Why we won't need coal
Last month, the International Energy Agency released a stunning report that suggested that the future of thermal coal exports could be threatened if the world ever decides to implement the policies to limit global warming to an average 2°C, rather than just merely talking about it, as they are doing in Durban this fortnight.
The coal industry laughed, suggesting such a scenario was highly unlikely. But what if technology took the decision out of the hands of politicians, as seems increasingly likely with the plunging costs of renewables, particularly solar PV, across the globe? And what does that mean also for Australia's energy infrastructure, and the tens of billions of dollars that will be invested in the coming decade on the basis that business will continue as usual?
New forecasts from China suggest the cost of solar PV in that country will fall below that of coal-fired generation within 10 years. From that point, or even before, says Wu Dacheng, the vice chairman and secretary general of the China Photovoltaic Society, the country's energy build out will be dominated by cheaper renewables.
China, which has only just introduced its own feed-in tariff for solar PV, is anticipating massive growth, and has already upgraded its official forecasts to 2020 from 30GW to 50GW. But it concedes that 100GW of PV is possible and may even be overshot. Wu himself said earlier this year that China would reach 5GW in capacity by 2015, but it is now likely to reach that in 2012.
As Abengoa's Scott Frier noted, FiTs are not necessarily the cheapest form of incentive, but they are devastatingly effective in unleashing the forces of greed and pushing down costs as developers try and squeeze as much capacity within those metrics. And the Chinese are not fettered by established industry vested interests trying to hold this back. In China, the government is the vested interest, and they have already been ruthless in their closure of inefficient power stations.
Wu told Climate Spectator in Sydney on Wednesday that solar PV is already cheaper than peaking prices in some areas of China, and will match parity with commercial and industrial supply in 2014, will reach retail parity in 2018 (households pay less for electricity in China than industrial users), and match wholesale price parity by 2021, when prices will be around 0.6 yuan/kWh.
His forecasts were reinforced by Martin Green, the executive research director of the world-leading Photovoltaic Centre of Excellence at UNSW, who says solar PV is likely to fall below the cost of coal in Australia (wholesale grid parity) before the end of the decade. He points out that most studies, and much of government modeling, are based around solar PV having a cost of $3.50 a watt. He says it is already down to just over $1/watt and will likely halve again to 50c/watt by 2020.
This has broader implications for energy grids. Green and other experts say much of the infrastructure spending on poles and wires is based around the assumption of business as usual: that coal will continue to be the cheapest and the central source of power. “I don’t see anyone discussing a national grid centred around renewables, but they should be,” says David Mills, the founder of solar thermal technology firm Ausra, and one of the leading experts in solar technology. “We're about to spend so much money on the grid, shouldn’t we thinking about what we are going to be powering it with?“
Mills last year released the first version of his ground-breaking research that showed that the entire US grid could be powered by just wind and solar thermal, and he provided an update on that research at the Solar 2011 conference on Wednesday. Mills challenges the very concept of baseload power, the sort provided by coal and nuclear.
“People say we need baseload plans, but we don’t,” he says. Instead, grids can work perfectly well with a mixture of inflexible supply (wind that blows whenever it wants), and flexible supply (solar thermal with storage). Mills has yet to release the financial modelling for his scenario, but notes that wind is already cheaper than new-built coal in the US, and solar thermal with storage, and used as a peaking plant, will be competitive with peaking gas.
Mills did not factor in PV in his scenario, but it would have the same impact as wind. As wind and PV fills up the energy stack (they go first because they have the lowest short run marginal cost – wind and solar radiation is free), what is needed to complete the requirements is flexible generation. Coal doesn't fit the bill.
The first impacts of this have already been seen in South Australia, where wind has provided more than 20 per cent of annual output last year and much higher on occasions. In Germany, where wind and PV capacity amounts to 45GW, Statkfraft has announced this week that it may close two gas-fired power stations, amounting to one gigawatt of capacity, because of this impact. And this in a country which has just shut down half its nuclear fleet and will soon close the rest.
