Stable, Reliable Coal-Fired Power Still the Cheapest By a Country Mile

You’ve got to hand it to the wind cult. Australia’s dwindling band of wind industry spruikers keep telling us that the answer to cheaper power prices is out there blowin’ in the wind.

The more deranged among their number have been telling us that wind power is actually cheaper than coal-fired power, for years.

There’s just one problem with that argument. And that would be the evidence.

The world’s top three wind ‘Superpowers’: South Australia, Denmark and Germany all suffer from the highest retail power prices in the world:

What the wind worshipper conveniently overlooks is that wind power delivers nothing but chaos.

Try asking a wind power outfit to guarantee delivery of a fixed volume of power on 30 June 2018, between 6:30am and 9pm. Or, indeed, at any given point, on any given day, between now and the 12th of never (see above the entire output of every wind turbine connected to Australia’s Eastern Grid during June last year – courtesy of Aneroid Energy).

When the wind stops blowing, or blows too hard, your friendly wind power outfit will cry ‘Act of God’ and leave you and yours freezing or boiling in the dark.

Except, of course, that you won’t be because … Oh, that’s right, nearly forgot, in Australia there’s a coal-fired power plant chugging away somewhere in the system, guaranteed to deliver the goods, come what may. Unless you’re living in South Australia – the place that gleefully blew up its last coal-fired power plant last year, then chances are its Stone-Age Darkness for you.

Australians get around 80% of their electricity from coal-fired power plants, with the balance from gas and hydro, in that order. After setting up policies that will squander more than $60 billion on subsidies to wind power, its contribution to Australia’s energy needs is little more than a rounding error. It’s a sad and very expensive joke.

Reports of the death of coal have been greatly exaggerated.

India, China and a menagerie of countries across Southeast Asia are plugging into coal-fired power: India is building 38 gigawatts of new coal-fired plant and China is planning to build a coal-fired plant every other day, with plans to export their electricity to power starved Germans.

And Asian economies are benefitting from vastly improved, cleaner and more efficient plant. High-Efficiency Low-Emissions (HELE) units are being favoured because they use 30-40% less fuel, making them cheaper and cleaner to run. Japan is building 45 of them.

What perplexes Australia’s energy hungry businesses (enterprises like miners, mineral processors and manufacturers that employ hundreds of thousands) is that this Country is yet follow Asia’s lead.

Here’s David Byers from the Minerals Council (representing the mining businesses that put bread on the table for thousands of blue collar workers) making the case for the new HELE plants that will power Australia into the next Century, and beyond.

Rejecting clean coal is like scoring own goal
The Australian
David Byers
18 December 2017

The announcement of plans relating to the closure of the Liddell power station brings into sharper focus the need to efficiently deal with the wider question of coal plant closures expected over the next two decades.

These closures are due to ageing assets. The goal of Australia’s energy and climate policy framework should be to deliver reliable energy at least cost while meeting the nation’s emissions reduction objectives.

To achieve this goal, we should apply a technology-neutral approach to all energy sources while avoiding subsidies, quotas or other non-market-oriented interventions.

After all, the track record of governments attempting to pick winners or mandate technologies — whether through regulatory intervention or by handing out subsidies — is not an auspicious one.

The most economically efficient and socially beneficial outcomes are achieved when governments set the policy goals and then allow markets to deliver the investment, innovation, technologies and business models needed to achieve those goals at the lowest cost.

So if we cannot extend the life of existing capacity, it is imperative that all energy technologies are allowed to compete on their merits when it comes to replacing retiring capacity.

The challenge is a big one. In the medium term, it’s estimated between 2012 and 2030 almost 40 per cent of our low-cost baseload plant is likely to retire.

Over the past decade Australia has moved from having some of the lowest to some of the highest energy prices in the developed world.

As Goldman Sachs recently noted, wholesale electricity prices are forecast to be $120-$130 megawatt hour in the medium term — an increase of 20-30 per cent on current expected prices.

This is hurting the international competitiveness of Australian businesses — including the mining operations which are significant energy users — while also affecting families struggling to pay ever-increasing electricity bills.

According to recent figures from Essential Research, the proportion of Australians who want power costs kept down as an energy policy priority has increased from 28 per cent to 37 per cent between June and December this year — a higher priority than either maintaining network reliability or reducing emissions.

And a recent KPMG report on energy poverty also described the “devastating” impact of energy prices as a fixed proportion of spending for low-income households, with particular impact on indigenous communities as well as poor households with big families in public housing estates. As a country, we should be focusing on how to reduce energy costs, not just limiting increases, as well as reducing emissions and improving reliability.

And on all three goals of cost, reliability and emissions, there are good reasons why high-efficiency low-emission (HELE) coal power should be part of the mix of energy technologies competing to replace retiring baseload power.

AGL’s assessment of its options for Liddell considered a suite of renewable, gas and batteries responses and costed this at $83 per MWh.

In comparison, the COAL 21 Fund and the Minerals Council of Australia has commissioned an independent study from Solstice Development Services and GHD which showed:

  • USC or HELE black coal is the lowest-cost generation option at $40-$78 per megawatt hour in (2017 prices) on a long run marginal cost basis, which is equivalent to the LCOE measure.
  • Other synchronous generation had higher wholesale costs, including combined cycle gas at $69-$115 per MWh and open cycle gas at $179-$430 per MWh.
  • Variable renewable energy, which is not available 24 hours a day, had higher costs with wind at $64-$115 per MWh. At an assumed average capacity factor of 37 per cent for wind, it also requires “firming” or back up generation to emulate baseload performance.
  • In the longer term, the opportunity for viable carbon capture and storage options (which would reduce emissions by up to 90 per cent) is costed at $69-$165 per MWh.

HELE coal is well placed to deliver on this and remains the cheapest form of new dispatchable electricity in Australia with the benefit of much lower emissions than older subcritical coal technology.

HELE coal-fired plants produce more electricity using less coal by harnessing new generation technology and materials. HELE plants operate at higher temperatures and air pressure to more rapidly convert water to steam, significantly improving the efficiency of boilers and turbines which saves fuel and reduces carbon dioxide emissions by up to 50 per cent.

It’s not a new technology — Japan began adopting these technologies in the 1990s — and Australians are entitled to ask themselves this: if it’s good enough for other advanced economies why aren’t we using HELE to lower costs and reduce emissions?

Turning our back on these economic and environmental benefits for ideological reasons rather than on rational policy grounds would be a big political own goal for Australia.

David Byers is the interim chief executive of the Minerals Council of Australia.
The Australian

HELE all fired up to power Asia, so why not Australia?

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Yup! I agree with Jamie Spry. Give the “climate catastrophists” a wide berth. Try not to get any on you.

  2. John McGrath says:

    I agree with Jamie Spry

  3. Reblogged this on Climatism and commented:
    “When the wind stops blowing, or blows too hard, your friendly wind power outfit will cry ‘Act of God’ and leave you and yours freezing or boiling in the dark.“

    Unreliables – wind and solar – Symbolic energy appeasing the hubris and superstitions of “save the planet” climate catastrophists.

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