Australia might be headed for a 2030 energy mix with almost 50 per cent renewables, but it will still have a “major problem” with power sector emissions, according to Bloomberg New Energy Finance’s Kobad Bhavnagri.
In an address to the Australian Emissions Reduction Summit in Melbourne on Monday – pointedly named “The World keeps moving, even if we don’t” – Bhavnagri, who heads up BNEF’s Australian arm, warned that without a price on carbon, and with the federal government’s proposed Direct Action plan – including its cornerstone Emissions Reduction Fund – Australia would burn as much emissions-intensive coal in 2030 as it does today.
“Australia has a major problem with coal,” said Bhavnagri, speaking directly after federal environment minister Greg Hunt, who just two weeks ago expressed his view that coal would be “a fundamental part of the world energy mix for decades and decades, if not more.”
Hunt, of course, is banking on the arrival of market-ready “clean coal” technologies, such as carbon capture and storage, to balance his coal forecast. Bhavnagri, however, does not seem to be factoring this in.
Without policy to drive change in the power sector, the contribution of coal “hardly changes,” said Bhavnagri, and “we have a very large task” in reducing our national emissions, with an awful lot of heavy lifting transferred to other industrial sectors.
The BNEF energy market analyst painted a scenario for Australia where, with the carbon price repealed – not to mention the doubt surrounding the RET, and the “extremely worrying” personal opinions of various members of the federal government – power sector emissions would rise immediately, as coal-fired power experienced a renaissance.
“All we will see by 2030 is about 4 per cent change (in power sector emissions),” Bhavnagri told the Summit. “Australia’s emissions stay the same, because coal doesn’t leave the system.”
Bhavnagri also questioned Minister Hunt’s assessment of the European carbon market as a failure, saying that one of the EU ETS’s “hallmarks of success” was that when the bloc’s economy was down, carbon prices also went down, giving participants breathing room.
The Bloomberg analyst also noted that, if Abbott & Co were successful in their bid to repeal the carbon pricing scheme, Australia would become the first country ever to get rid of an established price on greenhouse gas emissions.