A UNSW team of Ben Elliston, Mark Diesendorf and Iain MacGill has just released its own study of how Australia could power its entire grid on renewables. And like Mills, they also see solar with storage as a type of peaking plant. “The whole concept of baseload becomes redundant,” Elliston told Climate Spectator. “It’s worse than redundant, it gets in the way.”
The UNSW study, based on simulations of Australia’s energy needs in 2010, found that the entire supply could be met by a mix of solar thermal with storage, wind, solar PV, existing hydro and peaking gas plants running on biofuels. Only six hours of the year fail to meet the NEM’s reliability standard, all in evening peaks in the winter months.
Elliston says that one of the biggest impediments is the build-out of long-life assets – or the lack of long-term signals. “The business-as-usual market approach, where we plan at the margin, is not going to get us there. We need to start a new strategy now, which means not building new coal-fired power stations, and building transmission lines in the right place to build renewables .”
The authorities, and the utilities, do not seem to be listening. Indeed, Rick Brazzale, the head of Green Energy Trading, took up this theme when he told the conference that the Australian Energy market Operators’ annual statement of opportunities report, which gives forecasts of demand and is used by the industry to plan its expenditure, showed that non-peak demand would continue to rise in the coming decade, even though the experience of the past three years showed that PV and energy efficiency initiatives had caused it to stop, or even retreat.
Mills notes how the rollout of PV and electric vehicles could dramatically alter the way consumers use the grid. With utilities expanding time-of-use pricing – at 42c/kWh or more in peak periods in NSW, nearly twice the cost of PV – consumers were more likely to use their own solar arrays and the battery in their EV to reduce their demand on the grid. As British Telecom found out when raising phone charges to justify its land network, people use it less – forcing prices to go even higher to recoup the cost of investment. The same trend is likely to occur in energy, Elliston says.
So, if coal no longer has a place in the energy stakes of the future, is Australia then impoverished by its lack of thermal coal exports and doomed to take the cheapest PV imports from China? No, says the UNSW’s Green – he says more than half of the economic value of solar PV remains in its installation and commissioning, which is all local. And he says Australia has a unique opportunity to become a solar technology hub for the Asia Pacific region.
China may have the biggest manufacturers of solar PV, but they are relying on partnerships with Australian universities such as UNSW for their R&D, and their ability to remain at the cutting edge. And, says Green, there is also a great opportunity in education and training. Education is already Australia’s third largest export earner with $18 billion of sales last year. Cleantech such as solar could be a sizeable component of that sum.
John Grimes, the head of Australian Solar Energy Society, agrees. “The public has a perception that that solar is expensive, that it has failed,” he says. But there is in fact a seismic shift happening globally and it is all about China, which has flicked the switch on domestic consumption.
“This presents threats and opportunities. Threats are what we need to manage, but we should be pursing the opportunities.” Grimes says Australia should be pursuing a more strategic partnerships with China – like that between UNSW and Suntech, the world’s biggest solar PV maker. “Australia can leverage off the enormous manufacturing juggernaut that is China and generate maximum benefit to the economy.”
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Comments on this article
Enough
This discussion has gone way off subject and is now closed. Focus, people. focus!
K keith Williams (Comment at
K
keith Williams (Comment at 1500), I suggest that you pay more attention to the science before going off on a tangent.
Point 1: CO2 is not a major cause of so-called global warming. Paleo-history tells us that climate variability (a better description of the changes that occur in climate) of the degree presently being experienced is nothing new, no matter whether you look at the time scales of the past 1000 years or 10 millin years.
Point 2 : I suggest you catch up with the latest assessment of CO2 variability as published last month by the Japanese who did an empirical study (none of this pre-determined computer stuff) using the IBUKU Greenhouse Gas Observation Satellite (GOSAT), which if proved correct, will turn global warming alarmism on its head as it strongly suggests that that the role of CO2 in climate change may well be wrong. Just to whet your apetite, this paper produces evidence by direst observation that the Industrial nations may be the world's lowest CO2 polluters.
