The Guardian - Adam Morton
Ambitious export plan could generate billions and make Australia the centre of low-cost energy in a future zero-carbon world
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| There are ambitious solar and wind projects planned for both the Northern Territory and the Pilbara in Western Australia. Photograph: Alice Solar City/AAP |
The desert outside Tennant Creek, deep in the
Northern Territory,
is not the most obvious place to build and transmit Singapore’s future
electricity supply. Though few in the southern states are yet to take
notice, a group of Australian developers are betting that will change.
If they are right, it could have far-reaching consequences for
Australia’s energy industry and what the country sells to the world.
Known as
Sun Cable,
it is promised to be the world’s largest solar farm. If developed as
planned, a 10-gigawatt-capacity array of panels will be spread across
15,000 hectares and be backed by battery storage to ensure it can supply
power around the clock.
Overhead transmission lines will send electricity to Darwin and plug
into the NT grid. But the bulk would be exported via a high-voltage
direct-current submarine cable snaking through the Indonesian
archipelago to
Singapore.
The developers say it will be able to provide one-fifth of the island
city-state’s electricity needs, replacing its increasingly expensive
gas-fired power.
This will be the channel through which Australian energy production will greatly reduce [global] emissions
Ross Garnaut
After 18 months in development, the $20bn Sun Cable development had a
quiet coming out party in the Top End three weeks ago at a series of
events held to
highlight the NT’s solar potential. The idea has been embraced by the NT government and attracted the attention of the software billionaire
Mike Cannon-Brookes, who is considering involvement through his Grok Ventures private investment firm.
The NT plan follows a similarly ambitious proposal for the Pilbara,
where another group of developers are working on an even bigger wind and
solar hybrid plant to power local industry and develop a green hydrogen
manufacturing hub. On Friday, project developer Andrew Dickson
announced the scale of the proposed
Asian Renewable Energy Hub
had grown by more than a third, from 11GW to 15GW. “To our knowledge,
it’s the largest wind-solar hybrid in the world,” he says.
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| The skyline of Singapore. The Sun Cable plan could replace one-fifth of the city-state’s electricity needs, currently filled by expensive gas-fired generation. Photograph: Edgar Su/Reuters |
These developments are still at relatively early stages of planning.
Both teams say it will be four years before they lock in finance, with
production scheduled to start mid-to-late next decade. But renewable
energy watchers are cautiously optimistic they could help spark a new
way of thinking about Australia’s energy exports – one that better
aligns with the country’s commitment to the Paris climate agreement,
rather than broadening a fossil fuel trade at odds with it.
Opponents to Australia taking significant action on the climate
crisis often point out the country is responsible for about 1.4% of
greenhouse gas emissions, placing it about 15th on a table of
carbon-polluting nations. A
recent report by science and policy institute Climate Analytics makes the case that this underplays Australia’s contribution, which increases by 5% if fossil fuel exports are included.
The latter figure is expected to increase over the next decade.
Australia is the world’s biggest exporter of coal and rivals Qatar as
the leader in selling liquified natural gas (LNG). There is bipartisan
support for a significant expansion of both industries, though
government economists
anticipate export earnings from coal will fall.
Ross Garnaut, former advisor to Labor governments who is now professor of economics at the University of Melbourne and chairman of the
Australian-German Energy Transition Hub, makes the case that there is another way ahead. In a
recent lecture series
that is being turned into a book, he lays out his analysis of how
Australia, with the best renewable energy resource in the developed
world, could expand its energy production while significantly reducing
global emissions.
Garnaut points to the transformative reduction in the capital cost of
renewable energy and energy storage over the past two decades. As most
of the cost of clean energy developments is capital (the fuel is free),
he says the transformation has radically changed the ability of clean
projects to compete with fossil fuels. Given capital costs are lower in
developed countries, Garnaut says it means Australia can, if properly
managed, be the centre of low-cost energy in a future zero-carbon world.
It would make it the natural home for growth in minerals processing
for a world that increasingly values production powered by solar, wind
and other clean sources. Industries that would flourish under Garnaut’s
vision include familiar energy-intensive operations such as aluminium,
iron ore and steel, and new opportunities in silica, lithium, vanadium,
nickel, cobalt and copper.
