Three-eighths of a coal power station

Some notable milestones to pass on the way to 100% renewable energy are one-quarter, one-half, and three-quarters renewable electricity generation.

The average CO2 emissions per kilowatt-hour for all electricity generated at each of these milestones might be 660 grams, 440 grams and 220 grams respectively.

But they could be much less.

We'll look at the halfway milestone to see why this is so:

At this milestone, one-half of all electricity is delivered from renewable energy sources with no fossil-fuel CO2 emissions - solar PV and solar thermal, wind farms, hydroelectric including pumped hydroelectric storage, and battery storage.

The other half of electricity is delivered from fossil fuel power generators. These power plants are only dispatched at times when total demand exceeds the total capacity of all the available renewable energy sources.

These fossil fuel power plants may have average CO2 emissions per kilowatt-hour of electricity of 880 grams.

Average CO2 emissions and efficiency of a coal-fired power plant

In this case the average CO2 emissions per kilowatt-hour for all electricity generated at the halfway milestone will be 440 grams: (Zero for the half from renewable energy sources plus 880 grams for the half from fossil fuel power plants) divided by two.

It isn't necessary for the CO2 emissions from the electricity generated by fossil fuels to be nearly this high. They can be reduced to three-eighths of 880 grams per kilowatt-hour of electricity.

A way of doing this allows the use of power plants that are far more efficient than coal-fired power plants, are far cheaper to build, and are able to start more quickly in response to increases in demand.

A further advantage is that they use only three-eighths of the coal to generate each kilowatt-hour of electricity so the cost of mining and transporting coal for electricity generation is cut to just three-eighths of the cost with the less efficient, more expensive coal-fired power plants.

This way of supplying electricity at the halfway milestone reduces the average CO2 emissions for all electricity generated to just 165 grams: (Zero for the half from renewable energy sources plus 330 grams for the half from fossil fuel power plants) divided by two.

Average CO2 emissions and efficiency of a combined cycle power plant

The reduced quantity of coal for fuel for the combined cycle power plants can converted to methane by a reaction with hydrogen. The hydrogen can be produced by electrolysis using excess renewable energy generated whenever total demand is less than the output of renewable energy sources.

A coal-fired power plant that is emitting 880 grams of CO2 per kilowatt-hour burns coal containing 240 grams of carbon for one kilowatt-hour of electricity. Coal containing just 90 grams of carbon (three-eighths of 240 grams) is all that's needed for a combined cycle power plant to generate a kilowatt-hour of electricity.

Coal may be converted directly to methane by reacting it with hydrogen:

Hydrogen - A Key to the Economics of Pipeline Gas from Coal, C. L. Tsaros, Institute of Gas Technology, Chicago, Illinois

The objective in manufacturing supplemental pipeline gas is to produce high- heating-value gas that is completely interchangeable with natural gas - essentially methane.

The basic problem in making methane from coal is to raise the H2/C ratio. A typical bituminous coal may contain 75% carbon and 5% hydrogen, a H2/C mole ratio of 0.4:1; the same ratio for methane is 2:1. To achieve this ratio it is necessary to either add hydrogen or reject carbon. The most efficient way is to add hydrogen. The hydrogen in the coal can supply about 25-30% of the required hydrogen, but the bulk must come by the decomposition of water, the only economical source of the huge quantities needed for supplemental gas.
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In the second, or direct, method, methane is formed directly by the destructive hydrogenation of coal by the reaction:

C + 2H2 → CH4

There is a steadily growing list of commercially available systems to produce hydrogen using excess renewable energy:

Clean and Low-cost Hydrogen for Industry

The Sunfire steam electrolysis system, based on solid oxide cell (SOC) technology, promises lower onsite hydrogen production costs compared to legacy technologies. The ability to supply steam directly to the electrolysis module is unique and maximises efficiency.

National Energy Guarantee and known pitfalls

A Japanese study released in October 2017 warns of costly European policy mistakes when investment in renewable energy is increasing.

Though details of the National Energy Guarantee policy are still under discussion, the Japanese study is worth checking so that Australia doesn't fall into any of the pitfalls it warns of.

This is an extract with some of the warnings in the Japanese study.

The Ways Forward for Japan EPCOs in the New Energy Paradigm

October 2017

Renewable Energy Institute, The Ways Forward for Japan EPCOs in the New Energy Paradigm (Tokyo: REI, 2017), 76 pp.

at https://www.renewable-ei.org/en/activities/reports/20171006.html

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Executive Summary

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Japan electric power companies(EPCOs) have essentially been focusing on their domestic market so far. Yet, business opportunities also exist overseas. ... Critical to successful internationalization of Japan EPCOs business will be their ability to deploy cost efficient Renewable Energy (RE).

To make their way through this new energy paradigm, Japan EPCOs have the chance to learn critical lessons from their European peers.

European EPCOs have already faced similar challenges to those Japan EPCOs are now confronted with. And European EPCOs have failed to adapt quickly. Japan is lagging behind, and that is not necessarily a bad thing. Indeed, it means that Japan EPCOs may benefit from their European peers painful experiences.

