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Page added on November 27, 2011

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Energy future lurks where sun don’t shine

Alternative Energy

THERE are 300 days of sunshine each year at Villanueva del Rey in southern Spain, and it is driving the hopes and aspirations of advocates of sustainable energy not just in Europe but around the world.

In the fields outside Villanueva del Rey is the Gemasolar plant, billed as the world’s first around-the-clock solar power plant, which consists of a concentric series of mirrors that focus energy on a central tower.

What sets this project apart from others is a molten-salt heat storage system capable of storing heat accumulated while the sun is shining for up to 15 hours after it goes down, making it the world’s first solar power plant capable of producing energy 24 hours a day.

Renewable energy advocates are labelling it a “game-changer”, as it directly counters the argument against total reliance on renewable energy – that it’s not consistent, and that when the sun doesn’t shine or the wind doesn’t blow there’s no energy. Various Australian politicians – including independent Tony Windsor – have made the pilgrimage to Spain to inspect the station.

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It demonstrates that the technology can work under certain circumstances, but economics are against its immediate widespread introduction as a new way of providing baseload power. It costs about 18 times as much to produce energy from this installation as it does from a gas-fired power plant.

According to its website, the Gemasolar plant can provide power for 25,000 homes. But apparently Spanish consumers are more frugal than their Australian counterparts, as the standard Spanish home consumes 12 kilowatt hours daily, while Australians consume 20kW hours daily. Thus the 25,000 Spanish homes potentially powered by the $300 million Gemasolar equate to 15,000 Australian homes.

Compare this with the gas-fired Darling Downs Power Station in southeast Queensland, Australia’s largest and newest power station, operating for about a year. It cost $780m, more than twice the cost of Gemasolar, but has the capacity to service 400,000 households, more than 25 times as many people.

There is no doubt that more work on solar technology will bring down the price, while most of the efficiencies in gas production have already been made. But the comparison shows that the discovery of huge amounts of gas in various developed countries worldwide is likely to drive investment away from renewables and towards gas.

The argument is that gas is a “transitional” fuel, a sort of halfway house between high carbon-emitting but cheap coal and renewable yet expensive solar and wind. ACIL Tasman executive director Paul Balfe says coal emits 0.85 tonnes of carbon per megawatt hour of production, while gas emits 0.4 tonnes. Renewables, of course, emit nothing at all.

All this means that, internationally, gas is on a roll. In Australia, coal-seam gas is the major new energy source – the Darling Downs plant, for example, operated by Origin Energy, is fully powered by coal-seam gas. The $50 billion investment in plants and infrastructure in Gladstone in central Queensland also relies on coal-seam gas.

But shale gas has made much larger inroads in the US and could do the same in Britain and parts of Europe, notably Poland.

The shale gas revolution in the past decade has come about through advances in two technologies: hydraulic fracturing (fracking), which breaks up shale and liberates gas, and horizontal drilling, or inserting a pipe directly from the surface downwards and then along a seam of shale.

Shale gas requires more fracking than coal-seam gas, because shale is a far tougher mineral than coal. But there have been claims that shale gas extraction is less environmentally intrusive, as it occurs at a deeper level. In purely economic terms, technological advances have turned the US in a decade from a net gas importer to an exporter. Ten years ago, the US built terminals to receive shiploads of gas from the Middle East and Africa, but they now sit idle, made redundant by production in American shale basins.

In 2009, the US surpassed Russia as the largest producer of natural gas, while shale gas production in the US has increased from almost nothing a decade ago to about 30 per cent of its natural-gas supply, and likely to be 50 per cent in the next few years. This has created more than 200,000 jobs, no small boost at a time of mass unemployment in the US. More importantly, it has kept gas prices down while other energy prices are rising.

The environmental problems associated with the North American gas experience are well documented, not least in the film Gasland. But the US has a different system of land tenure than that of Britain and Australia. There, the owner of the land where the gas is extracted is deemed to be owner of the resource below that land, whereas in Australia minerals belong to the state. As a result, many farmers in the US who have had gas operations on their property are happier with the result – even if their farms are environmentally affected – because they are getting more money for the gas.

In Britain, the dash for gas has just started. Exploration company Cuadrilla, which is 41 per cent Australian-owned, claims to have discovered shale gas deposits that are 56 times Britain’s annual gas needs, although, to be more realistic, only 10-20 per cent of that might be recoverable.

The exact nature of the claims has certainly had local impacts. In Lancashire, the company claims there is a reserve of 200 trillion cubic feet, which if correct would be the biggest reserve in the world and equivalent to 20 per cent of the whole of China’s shale gas resource – the biggest in the world.

But protests similar to those in Australia against coal-seam gas are also being played out against shale gas in Britain. The government still has to work out how to respond, with British Energy Secretary Chris Huhne being in the hot seat. In addition to that role, he is Minister for Climate Change.

On the one hand, this is a possible solution to the political problem of rising domestic power bills, with the US experience a powerful example of how gas has kept power bills lower than they would otherwise have been. On the other hand, there is strong community feeling about the long-term effects of gas mining on farmland.

University of Manchester energy and climate change professor Kevin Anderson told The Australian last month that development of a cheap new energy source with half the carbon emissions of coal could make it politically difficult to continue subsidising the creation of a major renewable energy industry based largely on expensive offshore wind turbines.

“From a climate change perspective, we should be leaving new fossil fuels like this in the ground and pushing on with renewables, but that will be a whole lot harder if the claims about these shale gas reserves turn out to be true,” he says. “Yes, gas is cleaner than coal, but it would not end up displacing coal; it would displace renewables. The coal would still be used somewhere and the renewables would not be built.”

In Britain, the renewable energy source most under threat from the rise of gas is wind power, of which Britain is one of the largest producers worldwide.

