Leadership for outcome focussed energy policy Lessons from Australia: Successes, constraints, and cold hard realities Ben Heard ANS Young Professionals Congress 10 November 2013 ben.heard@thinkclimateconsulti ng.com.au www.decarbonisesa.com @BenThinkClimate FB: Decarbonise SA
What makes good energy policy? How do we lead for change? Here's my presentation to the Young Professionals Congress 2013 of the American Nuclear Society. I review Australia's current position in electricity generation and draw lessons on policy and technology; examine the policy failure of artificial constraints of nuclear; demonstrate the just-barely possible task of decarbonising by 2050, and provide my lessons for leaders in energy.
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1. Leadership for outcome focussed energy policy Lessons from
Australia: Successes, constraints, and cold hard realities Ben
Heard ANS Young Professionals Congress 10 November 2013
[email protected] www.decarbonisesa.com
@BenThinkClimate FB: Decarbonise SA
2. About me
3. Signs of Progress Australia and India will begin
negotiations for the sale of Australian uranium to the subcontinent
this month (March 7 2013) We need abundant, reliable power. Why not
nuclear? (Alan Finkel, Chair of ATSE 28 October 2013 Agreement a
boost for NSW uranium mining (Oct 3 2013) (Liberal) MP calls for
rethink on nuclear power (November 4 2013) Labor MPs urge rethink
on nuclear power (22 October 2013)
4. Presentation layout Welcome to Australian Energy The NEM The
mix Renewable success Wind (Renewable Energy Target) Solar PV
Nuclear constraint Fossil Reality Lessons for leadership
5. Welcome to Australian Energy Australia: Is the worlds 6th
largest country (geographically), over 7.5 million km2 Has 23.1
million people (2013), ranked 53rd in size globally. Has GDP per
capita of $44,000 (9th -12th highest, depending on source), roughly
on par with Canada and somewhat less than USA I am here
6. The National Electricity Market (NEM) Geographically largest
interconnected grid in the world. Covers 90% of Australian
electricity supply Most Aussies are here
7. We suck slightly less than you
8. Wait... actually we suck slightly more
9. Old King Coal... Source: Origin Energy
10. ...is a cheap and plentiful old bastard down under 2.2 time
entire domestic coal sector. Way to go us!
11. Renewable Success
12. Strong growth in Wind Red is South Australia. Smaller
state, major producer Source: McArdle 2013
13. South Australian Wind- growing contribution Source: AEMO
2012 Wind generation has increased at the expense of Interconnector
(coal) and Coal
14. South Australian GHG emissions falling Source: AEMO 2012
Wind has worked! Be in no doubt. However...
15. South Australia relying more on interconnection Source:
AEMO 2012 ...economic success is dependent on interconnection to
import and export from and to larger market. NEM has been like SAs
battery, and...
16. NEM wide wind is very low Source: Origin 2012 ...recall,
rest of the NEM has hardly any wind (yet). High system costs are
yet to be incurred, however negative price events and drop in
wholesale average is hurting baseload suppliers... Which is good
because they are coal, but bad because we still need baseload
suppliers...
17. Variability remains an issue 51,000 MWh daily NEM-wide
maximum Source: McArdle 2013 ...which is obvious when you look at
daily performance... As little as 50% that amount may be
provided
18. Incidences of low output may find a floor Source: McArdle
2013 ... And half-hourly periods of low output.
19. These are not arguments for constraint Planning Honesty
Realism ...does not make one anti wind
20. Wind: the policy How? Renewable Energy Target: 20%
generation from renewable sources by 2020 Retailers must acquire 1
certificate per MWh of mandated clean energy Market sets price
according to best technology (which is wind and hydro generation
from existing generators above established baseline) Certificates
around $35 per MWh (have ranged from $10-$60). LCOE difference
between wind and market average
21. Wind: How much $? From 2011-2020, the scheme will require
retailers to purchase certificates with a total value of approx
$20.2 bn in 2012 money (Source: Heard 2013, pretty rough please
dont quote me yet) and attract $18.7 billion in investment (SKM
2012). From 2011-2020 the scheme will increase annual output of
clean energy by 30,600 GWh per annum. Most of the new energy will
be wind Is this good value compared to nuclear?
