The inevitable decline of coal in Australia’s electricity supply has begun in South Australia, with news today that Alinta will mothball their old and dirty power stations, Northern and Playford, for 6 months of every year over winter. They are the first scalps of Australia’s incoming carbon price, but they will not be the last, with coal generators lining up nation wide to be compensated out of the picture. This is an outcome I am happy with. The point of pricing greenhouse pollution is to drive the most polluting generators out of the picture to make space for the new and better, and that is what we are seeing here.

These dinosaurs should never have even made it to 2012

But what we are also seeing is half a solution. What will replace these plants when they inevitably close altogether and for good? The news reports did not indicate where SA would be sourcing the generation gap over the winter period. My presumption at this stage is that in the short term we will see increased production from the gas generators in Adelaide, one of which is on the efficient end of the spectrum (Pelican Point), and two of which most decidedly are not (Torrens Island A and B) (Check out The Energy Plan for some more details).

Australia has put itself in a little bind. We are pricing some of our baseload generation out of the market with no genuinely clean alternatives. The only technology to fill the gap is more gas which, as recently discussed here, is close to a non-solution for climate change. Lest we forget the very point of a carbon pricing mechanism is resolving climate change, not promoting fossil fuel uptake.

No honestly, you're great. You just don't meet the job description.

The most market ready renewable power source is wind power. But no serious commentator contends that this is a baseload-suitable technology at any kind of acceptable cost. Even the incremental increases in South Australia’s considerable stock of wind generation will become more difficult in future, as discussed in detail here.

This leaves certain idealistic parties believing that the door now lies open for solar thermal with energy storage to march in and shine a light to Australia’s zero carbon future, starting with the 760 MW of coal replacement that is up for grabs at Pt Augusta (Just a quick aside. 760 MW of solar thermal would require a solar farm 19 times larger than Torresol’s global flagship for this technology, Gemasolar in Spain, using 50,000 heliostats, over around 3,500 hectares. Mere details, I know, but worth a mention I feel).

Gemasolar. Definite points for sex appeal, I admit

This belief demonstrates a monumental failure to grasp the political landscape in Australia.

My most recent intelligence has the solar thermal plan for Pt Augusta being priced at around $8bn by the proponents of this idea. Forgetting about whether this is near the mark, $8bn for 780 MW of baseload is extraordinarily expensive. Commerically speaking, it’s utterly dead in the water. Just watch. Any positive noises by Alinta or any other commercial entity extend right up to the point of committing funds and no further. Everyone knows this idea requires the mother of all handouts, many times greater than that of Solar Flagships (which, in case you missed it, has so far been a terrible failure with no funds committed and no projects confirmed. Place blame wherever you wish).

The very likely incoming Federal Government in Australia could not possibly have a more hostile leadership in relation to climate change, led by Tony “I do a very bad impersonation of someone who is not a climate denier”  Abbott. The chance of a renewable energy handout from that crowd while they go about trying to undo the carbon price itself is about as likely as catching Abbott and Bob Brown holding hands.

The best case political scenario from a traditional environmentalist perspective is the very unlikely return of a Labor Government. In this case you would have a Government whose political capital on climate change is completely and utterly exhausted, and most likely a Government that is no longer beholden to the Greens in the House. They would (quite justifiably in my opinion) have no compunction in leaning on the successful delivery of a carbon pricing mechanism as effort enough for the time being, thanks very much, and push their luck no further with the electorate by trying to hand over billions in clean energy funding to one favoured technology.

That leaves us back exactly where we started. Gas. The compromise solution that fails everyone (well, except the fossil fuel industry).

It’s a failure of our own making. We must let our decision makers put all electricity generation technologies on the table. Nuclear power is easily the zero-carbon baseload technology most likely to beat gas in a straight commercial battle, provided we press our decision makers to think just a little way into the future. It also happens to typically find great favour with the political Right because it is tested, reliable technology, and when talking about it they get to hang shit on traditional environmentalism for not supporting it.