Struggling, several European EPCOs posted record losses and saw their market capitalization collapse in recent years. They were victims of low wholesale electricity prices resulting from sluggish electricity demand and dramatic expansion of wind and solar power with lower marginal cost, leading to overcapacity and pushing fossil power plants out in the competitive market merit order. (page 1)

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Key Challenges Faced by Japan’s EPCOs

In the past two years RE accounted for the majority of new power capacity globally driven by dramatic cost reductions in wind and solar, and globally for the past three years the increase in RE electricity generation has been higher than the increase in fossil electricity generation. (Page 15)

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European EPCOs Failed to Adapt Quickly

These overall negative performances result from the European EPCOs failure to quickly adapt to the energy transition, at the generation level especially. While electricity consumption stagnated, significant expansion of close to zero marginal cost wind and solar power, in which European EPCOs did not sufficiently invest, took place in Europe. The latter helped lowering wholesale electricity prices due to the merit order effect. At the same time, conventional power capacity did not significantly decrease which combined with stagnating electricity consumption and the expansion of RE resulted in overcapacity further reducing wholesale electricity prices (Chart 31). European EPCOs conventional power plants were thus outcompeted due to their higher marginal costs and suffered from low wholesale electricity prices, thus significantly affecting European EPCOs profitability. (page 26-27)

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In Europe, several EU Member States including France, Germany, Italy, Spain, and the UK, notably, have introduced rewards for making capacity available, in the form of capacity mechanisms. However, capacity mechanisms are considered problematic because they risk distorting electricity markets. Inappropriate designs of mechanisms may for instance result in existing uneconomic power plants receiving financial support and disturbing the transition to a low-carbon economy – a failure. ³¹  The UK and Germany offer telling examples of far from perfect capacity mechanisms. (page 28)

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In Germany, from this year 2.7GW of largely inflexible and high-emitting lignite capacity will be placed into an emergency stand-by reserve, only to be used as back-up when required for a period of four years, after which these plants will be permanently retired. ³³  This comes at an estimated cost of €1.6 billion to the German government to compensate for lost revenues from the electricity market during these years of security stand-by. ³⁴

These flawed designs are unsurprising insofar as it has been found that many of EU Member States did not adequately assess the need or cost-effectiveness before introducing such mechanisms. ³⁵

In addition, it has also been recognized that capacity mechanisms implementation must be accompanied by appropriate market reforms. ³⁶

Thus, before adding gigawatts of new conventional power plants and/or pushing for the implementation of a capacity mechanism in Japan, Japan EPCOs should thus be well aware of these painful lessons learnt in Europe (page 29)

ENDNOTES

³¹   European Parliament, “Capacity mechanisms for electricity – May 2017” (accessed 28 August 2017)  

³³   The Economist Intelligence Unit, “Is Germany’s Energiewende cutting GHG emissions? – 20 March 2017” (accessed 31 August 2017)

³⁴   Overseas Development Institute, Rethinking Power Markets: Capacity mechanisms and decarbonisation (London, United Kingdom: ODI, 2016), 46 pp

³⁵   European Parliament, op. cit. note 31

³⁶   Ibid.

Electric vehicles make solar power mobile

Solar PV systems can reduce electricity bills for many families and businesses.

Unfortunately this isn't the case for families who rent because properties available for rent rarely have solar panels installed.

Even for families who do have solar PV systems, the savings aren't that great when everyone is at work or school during the the day when the sun is shining and the solar energy output is mostly being fed into the grid.

There is another way to supply solar energy to these households and help them cut their electricity bills.

Many businesses are saving on their power bills by installing solar panels, but the savings would be greater if they had batteries to provide power early in the day and late in the afternoon when the output of the solar system is below the midday peak output.

Suppose a business with a solar PV sysytem buys 4 or 5 electric vehicles that can deliver electricity from their batteries - the Nissan Leaf with a 40 kilowatt-hour battery is one electric vehicle designed for this role -  and leases them to its workers to be used in the following way:

• The worker drives the electric vehicle to work each morning and plugs it into a power exchange socket where it provides electricity to the business whenever electricity use is greater than the output of the solar PV system AND has its battery recharged whenever there is excess solar energy being produced. 
• The worker drives the car home each day after work and plugs it into a power exchange socket where it powers the home - with solar energy stored during the day while at work - during the evening peak period when electricity prices are at their greatest. 
• By late evening or early morning, if the car battery charge has fallen below the level that is needed for the morning peak period to prepare breakfast and for the commute to work, some additional energy from the grid is stored in the battery - again at off-peak rates.
• ...and so on, each day.

This may make electric vehicles a better investment than just assessing their value as a replacement for a simple petrol-fueled vehicle. They can provide electricity as backup generators for businesses when solar energy output is less than the amount of electricity used and they can let workers take solar energy home. This is especially valuable for anyone who lives in rented accommodation and/or lives in one of the many households where all the members are away from the home during daytime.

