RenewEconomy
- Ketan Joshi
The state of New South Wales is currently sitting alongside Victoria as the
two states of the ‘big four’ that are actually reducing emissions in a
clear, sustained and absolute sense.
Though both lean heavily on the land
use sector for these falling numbers, a growing role of renewable energy and
a notable drop in mining activity (which produces emissions domestically)
have played at least some role in both.
What is startlingly clear is that none of this is sufficient for any state
to really be on track to net zero by 2050. Though it will differ across
regions, a rough rule we can focus on is that grids should be mostly (95 to
100%) decarbonised by at least 2035, and preferably by the end of the
current decade.
As I’ve written prior, that baseline is essentially missing
from action in most of the debate on electricity, energy and climate in
Australia.
Here’s the most recent example: a new fossil gas power station has
been
announced, in New South Wales. EnergyAustralia is building a 300 megawatt ‘fast
start’ gas generator with hefty grants from the state ($78m) and federal
($5m) governments.
It’s there purportedly to replace the capacity lost when
one of NSW’s biggest coal plants, the Liddell power station, shuts down. The
Tallawarra B power station will open sometime around 2023.
We don’t need fossil fuelled power stations to replace other fossil fuelled
power stations. “The costs of energy storage have declined rapidly in recent
years, and it’s now clear that it provides a lower-cost solution for firming
low-cost solar and wind energy resources,” Clean Energy Council CEO Kane
Thornton said, of the decision.
That is before you account for the implicit
subsidy gas-fired power receives in offloading the costs of greenhouse gas
emissions and fuel extraction onto society, and of course, the explicit
subsidies this facility is receiving.
A state recently congratulated for its vision and ambition on climate is now
directing taxpayer funds towards avoidable fossil projects. It isn’t the
worst fossil project – it’s smaller than most and won’t operate much. But it
represents a broader and worrying trend, and it’s worth digging into why
this isn’t something to be welcomed.
The carbon footprint of Tallawarra B
The plant will run on 100% fossil gas for its first two years of operation.
After 2025, it will be 95% fossil gas and 5% “green hydrogen” (the NSW
government press release defines that as “cheap, reliable type of energy
that is made using 100% renewable sources”).
The turbine manufacturer, GE,
provides a handy visualisation of what type of CO2 reductions a 5% blend
entails, in a recent white
paper
– I’ve added an arrow to mark out the 95% methane mix by volume, in the
graphic:
The Daily Telegraph
reports, in a glowing article, that “share that will eventually rise to 60 per
cent”. Of course, there’s no date on that.
But GE’s white paper highlights something extremely important: you don’t get
a 50% reduction in emissions by blending methane and hydrogen equally.
As GE explains, this is because methane and hydrogen have very different
energy densities. That means you have to cram in a lot of hydrogen just to
get a
bit of an emissions reduction. So a 60% hydrogen / 40%
methane blend only gets you around a 35% cut in emissions.
To cut emissions
by 50%, you’d need at least 75% hydrogen in the mix! So these proportions
are extremely misleading.
The most recent
modification
submitted to the NSW government, in 2020, shows that it would produce
1,177,804 megawatt hours of energy in a year, around 588.49 kilotonnes of
CO2-e, around a 0.5% increase in NSW total emissions. This doesn’t include
any ambitions for blending hydrogen.
The core reason this is so low is
because the plant is expected to generate infrequently, as it’ll be a
‘peaker’ called on in rare circumstances of high demand and low wind and
solar output.
Though ‘open cycle’ gas turbines have a higher emissions
intensity than the ‘baseload’ closed cycle turbines, they generate far less,
and subsequently have lower absolute emissions.
But that means the inclusion of hydrogen is essentially meaningless. With a
5% blend of hydrogen, that’ll be only around a 2-3% reduction in total
annual emissions. With a 60% blend of hydrogen, it’ll only be around a 25%
cut.
If we very generously assume that this plant will be 60% zero emissions
hydrogen by 2035, this is what the cumulative emissions profile looks like,
compared to a pure gas plant:
Despite the clear presence of carbon emissions no matter how you cut the
data, this plant was described in the Financial Review as a “
carbon neutral” gas plant, and in the
ABC
as a “net zero” hybrid power station.
Despite only around 15% of plant
emissions being cut through hydrogen blending pre-2050, the remaining 85% is
named “residual” emissions. That’s some residue.
This weird language stems from EnergyAustralia’s promise to “offset” the
emissions. This rhymes with the suggestion of a recent report from the
Grattan Institute
to build a range of new fossil-fuelled power stations to provide “backup”
for the grid, and purchase carbon offsets for their emissions, instead of
building zero emissions grid balancing technologies.
Grattan themselves
highlight the significant problems with using offsets to justify worsening
avoidable emissions, but now we see a real-life instance of decisions being
made precisely on these grounds.
While the controversial nature of carbon offsets has been known for years,
yesterday a major new
investigation
from Greenpeace’s Unearthed and the Guardian revealed that schemes using
‘avoided deforestation’ to claim emissions reductions are largely
fabricated.
A lot of gas and nothing in return
While the emissions footprint of this plant is relatively small with and
without hydrogen (compare the annual 588 ktCO2-e to Liddell’s monstrous
14,700), this new plant is part of a bigger problem that is driving a
trajectory to badly miss ambitious climate targets.
One justification frequently thrown around for gas peakers is that they
enable a greater quantity of wind and solar to be integrated into grids,
leading to a comfortable net reduction in greenhouse gas emissions.
Putting
aside zero emissions alternatives that enable the same effect, it is utterly
irrelevant in the context of the unfurling project to keep coal-fired power
stations open as long as possible, using government intervention and
aggressive pro-fossil policy.
In fact, today, the Australian has a
piece
featuring the new boss of AGL energy Graeme Hunt, in which he very clearly
insists that their NSW plant, Bayswater, and their Victorian plant, Loy Yang
A, will be “amongst the last if not the last to close” in Australia.
Queensland’s state-owned coal company won’t be
closing
its operations any time soon, and the government
jettisoned
an entire CEO for daring to verbalise that possibility.
A terrifying game of
chicken
has emerged, where each coal plant operator is hanging on, hoping to soak up
the hit in wholesale price rises when another coal plant falls. The absence
of any clear state or federal coal phase-out plans has become a perverse
incentive to prolong emissions as much as possible.
There is an army of
powerful people working against
economic
factors – domestic and global – that are making early closures more likely,
and they are relatively likely to succeed. So what exactly is the
justification for building new gas plants, again?
Without a clear program to close coal in line with ambitious climate
targets, new gas plants will simply pile on top of high, prolonged coal
plant emissions, creating a worse outcome than one in which we use only zero
emissions grid firming options.
The principle is the problem, here. A new fossil fuelled power station is
being funded by significant taxpayer grants. It will doubtless be pointed at
to justify further gas mining projects, and gas pipeline projects.
The
federal government’s own pet project – the Kurri Kurri gas plant – will
probably go ahead too, despite neither being
needed
to replace Liddell. It will release greenhouse gas emissions, and offsets
and hydrogen will be used as window-dressing to justify that climate damage.
And it won’t contribute to the early closure of any coal-fired power
stations, because the owners of those plants are now aggressively fighting
to ensure those plants also receive
government money
to stay open for as long as they possible can.
NSW, and Australia, remain badly off track to achieve ambitious climate
goals because these micro-level decisions add up to a macro-level
phenomenon: a refusal to consider emissions as damaging or harmful, at least
not in any urgent sense.
The hydrogen veil on this announcement covers up a
deep, systemic and worsening problem for Australia’s grids.
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