Australia’s continuing reliance on coal and gas to provide its baseload energy comes at a cost to our greenhouse gas emissions.
On a global scale our national emissions might be paltry – just 1.3 per cent – compared with nations like India, Brazil and China but per head of population, our performance is pretty average for a relatively wealthy, developed country.
Added to that is that as one of the world’s largest coal exporters, Australia can rightly be accused of digging up the issue in the first place, pouring it into bulk carriers and simply shipping the problem elsewhere.
This binds emissions and the ethics of exporting emissions-producing raw materials firmly with the importance of maintaining a strong export income at a time when government efforts to protect people’s jobs and keep the economy moving during the COVID-19 pandemic has racked up a massive national debt: about $1 trillion, or around 50 per cent of our gross national product.
A transition to a lower-emission economy has to happen – it is inevitable – but it’s the potential national disruption, the backlash effect of job losses in key political electorates as big emitters close, and the need for a stable national electricity supply grid for industrial and domestic consumers alike which provide a damping effect on how quickly the shift occurs.
Clean energy start-ups, like the world’s largest solar farm to be built near the tiny town of Elliott, in the Northern Territory, take time and money to build, test, trial and deliver.
The Sun Cable project is a good example because construction won’t begin until 2023, and won’t start generating energy until around three years later.
One cushioning effect for the transition to renewables and/or hydrogen is provided by carbon abatement and on September 18, 35 new contracts providing over 7 million tonnes of abatement were purchased.
It’s a clunky process because it’s basically spending taxpayers’ money to buy the government time and should – in an ideal world – always be bookended by a firm political commitment to emission targets or it becomes just another self-inking money pit.
However, carbon abatement schemes can, in the short term, help by protecting jobs, votes in marginal electorates (of course) and ease any transition shock to the economy.
With smart and careful administration, it also acts as a stimulus to encourage new and emerging technology start-up companies.
So how does it work?
The process works like a public auction where companies bid to deliver the most abatement for the lowest price.
The latest auction has awarded 33 contracts to projects like the ACT’s Ingledene pine plantation near Tharwa (to trap carbon within soil and trees) and the new Mugga Lane landfill gas generators, which will burn the methane and push the power to the grid.
Why not just channel the money into solar and wind farms?
Private investment is doing a reasonable job of driving that end of the market and the Emissions Reduction Fund had 43 renewable energy projects registered in the first half of this year, which is more than the whole of 2019.
From a government perspective, it pays not to put all your proverbial eggs into the one basket because there are some interesting and emerging technologies which, with focused encouragement, could yield a very good outcome.
Sadly, emerging technologies currently are not getting much of a look-in.
This latest auction has mostly rewarded sequestration through vegetation (36.92 million tonnes of projected abatement through planting trees) and landfill gas capture (15.48 million tonnes), neither of which are genuinely innovative nor emerging technologies.
So is planting trees the best answer?
No, just one of the answers. So far about 95 per cent of contracts have been issued to waste management, and tree and vegetation growth.
Progressive farmers can play a big role if the administrative burden was simplified in order that the process of planting shelter belts and ploughing organics back into the soil was financially rewarding.
The average price paid per tonne of abatement is $15.74 and rising slowly but it isn’t a big enough incentive for small scale projects, considering the administrative hoops people have to jump through to participate.
It’s also not in the government’s best interests to be too macro in its targeting. It needs large scale carbon soak-up because the burning of coal is such a big emissions issue.
Isn’t it smarter to deal with emissions at the source?
Always. But most of Australia’s coal-fired plants were built back in the 1970s when priorities were different. Retro-fitting and refurbishment is costly and often as not doesn’t work.
Proponents of coal point to Japan’s intensified gasification technology. Japan still relies on cheap coal for about one-third of its power generation needs, is decommissioning old plants and planning on building as many as 22 new ones.
But these even still only achieve an efficiency of around 44 per cent. And they are still relatively big emitters (particularly compared with projects like the Snowy Hydro 2.0).
Investing in any energy generation which brings with it the heavy yoke of emissions is a hard sell, both to canny investors and the Australian public.
However, no mature technologies provide consistent base-load generation. Very big batteries are a part solution, the nuclear option is hugely politically volatile and hydrogen is technically a little ways off solved yet.
Fossil fuels still feature strongly in corporate plans with AGL, for instance, wanting to replace its soon-to-be-decommissioned Liddell coal-fired plant with a gas generator near Newcastle.
Power prices, like petrol prices, are a political lightning rod which can galvanise public opinion and topple governments.
In the end, political pragmatism will always prevail; emissions expectations are far easier to manage than huge rises in power prices.