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CSIRO report doctored to pretend gas cheaper than wind and solar

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The CSIRO Low Emissions Technology Roadmap report has been released by the Australian Coalition government, purporting to show that the cheapest avenue to cutting emissions is by limiting wind and solar and focusing more heavily on gas-fired generation.

But in reality, it shows no such thing. Or at least, it shouldn’t.

The report relies heavily on different scenarios. Extraordinarily, the primary scenario that focuses on high amounts of gas-fired generation and limits to wind and solar is paired with high gains in energy efficiency and energy productivity across buildings, transport and industrial processes.

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But the scenario for high wind and solar assumes business as usual on efficiency and productivity, meaning that the wind and solar scenario assumes 50 per cent more electricity generation is required in 2050 than in the scenarios where the amount of wind and solar is capped, or higher levels of fossil fuel generation is assumed.

Little wonder, then, that the high gas scenario comes out cheaper, albeit by not very much – in both investment costs and in consumer bills – prompting the government to declare that a “technology neutral” approach, the new buzz line for “let’s not go too hard with wind and solar”, is the preferred course of action.

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In a statement issued on Friday, energy minister Josh Frydenberg said the government welcomed the release of the CSIRO Low Emissions Technology Roadmap which, he noted, “strongly reinforces the Government’s technology neutral approach to emissions reductions and our focus on energy security and energy productivity.”

CSIRO chief Larry Marshall said it was important to consider “security, affordability and sustainability”, but then suggested the coal could be used as a feedstock for hydrogen.

“We think of coal as the past, but what if we could reinvent it into the feedstock for hydrogen,” Marshall said. Most people think hydrogen is only a good idea, or at least a clean idea, if the feedstock is wind or solar.

The report continues a sad history in Australia of analysis that is shaped to fit what appears to be a predetermined outcome.

How else to explain the decision to cost the high wind and solar scenario on the basis that there would be no gains in efficiency or productivity, where in reality these are the centre of high renewable planning. Wind and solar are the obvious path, but conservative governments simply don’t want to know.

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The report is particularly concerning coming out on the same day as Donald Trump pulls the US out of the Paris climate accord, and one week ahead of the release of the Finkel Review. Frydenberg suggested that both reports would be considered by the government.

The CSIRO’s estimated costs of wind and solar are also conservative, although not as bad as the modelling that had been used by the Climate Change Authority and the Australian Energy Market Commission to justify an Emissions Intensity Scheme.

It estimates, for instance, that the cost of wind energy will fall to $80/MWh by 2020. That is nearly 50 per cent more than the $55/MWh contract signed last month by Origin Energy for the Stockyard Hill wind farm.

It estimates of the cost of solar are closer to the mark, saying they will fall to $70-$85MWh by 2020. But we are probably already there, and the cost of solar plants in Queensland is already said to be below $70/MWh.

The CSIRO report offers a relatively benign view of the gas price, suggesting that it might only increase to $9/PJ by 2030 in its central scenario.

The gas price has already been trading well above this, and shows no sign of retreating, prompting AGL (Australian Gas Light) to say recently that it saw no role for gas as a transition fuel, predicting instead a jump from coal to big renewables. Sadly, the opportunity for a realistic cost assessment of this is missed.

And that’s a shame, because apart from the distorted headline conclusions, the report – 160 pages in the main section and a 290-page technical addition – provides some interesting reading.

It concedes, for instance, that high wind and solar, backed up with battery and other storage, is both feasible, cheaper than business as usual, and can deliver the abatement required. Relying on gas, it says, risks fuel price increases.

In any case, the plunging cost of wind and solar means that, in all scenarios, new electricity generation between now and  2030 is likely to comprise mainly wind and solar PV.

“In each pathway, onshore wind and large-scale and rooftop solar PV are expected to make up the majority of new generation to 2030. This is due to the low cost, low emissions and commercial maturity of these technologies,” the report says.

The high solar and wind is based around a share of variable renewable energy (90 per cent by 2050) that was identified in the CSIRO’s joint report with Energy Networks Australia.

It shows that energy reliability is enabled largely through battery storage, and energy security through means other than synchronous generators, e.g. synchronous condensers, or synthetic inertia provided by batteries with advanced inverters or by modern wind farms.

“Modelling carried out for this roadmap finds that with a mix of battery storage, excess VRE capacity and gas generation, a reliable electricity system delivering 95% abatement in 2050 compared with 2005 levels and VRE share of ~90% is possible at moderate cost (as compared to the no abatement scenario in the figure below).”

