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SCIENCE AT THE SHINE DOME 2002: ANNUAL SYMPOSIUM Transition to sustainability 3 May 2002
Integrated systems 1: Energy
World energy outlook
Energy and its role in the transition to sustainability – and importantly strategies for Australia – all in 25 minutes. This is quite a challenge – even to a lifetime enthusiast! Let us look at the facts. The World Energy Council in its recent World Energy Assessment predicted around 50 per cent growth in primary energy demand by 2020. This will arise from economic growth in the developing countries, bringing significantly improved standards of living and per capita energy use. In parallel, world population will grow from 6 to 7 billion, some say 8 billion, a vast number of whom will reside in close urban proximity in new megacities of over 10 million inhabitants. Energy-related urban air and water pollution will be a problem, demanding even more urgent solutions. At the same time some 1.6 to 2 billion people, nearly one-third of the world’s population, will still have no access to modern affordable energy services, and all the things that energy brings – clean water, light, warmth, communication, education, knowledge and a base for productive industry. In short – they lack empowerment. In human terms, above all, this is not a sustainable scenario. In the developing world the drivers of technology will be, firstly, access to affordable reliable energy supplies and, secondly, mitigation of urban pollution. Sustainability will carry limited weight. It will be a poor third. Nevertheless we fortunate people of the developed world are now rightly embarked on the long journey to sustainability. Through our rich inheritance we must be the leaders in this journey. We must realise, despite well-argued appeals to a contrary view, that sustainability is not a threat. Rather it is an extraordinary opportunity to create a fair and just world. In such a world every country, not just the lucky few, will have those attractive and unique features that will make it a place to live in peace and creativity, not one from which to flee in horror, fear and hate. Focus on sustainability can certainly create an opportunity-driven environment in which advanced energy technologies can help the deprived to better manage their own problems, and also help developed nations to build new, collaborative, productive but highly competitive markets. Australia, as an advanced and technologically strong developing country, is well placed to benefit richly from these markets if it makes a real commitment to do so. The Australian energy environment Australia is blessed with extensive fossil and renewable energy resources. Black coal, brown coal, natural gas, uranium, geothermal hot dry rocks, the sun, the wind, biomass and the oceans are available beyond any conceivable usage. Some resources, notably oil in the fairly short-term and later on natural gas, have finite lives within this century. Resource management will be necessary. Beyond that the challenge is to maintain our international competitiveness while achieving long-term sustainability. To meet these challenges successfully will rely above all on good science and technology coupled with a clear-sighted national energy policy. We are working towards those objectives but are not there yet. Australia undoubtedly has the scientific base, the brains and the technological understanding and can generate the intellectual capital to achieve sustainability without losing national competitiveness. The Chief Scientist has said we can render the Kyoto Protocol irrelevant by meeting and exceeding the targets through the application of Australian science. This must be our aim. The Australian Bureau of Agricultural and Resource Economics projections forecast a significant increase in primary energy use over the next 20 years averaging 2 per cent per annum. In this time-frame fossil fuels will continue to dominate Australian energy supply – indeed that is the most likely scenario until around the middle of the century. The gloomy news for Australia is that our greenhouse gas emissions are currently 117 per cent of the 1990 base line, even though we are committed to only 108 per cent in the 2008-2012 first Kyoto commitment period. But Australian Greenhouse Office projections are for 133 per cent above our 1990 emissions by 2010!! To reduce this will be a huge challenge, given Australia’s continuing growth of 2 per cent with electricity at 2.3 per cent mainly from coal. But as yet we have no truly long-term sustainability goals – no shared vision for Australia. The better news is that energy intensity per dollar of GDP is falling around 1.4 per cent per annum, with increased energy efficiency and new lower energy intensive value industries. While this is not enough Australia has the scientific base, the brains and the technological understanding to generate the intellectual capital not only to achieve the Kyoto target but in the longer term to render it inadequate and irrelevant. As I have