Volume 26 No 2 - Jun 2008 - Australian Institute of Energy
Volume 26 No 2 - Jun 2008 - Australian Institute of Energy
Volume 26 No 2 - Jun 2008 - Australian Institute of Energy
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VolUME <strong>26</strong> <strong>No</strong>. 2 – JUNE <strong>2008</strong><br />
www.aie.org.au<br />
OFFICIAL JOURNAL<br />
OF THE AUSTRALIAN<br />
INSTITUTE OF ENERGY<br />
Developments in Oil and Gas<br />
PLUS:<br />
Coal Technology<br />
Distributed <strong>Energy</strong><br />
<strong>Energy</strong> Views — ACCC,<br />
Garnaut and the IEA
ISSN 1445-2227<br />
(International Standard Serial Number allocated<br />
by the National Library <strong>of</strong> Australia)<br />
THE AUSTrAlIAN<br />
INSTITUTE oF ENErgy<br />
ENErgy<br />
News<br />
Journal Correspondence<br />
Joy Claridge<br />
PO Box 298<br />
Brighton, VIC 3186<br />
email: editor@aie.org.au<br />
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email: editor@aie.org.au<br />
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ENErgyNews is published by The <strong>Australian</strong><br />
<strong>Institute</strong> <strong>of</strong> <strong>Energy</strong> and is provided to<br />
all members as part <strong>of</strong> the membership<br />
subscription. <strong>No</strong>n-members may obtain<br />
copies <strong>of</strong> this journal by contacting either the<br />
Secretariat or the Editor.<br />
Contributions Welcome<br />
Articles on energy matters, letters to<br />
the editor, personal notes and photographs<br />
<strong>of</strong> those involved in the energy sector are<br />
most welcome.<br />
Published By<br />
The <strong>Australian</strong> <strong>Institute</strong> <strong>of</strong> <strong>Energy</strong><br />
ABN 95 001 509 173<br />
Registered Office<br />
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Print Post Approved <strong>No</strong>. PP 3<strong>26</strong>04/00001<br />
Disclaimer<br />
Although publication <strong>of</strong> articles submitted<br />
is at the sole and absolute discretion <strong>of</strong> the<br />
<strong>Australian</strong> <strong>Institute</strong> <strong>of</strong> <strong>Energy</strong>, statements<br />
made in this journal do not necessarily<br />
reflect the views <strong>of</strong> the <strong>Institute</strong>.<br />
Contents<br />
President’s Message 30<br />
The Price <strong>of</strong> Petrol 31<br />
Distributed <strong>Energy</strong> 32<br />
ETIS & IDgCC 34<br />
The IEA 36<br />
Water and <strong>Energy</strong> 38<br />
Special Feature<br />
Developments in Oil and Gas 39<br />
Articles<br />
An Overview <strong>of</strong> Advanced<br />
Clean Coal Technologies 44<br />
Garnaut Climate Change Review<br />
Government scheme helps deliver<br />
47<br />
cleaner energy 49<br />
Book reviews<br />
The Handbook <strong>of</strong> Biomass Combustion<br />
and Co-Firing 50<br />
Pinch Analysis and Process Integration 51<br />
letters to the <strong>Institute</strong> 51<br />
Membership Matters 53<br />
Cover: Courtesy TRUenergy<br />
ENErgyNews ENErgyNews — <strong>Volume</strong> <strong>26</strong> — <strong>No</strong>. <strong>Volume</strong> 2 <strong>Jun</strong>e <strong>26</strong> <strong>2008</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 29
President’s Message<br />
The challenge <strong>of</strong> rising energy prices<br />
Murray Meaton, President,<br />
<strong>Australian</strong> <strong>Institute</strong> <strong>of</strong> <strong>Energy</strong><br />
<strong>Energy</strong> costs remain on the front page<br />
in our newspapers with record price<br />
rises for fossil fuels and predictions <strong>of</strong><br />
even higher coal and crude oil prices.<br />
Such price rises would normally be<br />
expected to lead to reduced energy use<br />
but such is the demand from expanding<br />
economies that consumption continues<br />
to rise inexorably. While rising energy<br />
prices will inevitably cause some<br />
slowdown in economic activity, the<br />
rising consumption continues to<br />
increase emissions <strong>of</strong> environmentwarming<br />
greenhouse gases.<br />
In an endeavour to reduce global<br />
