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No single winner in energy review

THERE is unlikely to be a "winner takes all" technology in the Australian energy mix, with no sin...

Haydn Black

The report, which examines technologies, their capabilities and costs in 2015 and looking forward to 2030, was designed to provide an unbiased, neutral review of energy generation and storage options – and has been welcomed for recognising the role of gas.

Yesterday’s Australian Power Generation Technology Report, which examined coal, natural gas, solar, wind, geothermal, hydro-electric, nuclear and biomass, is a blow to Labor’s 50% renewables target and Greens’ 90% target, but good news for gas producers.

“As Australia and the world seeks energy options that balance financial cost and environmental impact, the assessments presented in this Report will help inform the mix of technologies we choose to utilise,” CO2CRC CEO and report chair Tania Constable said.

The report highlights that in the future all new technologies will cost more than the current mix and all of the technologies studied have strengths and constraints.

The study was able to compare technologies on a like-for-like basis on important dimensions such as construction costs and CO2 emissions and includes discussion about the connection of electricity technologies to Australia’s grids.

The report incorporates CSIRO modelling to project the potential energy costs to 2030 and provides a comprehensive discussion on key technology enablers such as energy storage and carbon transport and storage.

A collaboration of more than 45 major Australian utility and energy providers, industry, research, industry associations and environmental organisations, along with governments, participated in Australia’s most up to date assessment of the cost and performance of power generation technologies to 2030.

CSIRO executive director, environment, energy and resources Dr Alex Wonhas said the data was the best available for the Australian energy mix to date.

“The report’s independence, thoroughness and transparency will make it a credible tool for a broad range of decision makers,” he said.

The report shows supercritical coal and natural gas combined cycle plants had the cheapest levelised cost of electricity below $100 per megawatt hour, coal integrated gasification combined cycle technology rises to between $100-150/MWh, and various gas-coal options between $150-250/MWh.

In terms of renewables range between 100-200/MWh for solar, $150-300/MWh for solar thermal plants with storage, while wind is as cheap as coal at $8-120/MWh.

Nuclear would be one of the more expensive options at $160-220/MWh, but with much higher up-front construction costs than most other options.

Diesel is by far the most costly option at $250-300/Mwh.

The report found all new low- and zero-emissions technologies are projected to reduce in cost by 2030.

In general, the more mature the technology, the less opportunity for further cost reductions, with the scope of cost reduction for a given technology depending heavily on the global take-up of that technology.

The overall ranking of the levelised cost of for technologies in 2030 is not projected to change from 2015, but there is likely to be convergence in LCOEs across most technologies.

The report found that CCS will remain an enabling technology for reducing emissions from large stationary sources of CO2, such as power plants and other industrial plants, but to be effective will require development of a transportation and storage network, one that does not exist in Australia.

CCS is expected to add costs of between $5-70 per tonne of CO2.

“The report provides a thorough, independent assessment of the strengths and weaknesses of renewable, coal and gas technologies,” Australian Petroleum Production and Exploration Association CEO Dr Malcolm Roberts said.

“The expert verdict is that gas-fired generation is cleaner than coal, cheaper than renewables and can adapt quickly to meet changing demand.

“By every measure – costs, water use, emissions, waste and reliability – natural gas is strongly competitive against other generation types. Natural gas and coal remain the cheapest sources of baseload power.

“And combined cycle natural gas plants can provide baseload power at a comparable cost to efficient, supercritical coal-fired plants but with the critical advantage of much lower emissions.

“The report is an important contribution to discussion about our growing low carbon energy needs ahead of climate change talks in Paris next week.

“The energy debate is too often distorted by cheer squads for one or other technologies, ignoring the fact that our energy needs are complicated and demand a mix of generation sources.”

The Australian Pipelines and Gas Association, the group representing gas and presumably future CO2 pipeline owners, was likewise overjoyed to hear the report favoured gas.

“Natural gas is an important part of our economy – not only for power generation, but also as an input for manufacturing,” APGA CEO Cheryl Cartwright said.

“It will be a major part of our energy mix into the future as we move towards lower emissions electricity generation.”

The report demonstrates that natural gas should be a large part of Australia’s energy mix both now and into the future, she said.

“The challenge for the nation is securing sufficient gas resources to ensure gas maintains its key its role in our energy mix,” Cartwright added.

“As well as gas-fired power generation, natural gas is a critical input to manufacturing such as fertilisers and plastics. It also provides efficient high-temperature burning for a range of uses such as sterilising hospital products, waste disposal and firing for bricks and other products.”

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