already noted, the developing countries, while not signing Kyoto, will be driven towards sustainability by local urban pollution intolerance (NOx, SOx, acid rain and particulates). Here the demand for clean sustainable energy technologies provides a fast growing market and offers Australia significant business opportunities, not only in technologies and plant but also in education and training. Likewise the demand for distributed often renewable technologies to meet the needs of those who lack affordable reliable energy underscores these opportunities. World energy scenarios 1990-2050-2100 Let me turn now to a range of alternative world energy scenarios through to the end of this century. We have a number of options, a few of which have been exhaustively analysed in the recent United Nations and World Energy Council World Energy Assessment of June 2000. Strikingly this assessment is entitled Energy and the challenge of sustainability. The principle scenarios evaluated are listed here:
I must stress that the assessment does not seek to make a political statement, but only to present to energy planners the wide range of alternatives that present and anticipated evolving technologies could provide. The choice is essentially political – the will of the people. But the choices can only be made if we the people are adequately informed of the costs and the consequences of those choices. As Ian Lowe so succinctly says: 'Where the people lead the leaders follow!' The scenarios speak for themselves and we can look briefly at each one. A – High economic growth While each of the three variants is feasible, I would comment as follows: A1 – Ample oil and gas – is completely unsustainable. Australia is significantly resource restrained, especially in indigenous oil and eventually in gas. A2 – Return to coal – is likewise completely unsustainable if we have any intention of reducing global carbon intensity. Moreover, future economics would militate against it. A3 – Non fossil fuel future – most nearly accords with current medium-term (25-year horizon) Australian thinking, albeit without local nuclear energy. I will return to these technologies later. I believe this scenario is sustainable in the medium term, but will be questionable in the long term. B – Medium economic growth Essentially this scenario is business as usual. Again, I do not think it is sustainable. C – Ecologically driven scenarios Scenarios C1 (New renewables) and C2 (Renewables and new nuclear) are anathema to current energy infrastructure investment and development and seem to have no place in short-term or medium-term thinking. Nevertheless, if we are to think well beyond Kyoto – to a world of 11 or 12 billion people by 2100 – it is not so far fetched. Moreover they are not scenarios in which economic activity is unduly constrained, reference the predictions of gross world product by that time for each of Scenarios A, B and C. Broadly speaking, as the old industries decline, new advanced and innovative technologies will create the economic activity we all desire within a sustainable framework. World energy scenarios – the numbers
May I draw attention to the following points:
Drivers for sustainable technologies Let me turn now to what I believe to be the three drivers for sustainable energy technologies. Firstly, the humanitarian driver. There are strongly held but still seemingly impotent humanitarian concerns for the world’s deprived, especially those in the remote communities of developing countries. As I have said, there are between 1.6 and 2 billion people who lack adequate or reliable electricity or clean water. The number is not falling. Many have concerns for the increasing equity imbalance between the world’s ‘haves’ and ‘have nots’. Secondly, the good old commercial driver. The developed world is technology rich. New technologies in all energy resources offer a range of solutions to the challenge of sustainability. However, the internalising of externalities will almost certainly alter established market economics to favour sustainable technology development. Triple bottom line reporting, currently only a legal requirement for a company’s financial affairs, is increasingly being driven by shareholder and public expectation. This is a trend to be encouraged and it is good to see the emergence of the ethical investor market which carefully assesses the performance of companies against all three criteria. We now see developed nations competing to support new sustainable export industries using a range of powerful but often inconsistent market mechanisms (the carrots) and regulatory regimes (the sticks). Notwithstanding the consistencies, the commercial drivers are huge and export potential with global allies is vast, albeit from a low base. Thirdly, the scientific driver. Widely substantiated concerns, reinforced again and again, confirm that human-induced global warming is real. Hugely costly climatic aberrations in recent years are not readily explainable and underwriters increasingly demand cleaner technologies. Public