Jul 29, 2015

50 percent renewable energy would put Australia in line with leading nations

Renewable Energy
Australia
John Mathews
5 min
Opposition leader Bill Shorten told the Labor Party conference last week that the party’s policy should be for 

Opposition leader Bill Shorten told the Labor Party conference last week that the party’s policy should be for 50 percent of electricity to come from renewables by 2030.

This would bring Australia abreast with its international competitors such as California, with its recently announced target of 50 percent of electricity from renewables by 2030, and Germany, where the Energiewende (“energy transformation”) will see the country commit to 40-45 percent non-nuclear green power by 2020, and 55-60 percent by 2035.

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Shorten’s move is a major break with previous ALP policy, and promises to be so effective in building a new power sector to eclipse the present fossil-fuelled sector that it already has the conservative side of politics foaming at the mouth. This week predictably saw the return of the “Electricity Bill Shorten” name-calling, and The Australian newspaper branded the renewables policy “Labor’s loony turn”.

It is such a break with previous climate policy because it sets a target for building renewable energy capacity, rather than targeting notional carbon reductions by such and such a date without specifying how to get there. If adopted, this policy would allow Labor finally to free itself of the politically damaging obsession with using carbon pricing – either in the form of a carbon tax or a cap and trade scheme – as its principal green platform.

Although Labor is also committed to emissions trading, renewable energy offers the more politically straightforward approach of fast-tracking investment in the renewables sector, providing the business certainty that the Abbott government has been so keen to break.

RELATED TOPIC: Solar power and battery storage closing the gap in Australia

This was always the missing piece in Labor’s green strategy – eclipsed by its continuing commitment to support Australia’s exports of coal, gas and iron ore to the rising industrial powers of Asia, particularly China. The new policy represents a switch from a 20th-century obsession with fossil-fuel mining and export, to a 21st-century focus on creating energy security through renewables.

It promises to be effective for the same reason that Germany’s or California’s commitment to swing behind a power sector fuelled by renewables is effective. These targets are really about industry strategy, with a favourable side-effect that they also promise to lower carbon emissions. Denmark’s 2012 commitment to renewable power using wind energy (with a conservative target of 50 percent renewables by 2020) has already created the world’s number-one wind power company, Vestas. Support for renewables is a smart industry strategy.

China is, of course, the world leader in this transition, with a commitment to source 30 percent of electricity from renewables by 2020. China’s Energy Development Strategic Action Plan (2014–2020) specifies limits for overall energy and coal consumption, and at the same time sets targets for renewable energy capacity as reaching 350 gigawatts, 200 GW and 100 GW respectively for hydro, wind and solar, plus 58 GW for nuclear.

RELATED TOPIC: How expensive is the future of the energy sector?

These are by far the most ambitious targets in the world. China’s current electric power capacity stands at 1,360 GW, with hydro, wind and solar accounting for 424 GW–a total that grew by 51 GW in 2014 (or roughly a 1-GW non-thermal power station each week). By contrast, thermal generation of electricity (from coal) actually shrank in 2014.

What these countries' leaders understand, and what gives this new policy signal from the ALP leadership real teeth, is that renewable energy promises to be one of the leading industries of the 21st century. These industries promise not just reliable and secure energy, but also – for the countries smart enough to take advantage of the opportunities – industrial and manufacturing strength, exports, technological innovation and jobs. All of this comes with the convenient side-effect of reducing carbon emissions, which while welcome, does not have to be the main driver of the policy shift.

To those who think such an energy transformation is inconceivable, Germany and China stand as major correctives, with Japan hovering as another major contender. Germany abandoned its nuclear industry after Japan’s Fukushima disaster in 2011, and instead adopted aggressive targets for renewables, backed by a feed-in tariffs scheme which helped to fund the transition from consumers’ energy bills, not from public fiscal sources.

RELATED TOPIC: Is crowdsourcing the key to funding renewable energy in Asia?

The usual canards against renewables are already being trotted out by those who criticise their advance. The Australian’s environment editor Graham Lloyd wrote yesterday that renewables don’t offer the same “density” of energy as their fossil-fuelled and nuclear competitors – ignoring the point that it is their very diffuseness that makes them so attractive. Solar and wind energy can be generated almost anywhere, while fossil-fuelled and nuclear sources have to be centralized and suffer rigidities as a result.

Lloyd also claimed that energy storage and intermittency are “technological barriers” that make the transition to renewables difficult, along with cost barriers. But the real experience of Germany and China provide a very different perspective. These two countries, through their commitment to large-scale renewable energy, have been driving down costs. Solar panel prices globally have tumbled by 80 percent over the past few years, driven largely by scaling up production in China and to some extent in Germany.

Australia stands to benefit from these cost decreases as policy shifts to supporting a renewables-driven power system. These costs refer to production costs, or wholesale costs, driven by the learning curves that are a feature of all manufacturing industries. What the existing power producers actually charge consumers is another matter altogether.

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But as the political debate comes to focus on the real production costs of electricity, so the position of the incumbent power producers will prove to be untenable.

