Wind, bioenergy and gas could replace coal in Victoria

SYDNEY, New South Wales, Australia, 2004-12-01 Refocus Weekly Cleaner energy sources could displace both the capacity and the output of a 1,600 MW coal-fired facility by 2010 by a mix of realistic supply-side and demand-side initiatives.

A mix of wind turbines, bioenergy from crop residues, and natural gas combined cycle and cogeneration would reduce CO2 emissions in the state of Victoria by 13.7 megatonne per year, says a coalition of groups. The concept would be cost-effective and steer the state away from coal-fired assets in order to deliver deeper emission reductions in the longer term.

The state government is addressing the growing demand for electricity in Victoria by expanding existing coal-fired power plants and developing gas-fired facilities, as well as developing green power assets such as Pacific Hydro’s Portland windfarm, explains ‘Towards Victoria’s Clean Energy Future.’ The Clean Energy Future Group produced the analysis as a follow-up to its March report on a ‘Clean Energy Future for Australia Study.’

“Any decision to continue supporting coal-fired power asset development would lock the state into CO2 emissions that could dwarf any current and proposed measures for reducing the state’s emissions,” warns author Mark Diesendorf. “Decisions made today will determine our carbon emissions for decades, limit alternative reduced emission options for the future and undermine our ability to make the transition to a much cleaner energy future by 2040.”

The report says policy measures from the Victorian government must include a greenhouse intensity limit on all new power stations and on all proposals for major refurbishments, either a carbon levy or tradeable emission permits of the cap and trade type, and the requirement that energy retailers submit Renewable Energy Certificates each year to government as a licence condition. On the demand side, it wants an extension of energy performance standards from new buildings to buildings with new renovations, as well as all existing government-owned and government-tenanted buildings. It wants “substantial expansion” of the use of solar water heating that is encouraged both by incentives and by penalties, and by wide dissemination of ‘smart’ meters and peak-load pricing to make users pay the full cost.

The supply-side solutions from cleaner energy will increase the average price of electricity but the demand-side energy efficiency savings will reduce the amount of power purchased by consumers, “with the net result that energy bills will either decrease or remain approximately the same.” At that point, the challenge in moving onto the clean energy pathway becomes “neither technological nor economic, but rather organisational and institutional: namely, how to deliver cost-neutral packages of energy efficiency, renewable energy and natural gas to consumers.”

“Since the state government would have to play the leading role in making organisational and institutional changes, the key issue becomes one of political will,” it notes. “The proposed fuel substitution for electricity generation from coal to gas and renewable energy, coupled with efficient energy use, would reduce the socio-economic risk faced by Victoria as the result of having an electricity supply system that is based 97% upon brown coal, the most greenhouse-intensive of all fuels.”

The Mandatory Renewable Energy Target is the “only significant existing driver of low-cost, commercially available, renewable energy” in Australia, but the current target of 9,500 GWh a year by 2010 is very small, representing less than 1% of projected power demand at that time. “Furthermore, several market participants are inadvertently undermining MRET by accumulating Renewable Energy Certificates.”

As a result, MRET is expected to be fully utilised by 2007, and an expansion is essential to assist the establishment of bioenergy and to encourage wind power to use numerous inland sites having lower wind speeds than the best coastal sites. It wants MRET to expand to 21,600 GWh by 2010 and to 33,800 GWh by 2020.

“The expansion of MRET is best driven nationally by the federal government; however, in the absence of federal action, states could assist.”

The group wants subsidies for fossil fuels and energy wastage to be removed, estimating the national level of subsidies at Aus$5 billion a year as “perverse” subsidies to fossil fuels, which are “both economically inefficient and environmentally damaging.”

Water heating accounts for 27% of residential energy use in Australia, but only 5% of homes have solar DHW systems, which is less than 2% in Victoria. “It is clear that existing incentives are not sufficient,” and a “large shift from electric resistance hot water to solar and electric heat pump hot water could achieve a large reduction in emissions.”
State governments should pass legislation to make it illegal for local governments to require planning permission for installing solar hot water, because it takes so much time to apply that homeowners are discouraged from replacing an existing water heating system with solar, the report notes. Governments should require all new buildings and renovations to have solar, earth energy or solar-compatible gas hot water systems.

The Clean Energy Future Group includes the Australian Wind Energy Association, Bioenergy Australia, Renewable Energy Generators of Australia, Australian Gas Association and WWF Australia, among others.

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