Next Generation: Solving Australia’s energy problems – Grattan Institute Report
South Australia recently became the most expensive region in the world for power, as electricity prices rose to overtake Denmark following the latest hike from the country’s major energy retailers.
“Australians have endured a decade of toxic political debates about climate change policy, South Australians suffered a state-wide blackout last year, consumers across the country are screaming about skyrocketing electricity bills, and energy companies are shutting down big coal-fired power stations,” said Tony Wood, Grattan Institute Energy Program Director.
With all this in mind, the country needs to take measures to solve its ongoing, ever-worsening energy problem.
This is provided in the report named Next Generation: the long term future of the National Electricity Market. Within this, the Grattan Institute calls for preparatory work in the sector on a capacity mechanism, designed to encourage investment into Australia’s energy industry to reduce the threat of shortages and blackouts.
Capacity mechanisms are an administrative measure, designed ensure a desired level of supply is achieved. However, implementing this would merely be a short term solution, and Australia needs to look to sustainability in the long term.
“It is understandable that governments feel the need to ‘do something’. But the danger is they will rush in and make things worse. What Australia needs now is perspective, not panic,” Wood continues.
The report sets out a three-step policy in both understanding the country’s energy supply and implementing a capacity mechanism if necessary.
- The federal government should set out its energy ambitions based on the June 2017 Finkel Review aimed at using new clean energy targets to deliver lower power prices to consumers.
- The Australian Energy Market Operator should work alongside the Australian Energy Market Commission to produce an annual assessment that more readily looks at the future adequacy of the generation of energy supply.
- If the Energy Security Board deems that energy shortages seem at all likely, then the capacity mechanism should be implemented.
“This pragmatic, planned approach offers the best prospect of affordable, reliable, secure and sustainable power for Australians,” Wood concludes.
This plan has the long-term future of the country in mind, attempting to gauge energy shortages before they occur, whilst also preventing panic from the government in the face of potential blackouts in the short term.
Trafigura and Yara International explore clean ammonia usage
Reducing shipping emissions is a vital component of the fight against global climate change, yet Greenhouse Gas emissions from the global maritime sector are increasing - and at odds with the IMO's strategy to cut absolute emissions by at least 50% by 2050.
How more than 70,000 ships can decrease their reliance on carbon-based sources is one of transport's most pressing decarbonisation challenges.
Yara and Trafigura intend to collaborate on initiatives that will establish themselves in the clean ammonia value chain. Under the MoU announced today, Trafigura and Yara intend to work together in the following areas:
- The supply of clean ammonia by Yara to Trafigura Group companies
- Exploration of joint R&D initiatives for clean ammonia application as a marine fuel
- Development of new clean ammonia assets including marine fuel infrastructure and market opportunities
Magnus Krogh Ankarstrand, President of Yara Clean Ammonia, said the agreement is a good example of cross-industry collaboration to develop and promote zero-emission fuel in the form of clean ammonia for the shipping industry. "Building clean ammonia value chains is critical to facilitate the transition to zero emission fuels by enabling the hydrogen economy – not least within trade and distribution where both Yara and Trafigura have leading capabilities. Demand and supply of clean ammonia need to be developed in tandem," he said.
There is a growing consensus that hydrogen-based fuels will ultimately be the shipping fuels of the future, but clear and comprehensive regulation is essential, according to Jose Maria Larocca, Executive Director and Co-Head of Oil Trading for Trafigura.
Ammonia has a number of properties that require "further investigation," according to Wartsila. "It ignites and burns poorly compared to other fuels and is toxic and corrosive, making safe handling and storage important. Burning ammonia could also lead to higher NOx emissions unless controlled either by aftertreatment or by optimising the combustion process," it notes.
Trafigura has co-sponsored the R&D of MAN Energy Solutions’ ammonia-fuelled engine for maritime vessels, has performed in-depth studies of transport fuels with reduced greenhouse gas emissions, and has published a white paper on the need for a global carbon levy for shipping fuels to be introduced by International Maritime Organization.
Oslo-based Yara produces roughly 8.5 million tonnes of ammonia annually and employs a fleet of 11 ammonia carriers, including 5 fully owned ships, and owns 18 marine ammonia terminals with 580 kt of storage capacity – enabling it to produce and deliver ammonia across the globe.
It recently established a new clean ammonia unit to capture growth opportunities in emission-free fuel for shipping and power, carbon-free fertilizer and ammonia for industrial applications.