Billions needed to go green
TURNING Australia’s electricity supply a greener shade of black over the next 25 years could involve a capital outlay of almost $ 80 billion — and that’s only for new power stations. Retrofitting existing coal- burning plant to meet stringent future greenhouse gas emissions standards could cost billions more.
Electricity producers are wrestling with a raft of competing priorities as they strive to provide national supply security, and a lower environmental footprint for the nation’s largest single source of greenhouse gases, while retaining their commercial balance.
Power consumption has almost doubled in the past 20 years and the industry is predicting that it will rise another 67 per cent by 2030, even with a greater national focus on end- use efficiency. Actual electricity generated is higher still because of power stations’ own needs and transmission losses in transporting it from plant to customer.
The Energy Supply Association has told the federal Government that meeting load growth with conventional technology, and continuing to rely on coal and gas for 90 per cent of generation, will require spending about $ 35 billion on new power stations.
But the cost will depend, in reality, on what policymakers decide to do about greenhouse gas emission targets, and ESAA calculates that stabilising 2030 emissions at 2000 levels will push up capital outlays by another $ 20-$ 30 billion. Achieving an emissions target of 30 per cent below 2000 levels — a goal being driven by the environmental movement and inherent in the federal opposition’s pledge to pursue a 60 per cent cut by 2050 — will require the outlay rising to $ 70-$ 80 billion.
Research undertaken for the National Generators Forum indicates that retrofitting 60 per cent of coal capacity by 2020 with carbon capture technology would cost $ 883 per kilowatt for 17,000 megawatts of plant — about $ 15 billion. The situation is also complicated by the fact that retrofitted power stations need to burn more coal to produce the same amount of electricity, and that not all their CO emissions are available for capture and burial.
Even at the higher target, Australian generation will not be ‘‘ green’’ — emissions from burning fossil fuels are now about 200 million tonnes of carbon dioxide a year and would be roughly halved in 2030 by a radical change in the generating technologies.
The problem for the energy sector — and the power industry’s largest customers, the energy- intensive manufacturers who use a third of electricity consumed here, employ 1.1 million Australians and rely on secure supply and low prices — is that, despite a decade of debate, task forces, government announcements, new research and subsidy programs, and a federal government policy white paper, there is huge uncertainty over how Australia will pursue abatement goals. And no harmonised federal/ state approach. The situation is exacerbated by the need to also ensure that the power network keeps up with demand.