Australian Energy Scenarios Predicting Uncertainty

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Australian Energy ScenariosPredicting Uncertainty

• Professor Emeritus Frank Larkins
• Chief Scientist Energy
• Department of Primary Industries
• Victoria
• Presentation Griffith Hack 17th June 2009

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Australian Energy Scenarios Outline

• Current Situation
• Uncertainties
• Electricity Resource Projections to 2050
• Australian Energy Resources
• Regulatory Environment
• Energy Technological Advances
• Technology Replacement Costs
• Infrastructure Financing
• Cost of Electricity Generation Technologies
• Global Warming Climate Change
• Managing Community Perceptions
• International Developments

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World Energy Use by Fuel Type85 of world energy
is sourced from fossil fuels
37 25 23 9 6
World energy demand has increase 2.6 times in 40
years
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Energy Use per capita vs GDP per capitaIn GDP
per capita terms Australia is an energy intensive
economy
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Australian Energy Fuel Mix 2005
Energy Consumption By Fuel Type
Coal 41
Oil 35 95 Fossil Fuels
Gas 19
Biomass 3.7
Renewables 1.3
Source ABARE 2005
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Australias Energy ConsumptionCoal, oil gas
supply 95 of Australias Energy needs
Energy End Use Percentage Electricity Use Total
Electricity 30.8
Transport 24.3 77.7 0.3 24.6
Manufacturing 22.6 3.9 26.5 67.5
Mining Metals 6.2 10.3 16.5
Residential 7.8 8.2 16.0
Commercial 4.5 7.9 12.4
Agriculture 1.8 0.2 2.0 low use
Construction 0.5 0.5
Other 1.5 1.5
Source ABARE 2006
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Australias Net Anthropogenic Greenhouse Gas
Emissions 2006Source CSIRO 2006
Source Emissions Mt CO2-e Percentage
ENERGY 400.9 69.6
stationary energy 287.4 49.9
transport 79.1 13.7 69.6
fugitive emissions 34.5 6.0
INDUSTRIAL PROCESSES 28.4 4.9
AGRICULTURE 90.1 15.6 second largest
WASTE 16.6 2.9
LAND USE CHANGE 62.9 6.9
FORESTRY -23.0
TOTAL NET EMISSIONS 576.0 100
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Electricity Resource Projections to 2050 ()
Coal Gas Oil Nuclear Renewables Geothermal
World 2005 Treasury 41 22 7 14 16
2050 53 17 8 11 11
Australia 2005 Treasury 84 8 2 6
2050 Treasury ATSE(1) ATSE(2) 33 30 17 21 23 23 15 17 43 41 22 4 4
Victoria 2005 90 3 7
World electricity demand is expected to increase
at least 3 fold by 2050 Australian electricity
demand is expected to at least double by 2050
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Australian Energy Resources

• Black Coal 100 years
• Brown Coal 500 years
• Gas 65 years
• Crude Oil 7-10 years?
• Uranium 75 years
• Geothermal 800 years ?
• Solar/Wind/Wave/Tidal renewable
• Biomass renewable
• Source The Heat is On The future of Energy in
  Australia CSIRO 2006

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Regulatory Environment

• Australia and Victoria have ambitious sustainable
  energy targets
• Australia
• 20 per cent of Australias electricity will come
  from renewable sources by 2020
• To reduce carbon dioxide emissions by 60 by 2050
  HOW?
• A national emissions trading scheme (CPRS) to
  begin in 2011?
• CPRS insufficient stand alone driver for
  industrial change
• Carbon Capture and Storage Legislation Site
  Selection and Sovereign Risk
• Victoria
• Greenhouse gas emissions reduced by 60 by
  2050 HOW?
• 10 per cent electricity from renewables by 2016
• Energy efficiency measures
• CCS storage legislation
• Carbon reduction targets have led to
• Funding opportunities for pre-commercial clean
  energy technologies
• Government support through advice and
  facilitation
• National Low Emissions Coal Council RD Body

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Energy Technological Advances That Are Required

• Brown Coal Drying and Efficient Combustion
• Carbon Capture and Storage
• Geothermal
• Solar Thermal
• Solar Photovoltaic
• Energy Storage
• Electric transportation
• Nuclear ?
• Wind, Wave, Tidal

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Capital Cost to Replace10 of Australias Total
Current CO2-e Emissions in 2020 2050 by
Specific Technologies(i.e. 60 million tonne pa)
Technology 2020 A billions 2050 A billions
Coal - CCS 49 35
Gas 30 26
Biomass 25 20
Solar PV 174 70
Solar Thermal 104 70
Wind 46 35
Wave 42 36
Geothermal 60 40
Nuclear 20
Source ATSE 2008
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Infrastructure Financing

• At least 6 billion on RDD for new power
  generation technologies by 2020 (ATSE)
• CCS at least 1-2 billion for demonstration per
  plant
• At least 200 billion for new electricity
  generating plant by 2040 2050 to meet Treasury
  generation mix
• 7billion pa for 30 years
• From where will the capital be sourced?
• 2009-2010 Federal Budget - 4.5 b Clean Energy
  Initiative
• 2.4 billion - Low emissions coal technologies,
  CCS, 1 Mt CO2
• 1.6 billion Solar Technologies 1,000 MW, 4
  plants
• 465 million Establish Renewables Australia
• Expectation is for at least 21 funding from
  industry and states resulting in 10 billion by
  2020

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MWh Cost of Electricity Generation
TechnologiesSource CSIRO 2006
Technology Cost /MWh
Brown Coal 29
Brown CoalIGCCCCS 57
Black Coal 30-48
Black CoalIGCCCCS 60
Gas CCS 53
Nuclear 70
Biomass 88
Geothermal 89
Solar Thermal 196
Coal and Gas predicted to be the most economical
sources
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Managing Community Perceptions/Expectations

• Energy GHG Climate Change
  Drought/Water
• Will the community
• Accept CO2 Storage?
• Accept the CPRS cost impost?
• Change significantly their energy use practices?
• Adopt sufficient energy efficiency measures?
• Accept nuclear power v continued GHG pollution?

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International Developments

• Kyoto Protocol A valuable framework ..but
• Copenhagen Talks late 2009
• How likely an outcome with specific targets?
• Positions adopted by USA, China, India will be
  critical.
• Australia only 1-2 of world emissions, but coal
  exports of vital economic importance

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Victorian Government New Energy RDD Initiatives

• Energy Technology Innovation Strategy
• Stage 1 - 2005.
• A 180m RD Large Scale low emission
  technologies A 1,600m total
  investment
• Stage 2 - 2009.
• A 72m pre-commercial demonstration of
  sustainable energy technologies
• A 110m Carbon Capture and Storage
• Seeking industry and Commonwealth funding for
  projects

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Victorian Government Energy Technology
Innovation Strategy 2 What stage in the RDDD
cycle will it support?
ETIS 2 funds projects at the post-pilot stage in
the RDDD cycle which still show technical risk
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Concluding Remarks

• There are many policy and planning uncertainties
  relating to future energy use. However
• What is certain is that
• demand for energy in Australia will continue to
  increase
• there are sufficient energy resources available
  to meet demand for many decades.
• What is uncertain is
• how much of the global warming/climate change is
  due to anthropogenic factors, especially carbon
  dioxide emissions, and
• whether sustainable energy technologies will be
  available in Australia at internationally
  competitive economic cost that are both
  environmentally friendly and acceptable to the
  community.