No short-term disaster for coal-fired plants: report - Canberra pressured to dump payouts

Age
Wednesday 1/10/2008 Page: 6

CLIMATE adviser Ross Garnaut has made a mockery of claims that coal-fired power plants will have to close under emissions trading, showing that most will remain profitable until at least 2020 whatever target is chosen.

Professor Garnaut's final report puts pressure on the Federal Government to abandon its plans to compensate coal-fired power generators, projecting that 93% of today's brown-coal power generation will continue if, as he expects is the most likely case under a global deal, Australia cuts emissions by 10% below 2000 levels.

A 25% emissions target - the minimum advocated by climate scientists - would result in nearly two-thirds of brown-coal power generation still operating at the end of next decade. The modelling suggests the industry has time to adapt to a cleaner future. It is in stark contrast to claims this week by International Power Australia, owner of Victoria's 40-year-old Hazelwood power station, that even a soft start to emissions trading would force closure.

Under Professor Garnaut's vision, Australia's energy supply will change from being one of the world's dirtiest to being nearly greenhouse emissions free by mid-century. The change would cone through emissions trading and massive spending on development and infrastructure for lowemissions technology: $2.7 billion a year as part of a global commitment of $124 billion a year.

But slashing energy emissions will take time, and depend on the success of "clean coal" technology, predominantly carbon capture and storage, or burying carbon dioxide emissions kilometres beneath the surface, but also developing the use of vegetation as a greenhouse store.

"Priority should be given to the resolution of whether a near-zero coal future is even feasible, either partially or in total," the report says. "If it is not, then Australia needs to know as soon as possible so that all who depend on the coal industry can begin the process of adjustment." Most of the cuts in emissions before 2020 would come from households using less electricity as prices soar, and buildings and appliances becoming more efficient. Most new energy production would be gas, which has lower emissions than coal but more than genuinely clean forms of energy.

The aluminium industry would carry a disproportionate share of the pain as it chose to abandon Australia for countries where electricity will be considerably cheaper. Professor Garnaut says this would not be "carbon leakage" - industry moving offshore without cutting their emissions - as predicted by business groups, but a shift to running on clean hydro-electricity in Papua New Guinea and central Africa.

By the 2020s, a technology shift would kick in, with clean coal and renewable energy forms, particularly geothermal, or "hot rocks", and perhaps large-scale solar thermal expected to become economically viable. Nuclear could also come into play, but unless clean coal proves a failure or is dramatically more expensive than predicted, Professor Garnaut does not believe it is a path that Australia will go down given its large range of energy options.