debate is still ill-informed, often strident and lacking in scientific knowledge. Science and knowledge must be fundamental. Resources – lifecycle CO2 emissions A brief overview of carbon dioxide emissions, in many cases proxy for related polluting emissions, serves to illustrate the non-sustainability of the leading carbon-based technologies upon which Australia’s current and medium-term economic future so much depend. This is the enigma that we in science and technology have to face if we are serious about long-term sustainability. Coal Let me outline briefly the likely medium-term and long-term energy strategies for Australia. Coal is still our dominant resource and likely to remain so for several decades. Given that a major proportion of our greenhouse gas emissions come from coal, it is critical in the medium term to lift conversion efficiency and to explore the potential for effective carbon sequestration. Time does not permit any more than headlining the identified technologies which appear on the slide. In each of the following technologies there is a significant volume of work being undertaken both here and overseas:
Australia’s oil self-sufficiency, unlike any other resource, is expected to decline dramatically in the short term, with increasing reliance on imported crude oil or improved but costly reservoir recovery. A prospective option for Australia is to convert part of our large resources of natural gas to liquid fuel for use mainly in the transport sector to overcome the threat to national self-sufficiency. This produces a cleaner fuel, important in reducing urban pollution, but in the longer term is resource limited. Natural gas is currently the fastest growing sector of primary energy consumption, with significant growth in gas-fired electricity generation with far lower carbon dioxide emissions than coal. However, much of Australia’s natural gas, especially in the North West Shelf, contains a large proportion of carbon dioxide, indeed it is the largest single point source. This needs to be separated and reinjected into stable reservoirs. Moreover the gas reserves, though very large, are finite and the lesson of the North Sea in Europe needs to be heeded. Oil and gas are important transition resources. Their growing shortage and increasing cost will add substantial stimulus to improved industrial and particularly transport efficiency. Renewables Renewables – hydro, solar, wind, biomass, tidal, wave and geothermal hot dry rocks (HDR) – are virtually unlimited, carbon free and essentially sustainable. Enough solar energy falls on the Earth every 45 minutes to provide all of the energy needed for the whole world for 1 year. The HDR potential in Australia is forecast to be adequate for some 800 years. Wind, although limited in site potential, is effectively constant. We do not have a resource problem! What characterises renewables, apart from large hydro, is that the resource is diffuse, the conversion technologies expensive and the industry still small. Thus in Australia new renewable sources contribute 1 per cent or less to national energy end use. However, the economic environment for renewables is changing. Increasing concerns of urban air pollution and greenhouse gas emissions have focused attention on the promise, albeit long term, of renewables. Internalisation of perceived social and environmental externalities, expressed through predictions for carbon trading, Kyoto flexibility mechanisms and CO2 reduction targets, and in Australia policy instruments such as renewable energy certificates (RECs) aligned with national renewable energy targets, have brought positive market forces to bear on the accelerated uptake of renewables. Taken with the move to distributed generation, renewable technologies will rapidly gain market share. For developing country export markets, in places where large-scale central power systems will never reach, distributed renewables promise the most appropriate technology. To the Jonahs who believe renewables to be a meaningless technological curiosity, may I point out that 101 years ago the Queen Mother was born and eminent physicists declared that heavier than air flight was a irrelevant technology, indeed impossible. The Wright brothers proved them wrong in December 1903 with the first flight of the Kitty Hawk, although they were not taken seriously. Motor vehicles at that time had well under 1 per cent of the travel market share. By the end of her life the Queen Mother was travelling by land and air in significant safety and considerable luxury. My point is that if we open our minds over the span of the lifetime of one child, then the future promises outcomes – and hopefully real sustainability – that we can barely envisage. Current trends suggest that the cost of fossil fuel energy will increase to accommodate higher efficiency new technologies, carbon sequestration and probably carbon taxes. Conversely the commercial attraction of renewables is expected to improve dramatically with market scale, the internalisation of externalities