So let's be quite clear about this. The science is not settled. We know less than what we don't know and the panic stricken forecasts about our gloomy future are a huge take.
Definitely Hotter ...
Gents, climate change is a long term effect. It can't be monitored by looking out the window ! Gee, you're funny ! Even so, there are positive effects measured going back only to 1950, let alone the industrial revolution.
http://www.smh.com.au/national/la-nina-loses-her-cool-in-10th-hottest-year-yet-20111130-1o75i.html
Not only do we not need to frantically search for science based evidence to support this thesis, it drops into our laps today and every day.
David Gellatly, your CO2 assertions are ridiculous
David, you regurgitate misleading myths about Australia's "inconsequential" contribution to global CO2 emissions. The fact is that, in aggregate, all countries with the level of Australia's emissions, or less, collectively account for 30% of the world total (US Energy Information Administration). All countries should play a role in reducing emissions of all kinds of warming gases.
As for your trivialising of the role of atmospheric CO2 as a greenhouse gas, what is the basis of your 3% claim?
Finally, what about methane? Methane is a very potent greenhouse gas whose release (e.g. from Arctic tundra; Gulf of Mexico, etc) and influence will become more acute as the atmosphere warms from other causes. We do not want to reach such tipping points! Atmospheric chemistry and physics are nonlinear and we are playing with fire.
It seems you and your ilk are relaxed and comfortable about conducting a gigantic atmospheric experiment, smug in the knowledge that you won't be around when and if things go pear-shaped.
Solar can't be stored? Better tell Enviromisson...
Enviromisson has projects in China and USA for a solar updraft tower combined with solar ponds which can provide solar power 24/7. Yes, the initial capex is huge, but the ongoing expenses for the subsequent 60 years are virtually nil.
And don't forget High Altitude Wind Power and its 85% availability. Once the tech is worked out (and it's definitely on the way), the capex will be minimal. Recent TV segment on Kitegen in Italy, including footage of the 3MW prototype, and an animation of an offshore 1GW high altitude wind farm: http://www.youtube.com/watch?v=hdhY1hbrMDg (in Italian)
mocking the weather...
Look out the window, the weather is mocking you.
It is? I look out the window and I see the driest November..... EVER! And the temperature has been 2C above average nearly every day for six weeks....
RE Claims of zero warming due to humans
"The globe is NOT warming and the dams are full." - Not what Texas is talking about, not enough water to frack for the next generation of gas, and not just grow food. Biggest droughts for how long. The whole of SW USA and into Mexico is dry, to say nothing of Somalia.
More seriously the carbon based industry is reputed to have spent about half a bill on propaganda in the last 12 months (USA non MSM sources). I think we can see some of the impact of that spend so they are getting some value.
I just hope that the group which is trying to whip up antagonism against the scientists by releasing "climate-gate 2" get their invoices in and paid before that industry realizes that it is flogging a dead horse. Though I suppose big tobacco has not stopped yet.
Recently collected data does not seem to be supporting the concept that human induced climate change is a furphy.
Craig h, solar cannot be stored economically
Craig h,
Your maths are a bit dodgy because you haven't done any.
The cost of solar thermal with storage is astronomical. It is not viable and never likely to be for baseload power supply. Baseload is about 75% of of electricity demand. For example, Gemasolar, Spain, cost about $26,000/kW of average power delivered.
Apart from the cost, it cannot store sufficient to allow reliable generation. And it requires about 7 times as much concrete and 15 times as much steel as a nuclear power station of the equivalent output. That means a lot more mining, processing, manufacturing, fabrication, transport and decommissioning per kWh of energy delivered over its relatively short productive life. And we need to get water to the desert to make the concrete. It gets worse, but you get the picture. Solar will not be viable.
David - solar energy CAN be stored!