emissions, governments <strong>of</strong> all<br />
Special Features<br />
This issue’s feature on Developments in Oil & Gas is timely. As ENErgyNews goes to press the crude oil price<br />
is hovering at around US$130 per barrel.<br />
Hydrogen will be featured in September <strong>2008</strong> issue, and all material will be sourced from presentations to the World<br />
Hydrogen <strong>Energy</strong> Conference (WHEC <strong>2008</strong>) hosted by the <strong>Australian</strong> <strong>Institute</strong> <strong>of</strong> <strong>Energy</strong> and the International<br />
Association <strong>of</strong> Hydrogen <strong>Energy</strong> in Brisbane on 15–19 <strong>Jun</strong>e <strong>2008</strong>.<br />
In December <strong>2008</strong> issue, the topic is Future Liquid Fuels, covering alternatives to petroleum fuels including, but<br />
not limited to, bi<strong>of</strong>uels, synfuels, and coal/gas to oil. So, let the editor know <strong>of</strong> your intention to submit material<br />
by 24 October <strong>2008</strong>, and send copy to editor for publication by 14 <strong>No</strong>vember <strong>2008</strong>.<br />
The first special feature for 2009 will be Skills and Training in the <strong>Energy</strong> Sector. Details to follow in forthcoming<br />
issues <strong>of</strong> ENErgyNews.<br />
Suggestions for further topics in 2009 welcome, and please include contact details <strong>of</strong> expert contributors if known.<br />
Contact details: Joy Claridge editor@aie.org.au<br />
(03) 9596 3608 0402 078 071<br />
30 ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e 2007<br />
persuasions continue to strive to find<br />
a balance between new technologies,<br />
renewable energy development and<br />
energy saving measures. The <strong>2008</strong><br />
<strong>Australian</strong> Government Budget<br />
devoted substantial funding to research<br />
into clean coal technologies and<br />
renewable energy sources. Perhaps<br />
reflecting the challenge <strong>of</strong> choosing<br />
the easier pathway, a very similar<br />
amount was allocated to both fields<br />
<strong>of</strong> work. Specific funding initiatives<br />
included energy storage and hydrogen<br />
as well as geothermal drilling and<br />
bi<strong>of</strong>uel technologies. Solar technology<br />
research will also be boosted by an<br />
<strong>Energy</strong> Innovation Fund. The broad<br />
ranging initiatives and the substantial<br />
funding involved reflect the importance<br />
<strong>of</strong> emission reduction. They also<br />
recognise that energy prices will<br />
continue to rise and economies need to<br />
start adapting to crude oil scarcity.<br />
The large budget sums also reflect the<br />
challenges that lie ahead. While new<br />
technologies <strong>of</strong>fer promise for emission<br />
reductions from new energy sources,<br />
the continuing increase in population<br />
and demand for higher living standards<br />
in developing countries means that<br />
the developed countries will have to<br />
reduce total energy consumption if the<br />
ambitious emission reduction targets<br />
are to be achieved. This cannot be<br />
achieved without a measurable increase<br />
in energy costs or energy-saving<br />
investment. There will be an adjustment<br />
in the economy, and energy-intensive<br />
industries almost certainly will relocate<br />
to countries with less stringent energy<br />
reduction aspirations. Any adjustment<br />
in the mix <strong>of</strong> industry and energy use<br />
patterns involves transitional costs<br />
and social adaptation. Australia is a<br />
wealthy country and, while there will<br />
be resistance from those most affected<br />
by these changes, the nation appears<br />
to have strongly supported emission<br />
reduction targets. It is now time to<br />
develop the strategies that will deliver<br />
those with the lowest transitional cost<br />
and community pain.<br />
<strong>Australian</strong> <strong>Institute</strong> <strong>of</strong> <strong>Energy</strong> Branches<br />
around Australia have been busy in the<br />
past few months with meetings and<br />