It says that batteries are only needed above VRE share of 40-50 per cent, which occurs in the mid to late 2020s. To permit 90 per cent renewables penetration, around 0.75 GW (2.6 GWh) of battery capacity is sufficient to support each 1GW of VRE capacity; this provides around 10 hours of storage at average load.

Interestingly, it says that the high renewables cost comes in 18 per cent cheaper than pathway 3, where wind and solar is limited to 45 per cent and the remaining power comes from synchronous, dispatchable low-carbon sources. And this is despite an extra $8 billion needed for transmission in the high VRE scenario.

 And the report also notes some key trends.
  • Rapidly declining costs of rooftop solar PV and batteries combined with government incentives are causing electricity generation to become increasingly decentralised, with consumers driving the change.
  • The increase in variable renewable generation is causing electricity grid net demand to become more volatile, moving the system from a paradigm of peak and off-peak to one of under and oversupply (with variable timing). This increases the importance of electricity system flexibility, including generation that is easily ramped up or down to match supply and demand.
  • The digital revolution is enabling greater system automation and decentralised decision-making,
    as well as increasing the vulnerability of the future grid to cyber-attacks. Key emerging technologies including the Internet of Things, big data analytics, artificial intelligence and blockchain offer considerable scope to disrupt the electricity sector

While the report stresses that “no one pathway is recommended as preferable; rather, they are intended to serve as a tool for policy and other decision makers to conceptualise possible futures in the face of considerable uncertainty”, it’s not difficult to imagine which direction the Coalition will take.

Pathway 1, which focuses on energy productivity, new generation is restricted to technologies that have been recently deployed, namely wind, solar PV and gas, with limits placed on deployment of wind and solar PV (45 per cent). It assumes a slower rate of abatement.

Pathway 2 examines the full extent of the role variable renewable energy (VRE) technologies such as wind and solar PV can play, with particular focus on the enabling technologies required to achieve a high share of VRE. But it factors in no productivity and efficiency gains.

Pathway 3 examines the role low emissions, dispatchable technologies can play, namely concentrating solar thermal (CST) with storage, high efficiency low emissions (HELE) fossil fuel technologies with carbon capture and storage (CCS), nuclear and geothermal. Again, it factors no efficiency and producctiviety gains and is the highest cost scenario.

Pathway 4 is “unconstrained”, allowing all low emissions technologies with no limits on wind and solar, but assumes a greater role for gas, including with carbon capture and storage. Pathways 3 and 4 also investigate the role hydrogen can play as an energy storage medium across the energy sector. Pathways 4 also assumes a slower rate of abatement.  

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  • Robin_Harrison

    What’s the betting the CSIRO expect lots of funding for clean coal research.

  • Cooma Doug

    I used to have Greg Hunt on my dart board.
    Cant recognise him now, too many holes. So I put Josh on now. Already hard to recognise.

    • Matthew O’Brien

      need at least a dozen dart boards these days

  • Farside15

    Says it all – scenario for high wind and solar assumes business as usual on efficiency and productivity, whereas scenario that focuses on high amounts of gas-fired generation and limits to wind and solar is paired with high gains in energy efficiency and energy productivity across buildings, transport and industrial processes. How was this let through to the keeper? Shame CSIRO.

  • Alan S

    So the CSIRO has sacked scientists and replaced them with spin doctors. Perhaps we’ll at last get some empirical evidence and keep One Nation happy.

  • Tim Buckley

    Well said Giles, unbelievable that CSIRO would be forced to stoop so low and degrade their brand by manipulating the key input assumptions so as to get conclusions consistent with the dictates of the current LNP Federal government. I’ve got the report on my desk for weekend reading, but I’m not sure I’ll bother now. Better just to watch the free fall in prices of wind and solar in India – US$38/MWh and declining in real terms 5% annually for the next two decades. Another 7GW of now stranded coal fired power plant developments cancelled just yesterday in Uttar Pradesh, India, building on 13GW last month. India agrees with Blackrock when they say “Coal is dead.” It will take 10-15 years, but like the take-off of EVs, it is now technology and markets driven, and inevitable.
    http://www.business-standard.com/article/companies/up-govt-cancels-7-040-mw-of-stalled-power-projects-117053101654_1.html

  • Robert Comerford

    Gas is a fossil fuel, burning it creates CO2 .
    A child can understand that, so no maths is required
    Wind and sunlight do not create CO2.
    It is going to very hard to take the CSIRO seriously anymore.