The sad truth is, they will be right on that one. Oh well, who actually cares? That’s just one less fight on the path to climate stability. Our sincerity on the climate change issue is very easily tested by our willingness to consider all zero carbon options. Efforts to strongarm Australians into the most expensive zero carbon baseload while ignoring the cheapest will not work. This will breed resentment and further polarisation on dealing with climate change when we badly need unity.

The message for those wanting better climate outcomes than gas can deliver is pretty simple. Show your fellow Australians you are serious. Fight for an outcome, not a technology. Demand a truly open discussion on how we can replace our coal with zero carbon generation, with all options on the table.

One more generation of fossil fuel is one more than we can afford.

48 comments

  1. One side benefit of getting a nuclear power system up and running is that we could stop building diesel submarines. Unfortunately, there is no drive in the navy to use that avenue as a sensible ‘toe in the water’ from what I can tell; it could only come after. Then again, their still very unsure whether we will actually get the new subs at all.

    1. There’s not really a huge connection between the idea that we might buy Los Angeles class submarines and we might get nuclear power. The US Navy wouldn’t be very interested in knowledge transfer, we would basically have the engines serviced and refuelled in the US. The main benefit of it would be the Australians would accept that nuclear power is something that we do trade in, that we are part of. Equally, however, it would have a very very high price (for the weapon system in it’s entirety, not just the power plant) so there would be serious sticker shock, and it would associate nuclear power with war and militarism, which is a bit of a downer. So overall I’m not sure that it’s a net ebnefit. (apart from the fact that new subs will be mindbogglingly expensive, so anything else that the Aus govt wants to buy will have to be looked at very very closely).

      1. Correction: Virginia class. But these would still most definitely be 100% built and the power plant would be maintained in the US.

        1. The bigger problem with nuclear subs is that they require many more sailors than our existing diesel-electric ones, as they’re generally much larger than diesel-electric subs and nuclear reactors require lots of personnel to run as well. Given that we can’t get enough sailors for our Collins class subs as it is anyway, nuclear subs won’t be considered for a Collins class replacement at all.

    2. Imagine the size of the fuel tank in a non nuclear sub. Size wasted in a craft where it is at an absolute premium. Plus the fact that they are limited in range by the fuel load, and a nuclear sub isn’t. In an island nation, I have to imagine there are some incredulous defence planners who can’t imagine how Australia can say no to those advantages.

      1. I commented on this because it is related to my day job at the moment.

        The differential is greater than what you first imagine. There simply isn’t room in a non-nuclear submarine for the fuel that would be required to do what the nuclear boats do. Even for relatively short periods. To put it in perspective, a nuclear plant comes out ahead (both in weight and volume) on a boat after about three days. This goes for any boat – there are good engineering arguments for nuclear power on container ships, cruise liners, and other high power, large ships.

        Even more significantly for a submarine is the fact that the boat becomes air independent. There are downsides to nuclear as well, but they are primarily related to noise and size.

        In response to wilful’s comments, no one mentioned or is mentioning just buying a US boat. Going nuclear would be a design choice on a local design, and if we were committing to moving that way as a nation, be a great project to kick things off in terms of building local capability.

        Even if we were buying in a design it would probably not come from the US.

        1. >Going nuclear would be a design choice on a local design, and if we were committing to moving that way as a nation, be a great project to kick things off in terms of building local capability.

          you’re giving me nightmares. The cost! The overruns! The porkbarrelling!

        2. The air! Didn’t think of that… constant internal combustion when you are under water… yep, that’s a limiting factor.

          Noise a problem for a nuclear sub though? The Collins class is reputedly not the stealthiest of beasts…

          1. Air is wonderful.

            Collins, after some initial problems and reports to the contrary, is doing pretty well. But yes, diesel subs, when they aren’t running the diesel are quieter than a nuke.

            1. Well there you go…

              With that, may I request that discussion goes to the open thread? Subs are not really what I want newcomers to read about in the comments of this article. Cheers.

        1. Virginia Class SSNs are loaded with enough fuel when built to last them for their entire service life of 30 years. Think about it.