“This will be the channel through which production of energy in
Australia will greatly reduce emissions in the rest of the world. It
will also be a foundation for a new era of economic expansion and
prosperity,” he says.
Garnaut believes exporting electricity through high-voltage cable and
green hydrogen will be a part of this clean energy future, though they
would mostly be expected to come later. Sun Cable’s chief executive,
David Griffin, is bullish about the possibility of his company helping
power Singapore from the outback in less than a decade.
He says
the project will use prefabricated solar cells to capture “one of the
best solar radiance reserves on the planet”. But he says the major
transformation that makes the farm possible is the advent of
high-voltage, direct-current submarine cable, which he describes as the
“greatest unsung technology development”. Sun Cable’s underwater link to
Singapore will run 3,800km.
“It is extraordinary technology that is going to change the flow of
energy between countries. It is going to have profound implications and
the extent of those implications hasn’t been widely identified,” Griffin
says.
“If you have the transmission of electricity over very large
distances between countries, then the flow of energy changes from liquid
fuels – oil and LNG – to electrons. Ultimately, that’s a vastly more
efficient way to transport energy. The incumbents just won’t be able to
compete.”
Sun Cable’s backers believe Singapore, as a
well-regulated electricity market that runs mostly on gas piped from
Malaysia and Indonesia and shipped as LNG, is ripe for competition.
Across in the Pilbara, the Asian Renewable Energy Hub proposal has
taken another tack. The developers – a consortium of InterContinental
Energy, CWP
Energy
Asia, wind energy company Vestas and financiers at the Macquarie Group –
began with a plan to send energy to Indonesia via sub-sea cable. That
has been dropped in favour of green hydrogen – a shift driven, Andrew
Dickson says, by falling costs and growing international and local
interest that suggests a much bigger market.
An
expanded hub proposal
released this week says it will be spread across a vast area – 6,500 sq
km, or about half the size of greater Sydney – and create 3,000
construction and 400 operational jobs. About two-thirds of the 15GW
capacity will be met with giant wind turbines and one-third solar
panels. The developers say up to a fifth of the total capacity is
expected to go to large industrial energy users in the Pilbara,
potentially including new and expanded mines and mineral processing. But
most of the electricity generated will be used to run a hydrogen
manufacturing hub.
The hydrogen would be sold domestically and exported, most likely to
Japan and South Korea, which have expressed a desire to shift energy
consumption in that direction. Dickson says producing green hydrogen at
large volumes could open up possibilities such as using it to replace
coking coal in steel production. It could allow an expanded version of
the “green steel” model adopted in Whyalla by British industrialist
Sanjeev Gupta.
Dickson points to recent appraisals by the Australian chief scientist,
Alan Finkel, and the
International Energy Agency
as evidence of hydrogen’s potential. “People are realising, after
several decades of promise, that now could be the time for it to be a
thing,” he says.
Griffin and Dickson both decline to comment on the role the federal
government could or should play in developing green exports, although
they volunteer that some local MPs and state governments are supportive.
Both note the fact their proposals are off-grid has helped insulate
them from politically loaded debates that pit renewable energy against
fossil fuels.
Roger Dargaville, a senior lecturer in renewable energy at Monash
University and member of the Energy Transition Hub, underlines the
amount of work that is going into examining what a future of clean
exports will look like. A recent project he was involved in suggested a
40-gigawatt sub-sea electricity cable into Indonesia – much larger than
that initially proposed by the Asian Renewable
Energy Hub – would be viable by 2035 if that country adopts a low emissions target.
Dargaville believes future exports will almost certainly be a mix of
hydrogen, cabled electricity and minerals refined before shipment. He
says no one should underestimate the scale of what would be necessary to
replace Australia’s existing fossil fuel industries (coal and LNG
industries are worth more than $100bn a year and employ tens of
thousands) and that the political and technological challenges will be
significant. But he stresses no one should mistake where international
markets are taking us.
The only question is whether it is in the timeframe climate
scientists says is necessary. “It’s not really yes or no, it’s just
when.”
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