UK does not need dirty coal, and neither does Australia

The joint commitment by the three main political parties in the UK to phase out “unabated” coal has been welcomed by environmental groups as a major breakthrough. And it makes you wonder why the mainstream parties won’t do the same in Australia.

The heads of the Tories, the Labour party, and the Liberal Democrats, on Friday in the UK signed an agreement to phase out “unabated” coal, and work together towards obtaining a binding and effective climate deal in Paris later this year.

No time-frame was actually given for the phase-out, which would mean that any coal-fired generator not deploying carbon capture and storage should be closed. Some believe it should also mean no extensions beyond their technical life –others suggest it should the target should be 2023.

The Climate Change Committee in the UK has already recommended it be done by 2027. Given that even the coal industry doesn’t believe in the nonsense of carbon capture and storage – they complained loudly that it was “impossible” when President Obama legislated for “clean coal” in the US, then phasing out of unabated coal pretty much means the phasing out of coal generation altogether.

A day earlier, a study released in the UK by Trilemma, written by former senior staff of National Grid and E.ON, found that a phase out of coal by the early 2020s would not impact on security of supply in the short-term. In fact, it would actually increase long-term security because it would remove uncertainty for investors in cleaner alternatives.

This is completely contrary to  the traditional argument of fossil fuel generators, who like to use “security of supply” as protection. But coal with CCS will be too expensive, as will nuclear. France’s EdF has again put off a decision on the Hinkley C reactor in the UK, despite being offered a guaranteed price of nearly $A180/MWh, rising with inflation to nearly $A500/MWh in 2058, as well as more than $A30 billion in government loan guarantees.

“The likely response by market actors, and the tools available to National Grid as System Operator, give rise to replacement capacity that is vastly greater than the deficits created and will comfortably secure the system,” the Trilemma report says.

“The likelihood that a policy to restrict operation of coal plant will affect security of supply is extremely low and, even in the worst plausible scenario, the impact is easily managed through market responses and measures available to National Grid.”

The report said the potential of the clean-tech sector is “astonishing”, from tidal lagoons and local heat and power systems, to huge cost reductions in wind and solar.

It noted that Google has invested $3.2 billion in a smart home energy management company, and the world’s largest private bank, UBS, is advising its clients that large, centralised power stations will become redundant within two decades.

“In a future where solar power, electric cars and cheaper batteries transform the way our electricity market works, these power stations are simply ‘not relevant’.”

This is the major challenge in energy market debates right now, with one side insisting that centralised fossil fuel or nuclear generation is the only possible means of providing electricity, and the others – now including the major utilities in Europe and the US – saying that technology has changed so rapidly that this is no longer the case, and renewables, distributed generation and storage can do the trick.

Ironically, Australia actually has more coal-fired generation than the UK, despite a much smaller population. But the reality is that Australia could also implement a similar strategy.

The first thing to recognize is that by their own admission, there are too many coal-fired generators in Australia. According to AGL, more than one third are surplus to requirements, possibly around 9,000MW. Most are hanging around because they are hoping that the government (or the taxpayer) pay them to close, or at least help them with the remediation costs.

As we wrote last year, market regulators should be ensuring that coal generators are retired at the end of their normal life. This would allow renewables to compete in an even market – on a new build basis, wind and solar would likely get financing more easily than coal or gas.

AGL Energy said last year (see our story https://reneweconomy.wpengine.com/2014/australias-real-energy-problem-too-many-useless-coal-generators-12476) that the mean age of brown power stations is 34.2 years, and the median age of black coal generators is 27.4 years respectively. “A number of the older coal plants are well beyond design life,” it notes.

As the ANU’s Andrew Blakers pointed out last year, if all the fossil fuel capacity was retired at the normal time and replaced by renewables, Australia would be close enough to 100% renewables within two decades.

