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How Australia can become a renewable energy superpower

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Australia has the opportunity to become a renewable energy superpower – giving it a global economic advantage much greater than that ever gained from fossil fuels – a new report has suggested, but only if it seizes three key areas of opportunity, based heavily on innovation; and only if it acts quickly and doesn’t miss the wave.

The report, published on Monday by Beyond Zero Emissions, notes that Australia – despite having one of the best renewable energy resources in the world – is currently on the back foot in the global energy stakes.

Its “fossil fuel advantage” is fast disappearing , and it has an outdated and gold-plated electricity network that has acted as a ball and chain to progress.

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But it also suggests that Australia could turn this position around, by building an industry that supplies the renewable and energy efficiency market; by assisting the migration of energy intensive industries to renewables; and by harnessing the trade of renewable energy commodities.

The global shift to renewable energy – while largely a democratising force – will still bring advantages to some nations, the report says.

“The value associated with renewable energy is largely accounted for by the harvesting equipment, with very little ongoing costs and zero fuel costs. This is completely different to fossil energy where the majority of the value is in the ongoing consumption of fuel.

“As a result, the opportunity to capitalise on supplying renewable energy and efficiency equipment will be confined to the period of the transition; then it will recede.

“This opportunity will be based on innovation rather than natural resources. Considering that energy harvesting equipment is commonly available to all nations, advantages will accrue to nations or regions with higher quality renewable energy resources and a greater harvesting territory in relation to their domestic energy needs (Figure 6).

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“In essence, these nations will require less investment for equivalent energy output, lowering their energy costs. …the cost of power per unit of installed capacity can more than halve across the typical range of wind or solar conditions,” the report says. “This is the new energy advantage.”

According to the report, there are three main opportunities for “superpowers” in the transition to renewable energy.

“First, demand for renewable energy and efficiency equipment will surge during the transition and then recede.

“Second, after the transition, energy intensive industries will relocate in search of low-cost energy. Third, renewable energy commodities for export will be produced in countries with low-cost renewable energy.”

BZE says the sources of value in the energy system will change in the transition from fossil energy to renewable energy, developing in different phases (see figure 8 below).

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Having now reached the tipping point, the report notes that the majority of world energy investment over the next two decades is expected to flow to renewable energy and efficiency solutions – even under ‘business as usual’ conditions.

According to BZE, the global market for renewable energy and efficiency solutions is expected to grow from an estimated $US390 billion in 2013, to $US2.3 trillion by 2035 in order to limit global warming to 2°C.

In all, says the report, $US28 trillion is expected to be invested in renewable energy and efficiency throughout the period.

“The nature of renewable energy solutions is upfront equipment costs replacing the ongoing high fuel costs of fossil energy. This means that this opportunity will be at its strongest during the energy transition phase and recede into the renewable energy era.

As for energy intensive industries, the report says the economics of renewable energy will trigger a migration of this secor, in search of lower production costs for a competitive edge.

“Australia can attract these businesses with its abundant, low-cost energy as well as complementary industries established during the former glory years of energy intensive production in this country.”

Tradeable renewable energy commodities — such as biofuel, hydrogen or transmitted electricity — will be additional energy intensive industries of the renewable energy era, the report says.

And for Australia, “abundant, low-cost renewable energy, land availability, and proximity to the emerging Asian region,” make it a perfect fit.

“Managed well, the transition to renewable energy will restore and enhance former strengths, this time built on sustainable foundations,” the report says.  

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  • Miles Harding

    The tyrrany of distance is a huge issue for this; Electricty is difficult and inefficient to transmit large distances and the other (hydrogen and hydrocarbon) are inefficient to manufacture, transmit and consume.

    These losses in production and transmission suggest that energy will be expensive, which will be an issue for post-oil economies that are already reeling from the withdrawl of oil based products, such as plastics and fertiliser and the effects of a 4 deg.C temperature trajectory.

    Current plant derived biofuels are now near their limits and are such an environmental disaster that these will likely have to be curtailed at some point in the near future, so no help here.

    One thing that I can think of is reducing metals, such as Aluminium or Lithium to be shipped as the active component of a metal-air battery system. Apart from it being ‘future’ technology and potentually not all that efficient, it is still likely twice as efficient as the Hydrogen or Hydrocarbon synthesis systems being suggested here.

    Moving the energy intesive industries to where the energy is makes very good sense. Unfortunately, the Aust. government is very good at telling potential inustries to stay away by offering no incentives at all.

    • John Knox

      Your first premise: Not so really… How does a loss of 5% over 1,000km (using current [pardon the pun] technology) seem to you; it doesn’t seem that much to me. With renewable energy infrastructure in the ‘top end’ – are you listening Josh Frydenberg? – we could export clean, green electricity into SE Asia with relative ease using High Voltage DC power lines not unlike the Basslink feeder from Tasmania…

  • Adam Parris

    I’m sceptical about how big the export market will be for exporting hydrogen. Most developing nations are leap-frogging developed nations by using small micro solar grids and eventually wind to power a small village without the need for investment in transmission lines.

    They won’t pay to import hydrogen or afford to pay a massive amount to have a hydrogen processing plant installed especially when they don’t have the electricity capacity to power it or the transmission lines to deliver it.

