Towards Queensland’s Clean Energy Future wind gas A plan to cut Queensland’s greenhouse gas emissions from electricity by 2010 A Report for the Clean Energy Future Group in collaboration with Queensland Conservation Council By Dr Mark Diesendorf April 2005 This Clean Energy Future Group Report is an initiative of: In collaboration with: The Clean Energy Future Group came together in 2003 to commission a study investigating how to meet deep emission cuts in Australia’s stationary energy sector. The Group published a Clean Energy Future for Australia Study in March 2004. The Clean Energy Future Group comprises: • Australasian Energy Performance Contracting Association – www.aepca.asn.au • Australian Business Council for Sustainable Energy – www.bcse.org.au • Australian Gas Association • Australian Wind Energy Association – www.auswea.com.au • Bioenergy Australia – www.bioenergyaustralia.org • Renewable Energy Generators of Australia – www.rega.com.au • WWF Australia – www.wwf.org.au First published in April 2005 by WWF Australia © WWF Australia 2005. All Rights Reserved. ISBN: 1 875 941 916 The opinions expressed in this publication are those of the author & do not necessarily reflect the views of WWF. Author: Dr Mark Diesendorf Sustainability Centre Pty Ltd, P O Box 521, Epping NSW 1710 www.sustainabilitycentre.com.au Liability - Neither Sustainability Centre Pty Ltd nor its employees accepts any responsibility or liability for the accuracy of or inferences from the material contained in this report, or for any actions as a result of any person's or group's interpretations, deductions, conclusions or actions in reliance on this material. The Renewable Energy Generators of Australia Ltd (REGA) support the endeavour to investigate alternative opportunities for the long term sustainable supply of power generation in NSW, particularly through the increased penetration of renewable energy sources and energy efficiency measures. WWF Australia, GPO Box 528, Sydney NSW Australia Tel: +612 9281 5515 Fax: +612 9281 1060 For copies of this report or a full list of WWF Australia publications on a wide range of conservation issues, please contact us at [email protected] or call 1800 032 551. FRONT COVER IMAGES – LEFT TO RIGHT: Townsville Gas Power Station: Transfield Services owns, operates and maintains Townsville Power Station. This power station is operated as a base load plant providing input to the Queensland electricity system. Transfield Services recently converted the power station from a peak load plant using jet fuel to a base load plant fuelled by coal seam methane gas and expanded the station from 160MW to produce over 220MW. Courtesy: Transfield Service Windy Hill Wind Farm: One of Queensland's largest wind farms, Windy Hill Wind Farm is located near Ravenshoe on the Atherton Tablelands, on privately owned diary farmland. There are 20 turbines with a generating capacity of 12 megawatts. With minimal impact on farming activity, this wind farm is ideally positioned with good exposure to prevailing winds and close vicinity to electricity transmission infrastructure and large customer load centres. Courtesy Stanwell Corporation Limited Green Pacific Energy’s Biomass Plant. This innovative power plant in Stapylton uses green waste collected from suburban households to generate 5 megawatts of electricity. The well-proven Fluidised Bed Combustion process is used with a unique fuel source – branches, tree trimmings and non-native waste wood. Plans are in place to build a further larger plant on the same site at Stapylton. Courtesy of Green Pacific Energy Limited Barron Gorge Hydro Power Station: Located in Far North Queensland, at the northernmost end of the state's high voltage electricity grid, Barron Gorge Hydro Power Station is a clean, green electricity generator providing 60 megawatts of power. It also provides regional security of electricity supply by controlling voltage levels on the transmission system. Courtesy of Stanwell Corporation Limited. Solar Panels – Courtesy of BCSE Energy efficient appliances: Energy. Courtesy of SEDA Contents Why this report was commissioned 2 Executive Summary 4 Section 1 Introduction 6 Section 2 Queensland electricity backgrounder 8 2.1 Queensland’s electricity industry 8 2.2 State Government policies and strategies 9 Section 3 Reducing demand growth and cleaning up energy supply 11 3.1 Efficient energy use 11 3.2 Cleaner energy supply 14 Section 4 Energy reserves 17 4.1 Gas 17 4.2 Biomass 18 4.3 Wind 19 Section 5 Recommended policies and strategies 20 5.1 Set a greenhouse target for the ‘local’ economy 20 5.2 Expand MRET 20 5.3 Place a greenhouse intensity constraint upon base-load power stations 22 5.4 Implement other measures to encourage renewable sources of electricity 22 5.5 Implement tradeable emission permits or carbon levy 23 5.6 Remove subsidies for fossil fuels and energy wastage 23 5.7 Encourage the purchase of solar hot water 24 5.8 Mandate key