John Mathews is Professor of Strategic Management, Macquarie Graduate School of Management at Macquarie University.

This article was originally published on The Conversation.

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Jul 29, 2021

Carbon dioxide removal revenues worth £2bn a year by 2030

Energy
technology
CCUS
Netzero
Dominic Ellis
4 min
Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades says the UK's National Infrastructure Commission

Carbon dioxide removal revenues could reach £2bn a year by 2030 in the UK with costs per megatonne totalling up to £400 million, according to the National Infrastructure Commission

Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades - although costs are uncertain given removal technologies are in their infancy - and revenues could match that of the UK’s water sector by 2050. The Commission’s analysis suggests engineered removals technologies need to have capacity to remove five to ten megatonnes of carbon dioxide no later than 2030, and between 40 and 100 megatonnes by 2050.

The Commission states technologies fit into two categories: extracting carbon dioxide directly out of the air; and bioenergy with carbon capture technology – processing biomass to recapture carbon dioxide absorbed as the fuel grew. In both cases, the captured CO2 is then stored permanently out of the atmosphere, typically under the seabed.

The report sets out how the engineered removal and storage of carbon dioxide offers the most realistic way to mitigate the final slice of emissions expected to remain by the 2040s from sources that don’t currently have a decarbonisation solution, like aviation and agriculture. 

It stresses that the potential of these technologies is “not an excuse to delay necessary action elsewhere” and cannot replace efforts to reduce emissions from sectors like road transport or power, where removals would be a more expensive alternative.  

The critical role these technologies will play in meeting climate targets means government must rapidly kick start the sector so that it becomes viable by the 2030s, according to the report, which was commissioned by government in November 2020. 

Early movement by the UK to develop the expertise and capacity in greenhouse gas removal technologies could create a comparative advantage, with the prospect of other countries needing to procure the knowledge and skills the UK develops.

The Commission recommends that government should support the development of this new sector in the short term with policies that drive delivery of these technologies and create demand through obligations on polluting industries, which will over time enable a competitive market to develop. Robust independent regulation must also be put in place from the start to help build public and investor confidence.

While the burden of these costs could be shared by different parts of industries required to pay for removals or in part shared with government, the report acknowledges that, over the longer term, the aim should be to have polluting sectors pay for removals they need to reach carbon targets.

Polluting industries are likely to pass a proportion of the costs onto consumers. While those with bigger household expenditures will pay more than those on lower incomes, the report underlines that government will need to identify ways of protecting vulnerable consumers and to decide where in relevant industry supply chains the costs should fall.

Chair of the National Infrastructure Commission, Sir John Armitt, said taking steps to clean our air is something we’re going to have to get used to, just as we already manage our wastewater and household refuse. 

"While engineered removals will not be everyone’s favourite device in the toolkit, they are there for the hardest jobs. And in the overall project of mitigating our impact on the planet for the sake of generations to come, we need every tool we can find," he said.

“But to get close to having the sector operating where and when we need it to, the government needs to get ahead of the game now. The adaptive approach to market building we recommend will create the best environment for emerging technologies to develop quickly and show their worth, avoiding the need for government to pick winners. We know from the dramatic fall in the cost of renewables that this approach works and we must apply the lessons learned to this novel, but necessary, technology.” 

The Intergovernmental Panel on Climate Change and International Energy Agency estimate a global capacity for engineered removals of 2,000 to 16,000 megatonnes of carbon dioxide each year by 2050 will be needed in order to meet global reduction targets. 

Yesterday Summit Carbon Solutions received "a strategic investment" from John Deere to advance a major CCUS project (click here). The project will accelerate decarbonisation efforts across the agriculture industry by enabling the production of low carbon ethanol, resulting in the production of more sustainable food, feed, and fuel. Summit Carbon Solutions has partnered with 31 biorefineries across the Midwest United States to capture and permanently sequester their CO2 emissions.  

Cory Reed, President, Agriculture & Turf Division of John Deere, said: "Carbon neutral ethanol would have a positive impact on the environment and bolster the long-term sustainability of the agriculture industry. The work Summit Carbon Solutions is doing will be critical in delivering on these goals."

McKinsey highlights a number of CCUS methods which can drive CO2 to net zero:

  • Today’s leader: Enhanced oil recovery Among CO2 uses by industry, enhanced oil recovery leads the field. It accounts for around 90 percent of all CO2 usage today
  • Cementing in CO2 for the ages New processes could lock up CO2 permanently in concrete, “storing” CO2 in buildings, sidewalks, or anywhere else concrete is used
  • Carbon neutral fuel for jets Technically, CO2 could be used to create virtually any type of fuel. Through a chemical reaction, CO2 captured from industry can be combined with hydrogen to create synthetic gasoline, jet fuel, and diesel
  • Capturing CO2 from ambient air - anywhere Direct air capture (DAC) could push CO2 emissions into negative territory in a big way
  • The biomass-energy cycle: CO2 neutral or even negative Bioenergy with carbon capture and storage relies on nature to remove CO2 from the atmosphere for use elsewhere

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