Renewable energy may cost less than coal power

Sydney Morning Herald
Friday 3/7/2009 Page: 6

USING more renewable power in Sydney would make electricity bills more affordable, according to a study prepared for the CSIRO that challenges assumptions about cheap coal-fired energy. More intelligent use of the existing energy grid could slash greenhouse gas emissions and cut household power bills by up to $60 a year, the report from the University of Technology Sydney shows.

On Wednesday the Independent Pricing and Regulatory Tribunal gave utilities permission to raise energy bills by a fifth, or up to $200 a year for some families. The study looked at five scenarios for NSW, ranging from building more coal-fired power stations, as recommended by the 2007 Owen review of the state's energy needs, to a large energy efficiency campaign combined with more renewable power.

It found building baseload power using coal was much more expensive than focusing on energy efficiency and tapping into a network of small "co-generation" power sources sprinkled in the suburbs. That conclusion was reached without factoring in the increased costs to fossil fuel generators that would be imposed if Australia brings in a carbon trading scheme. Carbon trading is expected to raise the costs of greenhouse-intensive power like coal even more.

"Even though we decided to be very conservative in our estimates of costs for coal, it still shows that there is no reason why we should see coal as cheap, and renewable power as expensive - it's more interesting than that," said Chris Dunstan, a researcher at the university s Institute for Sustainable Futures.

Cogeneration, or the similar tri generation, involves installing small, efficient low-emissions power plants in buildings and using them to power structures in nearby streets. The Owen inquiry found there would be a shortfall in the state's baseload power by 2014 and recommended that a new power station should be built to compensate. Yet energy demand in the past two years has not increased as fast as the 2007 inquiry forecast.

Building a new coal-fired power station to meet demand before 2020 would cumulatively cost up to $30 billion, while building the infrastructure to supply the grid from more local low-emissions sources plants would total about $27 billion over the next decade, the university report calculated. The study, released this week, is part of a wider project for which the CSIRO commissioned five universities to examine Australia's energy sector and look at ways to cut greenhouse gas emissions.

The City of Sydney is the only council seriously planning for a network of small cogeneration plants. The Lord Mayor, Clover Moore, confirmed this week that the council intended to build a tri generation plant in the basement of Town Hall, with a view to supplying the QVB and possibly other surrounding buildings with energy.

"I have proposed a pilot project.., in partnership with a project by Frasers Property at the former Carlton United Brewery site," Cr Moore told business leaders on Wednesday. "Our restoration of Prince Alfred Park provides another opportunity for tri generation, and our consultants are now working on options for distributing lighting, heating and cooling for the project itself and parts of the surrounding neighbourhood."