On Friday 9th June 2017 Australia’s Chief Scientist Alan Finkle explained to federal parliament why the cheapest and most effective way forward for the National Energy Market (Electricity grid) is with a clean energy target (CET).
The emission target will have the lowest impact on prices and is cheaper than doing nothing.
A clean energy target is a policy that forces energy generators (different to energy retailers) to produce a set amount of energy from low emissions technology.
We have a 3 tiered market for electricity;
- Electricity generators, who supply power to the National Grid (Australian Energy Market Operator – AEMO)
- National Grid operator AEMO who control the supply and demand
- Retailers who buy from the market and sell to the end consumer
Retailers like Energy Australia act as a middleman between your house and the generators by way of the operator, purchasing electricity from AEMO in a market with a fluctuation price called a spot price.
It’s the operator’s job to insure supply security to the grid and to set the price based on supply and demand.
It’s the retailer’s job to manage the customer end of the supply chain and purchase electricity from the grid a the cheapest price and it’s the generator’s job to produce enough electricity to ensure supply, but not so much they drive down the spot price.
Currently, 85% of the electricity on the grid is black or brown coal which produces 800-1300 kgCO2eq/MWh – grams of carbon dioxide equivalent per kilowatt-hour.
A household uses around 25KWh of electricity per day.
So 1MWh or 1000KWh powers 40 homes for a single day.
Coal has an energy density of 2.3KWh/kg and contains 60-80% carbon.
The efficiency of energy transfer from coal burning to a house is around 25-30%.
So your average household burns about 40kg of coal every day producing 30kg of carbon.
Your home is responsible for burning about 40kg of coal and producing 30kg of carbon pollution every day!
The clean energy target will come into effect in 2020
The important part the government now needs to decide is what level of carbon per MWh gives a credit to generators and what percentage of total electricity retailers will need to purchase.
Australia’s dirtiest power plant produces 1227kg/MWh of carbon and the most modern clean black coal power plant produces 760kg/MWh.
The government may choose for instance to go with 700kg/MWh and 30% credits from 2020.
The way the scheme works is any electricity generated with lower emissions than 700kg/MWH will get part of credit which they can sell to retailers.The retailers must buy say 30% of their electricity as low emission credits. This gives incentive to both the generator and the retailer to use lower-emission electricity.
But will it be a meaning change?
The carbon number to look out for will be one where coal generators can squeeze their way into the credit.
It would be totally absurd to set the value at say 800, it would achieve nothing but to subsidise and prolong the inevitable transition to renewables.
We can clearly see from the table just how LOW the carbon emissions of renewables and nuclear are.
10, 11, 20….
Even though natural gas produces half the emissions of coal, it’s still magnitudes higher than wind and solar.
We’re going to need face marks soon
Emissions are not just changing the climate, air pollution kills many millions of people around the world every year and it’s entirely unnecessary.
The assumption our air here is cleaner is false, we share air with the entire world.
Sydney will soon be just like Bejing and Los Angeles.
The good news is increased rooftop solar, behavioral changes and increases in efficiency have resulted in peak electricity back in 2011. We’ve been decreasing our electricity consumption ever since!
BUT – We’ve somehow increased our carbon emissions….
With gas becoming too expensive and renewables becoming cheaper this is an incredibly important step.
Even if the clean energy target becomes a political farce, the market is STILL going to reward renewables long term because of their $0 cost.
|Wind||2.5 MW offshore||9|
|Hydroelectric||3.1 MW reservoir||10|
|Wind||1.5 MW onshore||10|
|Hydroelectric||300 kW run-of-river||13|
|Solar thermal||80 MW parabolic trough||13|
|Solar PV||Polycrystaline silicon||32|
|Geothermal||80 MW hot dry rock||38|
|Nuclear||various reactor types||66|
|Natural gas||various combined cycle turbines||443|
|Fuel Cell||hydrogen from gas reforming||664|
|Diesel||various generator and turbine types||778|
|Heavy oil||various generator and turbine types||778|
|Coal||various generator types with scrubbing||960|
|Coal||various generator types without scrubbing||1050|
Sovacool, Benjamin K. (2008). “Valuing the greenhouse gas emissions from nuclear power: A critical survey” (PDF). Energy Policy. 36: 2950–2963. doi:10.1016/j.enpol.2008.04.017.
Also published on Medium.