    • John Knox

      Hydrogen can be used as a substitute for fossil fuels for applications where electricity is unavailable or unlikely to be able to provide the same utility…
      Think air travel/bulk transportation

      • jeffhre

        Good point – using H2 for air travel would most certainly lead to a redefinition of the term – bulk transportation.

  • Jens Stubbe

    Australia has sufficient wind resources and space to accommodate the number of wind turbines required to supply the entire global energy demand and wind power should easily become as cheap as in US.

    In order to substitute the global demand for fossils you should build Synfuel plants based upon cheap electricity and way too abundant CO2. John Morgan has written an article with the premiss that it should be nuclear powered but there is no reason not to use the cheapest available electricity, which is currently wind power and probably always will be wind power except if solar technology certainly exceeds expectations in a dramatic way. http://bravenewclimate.com/2013/01/16/zero-emission-synfuel-from-seawater/

    The beauty of over provision with high capacity wind and use Synfuel as a massive power dump facility is that you will always have plenty electricity in your grid and thus never require storage investments.

    A recently published study about the average (observe not the cheapest in US) 20 year wind PPA in USA 2014 was $0.0235/kWh including PTC (Production Tax Credit) at $0.023/kWh for 10 years.
    The average unsubsidized 20 year wind PPA in USA 2014 can be calculated to $0.035/kWh.
    The average unsubsidized 25 year wind cost in USA 2014 was $0.03/kWh assuming that the sales price for electricity between 2034 and 2039 averages $0.01/kWh. http://www.windpowermonthly.com/article/1359489/us-wind-prices-fall-66-record-low

    NREL has also recently published a study that shows that with 140 meter hub height the current newly installed wind turbines from 2014 would fetch 50% higher capacity factor closing in at 65% capacity factor. http://apps2.eere.energy.gov/wind/windexchange/windmaps/resource_potential.asp#states

    The cost of wind energy dropped a meagre 6% from 2013 to 2014 after five consecutive years between 2008 and 2013 having dropped 15% every year on average. Most likely wind power will resume the trend from the later years as there are many innovations stacked up in any stage between concepts to final full scale testing that will have profound impact on the cost of electricity from wind.

    Wind power cost only have to drop 33% more before Synfuel based on electricity and abundant CO2 will become cheaper than the majority of the oil fields on this globe. In USA there is not access to privileged loans and the cost of access to land are high, so in effect Australia should be able to attract this business just by clever financial engineering and efficient legislation. If you choose to do so I would guess that most majors in the wind power industry would locate production and service facilities in Australia ASAP, which would provide major job opportunities. Other side effects are enormous opportunities for brine water based mining after minerals and a huge supply of freshwater for irrigation in the many arid and semi arid areas of australia.

    To outcompete even Saudi oilfields wind technology only needs to become 80% cheaper, which is definitively realistic given the track record of the business.

    I seriously doubt the exaggerated number the report suggest will be invested in renewables and energy saving up to 2035 as the outlined strategy to go 100% renewable is significantly cheaper than previous suggested routes. Other side effects include that the +1billion ICE vehicles around the globe all will become zero CO2 emission and also will stop NOX, SOX and soot pollution completely once they run on Synfuel that is a perfect drop in replacement in the current fuel distribution channels.

    • jeffhre

      Synfuel may be able to replace oil in places where it is difficult to reliably get electricity. Though if generation costs fall by 80%, where will those places be located?

      In any case, here is a paradox. If electricity costs fall to 80% cheaper for use directly – how will synfuel compete with its direct use, in meaningful volumes, on price?

      • Jens Stubbe

        Electricity for sale outside your own property requires grid transport and a infrastructure that can run on electricity.

        Synfuel is a drop in substitution for any liquid or gaseous fuel where the infrastructure is already in place in the form of storage, pipes, supertankers, cars, busses, planes, scooters and whatever.

        Besides it will a very long time if before an EV with reasonable range can compete on manufacture cost with an ICE car.

        The true paradox is that you either curtail renewables, store the excess or use it for industrial processes that accept only to get power when the electricity is in excess – and in this last and clearly most rational scenario Synfuels fit in.

        Besides the Synfuel the Synfuel production process handles a huge amount of materials which opens for a string of other products including fresh water, minerals, fertilizers etc.

        • jeffhre

          “store the excess or use it for industrial processes that accept only to get power when the electricity is in excess – and in this last and clearly most rational scenario Synfuels fit in.”

          If true, then will it compete with strategies like time of grid pricing and with smarter grids that push changing price signals to industrial process operators.

      • Jens Stubbe

        ABB funded research has just made it much cheaper to transport electric power. http://pubs.rsc.org/en/content/articlelanding/2016/ta/c6ta02041k#divAbstract

        Larger geographic markets for electric power and ever cheaper electricity generation (wind power is approaching 2 US cent per kWh) makes storing electrons on utility scale less appealing and makes it cheaper to develop remote wind or solar resources.

        Power from a greater geographic area will middle many distributed sources making the supply and demand for electricity more predictable and more stabile.

        To ensure power delivery for customers that require on demand power you need schemes such as smartgrid and also Synfuels.

        These strategies are perfect for Australia and you should already plan for 100% renewable grids and massive energy export.

  • DogzOwn

    Surely size of our energy consumption amounts to addiction and should be classified with substances, just like gambling on pokies, as revealed on 4 Corners? How much longer can we keep subsidising Portland Aluminium for buy price dirty brown coal power, as low as 1.5 cents/kWhr, per Stockade in Hansard 1996.