The burning question of renewable energy

Age
Saturday 19/6/2010 Page: 2

DESPERATE battle is being fought on the sidelines of the government debate about the new renewable energy target (RET) legislation and it is set to resume this week. The fight is about burning native forest timber and calling it renewable energy. The dollar figures involved megawatts of power generated - are small, but the environmental ramifications are huge, and emotions are running high. The federal government, urged on by the Construction, Forestry, Mining and Energy Union, continues perversely to support logging our remaining native forests even though a sagging woodchip market puts no value on the resource.

At the moment, under renewable target rules introduced in 2001, wood waste from native forest can only be burnt for renewable electricity if the trees were logged for a higher-value purpose such as sawmilling. But there are negative public perceptions associated with the use of wood waste from forestry, "considered environmentally destructive," according to a biomass resource appraisal for the Clean Energy Council. 'A common misconception is that bioenergy production will become a lucrative primary end use for wood and trigger a land-clearing bonanza.

Unfortunately, the fact that all timber production in Australia is governed by a strict and comprehensive regulatory framework to ensure environmental sustainability is often overlooked. This framework ensures that forest resources cannot be exploited for any form of wood production and wood waste bioenergy targets could be achieved without harvesting a single extra tree from 'business as usual' production." It is true that, up to now, not many renewable energy certificates (REC) have been generated from wood waste. According to the official register, just 1.2 million RECs over the past decade, or 5% of a total 24 million. But with the RET target rising from 2% by 2010, to 20% by 2020, the market opportunity will be significantly bigger.

The Clean Energy Council expects 7% of the RET, or 3000GW hours of renewable electricity, could be generated from wood waste by 2020, of which 40MWs of electricity generation capacity could be fired by native forest resource. It estimates 2.2 million tonnes of native forest wood waste - roughly a quarter of the total native forest logged annually - could be used. On the ABC's 7.30 Report on Thursday, Greens senator Christine Milne warned of this "massive loophole." Next week she will again move an amendment to remove native forest "furnaces" from the definition of renewable energy.

Depending what happens with the legislation, and if Milne's amendment fails, as expected, the final say may well lie with electricity retailers and other wholesale energy buyers (liable to buy a proportion of the power they use - rising to 20% by 2020 - from renewable sources). As of Thursday, conservation groups had written commitments from 11 electricity retailers, confirming they would not buy renewable energy certificates generated from burning native forest wood waste. They were: AGL Energy, Country Energy, EnergyAustralia, Origin Energy, TRUEnergy, Australian Power and Gas, Click Energy, ActewAGL Energy, Red Energy, Simply Energy and Victoria Electricity. That's a good chunk of the market.

Some have left themselves a little wiggle room: TRUEnergy states blankly that it will only use "commercially viable, environmentally responsible energy generation assets." And there are omissions: neither Integral Energy nor Tasmania's Aurora Energy have given commitments. The Energy Retailers Association of Australia is going to try to come up with an industry-wide policy. The fear is that, under present international carbon accounting rules, which allow Australia to ignore greenhouse gas emissions from forestry, generators burning heavily subsidised native timber generally supplied by state forestry agencies at a loss to the taxpayer-will sell power falsely designated as "carbon neutral" and "renewable," undercutting genuinely clean energy rivals. And they will get an extra subsidy to boot, in the form of a steady stream of RECs.

In Tasmania, Victoria and New South Wales, proposals are being developed to tap in to this new income stream, which could transform the market for woodchips. The industry test case i s a proposal by South East Fibre Exports to build a 5.5MW biomass-fired power station at the huge woodchip mill at Eden in NSW. The plant would consume 57,700 tonnes of wood waste a year, drawn from its own forest operations and from nearby sawmills, to generate about 31GW hours of electricity, of which 9GW hours would power the mill and 22GW hours would be sold to the grid.

Majority owned by Japanese company Nippon Paper, SEFE hopes to spend $19 million on the power station, creating 30 jobs during construction and six permanently. SEFE chief executive Peter Mitchell says the proposal only stacks up because the mill has the waste at hand. "Even with the RECs, if you were to harvest waste in native forest for power generation, the returns aren't there."SEFE's proposal, currently with the NSW government, claims savings of 7508 tonnes of greenhouse gas a year under the current Kyoto Protocol carbon accounting rules, which do not count emissions from logging or burning the wood.

The Soutli-East Region Conservation Alliance submission counters that this claim is misleading and says wood-fired power is 6.4 times more greenhouse intensive than coal-fired power. It estimates that logging to supply the Eden mill is responsible for 18 million tonnes of greenhouse gas emissions. The revenue from RECs could make a real difference to the viability of native forest logging operations. Australian National University economist Judith Ajani, author of The Forest Wars, says Australia has a historic opportunity to end native forest logging.

"We had the choice not to go into chip exporting in the 1960s... that's what's driven the forest conflict for four decades," she says. "We're now facing that same choice today, whether to facilitate native forest resources moving into the electricity and biomass feedstock markets, or not. "If they choose to stove into these new markets - they are big markets - then we are facing another lost opportunity to resolve Australia's forest conflict."

paddy.manning@fairfaxmedia.com.au