The Energy White Paper

No, I haven’t read it, and I have no intention of doing so. I’ll probably refer to it in the future, but sitting down and reading the thing in any sort of casual manner, no, that’s not going to happen.

Here it is if you’re an enthusiast

Why? Because, by it’s very definition, there will be no surprises in it for me, or anyone else with an eye on the industry. The EWP is essentially an answer to the hypothetical exam question “Energy in Australia; you have unlimited words and 4 years to write your response.”

And it has been in train for that long. Originally due at about the end of 2009 it was initially shelved due to the uncertainty of the carbon price. How could Government possibly comment on “energy” without knowing if there was going to be a price on carbon? So it was shelved in draft form until the dust settled, then re-drafted substantially when they thought there wouldn’t be a carbon price, then changed again when it turned out that yes, there really is going to be a carbon price, even if the Greens drag us there kicking and screaming.

What even is an Energy White Paper, or more to the point, why isn’t it interesting? For starters it’s a public document, so it doesn’t contain any classified information, or anything of national significance. It’s a story about energy in Australia, using publicly available information. So if you read the Business section of the paper and a couple of industry websites you’re probably on top of most of this stuff. It is also non-binding, as attested by the delays in releasing it, but it’s not that there’s anything to be bound to. There may be suggestions of policy options, but no new policy, no new declaration of direction from Government. It’s a gigantic boiler plate designed to show that “this energy thing, Government has it in hand and we know what we’re doing”. And in any case if there’s a change of government in a year, the whole thing might be re-written

Which is not to suggest by any means that it is likely to be a bad or useless document; the team working on it were some of the sharpest public servants I have ever met, with a remit to answer a complex question very, very thoroughly. But we come back to the first problem; these smart people were hamstrung by their terms of reference, and so they are stuck with telling a very accurate story of energy in Australia.

What does it say? Indulge me while I guess. I am happy to take corrections in the comments

Australia has a lot of coal; we sell a lot of coal to China, most of it is metalurgical coal; we sell coal to a few people now; it would be really great if we could burn the coal here and there were no emissions but someone needs to invent something before that happens. We have lots of uranium; we sell it to a few people now and are considering selling it to more people in the future. We have no plans to use it ourselves, but we’re not ruling out considering using it in the future.We still don’t have any of our own oil and it would be great if we did, because we use lots of diesel digging the holes that are driving the economy. We have lots of gas, in all sorts of interesting forms; there is about $160b being spent on the NW shelf extracting it and we’ll sell loads of it to China. There’s lots of gas in the coal seams around the place and we’ll extract it pretty soon and sell that too, but there are some community objections to overcome. There’s a new natural gas hub opening in Gladstone in Qld, which will mean that gas is now linked to international prices which will likely lead to increased prices for domestic consumers. However, there is a chance that increased domestic supply will buffer this increase so your guess is as good as mine. We still get most of our electricity from coal, and some of our powerstations are literally the worst in the world. But the carbon price will probably slow them down a bit. The Renewable Energy Target seems to be working and emissions intensity is trending down over the last 5 years. The RET has mostly supported wind developments and will likely continue to do so until 2018 or so, but moves to fiddle with the eligibility laws and the SRES/LRET relationship might change things a bit. Apart from wind most new developments in electricity generation are peaking gas turbines, driven by cheap gas prices and increased daily peakiness in the grid. The peakiness comes from higher residential demand driven by air-conditioning and heating loads, and from an increased penetration in intermittent renewables. Annual grid demand is down for the last three years, due to a combination of milder weather, the effects of previous energy efficiency schemes (housing insulation and the Energy Efficiency Opportunities program) and increased penetration of domestic PV which appears to the grid as reduced demand. There is more to be gained in energy efficiency and it is likely the trend of PV will continue, so the annual demand trend may continue for a couple more years. It could really fall off a cliff if aluminium pulls out of Australia entirely which many analysts have predicted and many companies have threatened. Increased short-term peaks are driving up electricity prices, principally through increased demand charges. This can be addressed with Smart Meters, further rounds of insulation and Time of Use pricing. Unfortunately consumer groups and nutjobs oppose Smart Meters and ToU pricing, so nothing will probably happen. Insulation has become anathema after Pink Batts and now no one is even sure if it works any more. Residential PV prices are still coming down and will likely continue to do so, but this will have minimal effect on short-term maxima, and may have an exaggerating affect in some areas. Wind remains the cheapest renewable energy technology and can be considered mature in Australia. Residential PV passed 1GW recently and will continue to grow, being cheaper than grid-power in many places now, even without subsidies. Solar thermal looks promising but is developing slowly as demonstration scale plants are expensive. Hot dry rock geothermal has potential, but it’s in the middle of the desert and everyone is worried about fracking now. Wave and tidal energy is a fringe activity in Australia and will continue to be so out to 2020, despite some promising demonstrations in WA and Victoria. Biomass is the greatest renewable contributor in Australia, mostly due to cane burning, and that will probably continue until wind catches up. Soil carbon sequestration looks like it might make a difference to Australia’s emissions but the industry is in it’s infancy. Something about cars I’m sure but that’s not really my field.


About evcricket

Extreme gardener, engineer and bird nerd. View all posts by evcricket

One response to “The Energy White Paper

  • Robert Merkel

    You missed a few other bits:

    * carbon capture and storage will save the world at some mysterious point in the future.
    * “fuel security” is a furphy, and Peak Oil is a nonevent (this is actually true, for better or worse).
    * we should flog as much coal, natural gas and uranium as the world is prepared to buy from us.
    * the world will want to buy as much coal, natural gas, and uranium as we can dig up (to paraphrase slightly).
    * we can safely ignore any possibility that the assumptions made above won’t pan out.

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