Solar thermal - that is heat from the sun - can be collected during the day and released when needed eg. at night. It is not solar PV, it is solar thermal. It basically works like this: shiny sun tracking refectors focus sun's heat onto (i) a liquid receiving medium (often molten salt, oil etc in black pipes) which is pumped to a heat exchanger where usually water is heated to run steam turbines - or (ii) onto a solid (eg heavy graphite blocks etc) and a liquid (often water) is pumped through spaces in the blocks, where the heat again creates steam. Temperatures around 750 degrees C are common.
So, sun's heat captured and stored to create steam for electricity on demand.
It is already here. It is already happening on a commecial scale in Australia - Solastor (www.solastor.net.au) research based at Cooma are presently deploying a huge system in northern NSW that will deliver clean steam turbine electricity 24/7.
PS: Assumptions underlying your maths are a bit dodgy...
Why we don't need coal
We ARE going to need coal, as least as long as there is no economic way of storing electricity generated by solar and wind, both of which are unreliable or not available, especially at night. What about all those electric cars which are going to be guzzling electricity all night.
Giles Parkinson needs to study elementary climate science.
E.g. only 3% of available CO2 is in the atmosphere(the rest is in the oceans. CO2 accounts for 3% of the total greenhouse effect. 3,2% of atmosoheric CO2 is anthropogenic. Aus accounts for 1.28% of this and we are hoping to cut our emissions by 5%. Do the arithmetic. This amounts to 1.8E-8, ie 18 billionth of one percent of the total green house effect. Not worth trying to fix.
Power Parity
Actually, I have to agree with the article. Prices are coming down, and the players in the coal industry are not factoring that in. The current power plants won't be shut down, not for a long time, but all this new production being planned is going to halve the coal price long term. So as coal prices fall dramatically by the end of the decade, Solar will have to continue to fall. Be interesting to see who wins. But I'm not buying coal shares....
Power Parity
Actually, I have to agree with the article. Prices are coming down, and the players in the coal industry are not factoring that in. The current power plants won't be shut down, not for a long time, but all this new production being planned is going to halve the coal price long term. So as coal prices fall dramatically by the end of the decade, Solar will have to continue to fall. Be interesting to see who wins. But I'm not buying coal shares....
conspiracy theories
Mike,
There is extra water in the atmosphere because of CO2 warming. Get your facts straight and stop obfuscating.
The only conspiracy is by a very small group of (non-expert) people trying to keep the world on a path to disaster.
Coal is 'indeed' the only viable option for now!
All I might add to Peter Lang's common sense comment below is for those who believe otherwise, ie in the future of renewable technologies (ie; wind, solar, geo-thermal, wave, tidal etc) is to go for it! Come on, make it happen.
There's been no shortage of tax payer funded financial support/subsidies spent already on all manner of renewable energy trials. Enough.
Put your respective business plan(s) together, table them in the form of an IPO for us all to consider. If your IPO stand's up to scrutiny, I might (that's a very big MIGHT) even be an investor!
Presumably you will have hordes of Eco/Green 'Believers' (eg Get-Up etc) who will be frothing at the mouth to stump up the necessary risk capital to produce base load power at a cost effective, competitive price. I wish you every success.
CO2
Andy, in reality water vapour is by far and away the most prevalent greenhouse gas in Earth's atmosphere. There's at least 25 times as much of it as water vapour, probaly 40 - 50 times as much. Changing CO2 even to the extent of doubling doesn't do much to total greenhouse gases. We can't even measure the change to total CO2 and H2O and be sure of our result.
As the UEA emails have shown, yes, Virginia there is in fact a conspiracy to beat up the issue far beyond any justification from the physical evidence. The British Met office is in on it as is our own BoM. For that there is indeed hard evidence.
I wonder if Giles actually believes this stuff that he publishes or is the the climate religion equivalent of L. Ron Hubbard?
Coal is the only viable option for now
Leaving aside that the consequences of global warming are grossly exaggerated by the CAGW Alarmists, humanity needs electricity. We will need coal to generate it until the Left stop making the only viable alternative – nuclear – too expensive. It will require a massive clean out of the impediments to low-cost nuclear before we will have an economically viable alternative to coal. Renewables will never be an economically or environmentally viable option.
