Passing Gas: Why Renewables Are the Future
Total Page:16
File Type:pdf, Size:1020Kb
PASSING GAS: WHY RENEWABLES ARE THE FUTURE CLIMATECOUNCIL.ORG.AU Thank you for supporting the Climate Council. The Climate Council is an independent, crowd-funded organisation providing quality information on climate change to the Australian public. Published by the Climate Council of Australia Limited. ISBN: 978-1-922404-21-3 (print) 978-1-922404-22-0 (digital) Andrew Stock © Climate Council of Australia Ltd 2020. Climate Councillor This work is copyright the Climate Council of Australia Ltd. All material contained in this work is copyright the Climate Council of Australia Ltd except where a third party source is indicated. Climate Council of Australia Ltd copyright material is licensed under the Creative Commons Attribution 3.0 Australia License. To view a copy of this license visit http://creativecommons.org.au. Greg Bourne You are free to copy, communicate and adapt the Climate Council of Climate Councillor Australia Ltd copyright material so long as you attribute the Climate Council of Australia Ltd and the authors in the following manner: Passing Gas: Why Renewables are the Future. Authors: Andrew Stock, Greg Bourne, Will Steffen and Tim Baxter. The authors would like to thank our two reviewers, Dr Hugh Saddler and one anonymous reviewer who donated their time of reviewing this report. Professor Will Steffen Climate Councillor — Cover image: Climate Council. Jeeralang A Power Station in Victoria. This report is printed on 100% recycled paper. Tim Baxter Senior Researcher (Climate Solutions) facebook.com/climatecouncil [email protected] twitter.com/climatecouncil climatecouncil.org.au CLIMATE COUNCIL I Contents Key findings .....................................................................................................................................................................................ii 1. Introduction: Gas has no place in Australia’s economic recovery, or climate safe future ................................1 2. Australia’s climate challenge ............................................................................................................................................... 3 3. Gas makes a major contribution to the climate crisis ..................................................................................................7 3.1 The use of gas in Australia 9 3.2 Gas is mostly made of methane, a potent greenhouse gas 12 3.3 The impacts of gas extraction depend on the method used 19 3.4 What are ‘fugitive emissions’ and why are they so important in understanding the impact of gas? 22 3.5 Gas-powered electricity generation in Australia 25 4. A better way to support wind and solar ...........................................................................................................................30 4.1 The declining role of gas 32 4.2 Australians pay a high price for gas 36 5. A cheaper, cleaner, more reliable future ........................................................................................................................40 References ...................................................................................................................................................................................... 43 Image credits .................................................................................................................................................................................48 II PASSING GAS: WHY RENEWABLES ARE THE FUTURE Key findings 1 2 3 Australia’s in the grip of a Gas causes climate harm The international gas market climate crisis. Extracting and its emissions are under- is in crisis, and Australia is and burning more gas reported in Australia. dangerously exposed to job escalates risk and puts more losses and power price volatility. Australians in harm’s way. › Even before it is burned, gas causes climate harm. The main › A drastic increase in our gas › The past year of climate component of gas, methane, exports has exposed Australia extremes—an unprecedented is a greenhouse gas nearly to international boom-and-bust drought across vast swaths of 100 times more potent than market cycles. The wholesale price Australia, the Black Summer carbon dioxide in the short of gas reached record highs for bushfires, and a third mass term. Along the entire gas most Australians between 2016 and bleaching of the Great Barrier supply chain large quantities 2019, before plummeting as a result Reef in five years—was driven of methane are emitted. of a global supply glut in late 2019. by the 1.1°C of warming that’s already occurred as a result of › Australia is not counting › Most of Australia’s gas is climate change. the true contribution of gas expensive to produce compared towards climate change. to international competitors. › Climate change is driven by the Upstream emissions of gas, as The centrepiece of the Federal consumption of fossil fuels: coal, well as other leaks, are under Government’s gas-led recovery, oil and gas. Although a limited reported, using out-of-date a stretch goal of $4 per gigajoule and discrete use of existing measures based on decades- for gas, was described as a ‘myth’ gas may be necessary as we old analyses conducted in other by the extraction industry’s own fully transition to renewables countries. Once corrected, the lobbyists. and storage, if we are to avoid supposed climate benefit of slipping from a climate crisis to gas often disappears. › The combined impact of COVID a full-blown catastrophe there 19 and a price war between cannot be any expansion of fossil Russia and Saudi Arabia saw the fuel production of any kind. Australian oil and gas industry lose more jobs than any other sector of › There is still a chance to hold the economy in the first round of global temperatures to well job losses this year; shedding 40% below 2°C above pre-industrial of its employees between March levels, but any new fossil fuel and April 2020. infrastructure puts this target at risk. That includes any new gas production, or new gas projects. KEY FINDINGS III 4 5 The second biggest user of We do not need new gas when gas in Australia is the gas renewables are cheaper and cleaner. industry itself, and that is costing all Australians. › Seismic shifts in the economics of renewables over the past decade › In 2019, Australia became the mean new gas infrastructure is world’s largest liquefied gas not needed. The cost of the core exporter, with nearly three times components of lithium ion batteries, as much gas exported than is used for battery storage, have fallen used in Australia each year. by nearly 90% in the past decade, from $1,100 per kilowatt hour in 2010 › Rising emissions from the gas to a mere $156/kWh in 2019. industry are cancelling out all the gains we have made in › It will be more expensive for Australia building a record amount of to transition from coal to gas. Wind solar and wind. and solar powered generation, even after being backed by storage, is the › More than one quarter of all gas cheapest form of new electricity consumed in Australia is burned generating infrastructure. by the gas industry to liquefy and chill gas for export overseas. › The Australian Energy Market Operator sees a steadily shrinking role for gas over the next 20 years. In most scenarios, more than two thirds of gas power stations will retire, without being replaced with new ones. › Incentivising gas-powered generation means disincentivising cheaper and smarter options. As the sunniest and windiest inhabited continent on the planet, and with careful planning of infrastructure, Australia can transition to 100% renewable electricity supply firmed by a mix of storage, and demand side solutions. climatecouncil.org.au 1 PASSING GAS: WHY RENEWABLES ARE THE FUTURE 1. Introduction: Gas has no place in Australia’s economic recovery, or climate safe future For too long, gas has flown under the Right now, Australia is facing twin crises radar. Along with coal and oil, it is – COVID-19 and climate change – and gas a major driver behind rising global is not the answer to either. The necessary temperatures, hotter conditions in public health response to COVID-19 has Australia and worsening extreme had a huge impact on the economy: both weather events. It has played an in Australia and around the world (Climate oversized role in driving up power Council 2020a). Economic recovery is top of prices – putting the manufacturing mind for most Australians, and governments sector at risk. Today, it is being have a crucial role to play in making targeted positioned as the “new” saviour of investments and implementing policies that the economy – based on overblown put Australians back to work. In doing so, claims that gas is cleaner than Australian governments can choose to invest coal and an overestimation of the in initiatives that set us up for the future, industry’s workforce. creating win/win solutions that create jobs and tackle long-term problems at the same time (AlphaBeta & Climate Council 2020). Growing the gas industry will hinder, not help, this recovery with expensive energy. The Australian gas industry has been behind rising energy bills for years. The price of gas for most Australians has reached historic highs (Australian Energy Regulator 2020a) and, in turn, this has driven up the price of electricity (McConnell & Sandiford 2020). Promises of cheap gas have been described as a ‘myth’ by the industry’s own lobby groups (Australian Petroleum Production and Exploration Association 2020). CHAPTER 01 2 INTRODUCTION In addition, growing the gas industry