Comments on: Clean energy target

By: Kevin Cox

Kevin Cox — Sat, 22 Aug 2009 22:22:58 +0000

I thought the myth of needing base load power had well and truly blown away. You do not want too much base lower power because we do things like put power into the ground in the wee hours of the morning. If there is a lot of variable wind power or solar power then we will find ways of coping with the variability in the same way we find ways of coping with the non variability of base load power.
These arguments about technologies and picking winners etc are not the issue because the simple fact is that we have to stop burning coal and gas sometime or other and the alternatives, by the time we have enough generating capacity, will be cheaper than burning expensive fuels. It is called the technology learning effect and for photovoltaics it is likely to be about 50% reduction in capital costs per unit of output for each doubling of capacity and for solar thermal and geothermal about 20% reduction in capital costs.
A better more direct approach is to fund non polluting energy sources with zero interest loans that get paid back from the profits from the production of energy. So called renewables are immediately profitable if we get rid of interest charges and repayments come from earnings.
This also removes the need to allow people to pay for the privilege of polluting be it RECs, Emissions Permits, or putting a price on Carbon. I am troubled by the idea of allowing people to do things that are bad for us all simply by paying money especially as there are other ways of addressing the problem.

By: Ian Westmore

Ian Westmore — Sat, 22 Aug 2009 06:53:20 +0000

When the legislation comes into effect, wholesale electricity buyers will be required to have renewable energy certificates to cover 20% of their electricity purchases
With RECs being issued for 5x the renewable energy produced, the 20% target will actually be somewhere between 4-20%, the final figure being determined by the alternative energy mix. Like so much of the Government’s CC legislation, the fudge factor is very high.
Wind can only ever be a partial contributor to our power needs, its simply not reliable. Wind coupled with lots of hydro is great (but we don’t and never will have much hydro here,
So why not use wind generated power to overcome the country’s hydro limitation, an unreliable water supply, by pumping the water used during peak periods back uphill during the off-peak.

Also, while wind may not be reliable in any given area, there will usually be lots of wind somewhere across this vast continent. With the greater efficiency of high-voltage DC transmission, drawing power from even remote areas to the major population/energy consumption areas is becoming economically feasible.

By: M

Fri, 21 Aug 2009 07:22:42 +0000

Sam the best reference on Australian carbon intensity is the EITE compensation section of the CPRS white paper I think. However it varies a great deal between states. Vic is probably 1.3 t CO2e/MWh. NSW/QLD are more like 1.05. Tas is only 0.13. However remember that Tas is a net importer from VIC of a bit of its energy 10-20%.
http://www.energytoday.com.au/contentid70.html

By: Sam Wylie

Sam Wylie — Fri, 21 Aug 2009 01:45:56 +0000

M, I agree with most of what you say. Do you have a reference for the 800 kg/MWH? That would be very useful.

By: Matt C

Matt C — Fri, 21 Aug 2009 01:43:10 +0000

Sure Sam, but by definition the REC price can’t fall below the ETS carbon price in MWh terms. So where are the benefits here?
M is right this is just picking winners.

By: M

Fri, 21 Aug 2009 00:55:43 +0000

Lots of points to make.
Sam, in Australia that figure is over 800 kgs per MWh. In Victoria it is closer to 1.2 tonnes per MWh.
This legisaltion has nothing repeat nothing to do with climate change or emissions. It is an expansion of the existing target that has been around since the Howard era. It is about subsidizing the renewable energy industry and trying to get it established in Australia, this industry will be crucial post 2030 when the path towards zero emissions begins in earnest. If the goal was to reduce emissions in the short-medium term this is a fairly bad way to go about it.
I think the policy is a good idea and should help drive the technology costs down over time, however it’s not necessarily well implemented.
REC multipliers for roof-top solar makes economist nauseous. Roof-top PV should be supported by a feed-in tariff, not a multiplier to RECs (since if the 12% of target left to be met was 100% solar PV you’d end up on about 11% actual renewable energy).
Coal mine waste gas. Not renewable. Good technology, should be developed. Not renewable.
A massive flood of wind power isn’t desirable. Put simply its non-scheduled, most wind generates at a capacity factor of 35%. Wind can only ever be a partial contributor to our power needs, its simply not reliable. Wind coupled with lots of hydro is great (but we don’t and never will have much hydro here, NZ is another story). Lots of wind generation does not lower prices, it just increases volatility (since the backup peaking generators have to make their money sometime). Plus almost all of the components, technology and companies involved are from OS (lots of money to the spainish and danes, which is what they deserve since they did the hard yards first).
Exempting industries is contentious. Aluminum is the big one at 15% of electricity consumption, but once you start including all the energy intensives that starts adding up to a large fraction of total demand (close to 50% in somewhere like Tas).
Big problem is that there is no certainty that any form of baseload renewable will be able to compete with wind on price within the timeframe. For the long term future, base-load renewable or some sort of highly efficient, cheap, large energy storage is necessary to adapt to a zero emissions world.

By: sam wylie

sam wylie — Fri, 21 Aug 2009 00:42:52 +0000

Matt, the $65 penalty to wholesale electricity buyers for not having a REC puts a ceiling on the price of RECs. The equilibrium price of RECs will be lower than $65 if the supply of RECs is large enough. We will find out whether the price hits the ceiling.

By: Sam Wylie

Sam Wylie — Fri, 21 Aug 2009 00:39:44 +0000

Matt, the $65 penalty for a wholesale electricity buyer not having a REC puts a ceiling on the price of RECs. The equilibrium price will be below that if there is sufficient supply of RECs. We will find out whether the equilibrium or the ceiling prevails in the long run.

By: sam wylie

sam wylie — Fri, 21 Aug 2009 00:21:33 +0000

Appu,
The figure of 600 grams of CO2 per KWH of electricity production is in Table 4 of the document at: http://www.eia.doe.gov/cneaf/electricity/page/co2_report/co2report.html#table_4
The table reports that in 1998/9 the average CO2 per KWH was 1.33 pounds across all generation units in the US. That is about 600 grams per Kg.

By: Appu

Appu — Thu, 20 Aug 2009 22:31:14 +0000

Sorry if I missed something, where on the CO2 emissions report can I find the 600kg or equivalent please?

By: Matt C

Matt C — Thu, 20 Aug 2009 16:03:35 +0000

So basically the conclusion is that while the ETS’s price on carbon remains below $100 this is a vastly inefficient way of reducing emissions.