    • Prj Indigo`

      Just a tidbit… wind and sunlight DO release more carbon from rocks – thus CO2 from erosion. Real fact.

      • Ian

        Try google, or rely on your understanding of soil chemistry. CO2 combines with rain to form weak acid, which weathers rocks, releasing cations Ca K Mg etc forming CaCO3 in ocean, shells fall to form carbonate rocks. So weathering of rocks will remove CO2, eventually. Bit of a slow process though.

  • Colin Nicholson

    It is an example of how to blow 50 years plus of credibility with one hit. Where now for CSIRO?

  • Richard

    I wouldn’t worry about it. It’s all just political cock and bull and they all know it.
    Just watch where the money goes.

    • jayro

      exactly my thoughts – I don’t see new money going into coal or gas. Even Telstra is buying solar investments. i.e. it’s clear to business

      • Matthew O’Brien

        Won’t be “new” money – it will be tax money better spent on schools and health let alone renewables. You forget the Conservative purpose – “socialise the costs / privatising profits”. It’s Trickle Down Econs 101.

  • For Larry Marshall to agree to put his name on this report is pathetic. He doesn’t “need” this job: he is independently wealthy and his name used to stand for cutting edge Australian innovation, not blind resistance to change and defense of vested interests against the public interest.

    For him to go further and openly defend the substance of the document is outrageous. I guess you can’t keep on flying like an eagle once you start hanging with turkeys. (Namely, the Liberal lackeys he deals with on a daily basis, not the CSIRO.)

    It appears that he, like so many before him, has fallen prey to the Iron Law of Institutions: “the people who control institutions care first and foremost about their power within the institution rather than the power of the institution itself. Thus, they would rather the institution ‘fail’ while they remain in power within the institution than for the institution to “succeed” if that requires them to lose power within the institution.”

    Maybe it wasn’t such a great idea after all to put a so-called serial entrepreneur in charge of one of our country’s national treasures. One wonders just how long he will last in his latest incarnation as shameless collaborateur.

  • Max Boronovskis

    Serious question… How do we get this story to go mainstream?

  • Adam Lucas

    Great story, Giles. Larry Marshall needs to be publicly shamed for kowtowing to the government in such a craven fashion. He appears to be determined to destroy CSIRO’s credibility on as many fronts as possible: climate change science, energy policy, gender equality in the workplace. I wonder if any of the analysts involved in writing the report might be encouraged into blowing the whistle on being stooged.

  • Les Johnston

    Disparate times, fudging facts to suits political ideology. Sounds like the Wind Commissioner in a new role.

  • Joe

    The ‘C’ in CSIRO now stands for “COALition”.

    • Sly Phi

      The ‘S’ disappeared a few years ago. The ‘R’ stands for ‘Rationalization’ and the ‘O’ for ‘Oligarchy’.

  • MaxG

    As sad as it is; think about your own jobs and what happens when you boss tells you something to do — whether you like it or not, you will do it or quit. Most can’t afford to quit, which also proves that you are not a free (wo)man.
    In any case the CSIRO has lost all credibility — but then, this is what this backwards government wants… then declares it is useless and dismantles it. Ya can’t win 🙁

  • Mike Shackleton

    As with any technical/engineering report, the parameters you assign at the start of the study have a large impact on the recommendations that you give at the end. The problem with CSIRO trying to write a report in the renewables space is that it’s moving too fast for them to keep up. By the time the report is reviewed, commented, and issued the situation has changed. They have put themselves outside the decision loop.

    https://en.wikipedia.org/wiki/OODA_loop

    It would be important to see the assumptions and limitations section of the report. It is easy as a technical advisor to negate your liability by clearly assigning limitations to the report. I feel for the CSIRO – they have come up with scenarios based on outdated assumptions – the government will take the scenario that best suits their agenda and then hold the report against them when the scenario doesn’t play out. They’ll use that as another nail in the coffin the current government seems to be building for the CSIRO, or at least a reason why their operations should be privatised.

  • Don McMillan

    Activist groups are very selective regarding accepting studies, inquiries and science. There has been an increasing anti-intellectualism movement in Australia which may explain why our electricity system is riddled with poor engineering.

  • Richard Werkhoven

    Suggesting the worst CO2 source as a ‘feedstock’ for an inefficient storage technology like Hydrogen is absurd.

    Let’s take the worst possible CO2 source and make it less efficient so we use more than we otherwise would to make something. Because we need to satisfy the LNP’s desire to make coal seem green?

    It’s criminally negligent or incredibly dumb. Or maybe both?