Weak regulation is increasing Australia’s carbon emissions and allowing dirty power stations to survive. By Mike Seccombe.

Filthy secrets shroud Aust’s emissions reduction plans

Hazelwood Power Station in Victoria’s Latrobe Valley.
Hazelwood Power Station in Victoria’s Latrobe Valley.

The United States president’s speech on climate change on Tuesday was vintage Obama: at once rhetorically moving and substantive.

At the end he got emotional as he evoked NASA’s famous “blue marble” picture of Earth, as seen from space.

“This blue marble belongs to all of us,” he said. “There are more than seven billion people alive today; no matter what country they’re from, no matter what language they speak, every one of them can look at this image and say, ‘That’s my home.’ And, ‘We’re the first generation to feel the impact of climate change; we’re the last generation that can do something about it.’ We only get one home. We only get one planet. There’s no plan B.”

It was powerful stuff. As for the substance, Barack Obama was there to announce his clean power plan, which he called “the single most important step America has ever taken in the fight against global climate change”.

By 2030, Obama said, America’s electricity generation sector would be required to cut its emissions of carbon dioxide, the principal cause of global warming, by 32 per cent compared with 2005 levels.

The plan will see the closure of hundreds of coal and oil-fired power stations during the next 15 years, on top of more than 200 others mothballed in the past five years. 

The contrast with what happened in Australia this week could hardly have been more stark. The same day Obama announced his plan to cut greenhouse gases from the US electricity sector, we got new figures from the energy consultants Pitt & Sherry, who monitor emissions from Australia’s National Electricity Market. They showed a big increase.

Carbon dioxide emissions for May and June were up by an annualised 1.2 per cent, or about two million tonnes. The figures represented a sharp acceleration in the trend to higher emissions that has been apparent since the Abbott government scrapped the carbon price.

The cause wasn’t increased demand; it was that Australia’s electricity grid was getting more of its power from coal. Generation from hydro was down and other renewables were flat – investment in wind and solar has been moribund due to the uncertainty about the future of the renewable energy target. Generation from gas also was down, ironically because the demand for it in a decarbonising world had pushed global prices up. (Gas produces about half the CO2 of black coal.)

Conversely, coal prices were down so usage had gone up, and it had gone up most sharply for the dirtiest, brown coal. From a low point of 72.6 per cent of total generation last July, coal’s share of emissions was back up to 76.3 per cent.

A second point of contrast came with the release of an analysis of the so-called “safeguard mechanism” by which the Abbott government seeks to guarantee emissions reductions under its $2.55 billion Direct Action plan, now called the Emissions Reduction Fund.

But energy market analysts RepuTex found the government’s scheme would do nothing to force the reduction of carbon emissions from power plants.

It showed the scheme is fundamentally flawed in that it sets “baselines” for emissions, but the baselines are so high most industries could significantly increase emissions and still not exceed them. An analogy would be holding a limbo contest in which the bar was a couple of metres above the floor. Not only could contestants pass under it without bending, they could jump and still not hit the bar.

“Notably,” said the RepuTex analysis, “out of Australia’s top 20 emitting facilities, none are expected to incur any liability, despite almost all being forecast to grow their emissions over the next 10 years. This means the largest generators such as Loy Yang A and B, Hazelwood, Bayswater and Yallourn are expected to avoid exceeding their sectoral baseline under the scheme.”

RepuTex was not the first to suggest the safeguards are toothless. Modelling carried out by Environment Victoria in April found the safeguards would permit electricity generators to increase CO2 emissions by as much as 112 million tonnes a year.

“Even if only half of this annual increase in emissions from electricity eventuated, it would largely negate the remaining 236 million tonnes of abatement that the Emissions Reduction Fund would need to purchase to meet our [existing] international obligations,” it said.

Contrast this with the Obama plan, which sets firm and ambitious targets for emissions reductions for every state in the US. It’s true that many details of the Obama plan remain to be fought over. Individual states will have latitude in deciding how they go about it. But the clear intent, as articulated by John Podesta, a former senior Obama adviser and chief of staff to Bill Clinton, now chairman of Hillary Clinton’s presidential campaign, is that it will push states into implementing emissions trading schemes. Clinton has committed to following through. Already, 10 states have set these targets themselves.

The details will come later but the important thing, with the global climate change conference to be held in Paris at year’s end, is that they show America is now serious.

As Michael Bloomberg, the former Republican mayor of New York and billionaire philanthropist, said: it not only sets the course for America’s energy future, but shows the US was “leading by example, putting more pressure on other countries to act”.

The Australian government remains the only major player not to have signalled its plans for Paris, but given its approach so far it does not look like it will commit to anything so sweeping as the Obama goal.