22. Compare $18.7 billion Wind Nuclear GWh per annum 30.6 24.6
(@ $6,000 kW installed, 90% CF) Scale Small, incremental additions
Large additions Legal in AU Yes No Intermittent Yes No Additional
system costs TBC, expect high TBC expect low Lifespan 25 years 60
years From a climate perspective I can only argue for both
23. Place outcomes ahead of ideology and tribalism Wind: NIMBY
issues, hated by the right, demonised by some nuclear advocates
Constraint will reduce near-term clean energy investment and proven
GHG reduction Nuclear: Illegal, hated by the left, demonised by
most renewable advocates Constraint will reduce long-term clean
energy investment and proven GHG reduction, lock in high technology
and system costs, continued dependence on fossil baseload and
back-up, and high reliance on political consensus for climate
change action
24. Solar PV Spike in systems Source: Origin Energy Subject to
changing and significant subsidies since 2008: Cash rebates Feed-in
tariffs RECs, then REC multiples Industry grants (50% cost) for
large scale systems (99 kW) plus RECs This has intersected with
plunging system prices to create an unstable boom
25. Solar PV Spike in capacity Source: Data by DataMarket.
Chart by Mike Sandford 2012
26. Solar PV System impact Revenue gap Peak unchanged Mike
Sandford 2012
27. Nuclear Constraint Australias Environment and Biodiveristy
Conservation Act (1999) Section 140: 140A No approval for certain
nuclear installations The Minister must not approve an action
consisting of or involving the construction or operation of any of
the following nuclear installations: (a) (b) (c) (d) a nuclear fuel
fabrication plant; a nuclear power plant; an enrichment plant; a
reprocessing facility.
28. National GHG emissions since 1999 What success does not
look like
29. Cold hard reality: growth has kicked clean energys
tail
30. Cold hard reality: growth has kicked clean energys tail We
have a lot of work to do. We need plentiful, cheap, clean energy
instead of plentiful, cheap dirty energy. History has invalidated
other ways of thinking about this problem.
31. How fast can we add energy? Source: Russell 2013
32. Can Australia decarbonise by 2050? Assuming rapid wind
growth to 2025, then rapid nuclear growth, we need to add clean
energy at close to the fastest ever rate per capita, globally, for
25 years straight!!!
33. The answer is maybe It CANNOT be done without a plan A
sensible plan MUST be formed in national (global) interest so MUST
strive for bi-partisan support A sensible plan CANNOT proceed on
ideological or whimsical favouring or disfavouring of technologies
In Australia I contend that the most sensible plan with the
strongest evidence-based backing would facilitate continued rapid,
near-term growth in wind and (to a much lesser extent) solar PV
Prepare for rapid rollout of nuclear power generation. It will be
essential no matter what Maintain an environment of support for
baseload-suitable renewables like solar thermal with storage,
enhanced geothermal and biomass with well-targeted support for
R&D Political durability is critically required
34. Creating political durability Clean technology neutrality
Political power/consensus
35. Creating political durability Clean technology
cost-effectiveness Political power/consensus
36. Lessons for Leadership YOU will probably not end up
powerful per se You can be influential for powerful people. Aim for
that. If power comes, so be it Independence from a foundation of
strong values is a ferocious weapon of change Occupy the middle and
pull both sides forward Call bad policy, loudly. Be VERY sparing in
criticisms of people Conduct yourself as though change for the
better is inevitable... You would just like it sooner not later
Reward every opportunity with a calculated risk. Safe is useless,
forgettable, no one will thank you, and the opportunities will stop
coming Who are you upsetting? If the answer is no one, you need to
try harder You do not need everyone...which is fortunate, as you
are not going to get them Be more likeable than the other guys
(with thanks to Suzy Hobbs-Baker)
37. More and, less but And is the antidote to extremism Nuclear
power is very safe/ but and new reactors are even safer Renewables
will deliver more energy in future but/and we cant meet this
challenge without nuclear power Wind power has successfully cut
emissions in South Australia but/and connection to the NEM has been
vital for stability A solar PV system is a great option for the
South Australian home-owner but/and they are causing real
difficulties in the electricity market Nuclear power is our best
value option for clean energy and it is too expensive And Sets you
apart as capable of accommodating complexity and seemingly
competing truths, Reinforces your independence Builds bridges
38. Conclusion Ben Heard
[email protected] www.decarbonisesa.com
@BenThinkClimate FB: Decarbonise SA