Australasian Science Magazine

Credit: juanjo/Adobe

By Hugh Bradlow

The Finkel Review provides a roadmap to investment in clean energy technologies.

We have three goals for our energy supply, two of which are uncontroversial: deliver electricity at the lowest cost to consumers and businesses, and ensure that the supply is reliable and adequate. The third consideration – to reduce (indeed remove) greenhouse emissions from our electricity generators – turns the rational discussion on energy into an emotional debate.

“Clean” energy (generally from sun or wind) is currently more expensive than “dirty” energy from burning oil, coal or gas, all of which release CO2 into the atmosphere.

There are people who don’t accept the need for clean energy generation because they believe, contrary to all the scientific evidence, that anthropogenic climate change is a myth or exaggeration. They are the clear minority.

If you accept the necessity to achieve all three goals, it leaves society with two choices:

• require all generating sources, including fossil fuels, to emit zero (or almost zero) CO2. Renewables, biomass and nuclear do this naturally, but the fossil fuel generators would need to remove their emissions using technologies such as carbon capture and sequestration (CCS).
• put a price on carbon emissions and other pollutants (e.g. sulphur, mercury) so that the true cost of the generation cycle, including waste disposal, is taken into account.

If we adopted one of these two options, the market should have the freedom to decide which generating technology to implement based on its business case.

We would need to require suppliers of variable renewable electricity to ensure reliable supply through the use of energy storage. The massive investments going into batteries, super-capacitors and other storage solutions (such as pumped hydro) give us confidence that we will be able to meet this storage need at utility to household scales.

There is also a need for “smart grid” technologies, but there are no major technological impediments to implementing them.

On the current technology trajectory, the cost of reliable renewables will be cheaper than fossil fuel generation – probably within a decade – but, while the price of electricity will go up in the short to medium term, we will end up with secure, clean energy that is cheaper than dirty alternatives.

The major issue is that there will be a probable 20-year period during which we will need to replace our existing generating capacity with these new solutions. The longer we delay the start of this replacement cycle, the greater will be the unnecessary pumping of CO2 into the atmosphere. The real question is whether we wish to accelerate the replacement cycle of our existing capacity.

The recent Independent Review of the Future Security of the National Electricity Market, chaired by Chief Scientist Dr Alan Finkel, has grasped this challenge by proposing a Clean Energy Target (CET) to drive investment in clean energy generation technologies. Australia has been sorely lacking stable, long-term and bipartisan policy on energy for too long, and the Finkel Review provides us with a roadmap to achieving this. It is important that all Australian governments commit to implementing its recommendations.

Either a CET or a price on carbon emissions will speed up the deployment of clean energy in Australia, but the question is greatly complicated by the vested interests who drive our current high-emission generation capacity, both the miners and the generators. The latter have made historical investments, and simply mothballing their plants will leave large stranded investments. The investors would much rather just let the current capacity diffuse out through natural economic forces, which will take a couple of decades or more.

We are at a crossroads with regard to our decisions on energy. We can continue to burn fossil fuels for another couple of decades and let the natural replacement cycle take its course. Or we can eliminate today’s practices as soon as possible – a solution that will be supported by technology developments but leave us with an investment “hump” in the short to medium term.

People will argue that Australia’s decisions will not affect the overall global impact on the greenhouse emissions by much, but that evades the real problem as to whether Australia aspires to be a global thought leader in the digitally disrupted 21st century, or just lazy and selfish.