seminars on current energy issues.<br />
Two large conferences are scheduled<br />
for <strong>2008</strong>, with support for the 17th<br />
World Hydrogen <strong>Energy</strong> Conference<br />
in Brisbane in <strong>Jun</strong>e and the <strong>Energy</strong> in<br />
Western Australia conference in Perth<br />
in August. A very topical <strong>Energy</strong> in<br />
NSW event is also scheduled for July.<br />
I encourage all members support these<br />
ambitious events as well as regular<br />
Branch meetings.<br />
Murray Meaton<br />
President, AIE
Few nations are as enamoured with the car as Australia.<br />
There are 14.8 million registered vehicles on our roads and,<br />
when surveyed in 2006, 90% <strong>of</strong> households said they kept at<br />
least one car on the property. With 80% <strong>of</strong> those 18 and over<br />
using a car as a primary method <strong>of</strong> transport to get to work<br />
or study, any change in the basic cost <strong>of</strong> motoring potentially<br />
affects a huge section <strong>of</strong> the population. With its widely<br />
dispersed centres <strong>of</strong> agriculture, industry, mining activity,<br />
and large distances, Australia is a society highly dependent<br />
on fuel. Its citizens therefore are keen observers <strong>of</strong> petrol<br />
price fluctuations and harbour deep suspicion <strong>of</strong> factors<br />
that lead to its pricing. As a result there is a long history <strong>of</strong><br />
government involvement in petrol and petrol pricing.<br />
These community suspicions are perhaps driven partly by the<br />
complicated factors that lead to the eventual price paid at the<br />
pump by motorists. Weekly price cycles are one <strong>of</strong> the most<br />
obvious feature to motorists and generate much comment,<br />
especially around public holidays. Petrol price cycles remain<br />
an enigma to authorities, despite numerous investigations<br />
attempting to explain their origins. In terms <strong>of</strong> the standard<br />
<strong>of</strong> fuel sold in Australia, it varies both domestically and in<br />
comparison to standards overseas. There is also frequent<br />
buying and selling <strong>of</strong> petrol between the four major petrol<br />
companies within Australia. Despite the media focus and<br />
clear public concern about the price <strong>of</strong> petrol, <strong>Australian</strong>s<br />
continue to enjoy relatively cheap fuel in relation to other<br />
developed economies in the OECD group. In March 2007<br />
only Mexico, the United States and Canada had lower retail<br />
petrol prices than Australia in this group. The actual cost <strong>of</strong><br />
the fuel remains relatively similar across all countries, with<br />
government taxes making up for most <strong>of</strong> the differences<br />
between the 29 countries included in a 2007 OECD survey.<br />
The ACCC has for some time monitored the seven-day<br />
rolling average <strong>of</strong> retail unleaded petrol prices for the five<br />
largest cities and compared it to a rolling average for the<br />
region’s benchmark price, Singapore MOGAS 95 unleaded.<br />
Comparing the rolling average <strong>of</strong> what motorists pay at<br />
the pump and the regional benchmark (allowing for a lag<br />
<strong>of</strong> around one week) means the ACCC can easily monitor<br />
when <strong>Australian</strong> retailers are inflating prices. During 2007,<br />
the average difference between the wholesale and retail prices<br />
was 61.3 cpl (cents per litre). When that gap increased to<br />
63.8 cpl in January and then again rose to 65.5 cpl in <strong>Jun</strong>e,<br />
the ACCC made the information public and called on the<br />
petrol retailers to give motorists a fair go by pulling their<br />
prices back into line with the benchmark.<br />
The repeated disparities became the catalyst for the<br />
ACCC seeking the national Treasurer’s approval for a<br />
far-reaching inquiry into the industry under Part VIIA <strong>of</strong><br />
the Trade Practices Act. What resulted was an exhaustive,<br />
comprehensive examination <strong>of</strong> Australia’s unleaded<br />
