LNG exports and heatwaves drive up energy costs

Electricity prices spike as temperatures soar. Climate change and LNG exports increase energy costs. https://t.co/YgIU7fMKxm @JoshFrydenberg

— Askgerbil Now (@Askgerbil) February 8, 2017

Australian thermal #coal sold in 2015-16 for just $2.69 per GJ.
The LNG export price fell from $13.20 per GJ in 2014-15 to $8.60 in 2015-16

— Askgerbil Now (@Askgerbil) February 4, 2017

The Australian Government's LNG export policy - with no reservation for industry and residential consumers - has resulted in a 250 percent increase in the cost of natural gas since 2014. The resulting $8.60 per gigajoule price for natural gas makes efficient, low emission combined cycle gas turbine (CCGT) power stations like that at Pelican Point, South Australia, quite costly to run compared to a high emission low efficiency (HELE) coal-fired power station.

The raucous noise over renewable energy in South Australia and the upsurge in government members spruiking high emission low efficiency (HELE) coal-fired power stations is most likely a deliberate distraction from this fiasco that is the government's "sell-it-all" LNG export policy.

Gladstone LNG plant places a demand on gas from NSW and elsewhere

Energy Action | Feb 19, 2016

Gas flows on the Moomba-to-Sydney gas pipeline has supplied NSW with gas since 1976. However, according to data from the Australian ­Energy Market Operator (AEMO), the flow was reversed in December for the first time as the third of three gas export projects being built at Gladstone powered up.

New Moomba Gas Supply Hub launched

MEDIA RELEASE - AEMO
Wednesday, 1 June 2016

The Australian Energy Market Operator (AEMO) has today announced the launch of the newly established Moomba Gas Supply Hub and two additional trading locations at the Moomba to Adelaide pipeline and the Moomba to Sydney pipeline, which are now open for trading.

The Moomba Gas Supply Hub follows the successful introduction of the Wallumbilla Gas Supply Hub (GSH), established in 2014 to enhance the transparency and reliability of gas supply by creating a voluntary market that offers a low-cost, flexible method to buy and sell gas at interconnecting transmission pipelines.

Gas and LNG Market Outlook, January 2017

National Australia Bank

The exposure of eastern Australia to LNG export markets will have far reaching implications for domestic gas use.

Wholesale prices are likely to increase significantly and some questions remain over availability of commercially recoverable gas from Queensland coal seam gas fields.

Higher wholesale gas prices are likely to spill over into electricity markets by increasing fuel costs for peak load open cycle gas turbines.

Higher gas prices are already flowing through to large domestic customers, with reports that contracts are being offered well in excess of current netback export parity prices.

The price of gas for residential customers in Australia’s five largest cities could increase by more than 50% by 2020.

Boyne Smelter to close cells, cut production after power price spike

Tegan Annett | 21st Jan 2017, Updated: 23rd Jan 2017
Gladstone Observer

IF nothing changes in Queensland's electricity market, 40 aluminium-producing cells at Boyne Smelter will be closed.

That's the message from general manager Joe Rea who says it will result in jobs lost and leave the Boyne Smelter down 45,000 tonnes in aluminium production.

The price hike was driven by high electricity demand in response to very hot weather conditions in Queensland. He said on January 18, a new demand record was set at 9,357MW exceeding the previous record of 9,097MW.

Queensland moves to reserve gas for domestic use

Matt Chambers | 26th Jan 2017
The Australian

Gas producers have voiced alarm at Queensland’s move to earmark a small patch of new exploration ground for domestic use, although former federal resources ministers and previously staunch domestic gas reservation opponents Ian Macfarlane and Martin Ferguson have changed their position and now back the move.

Queensland Resources Minister Anthony Lynham yesterday announced the release of 58sq km of exploration ground in the onshore Surat Basin with the “strict” condition that any gas produced must be used in Australia.

The Queensland Resources Council, which counts both the big gas exporters and some big gas users (such as Incitec Pivot, Rio Tinto and Glencore) among its members and is now run by Mr Macfarlane, applauded the move.

Invest in 19th Century Technology

and waste investors' money like Alcoa in Australia

Or

Invest in 21st Century Technology

and remain a viable business

"...overall fuel saving by the proposed Aluminium and methanol coproduction, relative to the conventional processes, would be 53.3%." Read more below...

