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NOBEL LAUREATES BEIJING FORUM 2007

The utilisation and promotion of new energy sources in Australia
Forum on Energy Conservation, Emission Reduction and Sustainable Development, Beijing, 14 September 2007

Professor Kurt Lambeck
President, Australian Academy of Science

I have been asked to talk about policies on the utilisation and promotion of new energy sources in Australia. To do so I must stress that the Australian Academy of Science is not part of government. It is an independent body that gives advice to government when asked, and sometimes when not asked. Thus I do not speak with any official backing. Also, it is a time of rapid rethinking of policies and what holds today may not hold tomorrow.

If an Australian public view on climate change were canvassed I suspect that it would be one of concern about such change and about the consequences of this for future generations and a vague notion that something needs to be done and a sense of frustration that our government is not taking it seriously enough. Understanding of the change would not be widespread and there would be uncertainty about whether the change is part of the natural tempo of the planet or whether it is anthropogenically driven. There would also be widespread unease at what is happening to the landscape through the interactions of changing land use and climate. What would have driven these messages home in recent times is the sustained drought that much of Australia has been subjected to for a number of years and which is impacting on the daily urban activities as well as on the agricultural community. There would be a broad consensus that climate change is occurring and, that while Australia is making only a negligible contribution to the driving forces, it should contribute to global efforts that attempt to redress the perturbations introduced into the climate system.

But this would not be a universal position. There is genuine scientific scepticism about the understanding of some of the processes and about drawing firm conclusions from incomplete data and from limiting modelling capabilities. This is the legitimate concern that drives climate science and that leads to improved understanding through successive approximations.

There is also opposition to the climate change arguments. Some deny that any change is occurring at all: others that all change is natural or that climate change science is driven by self-interests within the scientific community. Rather than driven by the scientific evidence, these positions are largely driven by energy and economic interests, or by the simple belief that there is no place at all for science in economic decision-making and that market interests alone are adequate.

There appears to have been some shift however away from this latter strident position. In June this year BHP Billiton announced a new climate policy that recognises the reality of change and the urgency of stabilising CO₂ emissions. Rio Tinto likewise in 2007 issued a draft policy on climate change. In May this year News Corp announced that the company would be carbon neutral by 2010 to combat the 'clear catastrophic threats' posed by climate change. Factors in this are the recognition of the scientific basis for climate change, of the recognition that an unsustainable planet is in no one's interest, particularly not in the company's bottom line, and recognition that there may actually be economic benefits from the more efficient use and production of energy, including new energy sources.

I find particularly interesting the announcement that News Corporation, a large global media company, was to become a carbon neutral company because since that announcement the shrill opinion-piece writers in its Australian flagship The Australian have largely ceased their tirades against climate science and climate scientists.

Australia's Federal Government has been more reluctant to recognise the strong possibility that current climate change has a human component and as recently as this year the Minister for Finance publicly stated his doubts about the link between fossil fuel and greenhouse gases. This position is seen in the reluctance to ratify the Kyoto agreement but this is more an expression of reservation about a mechanism than a rejection of the need to control greenhouse gas emissions, and other mechanisms were put in place to monitor Australia's emissions and to keep it to its Kyoto target. More recently we are seeing new initiatives that indicate a strengthening of Australia's commitment to responding to climate change. These include the APEC leaders' discussion just a few day's ago in Sydney, where climate change and energy security were at the forefront of the agenda, and Australia's participation in the Meeting of Major Economies on Energy Security and Climate to be held later this month.

In fairness to the Federal Government, it needs to be said that it has consistently supported basic and strategic climate science research in the universities and in its research agencies at a reasonable level, with the result that the state of the basic science is healthy and that Australia has been able to play an important role in international forums dealing with climate such as the World Meteorological Organization, World Climate Research Project, IPCC etc.

In talking about government policy, it should be noted that there are three levels of government in Australia and that climate adaptation and mitigation policies are being developed at all levels. In particular, energy and climate change policy is shared between federal and state jurisdictions. Coordination occurs at the Council of Australian Governments. This may lead to some divergence about what is actually attempted but it also has some advantages in that sometimes the states can stir the Federal Government into action, as has happened with carbon trading.

Another general point is that power generation costs in Australia are low by any world standards. This has resulted in low levels of energy efficiency compared with many other industrialised countries and this is one performance that governments, at all levels, are attempting to improve through the introduction of mandatory equipment performance and building standards.