energy efficiency measures 25 5.9 Encourage voluntary energy efficiency measures 27 5.10 Remove barriers to energy efficiency in network price regulation 27 5.11 Give incentives for local jobs in appropriate regions 28 Section 6 Allocation of costs of the alternative mix 29 6.1 Cost to government 29 6.2 Cost to electricity consumers 29 Section 7 Employment gains from substituting renewable energy for coal 31 Section 8 Conclusion 34 Section 9 Acknowledgments 35 Section 10 References 36 Appendices 39 A Note on the reliability of wind and coal power 39 B Wind power monitoring in Queensland 40 C Economic mechanism to enable gas and renewables to compete with coal 41 D Environmental impacts of bioenergy and wind power 43 Units and Conversion Factors 48 Towards Queensland’s Clean Energy Future Why this report was commissioned Recently the 14 member International Climate Change Taskforce recommended: “A long-term objective be established to prevent global average temperature from rising more than 2°C above the pre-industrial level, to limit the extent and magnitude of climate-change impacts.” Global average temperature has already increased by 0.6°C with a further 0.4-0.7°C locked in from greenhouse gases already emitted by human activity. According to findings from the recent Avoiding Dangerous Climate Change conference, convened by British Prime Minister Tony Blair, to be confident of limiting the temperature increase to less than 2°C we need to keep the atmospheric concentration of greenhouse gases to 400 parts per million. Unfortunately we are only ten years away from reaching this critical threshold. The solution to global climate change requires immediately action to halt increases in emissions and thereafter actions to reduce emissions by 60% by 2050 (Coleman et al., 2004). In the interests of achieving a more sustainable Australia that could meet its international obligation to reduce greenhouse gases (in particular carbon dioxide), a coalition of organisations, known as the Clean Energy Futures Group, came together to examine how the nation might achieve these deep emission cuts. The result, A Clean Energy Future for Australia, explains how Australia can reduce its CO2 emissions from stationary (i.e. non-transport) energy by 50% by 2040, compared with the 2001 level (Saddler, Diesendorf & Denniss, 2004). Queensland is at the cross-roads of two very different paths for meeting its energy needs. It can continue its dependence on an energy source, coal, that heavily pollutes the atmosphere with climate- altering greenhouse gases. Or it can begin the task of weaning itself off this inherently unsustainable fuel, by choosing cleaner and safer, but equally reliable alternatives. This report by Dr Mark Diesendorf builds on the previous long-term study, focusing on an immediate pressing need for Queensland: How to avoid building a coal-fired power station that will lock the State into 4.5 million tonnes of additional greenhouse gases every year for the next 40 years. This would be equivalent to putting an additional 1.1 million cars on the road and over its lifetime would completely dwarf greenhouse emission reductions undertaken to date. So far there has been a lack of detailed analysis being undertaken by Australian governments to seriously examine alternatives to the status quo. The Clean Energy Future Group is concerned that a lack of serious study is creating a preponderance amongst government for using past solutions – not because they are the most appropriate, but because they are familiar. There seems to be a mentality that “if it ain’t broke don’t fix it” – but this is a system that is very badly broken. This report is not intended to be a comprehensive and in-depth study – rather it is an attempt to broaden the debate on options available to meet Queensland’s electricity demands. Dr Diesendorf proposes a mix of energy efficiency and cleaner electricity supply measures that could substitute for a 750 MW coal-fired power station by about 2010. It must be stressed that Clean Energy Future Group does not put forward this report as a comprehensive statement of what could be achieved. Rather this is just one conceivable approach that Towards Queensland’s Clean Energy Future 2 will deal with the immediate issue of substituting for 750 MW of coal fired power by 2010. More detailed work is required, but this report takes a first step by illustrating that there is a viable and affordable alternative. The onus is upon government to undertake a detailed examination into how it can achieve a cleaner, more sustainable energy supply, not just continue with the status quo whilst tinkering at the edges. The policy recommendations in this report are those of the author but are not inconsistent with many of those put forward by the members of the Clean Energy Futures Group – we all share a common aim. For more information on each members’ policy positions, readers should visit our respective websites.