Global challenges of transitioning electricity sectors to tackle climate change
The electricity grid in south-east Australia is the longest piece of network infrastructure in the world according to climate change and energy specialist David Blowers from the Grattan Institute.
It has come under a lot of pressure lately, some of it to do with the integration of intermittent renewable energy into that system.
Mr Blowers said unlike many other countries, Australia did not have the option of sourcing energy from another country.
“We’ve got to find a way of balancing our own systems without using different forms of technology,” he said.
“The UK has effectively put in place what I’d describe as ‘a planned energy market’.
“They’ve decided what kind of generation they need, how much they’re prepared to pay — and they’re prepared to pay a lot.
“In Germany it’s different again because they’re surrounded on all sides, they can go an access to electricity from four or five different countries — hydro from Denmark, brown coal from Poland, nuclear coming in from France.”
Gas and LNG use growing
Gas is often referred to as a ‘transition fuel’ as countries move towards deep decarbonisation and more renewable energy.
The market for liquefied natural gas (LNG) is growing rapidly in China, Japan and South East Asian countries.
Associate professor Frank Jotzo, who is with the Crawford School of Public Policy at the Australian National University (ANU) said China was still building more coal-fired power stations, but gas use was increasing.
“Natural gas plays a minor role in China at the moment but it’s growing,” Dr Jotzo said.
“In part, it’s replacing coal use and has less adverse effects on the atmosphere than coal.”
The bid to clear Chinese cities of their notoriously dangerous pollution levels has helped propel ASX-listed company Sino Gas and Energy to start producing gas from pilot wells in the Ordos Basin.
“We were very fortunate to have ownership developed with [JV Partners] the Chinese National Offshore Oil Corporation (CNOOC) and PetroChina for the last couple of years,” said MD, Glenn Corrie.
“We can pipe natural gas that is far cheaper than imported LNG using existing pipeline infrastructure.
“The landed cost of LNG today is probably about $US8-$9. I think our cost of supply by comparison is about $US2 and our prices are around $US7 at the moment.
“Today, gas is only 5.5 per cent of the Chinese energy mix but there is a policy being developed to increase that to 10 per cent.
“That is still well below non-OECD countries that are doing about 30 per cent overall.”
US now great unknown on climate change
Under the presidency of Barak Obama, the US took a leading position on climate change, making a joint announcement with China on emissions reductions plans and signing up to the Paris Agreement.
A number of coal mines have been closed and the country has also been able to reduce its emissions, in part due to the rapid development of its shale gas industry.
President-Elect Donald Trump has said he wants to pull out of the Paris Agreement, re-open mines and fire up coal-fired power stations.
As to how much of that will actually happens has four years to play out.