The other general remark is that much of the public awareness of the climate-energy nexus is of recent origin, the result of the sustained drought across the southern part of Australia. In addition to its direct impacts this is having a direct impact on power costs through the reduction in hydroelectric generation and through the threatened closure of some thermal power stations through lack of cooling water. The result is a small but growing public willingness to accept the need for changes in power generation methods and that there is a growing recognition of a real cost to society of the use of fossil fuel that cannot be disconnected from the cost of production only.

It is difficult to talk about any form of energy in Australia without first addressing coal.

Australia is heavily dependent on coal for its electricity generation and the export of coal is one of the mainstays of the country's economy. The reserves of high-quality black coal as well as of brown coal are adequate for this century and beyond at current rates of exploitation.

Combined with its low direct production cost, this has meant that there has been little incentive to develop a thriving renewable energy capacity. And it means that there are no plans to phase out coal in the foreseeable future.

But, as already noted, there is growing, albeit recent and some would say belated and overly cautious, acceptance that greenhouse gas abatement must become a central part of Australia's energy policy. This has now been reiterated several times at the highest levels of government, as well as by the Federal Parliamentary Opposition. It comes across clearly in Australia's recent bilateral and multi-lateral discussions at APEC and in Australia's participation in the Meeting of Major Economies on Energy Security and Climate later this month. These actions are all part of a step-wise search for a national-regional-global solution to the energy-climate nexus that leads to economic growth and avoids instability. Unfortunately our current government tends to follow US policy and in an absence of much US leadership in global policy on climate and energy I do not anticipate that our government will play a major global role.

How the changing thinking will be converted into national policy still remains to be seen, but the current signals are that a capped market-driven carbon trading scheme will be developed on a national basis and that market mechanisms will determine the likely choice and combination of clean technologies. The recent Report of the Task Force Group on Emissions Trading is indicative of current thinking and policy development.

Nevertheless benefits are seen in not waiting for the development of a global carbon-trading scheme but one can anticipate that the adopted scheme will be one that will not place the Australian economy at a disadvantage in the period that there is no international agreement. Hence the reluctance at present by the Federal Government to actually set a cap on total carbon emission, and talks only of aspirational goals, although the Federal Opposition has been more forthcoming in identifying a target figure of 60% of 2000 emissions by 2050, similar to that proposed to the British Government by the Stern Review.

In face of the reality that market forces alone will not be effective in driving the development of new or improved technologies the need for financial support, from federal and state governments, for the research and development stages is recognised even if not forthcoming in the quantities that Australian researchers think are necessary or not directed equitably at all potential alternatives. The directed focus is on supporting collaborative research between universities, the government research laboratories, and industry. This is achieved, for example, through the Cooperative Research Centres as well as a range of other research and development groupings. Thus many of the fundamentals for the underpinning research has been put in place over the past two decades by successive governments and the research sector is quite well placed to take advantage of the new government funding initiatives. There nevertheless remains much to be done to ensure that the research base will carry us into the future, but that is another story.

Clean-coal technology remains the preferred route of government policy on the energy-climate link with a focus on improving efficiency of power plants, reducing the CO₂ emissions, and in capturing and storing the emissions. The emphasis remains on:

• support for R&D of promising emission reduction technologies, and carbon capture and storage technologies and
• support for the development of demonstration plants for these technologies.

Examples include:

• improved brown coal drying technology
• a 400 MW integrated brown coal drying and gasification plant
• enhanced coal bed methane extraction for a gas fired power plant
• a coal-fired oxygen-burning demonstration plant
• carbon sequestration projects.

Central to government (and industry) thinking is the recognition that (i) Australia cannot go it alone in the technology development and in the building of demonstration plants, and (ii) that there are Australian contributions to the technology development that are important beyond our boundaries and (iii) that bilateral and regional collaboration is essential.

They are also issues that have been central to the Australia-China academies collaboration and the origins of many of the collaborative projects can be traced back to earlier exchange programs initiated between the Australian and Chinese academies of science and engineering. This includes the agreements on clean energy to be signed between Heads of State during the APEC meeting as well as the agreement signed in the last week between CAS and BHP Billiton.

One of the most recent developments in clean coal technology has been the Queensland Government's progress with the project that integrates coal gasification to produce a hydrogen-rich fuel for power generation with CO₂ capture and sequestration in deep saline reservoirs. Drill tests of the reservoir have proved the feasibility of safe storage and a complete feasibility study is to be complete by the end of 2008. The next step will then be a 100 MW coal-fired power station with zero emission. China is central in Queensland's thinking about the future of this technology.

One major shift that has occurred in government and public thinking is the future role of nuclear power in Australia. Australia is of course a major uranium miner and exporter but, beyond the operation of research reactors for some 40 years, there has not been any development of the uranium cycle beyond mining and export.