  2. I think an energy crisis is on the cards for SA within the next decade. A dry year will force the Pt Stanvac desal into overtime and current gas supplies won’t cope. Note some Cooper gas is newly committed to the Gladstone Qld LNG plant and some Otway gas will go to the new Tarrone Vic open cycle plant. They assume fracking and horizontal drilling will produce more gas as in the US but the geology may be different here.

    Then there are the half pregnant men who hate nuclear love uranium mining. If Olympic Dam is the economic salvation of SA that 650 MW has to come from somewhere the same time Playford’s 240 MW is removed and Northern’s 450 MW goes part time. There is not enough long term gas to justify a 400km pipe to Roxby Downs for an onsite power plant. Burning carbon to produce uranium…strange.

    I think the Submarine Corporation could be intimately involved in any nuclear build. They know about pressure vessels and how to weld titanium to steel. There’s also a few cluey people among the Edinburgh defence boffins. I wonder if Alinta is walking away from generation because they know it is a politically thankless task. Weatherill should appoint an expert committee to look into nuclear for SA. If they conclude it doesn’t stack up then explain why without SASDO2011 style fantasies about geothermal and CSP.

  3. In many ways i would hate to see an Abbott government but a continuation of Gillard et al is probably just as bad just in slightly different ways – sad situation.
    There is possibly more chance of nuclear getting up with Abbott in the saddle regardless of a carbon tax death or disablement and the denialist sentiments of some in the Tories. It is too early to judge what effect the tax will have on energy generation but the indications to date are not promising.Electricity generation costs will simply be passed on to the consumer and welfare provisions to ameliorate this will be sacrificed to budget surplus insanity.
    For the nuclear lobby,education of the electorate with consequent pressure on the decision makers is the way to go – tall order I know.

    1. Weird, I agree. With the CPM up and soon to be running, there is a very real chance that the Coalition in power would be the best thing for the climate. I can imagine them getting stroppy and saying “You pushed this carbon price on us, now we are going to make damn sure it works by getting nuclear in the picture”. Best possible outcome for low carbon power in australia: Carbon pricing plus nuclear.

  4. I just remembered ABC Landline just covered another Pt Augusta story that probably doesn’t make economic sense either, namely very high cost saltwater greenhouses (with winter gas heating) to grow a few tomatoes
    http://www.abc.net.au/landline/content/2012/s3477672.htm

    I’m not sure if even the Gillard govt would put up much money for a CSP plant. The green energy finance corporation gets $10bn seed money in July 2013 and there’s every chance Abbott will be PM in October then dismantle that organisation. If carbon tax goes as well then SA could open up new coal areas. Apart from the Telford extension to Leigh Ck there is Arckaringa Basin north of Olympic Dam that could use the Darwin railway. Foreigners can have their fancy uranium but real Aussies use coal. It looks like dry times are returning to SA along with gas shortages so that coal will be needed to power the desal plants.

    1. My understanding is that the CEFC will be funded up front by this government in an effort to make difficult its later retraction. How successful that will be, I’m not sure.

      One possibility is that the Liberals will repurpose the fund rather than retire it. It would be good to have a nuclear project ready to put on the table if that were to occur…

  5. Speaking of solar thermal to replace Playford and Northern, BZE had a release last night (19/04) at Adelaide Uni in the Napier building on their plan to replace these plants with a solar thermal plant. I only found out an hour before it started. You can find the report here:
    http://beyondzeroemissions.org/blog/repowering-port-augusta-report-now-available-120419

    Haven’t gotten past the exec summary myself. However adding onto this I did hear of a hybrid gas/concentrated solar plant proposal for Playford and Northern. The steam from the gas plant would travel though the concentrated solar troughs to superheat (don’t quote me on that, going off the top of my head) the steam to drive the turbines, increasing it’s overall efficiency.

    The best option for SA appears, from a Nuclear stand point, to be SMRs. Big plants are better suited to the Eastern seaboard, where SA is on the back end of that grid and would benefit from dispersed SMRs. I see Hitachi is planning to fund the majority of the Sellafield project. As always the first step is the EPBC Act amendments.

    1. Is it my imagination, or does the actual capital cost of this proposal of their’s appear NOWHERE in the report? By all means correct me, but I think they may have achieved the amazing feat of writing about a 50 page report and leaving out the capital cost.