and the attraction of markets remote from the reach of conventional central generation systems. Nuclear Nuclear power offers near carbon-free energy. Australia has abundant natural uranium resources and exports about 10 per cent of the world’s yellowcake production for power reactors. However, Australia has no medium term prospect of nuclear power and the issue remains controversial. Nuclear power supplies about 16 per cent of the world’s electricity and 25 per cent of base load generation in developed countries, saving some 2300 million tonnes of CO2 per year, relative to black coal. Nevertheless, public concerns militate against universal acceptance of nuclear power, despite claims of more than 9500 reactor years of operating experience over five decades in more than 430 reactors. It is important that Australia remains abreast of nuclear power developments. The foreshadowed pricing of carbon, an increasing level of greenhouse related events and the evolution of new, safer and significantly cheaper Pebble Bed Modular Reactors (PBMR) could alter the economic and social acceptability of the nuclear fuel cycle as a route to energy sustainability. I have often proposed, and do so again, that our four Academies jointly address the issue of Australia’s role in the nuclear fuel cycle. If the Academies do not meet this challenge we may be sure that, before too long, other groups of less rigorous scientific discipline may take the lead in the community debate. Hydrogen Hydrogen is the ‘Holy Grail’ of sustainable energy. It is inherently clean, generating near zero emissions of air pollutants. The most promising application will be its use in fuel cells in electric vehicles, although on-board storage is a challenge. And there is as yet no infrastructure for hydrogen production, storage or distribution. Hydrogen can be produced as a side stream from the liquefaction of coal or gas and it can be argued that this promise strongly underpins liquefaction technologies. Other production routes include electrolysis of water, requiring very low cost electricity, membrane separation from carbon dioxide or methane thermal decomposition with long-term storage of the resultant carbon black. I have been privileged over the past four weeks to participate in an external review of CSIRO’s energy-related research and development programs. Energy has rightly been nominated as one of CSIRO’s new Flagship Programs. It is likely that this program will embody some or all of the following elements:
Each of these represents mainstream priorities for Australia, although by no means the only energy-related research directions. Here is a very brief review. Energy networks of the future will be distributed with a wide technology portfolio. Distributed energy and power will be closer to city, suburban and regional consumers; it will be based on small-scale advanced gas, renewables and related technologies; and it will provide locally for combined power, heating and cooling at high efficiency. It will be flexible, reliable, cheap and will reduce greenhouse gases and pollution. Over a long period it will diminish the significance of large centralised power plants of low efficiency and high pollution. Energy efficiency is undoubtedly the most effective and economically rewarding short-term pathway to sustainability. However it is universal, disaggregated and hard to capture under any one technology or market. Nevertheless experience shows that between 15 per cent and 25 per cent of all end-use energy can be saved in industry, commerce and the domestic sector using technologies available today. Capital investment is generally low with returns typically under 2 years or even less. Arguably, energy efficiency is the most effective means in the immediate term for meeting CO2 reduction targets. Moreover it significantly reduces the need for new investment in central generation. EEU offers the potential to reduce dramatically energy intensity per unit of GDP and per unit of product. The technologies to be targeted include:
Intelligent transport systems will offer advanced infrastructure design and traffic management. Hybrid vehicles already offer less than 50 per cent fuel consumption and only 10-35 per cent of the pollution of conventional vehicles using:
Challenges and opportunities for Australia The changes we choose will lead to changes in employment, perhaps from coal to renewables (including biomass). There will be social changes, particularly if externalities have to be factored into cost and pricing. This is again an important field for study between the Academies. The challenges and opportunities for Australia can be summarised as follows:
The choice of energy future is ours. Technology can provide the solutions. We must understand which energy pathways are sustainable, the technology options we need, and the social, economic and environmental consequences of each choice. Australia needs a national energy policy and a true national vision for sustainability.
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