We will see later this month when the government announces its targets for Paris. It’s certainly under pressure. Opinion polls show the public becoming increasingly concerned about the government’s apparent support for the coal sector over renewables. An Essential poll this week showed 65 per cent support for the Labor opposition’s adoption of a target of getting 50 per cent of Australian energy from renewables by 2030.

That target, indeed any meaningful target, will necessitate shutting down a large part of Australia’s fleet of coal power stations. And not before time. 

In a paper for the journal Nature Climate Change in February this year, Christopher Kennedy, a professor of engineering at the University of Toronto, compared International Energy Agency data on 16 individual countries and the European Union, and found Australia’s energy sector was more carbon intensive than any but India’s. Worse than China’s, worse even than Saudi Arabia’s. Per unit of electricity produced, Australia’s power stations emitted about 60 per cent more carbon dioxide than those in the US, and well over twice as much as Europe.

And it’s not just CO2 to worry about. One reason so many power stations in the US have closed down over recent years is that stringent standards have been introduced to force them to scrub out other toxic emissions. Obama mentioned mercury and sulphur.

“The dominant source of mercury in the air in Australia is the burning of fossil fuel,” says Dr Roger Dargaville, deputy director of the Melbourne energy institute, at the University of Melbourne.

His colleague, Dr Robyn Schofield, says that while Australian coal is mostly low in sulphur, the amounts produced here are still way above those coming from scrubbed smokestacks in most other countries.

“We lack the clean air standards they have elsewhere,” she says. “For example, Australia currently has no standard for fine particulates. These particulates are class one carcinogens, which puts them up there with asbestos.”

Let’s look at the Hazelwood Power Station in Victoria, which became famous for the fire that choked Morwell for weeks in toxic smoke last year. It is Australia’s dirtiest power station.

“Hazelwood produces 1.56 [long] tons of carbon dioxide per megawatt hour of electricity produced, which is among the worst in the developed world, if not the worst,” says Dargaville.

It produces a lot of other toxins as well. The most recent figures from the National Pollutant Inventory – compiled by the federal government from industry-supplied data – shows Hazelwood also pumps into the air an annual 435 kilograms of mercury, 74 kilograms of arsenic, 22 tonnes of ammonia, seven tonnes of hydrochloric acid, 26 tonnes of sulphuric acid and 600 tonnes of fine particulates, among other things.

Hazelwood is more than 50 years old. When commissioned, it was expected to be closed by the year 2000. Almost anywhere else in the developed world, it would have been.

“Under the rules in place in EU and US, power stations have and will be closed that are cleaner than Hazelwood and the other Victorian generators,” says Dr Nicholas Aberle, of Environment Victoria. “The four dirtiest power stations in Australia are the brown coal stations of the Latrobe Valley.”

The irony is, Australia does not need the power. According to the Australian Energy Market Operator, Australia now has excess capacity of about 8000 or 9000 megawatts.

“You could close down Hazelwood tomorrow and the lights would still stay on,” says Aberle. In fact, you could close down several Hazelwoods.

And power stations are closing, under pressure from declining demand and more renewables. The problem is, it is not the dirtiest ones that are closing, but the most expensive.

“Brown coal, because nobody else wants it – there is no export market – is incredibly cheap,” says Victoria McKenzie-McHarg, climate change campaign manager for the Australian Conservation Foundation.

“Because of that and because their operators are wanting to really sweat the assets, they’re running at really high capacity. They’re at about 85 per cent. A lot of those NSW and Queensland stations, because they’re more expensive and we have a massive oversupply of electricity, at times are only running at 50 per cent. So unless we have a structured approach, we will see more efficient black coal stations in Queensland and NSW close first, and we’ll still be left with these old clunkers.” 

But the current government appears to have no interest in managing the decarbonisation of the electricity sector. Indeed, it seems intent on frustrating it. And while the alternative government, Labor, has committed to an ambitious target for alternatives, it has offered little detail, other than a vague commitment to an emissions trading scheme.

A bigger renewable energy target is not enough, McKenzie-McHarg and others say. To make the necessary changes, Australia needs emissions performance standards, much like the Obama plan.

The Saturday Paper asked Labor environment spokesman Mark Butler about this. He was not prepared to announce further policy details so far out from the election. But he acknowledged Australia’s electricity sector is the single largest source of carbon pollution and “one of the heaviest polluting sectors in the developed world”.

In government, he said, Labor would “work with the electricity industry, unions and other stakeholders to develop a comprehensive electricity modernisation strategy.”

His words may not have had the rhetorical beauty or power of Obama’s, but they at least offered some hint of an intention to finally clean up the dirtiest power sector in the developed world.

This article was first published in the print edition of The Saturday Paper on August 8, 2015 as "Filthy secrets".

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Mike Seccombe is The Saturday Paper’s national correspondent.

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