One thing you never hear from PV...
UNSW and BeyondZero and the "PV coal parity or less" promoters rarely if ever fully address all the issues, and the least explored is the cost. The second last would be all the issues of how you get people trained up, educated and experienced to manage roll outs. The third last is proving up energy security.
What is focussed on like any engineering enthusiast enjoys most, is the technology toy. I can safely predict that if you throw enough technology at something - it could even take you to the moon, or even completely replace everything with PV (and do NOT forget it is PV plus whatever you need to get you though the night). But at what cost?
The rules are:
Write articles that address these three issues then we are going somewhere.
Baseload nukes with some PV and with some energy storage meets all three criteria.
So...whats the next problem?
I'm on about LCOE again
One long-term signal that would be considered is the Levellised Cost Of Energy (LCOE). Surely this is the significant factor that allows experts to say sweeping things such as the cost of solar PV will fall below that of coal-fired generation within 10 years, and be the trigger for renewable investment. Perhaps Elliston is pessimistic, but let's hope those tasked with designing the energy resource are still not trying to look the other way by then. I want some real scientists and economists to run that show.
Coal Is Killing The Planet
Brian, how do you justify your claim that the world is not warming? The British Met Office tell us that the last 13 warmest years on record have all occurred in the 15 years between 1997 and 2011.Physicist John Tyndell demonstrated in 1859 (ironically the same year the first commercial oil well flowed in the USA) that CO2 is, among others, a potent green house gas. Burning coal creates CO2 and is slowly but surely cooking our environment as a result.Unfortunately Australia is addicted to its revenue from coal which I've just witnessed in Newcastle (the world's largest coal port) this weekend seeing black mountains of it waiting to be burnt in foreign power stations.This article demonstrates that our vast coal reserves will one day be worthless and that day may come sooner than we think! Ocean liners of the early 20th Century scoffed at the fledgling airline industry, but who had the last laugh?
"But what if technology took
"But what if technology took the decision out of the hands of politicians, as seems increasingly likely with the plunging costs of renewables, particularly solar PV, across the globe?"
Note to Giles- we live in a democracy, or do we need to follow Clive Hamilton's advice and "suspend democracy"?
Governments need to heed the wishes of the people- its our system of government-if you don't like it, get over it or move to North Korea.
Rather live in a dirty free world than a clean dictatorship!
Rate Limiting Steps - choke points?
The roll out of massive amounts of solar and wind will entail the usage of of materials that might not be in surplus supply over the next few decades. The obvious one is copper as it still is the most cost effective and widely used way to transmit electrons. The Heavy Rare Earths, Vanadium, Lithium, Tellerium, Cadium etc will also play a part.
Fortunately for Australia we have most of the above in relative abundance.
Brian, cite your evidence please...
Brian, please provide full references for your statement that the world is not warming. And don't quote 'sources' like Monckton, Plimer, the (American) Heritage Foundation, Cory Bernardi or Alan Jones. Besides, your beloved coal will run out one day, won't it? What then? Or do you think that Planet Earth's resources are infinite?
Coal Fired
Psst: There is an elephant in the room. The globe is NOT warming and the dams are full. Global warming is a croc, but there will be too many red faces to admit you got it wrong. Look out the window, the weather is mocking you. Stop trying to delude yourself and deceive the people. If more coal power stations are not built and soon, we will soon have power rationing and exponential price rises
Assumptions
The article states: "But what if technology took the decision out of the hands of politicians, as seems increasingly likely with the plunging costs of renewables, particularly solar PV, across the globe?"
This assumes that the current technologies around coal energy conversion into electricity do not change.
The University of Queensland has been working on a fuel cell that is powered by coal and produces water and carbon fibre as its only waste products and can potentially be scaled to 400MW. Without appropriate funding these possible technologies will never see the light of day and hence strand a resource that is abundant in our country.
A carbon tax that is technology and resource independent should provide equal incentives to develop these sorts of technologies as the renewable resources of wind and solar.