Vacuum Carbothermic Reduction 
of Alumina to Metal

Extract from:

M. Halmann, A. Frei, and A. Steinfeld

Mineral Processing & Extractive Metall. Rev., 32: 247–266, 2011

Copyright © Taylor & Francis Group, LLC

ISSN: 0882-7508 print/1547-7401 online

DOI: 10.1080/08827508.2010.530723

INTRODUCTION

The carbothermic reduction of alumina can be represented by overall (simplified) net reaction as follows:

Al₂O_3(s) + 3C_(s) = 2Al_(g) + 3CO_(g)               (1)

The current industrial production of aluminium is based on the electrolytic Hall–Héroult process [discovered in 1886], which is characterized by the large energy consumption, about 15 MWh / tonne Aluminium (International Aluminium Institute 2009) and by the release of perfluorocarbon (PFC) and vast amounts of greenhouse gases, reaching 7 kg CO₂-equiv / kg Aluminium in modern plants.

Figure 3: Equilibrium distribution vs. temperature for the system Al₂O₃ + 3C at 10^-4 bar.

Under a vacuum of 10^-4 bar (Figure 3), with an onset of Aluminium production already at 1600 K, the formation of Al₂O and Al₄C₃ is calculated to be significantly suppressed.

At 1800 K, the equilibrium reaction is represented by Equation (10):

Al₂O₃ + 3C = 1.99Al_(g) + 2.99CO_(g) + 0.006Al₂O_3(g) + 0.006C_(gr)       (10)

A preliminary estimation of the energy demand of the process under these conditions was made in a two-step calculation. The hypothetical heat input in the reaction of Equation (1) to 2Al_(g) + 3CO_(g) at T=1800K and 1 bar was calculated to be 1605 kJ / mol Al₂O₃. The minimum work of expansion from 1 bar to p=10^-4 bar was 699 kJ / mol Al₂O₃. The total theoretical energy input would be 0.0427 GJ / kg Aluminium, comparable to that of about 0.045 GJ / kg Aluminium in modern smelters by the Hall–Héroult process (International Aluminium Institute 2009). In case CO would be submitted to water-gas shift to form syngas for methanol synthesis, this could result in the production of 1.056 kg methanol / kg Aluminium. In conventional methanol production via methane steam reforming (MSR), the total fuel consumption is 0.0445 GJ / kg methanol, thus requiring 0.047 GJ to produce the above amount of methanol (Frank et al. 2009).

Therefore, the theoretical overall fuel saving by the proposed Aluminium and methanol coproduction, relative to the conventional processes, would be 53.3%. The required heat for the process may be supplied by concentrated solar energy, induction furnaces, or electric discharges.

In case concentrated solar energy would be used for process heat, the total theoretical energy demand for pumping work would be only 0.0129 GJ / kg Aluminium.

If the combustion of fossil fuel is used for process heat, the calculated CO₂ emission would be 3.32 kg CO₂ / kg Aluminium, resulting in 53% avoidance of greenhouse gas emission relative to modern Hall–Héroult plants (International Aluminium Institute 2009). Emissions would be further decreased when applying concentrated solar energy as the source of process heat.

The WHOLE Point of the Carbon Tax?

Not the WHOLE Point of the Carbon Tax -

Tony Abbott: “The impacts of the carbon tax on the construction industry because anything that uses steel, cement, glass, plastic or aluminium is going to have a big impact from the carbon tax because making all these things involves an enormous amount of energy and the whole point of the carbon tax is to make energy more expensive [sic. See below].”

“There is no doubt that this package, as it stands, is going to do terrible damage to the aluminium industry in this country. We have an aluminium industry in this country because we’ve got cheap power and if we don’t have the cheap power it’s going to be very difficult to sustain. Now, I know they’re talking to the Government about various forms of assistance but the best assistance you can give aluminium is not to have a carbon tax.”
(From the transcript of the Hon. Tony Abbott MHR, interview with Richard Kew, Coast FM, Western Victoria, July 15, 2011 – Subject: Julia Gillard's Carbon Tax) 

The Whole Point of the Carbon Tax Is NOT To Make Energy More Expensive -

Aluminium refining with the Hall–Héroult process developed 125 years ago uses about 15 kWh of electricity for each kilogram of aluminium produced from aluminium oxide.

At very high temperatures attainable with Concentrated Solar Thermal technology, this 15 kWh of electricity can be reduced: with higher and higher temperatures, the amount of electricity required becomes less and less.

Ellingham Diagram

Any experimenters willing to develop a commercially competitive Concentrated Solar Thermal aluminium refining process that reduces the amount of electricity to 1 kWh for each kilogram of aluminium produced should get their funding bids ready.

Eliminating the environmentally hazardous fluoride compounds created by the 19th Century industrial process still used today will be an extra benefit.