      1. You are correct there is no Capital section with accompanying discussion on where the capital will come from. As far as I am aware the SA gov. has none to spare, the Fed are rolling back theirs, and which private investor will? There is no discussion on these capital source scenarios. It’s all well and good to have a “Repowering Pt. Augusta Proposal” which outlines what is in this report, but to call it a blueprint is a bit misleading without any Capital figures or where it can likely come from.

        Also I think that putting in those massive (136m tall) Enercon E-126’s to supply 1840GWh (CF @ 30%), 700MW installed, is a bit of a stretch considering they propose 95 turbines, and only 35 have been installed since 2007. Looking at Enercon’s impressive pamphlet on this model, to get the 7.35MW that 95 turbines will produce you need an average wind speed of 15m/s. Last time I looked SA was 7m/s average, which according to Enercon’s power curve for the E-126 produces 1.25MW.
        Which would mean you will need 560 136m turbines, plus the 4 1km squared solar collectors all around Pt Augusta outlined in the report. Discounting the capital, where do you put it all? (Cultana is a no go; where the hills are, the other side is a nat. park) Then this feeds into dispersion of intermittent sources. Some wind farms in SA only get 25% CF, and 30% is considered the conservative average state-wide.

        http://www.enercon.de/p/downloads/EN_Productoverview_0710.pdf (E-126 on p. 20-21)

        It’s a bit of a long bow if you ask me. Maybe if money were not an issue, defence was happy to have 136m tall obstructions in an area where helicopters frequent, the traditional land owners were happy to have a large section of area levelled, and we ignored national parks legislation…

        1. Well, exactly. Their strategy seems to be glossy reports that get sincere and well meaning people excited enough to volunteer their time and donate money, yet in this case they are not putting forward the first number everyone wants to know: total capital cost!!! I need a closer read, but it looks like they have worked hard to demonstrated where, via funding and subsidies, the money will come from and therefore demonstrate that the electricity will be a reasonable price.

          As it should be!!! If my consulting fees were covered by someone else, you would think I was a bargain, but it would not make me any cheaper!

          I think that report is very poor form. It’s all the more galling to think how often people front me with the suggestion that cost is the great barrier to nuclear power. Well, fine. If that’s true then people should have not problem with the thrust of this article, nor should they have a problem in disclosing their cost estimates and the underlying assumptions.

          Query on that wind speed average, might it be higher than “average” speed at the height of these turbines?

  6. My understanding is the first US NRC approved SMR, the NuScale, won’t be ready until 2020. It outputs 540 MW for 12 modules. If the SA gas situation becomes dire they will need an immediate 1 GW replacement for Torrens Island. I suspect that’s why they installed an LNG expansion unit there when/if pricey shipments are sailed around the coast from WA. Uncanny how Rex Connor predicted this in the 70s.

    1. SMR is good and bad like that. Conceptually it is a dream for SA, mainly by virtue of the spreading of cost over time in our small economy. But you are right, while there are good signs and much enthusiasm they are some way away.

      Sometime soon though, somewhere in Australia, we are going to need to replace baseload capacity by the GW. I think the whole nation is going to get a rude reminder that such things cost very large sums of money, regardless of technology.

  7. I’m just so gloomy and depressed about climate change policy in Australia at the moment. Gillard, who’s never really cared much about the issue except through the lens of popularity and whatever the factions think, has pissed in the well for the next several years. Tony Abbott really is quite obviously a climate denialist and will do nothing or worse than nothing. We’re going to be put back another six years at least, until the adults retake the asylum. I don’t believe that at the national level there will be any effective action to discuss nuclear power or any other practical ways to reduce our emissions for quite a few years. Really, one just has to try to keep the fires banked, and not have them go out. Decarbonise SA will still do important work, I just don’t think there will be tangible benefits visible any time soon.

    I hope I’m wrong.

    1. One thing to remember is that unlike solar, wind etc, nuclear is viable enough in its own right to not be tied to ‘climate change’.

