Forget coal, the new roadmap is a gas guzzler

Federal Energy Minister Angus Taylor's long-awaited technology road map released on Thursday is an attempt to end a decade of infighting over the so-called "climate wars".
  1. Federal Energy Minister Angus Taylor’s long-awaited technology road map released on Thursday is an attempt to end a decade of infighting over the so-called “climate wars”.

    After years of policy paralysis on energy and climate policy – with everything seen through the “coal vs renewables” paradigm – the road map tries to clear it up once and for all that renewable energy will provide the backbone of Australia’s power system in the second half of the century.

    Coal – which is now responsible for three-quarters of Australia’s electricity generation – is only mentioned 20 times in the 93-page discussion paper and almost in passing.

    Right now, coal-fired power provides stable generation, providing back-up for intermittent solar and wind but gas – now that it’s affordable again – returns as the transition fuel to take us to a low-emissions future.

    “Clean coal” technology – such as the high-efficiency, low-emissions plants spruiked by the pro-coal supporters in the Coalition – is nowhere to be seen in the 140 technologies outlined in the discussion paper. And nuclear power is only mentioned in passing.

    However, the release of the Morrison government’s technology road map left some asking: is that it?

    With a Coalition government steering clear of any national mechanism or carbon pricing to drive the economy towards lower carbon emissions, technology is being hailed as the new way forward.

    For some energy experts, the technology road map – without an over-arching mechanism to send a price signal to investors – leaves them a bit cold.

    “In some ways, it’s like a map without a road in a sense. Where’s it all going?,” says Grattan Institute energy program director Tony Wood.

    “Giving early stage technology a bit of a prod is a good idea,but ultimately the role of government is to say here’s what needs to be done and let the market sort out the lowest cost of doing it.”

    In some ways, Taylor’s technology roadmap is seen as a way for the Morrison government to draw a line under the internal debate within the Coalition about coal-fired power being a long-term solution for Australia’s energy woes.

    For Taylor – who played a central role in the demise of former prime minister Malcolm Turnbull’s National Energy Guarantee – technology is the magical wand that will help drive Australia’s energy transition.

    “This is about technology, not taxes,” Taylor said this week.

    “It means reducing emissions, not reducing the jobs and the economy. It is an approach based on rigour, confidence, optimism and Australian ingenuity, not ideology.”

    However, ideology doesn’t lurk far below the surface in Australian politics. There has been some grumblings from former resources minister and Queensland Senator Matt Canavan about coal being downplayed in the report.

    But it’s too early to tell whether the cursory reference to the importance of coal will be enough to appease the pro-coal supporters in the Coalition, who want the federal government to underwrite a new coal-fired power station in North Queensland or extend the life of AGL Energy’s Liddell power station in NSW.

    The long-awaited technology roadmap outlines 140 potential technologies –from hydrogen, pumped hydro, large-scale batteries and carbon capture and storage – which will help transform Australia’s economy to a low-emissions future.

    For many, the discussion paper is a final concession that renewable energy is the future of the energy grid come 2050.

    It will be existing technologies such as gas – which is now back on the agenda as the transition fuel given the plunge in international oil prices – that will help Australia reach its end goal of 26 to 28 per cent reduction in carbon emissions on 2005 levels by 2030.

    The technology road map will be the cornerstone of Australia’s ticket to COP26 global climate talks, which will now be held in Glasgow next year because of the coronavirus.

    But critics still cast doubt on whether Australia has done enough to reach the 2030 targets, without the use of “carry-over” credits from the previous Kyoto agreement.

    While Labor has pledged to deliver net zero emissions by 2050, the Morrison government says it doesn’t want to risk the economy and it would happen by the “second half of the century” as per the Paris climate agreement.

    Investor Group on Climate Change director of policy Erwin Jackson says the government’s latest plan was a step in the right direction but there still needs to be a “clear signal” for private investors.

    “This is part of the puzzle that the government needs to do but what is missing is the long-term market signal,” he says.

    Jackson says the former Howard government released a technology road map in 2004 which had a big focus on carbon, capture and storage and public and private money went into the technology.

    “But we never saw large scale investment from the private sector. And the reason? The government has thrown money at it but the government has never deployed the market signal,” he says.

    “It’s not surprising that we’d say investors would like carbon pricing but we’re also pragmatic.”

    Jackson says the road map has the potential to be the making of a long-term energy and climate policy but a mechanism such as carbon pricing or net zero emissions target should drive the transition.

    “There’s a lot of the ingredients there that could be turned into a credible cake. But it does require knowing what the cake is going to look like at the end, otherwise investors are going to remain wary,” he says.

    “But what the road map does show is that Australia has vast opportunities to reduce emissions across all sectors of the economy.”

    The road map expands the focus from the energy sector to transport, agriculture and industry – reinforcing former Origin Energy chief executive Grant King’s warning from last year about the energy sector not being able to do all the heavy lifting on its own to reach Paris climate targets.

    The technology road map says electric vehicles, hybrids and alternative fuels would help boost road transport efficiency and reduce emissions but they might not be ready until next decade.

    In the agriculture sector, there are opportunities to improve soil carbon levels and livestock productivity as well as deploying technologies to enhance fertiliser use, carbon storage in vegetation and improve fire management.

    But other sceptics worry about how much reliance can be put in emerging technologies such as hydrogen and carbon capture and storage which are yet to be commercially viable.

    Producing hydrogen for under $2 a kilogram – which is Taylor’s end goal – still seems a long way off.

    Labor’s climate and energy spokesman Mark Butler has cautiously welcomed Taylor’s plan which is an acknowledgment that renewables are the future.

    “But it is no substitute for an investment framework that makes that technology a reality for Australia’s electricity system,” he says.

    “An investment framework gives investors confidence to deliver these technologies on the ground because that is what will make a difference for Australian businesses and households.”

    But for most energy observers, who have seen schemes fall by the wayside over the past decade, the technology road map is something that could lead a way out of the holding pattern on climate policy.

    “It won’t send us backwards, but at least move us forward a bit,” says Wood.

    Source: Financial Review