Consider the scale of the British wind power industry. At the moment there are more than 3000 windmills around the UK, and plenty more in the pipeline, with another 2000 under construction while approval has been given for another 3000 and applications for 5000 more are awaiting approval.

In the next few years, it is possible that there will be 13,000 windmills dotted around the British countryside. The pace at which this industry is growing is causing the sort of social unease in Britain that the rapid expansion of the coal-seam gas industry is causing in Australia. Local protest groups against wind power have sprung up, largely along the west coast of Britain and particularly in Wales.

The sort of rhetoric being used – that local communities should have some sort of control over what’s happening in their areas – is remarkably similar to that in Australia about coal-seam gas.

By contrast, Australia’s wind-power industry is considerably smaller, with only 767 windmills installed. But, like Britain, it is on the cusp of massive expansion, largely in Victoria, where 2500 mills have been proposed, and South Australia, where about 2000 are on the drawing board.

Energy experts such as Grahame Baker, a senior adviser at Brisbane consultancy Resource and Land Management Services, say one of the big drawbacks to wind development is that it requires other power sources to supplement it, simply because wind is unpredictable.

“One of the big problems with wind is that when you need it most it’s not there. People reach for their air-conditioners on hot, dry days, and most times that’s precisely the times when there’s no wind. The idea is that you can use something like gas to fill in the gaps in power from wind so that you’ve got a constant supply,” he says.

It is precisely this emerging area of hybrid energy that renewable energy advocates such as Matthew Wright of Beyond Zero Emissions see as likely to favour gas crowding out renewables.

“Wind is predictable in the long term – you know over the course of a year how much wind you’re going to get in an area. But it’s true that you don’t know at the start of any one week just how much wind you’re going to get in that week,” he says.

He recognises that wind needs some “smoothing out” mechanism to provide constant, reliable power, but advocates that this role should be filled by solar rather than gas.

“If you use gas it’s like putting lipstick on a pig – you can call it whatever you like, but it’s still a pig. You can’t claim that using gas with wind is a renewable technology, because it’s not. Wind and gas are not compatible, it’s as simple as that. Especially since you now have the possibility of baseload power once that sort of technology being used in Gemasolar becomes more available.”

Wright sees the use of gas in hybrid technologies as the thin end of the wedge, a way that gas can keep a foothold in a rapidly changing energy landscape. He is especially critical of the use of gas in the federal government’s flagship solar project at Chinchilla on the Darling Downs, not far from Origin Energy’s gas-fired power station, for which Canberra is providing $464m of the plant’s cost of $1.2bn through its Clean Energy Fund.

This area of the Downs, about 300km west of Brisbane, has almost all the types of energy production showcased. There is Kogan Creek, a coal-fired power station, the gas-fired Darling Downs Power Station, the underground coal gasification project of Linc Energy, which involves burning coal underground to create energy, and now the solar project.

Campaigners such as Wright are concerned, though, that the solar plant will not be emissions-free because it is using gas as a bridging power source. Worse, the gas is from coal seams.

“Why wouldn’t you use the sort of technology that’s being used at Gemasolar instead of having to rely on an unrenewable source of energy like gas?” he says. “We’re stridently opposed to gas being used in this way. There’s an opportunity for us to utilise new technology and we haven’t taken it.”

What especially sticks in his craw is that the central company in the consortium building this solar station is French company Areva, the world’s largest nuclear energy group. “How can you have a nuclear group involved in a clean energy project?” he says.

But Areva’s involvement in solar technology is typical of what is happening throughout the renewables sector, as major energy companies move in, not least because of carbon taxes. Origin Energy, for example, operates conventional and unconventional gas operations and is the biggest buyer of wind farm energy in Australia and has an interest, through a subsidiary, in wind farms in New Zealand.

Origin managing director Grant King made the point in a speech to the Committee for Economic Development of Australia that the cost of producing renewable energy is considerably higher than that of coal and gas, but the cost of renewables is coming down. In very broad terms, power from coal costs about $60 per megawatt hour and gas $70 per megawatt hour, while wind costs about $110 per megawatt hour and the cheapest form of solar energy, photovoltaic, costs about $230 per megawatt hour, with solar thermal about $300 per megawatt hour.

But, Wright says, the costs of renewables are coming down while those of fossil fuels are static. Even the federal government, in work for its white paper on energy, concedes that the cost of generating energy through renewables will come down in absolute terms. Then, of course, the carbon tax will further bridge the price gap between gas and renewables.

“If you had to pick between the price trending down and the one standing still, which one would you pick?” Wright says.

Another problem facing renewables is only just starting to emerge, and it could be as big as the economic factor. That is community acceptance. In his speech to CEDA, King made the point that environmental groups, while fierce critics of fossil fuel production, remained silent on environmental problems associated with renewable energy. “We know from our own experience that community opposition to wind farm development in regional Victoria, South Australia and southern NSW is just as strong as concerns expressed about CSG development in Queensland.”

But this not-in-my-backyard criticism is present in all energy developments.

The Australian

2 Comments on "Energy future lurks where sun don’t shine"

  1. Kenz300 on Sun, 27th Nov 2011 6:03 pm 

    Renewable energy investment is surpassing fossil fuels in new power plants. Electricity from sun power, wind energy, wave energy and biomass had an investment of $187 billion last year compared with $157 billion for natural gas, coal and oil, according to calculations by Bloomberg New Energy Finance.

  2. BillT on Mon, 28th Nov 2011 3:48 am 

    This will be true of ALL alternate energy sources. ALL will be much more expensive and the quantities available will also be small as an over all percentage. Total energy supplies will NOT grow in coming years, but will continue to shrink. And the world economy will contract along side…

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