      As such, although nuclear may gain momentum out of the press to do something about climate change, the beauty of it is that the case for nuclear doesn’t fail as an option simply because people don’t accept the so called ‘consensus’.

      Nuclear power has the requisite logic behind it to allow the Liberals to push it as a ‘tip of the hat’ to the possibility of climate change, and still maintain their branding as economic rationalists.

      1. Wilful’s apoplexy aside (it is their branding, Wilful. A bit like “Coke is it”), you are dead right, which is why we need to seek the opportunity in the political reality to drive down GHG emissions. You can even imagine the Libs adopting a “Well, this risk (climate change) should be managed, and this is the best way to do it”, and just playing all angles a bit.

        I think there is a breed out there I call “solution denialists”. They ape denial of the science, but what it really boils down to is that they don’t buy the proposed solutions. Nuclear completely defuses those folks.

        1. /OT

          Yeah, there is not much principle left in politics. Mostly branding.

          It’s one reason Labor can’t take a trick these day – they’ve tried to transition their brand and failed. They lost the working class chasing the green vote, and now they represent no one save those living off the system.

          The follow on effects are that the Liberals are semi-successfully chasing the working and even the union vote (at least down here in Tassie). That’s hard going as it is again stretching the brand. The only advantage they have is there is no other ‘right wing’ option to clean out their core constituency.

          It’s a pretty big vacuum though.

          /end OT

  8. Sounds like things are looking grim for SA in the next 10 years if the gas runs low. Of course, this will make the Victorian Latrobe Valley power station operators collectively rub their hands with glee at the prospect of increased power exports via the NEM to SA. Maybe they’ll build another HVDC line to do it.

    1. But that’s the thing!!! That crowd are cap in hand, right now, looking to take advantage of the 2,000 MW compensated closure of generators as part of the carbon pricing mechanism!!! Will this bit of winter demand in SA be enough to keep them open? Maybe for a little while but not long; the compensation of the scheme (free permits) get’s trimmed back pretty swiftly. SA’s problems are bad, but they will be reflected and exacerbated by similar situations right throughout the NEM because this country has no energy plan worth a damn.

      1. Thing is, the plants that are going to be closed are on their last legs anyway. Hazelwood was built in the early 1970s and is most likely to be shut down of the Latrobe Valley generators. It’s also probably riddled with asbestos, so any money that International Power (the current owners) can get from the Government to shut it down is great news for them. Victoria will burn brown coal for as long as it can – cheap power is just about the only thing the state has going for it. SA is worse off because Leigh Creek is the only significant coal resource in the state and is situated nowhere near any water to cool a power plant. Just about the only realistic thing SA could do to keep the lights on is to immediately replace Torrens A and B with modern CCGTs to extend the gas supplies.

        You say in your post that Northern and Playford B have a combined output of 760 MW. The proposed Olympic Dam expansion will consume about 600MW IIRC. Now, if you shut down Torrens A & B, Northern and Playford and build a new 275kV line to Olympic Dam, you could replace all of that generation output with a pair of AP1000s. That’s practically off the shelf given that all current AP1000 builds consist of a pair of reactors. Of course, that could cost up to $14 billion to do – if you got BHP and the Federal Government to fund it though…

  9. Latrobe brown coal fired electricity should go up 1.35 X $23 = $31 per Mwh after July. Various graphs show SA has made a conscious effort not to import much electricity from interstate. Odd because river water, the SEAgas connector and car subsidies all come from the east.

    The optimal extraction rate question may not a have a unique answer. Mining a resource slowly at low cost may give the same present value as quick high cost mining. Sorry no simple link on this. BHP-B may conclude they can go for decades longer getting 4,000 tpa U3O8 and other products from Olympic Dam constrained by local groundwater and the 132kv line from Pt Augusta fed by Vic rather than SA coal power. When Kazakshtan, Namibia etc run out of uranium they will get top dollar. Remember they have been pilloried as cuttlefish killers over the Whyalla desal. You sort of wonder if Alinta and BHP have made a pact not to stir the pot in SA but keep their heads down.

