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Australian Governments Spend Big Capturing Carbon

Australian Governments Spend Big Capturing Carbon

by Bill Hudson, Australian Energy Review

Australian state and federal governments are spending up on carbon capture and storage technology despite a government-funded think tank’s research showing it will be too expensive and too far off to make a difference to greenhouse gas emissions.

Australian governments have announced over $3 billion to back carbon dioxide capture and geological storage (CCS) technology involving the capture, transportation and long-term storage of carbon dioxide and other greenhouse gases in deep geological formations underground.

With 20% of the world’s thermal coal used in electricity generation coming from Australian mines, CCS is seen as a way to protect exports and domestic electricity production, four-fifths of which comes from coal-fired power stations.

In its 2009 Federal budget the Australian govt announced $2 billion over nine years for the development of industrial scale CCS projects.

Climate Change Minister Penny Wong said. “The successful deployment of carbon capture and storage will facilitate Australia’s transition to a low-pollution economy, generate the low pollution jobs of the future and help preserve the value of Australia’s coal exports.”

Last year Victorian Energy Minister Peter Batchelor pointed to his government’s financial support for a carbon injection demonstration project underway in the Otways.

“CCS is still in its infancy, but the work being done at both a State and Federal level will ensure Victoria is well positioned to capitalise on both the environmental and investment opportunities if this technology proves successful,” Minister Batchelor said.

“[This] will enable further research into clean coal technologies,” said NSW Minister for Mineral Resources Ian Macdonald of the NSW Government’s $100 million injection into its Clean Coal Fund, which is which is backing CCS.

The Queensland Government has committed $102.5 million in the ZeroGen project and “other demonstration projects to accelerate the development and deployment of low emission coal technologies,” said Queensland Minister for Mines and Energy, Stephen Robertson.

The $2 billion from the Australian Federal Government is earmarked to build up to four carbon capture and storage projects.

The shortlisted projects include the Wandoan and ZeroGen power plants in Queensland, the Collie South West Hub project southwest of Perth and the CarbonNet project in Victoria’s Latrobe Valley. A final decision on the successful projects will be made in mid-2010.

“Advancing storage technology and capacity is vital to the future of Australia’s coal industry,” said Federal Minister for Resources and Energy, Martin Ferguson. “Frankly, the global community will be hard-pressed to reach our climate change targets without it, and the International Energy Agency agrees.”

In its climate change White Paper, the Australian Government recognised that coal is likely to remain the principal source of energy supply in the future and continue to be a significant source of export revenue. According to the White Paper, the “future of coal depends on CCS”.

The Australian Treasury’s modelling of the economic impact of the proposed Carbon Pollution Reduction Scheme (CPRS) is critically dependent on the assumption that CCS technologies will be widely developed and deployed between 2020 and 2025. It assumes that CCS will account for between 28 per cent and 39 per cent of electricity generation by 2050.

Treasury modelling further shows that if CCS is not available, Australia’s coal production will fall 4 per cent below current levels by 2030 and 18 per cent below current levels by 2050.

Australian coalminers praised the Government’s spend on carbon capture and storage technologies.

“Australia and the world have a short window of opportunity to get carbon capture and storage operations up and running,” said CFMEU Mining and Energy union General President, Tony Maher.

Steve Sargent, CEO of GE Australia, said, “Coal is a multi-billion dollar export that is important to Australia’s economy and the thousands of jobs it supports. The long-term viability of this industry depends on our ability to use our technology and know-how to reduce CO2 emissions in the process of generating electricity from coal.”

However a major report commissioned by the Australian-government founded Global Carbon Capture and Storage Institute (GCCSI) concluded that the technology is unlikely to be cost-effective before the decade starting 2030.

The report shows that the cost of capturing a tonne of CO2 will likely be higher than simply buying emissions allowances on proposed carbon cap-and-trade markets.

The Australian Government launched the GCCSI in July 2009 at an event jointly hosted by the President of the United States, Barack Obama and Italy’s Prime Minister, Silvio Berlusconi in L’Aquila, Italy.

Australian Prime Minister Kevin Rudd has pledged $100m per year to fund the institute, calling the drive for CCS as important as the Industrial Revolution of the 19th century and the Information Revolution of the 20th century

John Hartwell, Head of Resources Division at the Australian Department of Resources, Energy and Tourism, admits that CCS technologies will not be deployed in Australia until at least 2020. George Monbiot has calculated that using CCS at existing coal-fired electricity generation plants will cost between $151 and $259 per tonne of CO2.

The CPRS has been modelled on a carbon price of between $20 and $40 a tonne.

Vaclav Smil, of the University of Manitoba says an infrastructure with an annual volume twice as big as the world’s crude oil industry would be required to sequester one quarter of the carbon dioxide emitted in 2005 by large stationary sources.

“It is a moot point whether CCS will play any meaningful role by 2030 let alone 2020,” says Bob Burton, Managing Editor of SourceWatch. “The governments of Saudi Arabia and Australia have resorted to hyping the state of the technology and its applicability throughout the world.”

Cross posted from The Angle: http://theangle.org/2010/01/31/australian-governments-spend-big-capturing-carbon/

ENDS

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