The following video uploaded in 2013 describes the process in 2 minutes. At that time, the Nissan Leaf had only a 24 kilowatt-hour battery. The recently released model has a 40 kilowatt-hour battery. 

One application of the technology is described in Adam Vaughan's the article published in The Guardian on October 3, 2017:

Electric car owners 'can drive for free by letting energy firms use battery' 

Electric car owners will be paid for letting an energy company use their vehicle’s battery in a pioneering scheme to increase take-up of the cleaner vehicles and help power grids manage the growth in green energy.

Nissan and one of the UK’s biggest challenger energy suppliers, Ovo, will offer the “vehicle-to-grid” service to buyers of the Japanese carmaker’s new Leaf from next year.

After installing a special charger in a customer’s home, the supplier will take over the management of the car’s battery, with owners able to set a minimum amount of charge they want for driving the next day. Ovo will then automatically trade electricity from the battery, topping it up during off-peak periods when power costs about 4p per kilowatt hour (kWh), and selling it at peak times for about four times as much.

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Australian Government Minister unaware of ratification of Paris Agreement

In September 2017 Steven Ciobo, the Australian Minister for Trade, Tourism and Investment made a decision to allow taxpayer funding of coal projects.

Coalition to allow government-backed loans to coalmines as banks hesitant https://t.co/R7gjTvE2dk

— Guardian Environment (@guardianeco) September 11, 2017

Steven Ciobo re-writes rules so he can provide a taxhaven based foreign #coal billionaire an @EFIC_au billion dollar subsidy. I thought Ministers were elected to work for all Australians, not just billionaires @turnbullmalcolm?!https://t.co/JmbUt7F3sV by @grhutchens

— Tim Buckley (@TimBuckleyIEEFA) June 5, 2018

After this decision became known he was asked on 6 June 2018 to give reasons for it.

The reasons reveal the loss of capacity of the Coalition Government to obtain economic intelligence needed for policy decisions.

Steven Ciobo mistakenly believed (his answer to the question is shown in full below) that decisions by a number of banks and others to not invest in thermal coal mines was a consequence of social pressure rather than economic pressure.

Westpac last year effectively ruled out financing Adani Group's controversial, giant coal mine in Queensland's Galilee Basin under climate change policy. https://t.co/1Pbt2qMotf via @ABCNews #auspol

— Askgerbil Now (@Askgerbil) June 7, 2018

Australian banks have made climate-related investment policies for coal projects in the interests of their shareholders following from the Australian Government's ratification of the Paris Agreement. (See "Ratification of the Paris Agreement on Climate Change") This ratification was made on 10 November 2016:

The Australian Government today reaffirmed Australia’s strong commitment to effective global action on climate change with the ratification of both the Paris Agreement on climate change and the Doha Amendment to the Kyoto Protocol.

Further information on the Government's commitment to the Paris Agreement describes "key outcomes" for coordinated global action including:

A global goal to hold average temperature increase to well below 2°C and pursue efforts to keep warming below 1.5°C above pre-industrial levels.

This "coordinated global action" has a number of economic impacts and it is these that underpin decisions by banks to reduce investment in thermal coal projects - NOT "social pressure" as Steven Ciobo mistakenly believes.

The economic intelligence he should have been across includes the material produced by the International Energy Agency following the Paris Agreement. Note that the announcement by the Westpac bank to which Steven Ciobo took umbrage is made with this material clearly in mind:

Westpac launched its updated Climate Change Action Plan on 28 April 2017. It said:

"the International Energy Association’s (IEA) modelling indicates that under a two degree scenario thermal coal demand will peak in the current decade and decline thereafter."

The economic pressures that result from global action are being felt beyond Australia. The Turnbull Government is poorly advised in deciding to risk taxpayer funds in a futile last-stand against change:

Minister for Trade, Tourism and Investment

The Hon Steven Ciobo MP

National Press Club interview

6 June 2018

QUESTION: Amy Remeikis from The Guardian. Just to come back home for a moment, last year you reversed the Efic decision to allow for onshore resource investment. I'm just wondering what is the rationale behind that decision given that major Australian financial institutions have been pulling away from that sort of investment since 2015, and if you didn't consult with your department, who did you get advice from, if at all?

STEVEN CIOBO: Sure. Well, the rationale for it was because the decision by a number of banks and others to not invest was a consequence of social pressure rather than economic pressure. And the reason I can say that is because, contrary to The Guardian's claims and reporting, I did actually obtain advice. In fact, my decision to alter the statement of expectations for Efic went through Cabinet. And of course by definition I received advice from the department in relation to it, and they, in fact, highlighted it was a consequence of social pressure rather than economic decision-making that led to that. So that's the reason why we made the change. Because in essence it is obviously preposterous to deny viable resource projects - completely separate to the issue of coal - from securing financing for export, which creates livelihoods, drives, in many respects, rural or urban economies. I think Australia owes it to our people to do everything we can to provide and uphold their standard of living.

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