In 2006, however, the Federal Government announced a Uranium Mining, Processing and Nuclear Energy Review that includes all aspects of the nuclear fuel cycle. One conclusion is that if a decision is taken today to proceed it will take about 15 years to establish a fully operational power plant with all the necessary regulatory instruments in place. Another is that the costs for nuclear power generation will be competitive with that of coal-fired power only if the full costs of the latter are included.  But whether the Australian public is ready to accept nuclear power remains problematical and will need a clear demonstration that other power sources are not adequate for Australia. A more immediate outcome of the review is likely to be a movement away from the current 'three mines policy' for uranium mining.

The principal renewable energy in Australia is from hydroelectric sources, current capacity of generation being approximately 7.6 GW or about 7% of the total available. But most of this capacity cannot be used at present because of the severe drought conditions in south eastern Australia where more than 50% of the capacity lies. In view of the uncertainties of long-term rainfall patterns across Australia the scope for substantial expansion near the main centres of population must appear limited and hydroelectric power is likely to become less significant with time.

Policies for other forms of renewable energy do not appear to be well developed in Australia, apparently being seen as of little interest other than for generating power in remote areas beyond the main distribution grid. Thus Federal Government support has been largely limited to schemes such as the Renewable Remote Power Generation Programme that was further funded in 2006 and to which a follow up scheme directed at larger projects is expected.

Wind power has not been an important element in energy policy development and is not seen to become such in the near future, with forecasts being less than 1GW total capacity by end 2008. I am not sure that I understand the lack of enthusiasm for wind power as it flies in the face of the growing demand in Europe, particularly Denmark, Sweden and Germany. One reason may be that these are relatively mature technologies and that market forces alone should determine the futures of these energies and that government intervention is not required. Certainly these technologies are not seen as being cost effective at present and, in the case of wind power, costs may actually be rising in a small market such as Australia because of a growing global demand for wind turbines. In consequence, developments of new wind farms appear to be stalling although a realistic pricing of energy through a carbon trading scheme will no doubt see a renewed interests in these renewable energies.

Solar energy, likewise, does not appear to be very high up in the agenda at the Federal Government level but Professor Martin Green will talk about this later. One concern about this is that Australia may not be able to benefit greatly from its past investments in the basic and strategic research into solar energy.

Electricity generation from hot rock geothermal sources, while strictly not a renewable, is one of the more promising developments and one in which Australia is the leading player. The differences from the traditional geothermal plant is that the heat source comes from stable plutons at depths of several kilometres rather than from tectonically less stable volcanic provinces, as in the case of New Zealand or Iceland. The most advanced project is in the Cooper Basin where the geological mapping had been carried out during previous oil and gas exploration. The pioneering work of drilling down to considerable depth into the granites, to test the thermal models and to stimulate fluid flow has been successfully carried out, as has the energy conversion plant and a full demonstration plant should be ready in late 2008.

What can the Australia-China relationship developed by our respective Academies, contribute to the promotion and development of new energy sources? Recent actions by our two governments show that there is recognition that uncontrolled greenhouse gas emission is not in anyone's interests: China and Australia do have common interests in seeing actions implemented that avoid the damaging effects of uncontrolled emissions.

But this is tempered by the recognition that it is a global issue and that any unilateral actions that places them at economic disadvantages relative to other countries are not acceptable to either government. Thus neither government is likely to make hasty decisions, and any mitigation and adaptation actions are likely to be taken up only gradually. But, because of the usually long lead times in going from a clever idea to the widespread acceptance of a solution, this should not delay the development of the strategic science nor of the requisite technologies and regulatory instruments.

Possible mitigation and adaptation actions between China and Australia have been explored at some length since 2004 in our joint Academy discussions on energy and sustainability and this already led to a number of joint initiatives that I discussed earlier this week. But as I then said, what has perhaps been more important for the long term is that the past links have established a very effective communication, not only between scientists in the two countries but also between scientists, technologists and policy makers, one that is providing a strong base for bilateral discussions between us on all energy and climate issues and one that ensures that the best scientific and technological advice is available.

But in the face of some of the statistics about current and future power generation in China, the urgency is there for these issues to be taken beyond the 'exploratory stage' to serious joint collaborative pilot projects. The experience gained over recent years shows that the intellectual capacity and drive to work together is there to ensure success. We, at the Australian Academy of Science, will be continuing to argue strongly for this with our Government, and will continue to grow our relationship with China's scientists to effect success in this.