviewed the climate, environmental, economic and social impacts of gas exploration in Victoria.

The report suggested a slight increase in absolute annualised greenhouse gas emissions. In other words, Victoria’s annual greenhouse gas emissions would be proportionately increased by lifting the ban.

It also suggested expanding gas development would contribute between only 0.1% and 0.2% of Victoria’s annual greenhouse gas emissions, and that this wouldn’t affect Victoria’s 2050 net-zero target.

But 0.1% to 0.2% still amounts to releasing an additional 122,000 to 329,000 tonnes of CO₂ equivalent into the atmosphere.

What’s more, this assessment completely ignores emissions released through increased gas usage within the community. Globally, CO₂ emissions from natural gas use rose almost 200 million metric tons in 2019 and were responsible for two-thirds of the global emissions increase.

What it means for the community

The report predicts 242 jobs, A$312 million in gross regional product and A$43 million in royalties for Victoria. But overall, gas prices in the east coast market won’t change.

The additional 128-830 petajoules (a joule is a measure of thermal energy and a petajoule is a million billion joules) that is potentially capable of being produced by lifting the moratorium will not be enough to address the forecast shortfall.

For the communities around the gas exploration sites, the report indicates the social impact of lifting the moratorium would be manageable.

The report indicates that 80% of the south-west and Gippsland communities – from more than 800 engagements with industry, farmers, local school students, and environmental community groups – either supported or tolerated onshore conventional gas development if noise or disturbances were appropriately addressed through regulation. But industry wide codes of behaviour are yet to be implemented.

At what cost?

Lifting the ban on onshore conventional gas in Victoria comes at a time when the need to reduce greenhouse gas emissions is profoundly important.

Climate change is accelerating. While gas may be an important resource as we transition to renewable energy, accelerating its production, particularly in the absence of stringent regulatory controls, comes at a very high price.

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

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

Australia: Climate Targets Further Threatened by Northern Territory Gas Plans

Court warns of ‘irreversible consequences’

Climate-savvy shareholders unite

The litigation trend

Change is nigh

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A gas-led economic recovery

Bad: investing in gas

Good: investing in critical infrastructure

The verdict

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Coal-fired plants close, then prices fall

Coal can’t respond quickly

What was a feature is now a bug

Gas and batteries can fill gaps coal can’t

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Cutting out gas

Switching to all-electric homes

Zero-carbon buildings

An economically sensible move

Should we be cooking with gas?

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Scare-tactics won’t resolve the climate emergency

We need to address the ‘energy trilemma’

What is it with the federal government and gas?

I’ll say it again: renewable energy is the future

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Heatwave in Antarctica

Bleaching the reef

Coal mining under a Sydney water reservoir

Victoria green-lights onshore gas exploration

Trump rolls back environmental rules

And so…

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The fracking ban isn’t so permanent

Conventional vs unconventional gas

Greenhouse gas leaks

Increasing annual emissions

What it means for the community

At what cost?

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