    1. There are other uranium deposits in SA and Australia. Greater uniformity in legislation ought help see some more of them developed. At the Paydirt conference you should have heard how many times they talked about difficult approvals environments. Which (if you watch the vid) is one reason I told them to get of the rear ends and sell their product to the people the way “natural” gas has.

  10. Weatherill should appoint an expert panel to look into nuclear for SA. Appointees should they accept could come from academia, BHP Billiton, Alinta, ETSA and the Submarine Corporation. I mention the Sub Corp because I think they could work in with nicely with installing SMRs. The catch is should they decide against nuclear they have to come up with a concrete alternative, not something airy fairy. It should include a timeline. Something like 2 GW geothermal baseload by 2020 won’t cut it. Importing LNG from WA Browse Basin on the other hand is reality based but expensive.

    The report should also look at sites. I nominate Pt Stanvac/Fleurieu, Robe/SE, Yorke Peninsula and Ceduna each of which trade off political and financial costs eg new transmission required but fewer NIMBYs. If the panel reported by year’s end that would give the fear mongerers plenty of time to whip up some hysteria. The alternative of course is that SA electricity prices could rise higher than Germany and Denmark if that’s what the people want.

  11. I doubt the BZE proposal will get much traction. What seems more likely is a solar trough steam boost for the Northern station along the lines of Kogan Ck Qld. That could keep people distracted for a couple of years. What the the pollies really want is cheap gas and warm green windpower. If fracking disappoints I suspect the least-worst scenario for them would be for the Federal govt to compel a stiff percentage Qld CSG to be diverted south. It’s not only SA, Vic and Tas who will run short of gas but AGL is saying NSW will have problems as well. Even with an Abbott national government there will be too many uncertainties over coal plant as a long term investment.

    Thus I think a plausible timeline is a solar sideshow for a year or two then Federal intervention in the national gas market. People will be gobsmacked by power bill increases. It would be great if build times for NPP (large or small) could come way down in that period.

    1. I think you are running out a highly plausible scenario there.

      Re build times I expect all eyes will be on the US to see how the new AP 1000 build progresses, and Finland to see if they get their second go at the EPR a little closer to time spec than the first.

      We need to be working to ensure the non-technical time delays are minimised, such as building public awareness and enthusiasm so that the predictable BS objections struggle to get traction.

      1. Finland still hasn’t decided whether they will build a second EPR or a Toshiba ABWR at the Pyhäjoki site. I would be focusing more on how quick the AP1000 builds in the US get completed and the cost overruns that occur there.

    2. And no, the BZE option will not get actual commercial or political traction. The great risk in it though is that it captures the public sentiment which avoids examining nuclear, then gas just slips through and claims the crown.

  12. BHP-B must think they will eventually get a power source for their plans to grow
    http://www.adelaidenow.com.au/business/bhp-pays-minotaur-exploration-10m-for-land-near-olympic-dam/story-e6frede3-1226336057417
    Note they think they have the connections to dig inside the Woomera Protected Area. I believe if you factor in several new mines, desals and processing plants the new power need for that region could be over 1000MW. That’s completely ignoring new baseload for Adelaide. A few MW of expensive solar power at Pt Augusta isn’t going to cut it. A lot is at stake if SA doesn’t get a major new energy source
    – OD expansion SA’s best economic chance will go begging
    – gas rich parts of Australia will resent it if they have to sell cheap
    – SA will still have the Southern Hemisphere’s highest electricity prices.

  13. Many people will regard the solar boost to the remaining Pt Augusta coal station as a revelation on the SA energy outlook
    http://www.abc.net.au/news/2012-07-20/solar-thermal-plan-for-port-augusta-power-stations/4143728
    My take home messages are
    1) fossil burners need bribes (contracts for closure) on top of carbon tax
    2) solar is intermittent and requires dirty FF backup
    3) gas will be too expensive.
    I think the 34c per kwh now paid in SA tops electricity prices in Europe. Note the Pt Augusta coal stations are the most westerly large coal plant on the east Australian grid and also closest to prospective big power user Olympic Dam.

    Putting it all together it suggests building more wind and solar for SA is unlikely to help much in terms of either cost or meeting demand. Now what?

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