A later thesis done by one of Blaker’s PHD students at ANU – Joel Anderson – says Australia could reach close to 100 per cent renewables just through natural attrition (although some plant retirements would be accelerated).

oz coal gone

And these are the plants that will be left, with the end of their technical life marked. It is interesting to note that AGL, despite its claims over over-supply, is considering asking for Liddell to run beyond 2022, particularly if its major customer keeps going.

oz coal full copy

If these plants were to be retired, and not replaced with new base load, renewable energy would need to deliver 140,000 GWh by 2040. Given that that current target would result in 60,000GWh delivered by 2020, this would effectively mean a doubling in 20 years. Given that the current target requires 25,000GWh to be built within 5 years, this would be consistent with that sort of roll-out.

“Several reports have looked at an all-renewables future by natural attrition,” Blakers notes. “It’s obvious that wind and PV can fill the gap as the fossil fuel plants retire over the next few decades – the required installation rate is similar to that required to meet the RET – i.e. modest.”

And UNSW’s Ben Elliston, Iain MacGill and Mark Diesendorf performed thousands of computer simulations of the hour-by-hour operation of the NEM with different mixes of 100% commercially available renewable energy technologies scaled up to meet demand reliably.

“We use actual hourly electricity demand and actual hourly solar and wind power data for 2010 and balance supply and demand for almost every hour, while maintaining the required reliability of supply,” Diesendorf wrote last year. The relevant papers, published in peer-reviewed international journals, can be downloaded from the UNSW website.

Using conservative projections to 2030 for the costs of renewable energy by the federal government’s Bureau of Resources and Energy Economics (BREE), the trio found an optimal mix of renewable electricity sources. The mix looks like this:

  • Wind 46%;
  • Concentrated solar thermal (electricity generated by the heat of the sun) with thermal storage 22%;
  • Photovoltaic solar 20% (electricity generated directly from sunlight);
  • Biofuelled gas turbines 6%; and
  • Existing hydro 6%.

So two-thirds of annual energy can be supplied by wind and solar photovoltaic — energy sources that vary depending on the weather — while maintaining reliability of the generating system at the required level.

 

 

 

 

Comments

5 responses to “UK does not need dirty coal, and neither does Australia”

  1. GaryDoggett Avatar
    GaryDoggett

    “No time-frame was actually given for the phase-out, which would mean
    that any coal-fired generator not deploying carbon capture and storage
    should be closed. Some believe it should also mean no extensions beyond
    their technical life –others suggest it should the target should be
    2023.” As rubbery as the China-USA deal that is no longer spoken of in polite company.

    1. john Avatar
      john

      As I posted today looks like China is acting now not waiting 10 years.

  2. Terry J Wall Avatar
    Terry J Wall

    Anybody concerned with people as apposed to profit, will realise that more jobs will be found in a renewables as opposed to current FFuel infrastructures (with their subsidies).

    If there is no change in the Governments use of OUR money, then we know for sure that they have their head firmly implanted up the posteriors of the FFuel corporations using the power of their feet to ensure they remain embedded in the “Dark Side”.

  3. john Avatar
    john

    China is implementing a plan to reduce the use of coal.
    The Weekend Oz had a long article on this from China very interesting I must say.
    Quotes from the article printed for 14-15 Feb.
    “Large coalminers were ordered to cut production by 125 million in the final three months of last year and companies and power firms that fail to meet the new targets will be penalised.”
    “In recent changes, the Chinese government said new taxes would be levied on coal sales within China and that power utilities needed to cut their import levels by 50 million this year.”

  4. Peter Thomson Avatar
    Peter Thomson

    Australia is a major producer and exporter of coal while the UK is a major importer – this difference is a major factor driving the policy directions taken by the two countries.

    From the UK point of view reducing and eventually eliminating coal usage is a preferred strategy, as this reduces reliance on imported fuel supplies. This helps protect the UK from fluctuating and uncertain future energy costs, and is good for national energy security. It is therefore in the best interests of the UK to research into ways to eliminate coal from their economy.

    For Australia however, where coal is plentiful and coal exports are a large chunk of the economy, encouraging increased coal consumption both locally and overseas appears to be good policy. At least it does, until the effects of CO2 pollution are taken into account.

    This is why the fossil fuel exporting countries, OPEC and the like, and fossil fuel companies have fought tooth and nail for four decades against climate change science – a campaign of obfuscation so successful that even today many people still believe the science is controversial and in doubt.

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