The Price <strong>of</strong> Petrol<br />
Petrol Prices and <strong>Australian</strong> Consumers<br />
Based on a presentation to South Australia Branch<br />
by graeme Samuel, Chairman, ACCC (<strong>Australian</strong> Competition<br />
and Consumer Commission), on 22 February <strong>2008</strong>.<br />
petrol market. That report was<br />
submitted to the government on 14<br />
December 2007, and made a number<br />
<strong>of</strong> important findings. It concluded<br />
that the industry was fundamentally<br />
competitive and that there was no<br />
obvious evidence <strong>of</strong> price fixing. However, it did note there<br />
were concerns in the market. These included a cosy club <strong>of</strong><br />
sellers with a unique ability to control the supply and price<br />
<strong>of</strong> fuel. These suppliers also had an advantage over motorists<br />
in the form <strong>of</strong> real-time price information which allowed<br />
them to closely follow the price <strong>of</strong> competitors and adjust<br />
prices accordingly. Refining was also highly concentrated<br />
and barriers to entry were high for independents wanting to<br />
provide new competition, with one <strong>of</strong> the greatest barriers<br />
being a lack <strong>of</strong> port facilities for importing cheap petrol<br />
from overseas. In order to address these issues, the report<br />
recommended a closer look at the buy/sell arrangements<br />
between the major oil companies and an audit <strong>of</strong> terminals<br />
that would be potentially suitable for importing petrol into<br />
Australia from other markets.<br />
Since the release <strong>of</strong> the petrol report (see www.accc.gov.<br />
au to download a copy), the government has responded by<br />
directing the ACCC to conduct formal monitoring <strong>of</strong> the<br />
prices, costs and pr<strong>of</strong>its related to the supply <strong>of</strong> petroleum<br />
products in the petroleum industry. This requires the<br />
ACCC to produce annual reports to the Commonwealth<br />
Minister for Competition and Consumer Affairs over the<br />
next three years. The government has also announced the<br />
appointment <strong>of</strong> Pat Walker as a commissioner to the ACCC<br />
with special responsibilities in the area <strong>of</strong> petrol. Mr Walker<br />
is a former Commissioner for the Consumer Protection<br />
and Prices Commission in Western Australia. Despite the<br />
extensive work already conducted as a result <strong>of</strong> the petrol<br />
inquiry, there remains much still to be done. As well as an<br />
audit <strong>of</strong> all potential terminals suitable for importing petrol<br />
and the responsibilities <strong>of</strong> ongoing monitoring, there will<br />
also be a closer examination <strong>of</strong> the information sharing<br />
arrangements provided to petrol retailers and a running<br />
watch on developments in shopper docket schemes that may<br />
impact on the competitiveness <strong>of</strong> the market.<br />
Despite this work, to echo the words <strong>of</strong> the minister, Chris<br />
Bowen, “there is no magic bullet that will lead to a sudden<br />
sharp drop in the price <strong>of</strong> petrol in Australia”. Like every<br />
other country, Australia must pay the going price for this<br />
internationally-traded commodity. That said, there is scope<br />
to ensure that at the local level steps are taken to make petrol<br />
pricing as competitive as possible. To ensure motorists get the<br />
best possible price when filling their cars we need to ensure<br />
accountability, transparency and increased opportunities for<br />
competition between sellers, while empowering motorists<br />
with the information to make informed buying decisions.<br />
ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 31
Distributed <strong>Energy</strong><br />
ready, willing and able<br />
Summary <strong>of</strong> the AIE Sydney Branch Symposium held on 16 October 2007,<br />
prepared by Mark Gadd, Director, Autonomous <strong>Energy</strong>.<br />
The New Face <strong>of</strong> DE<br />
By Craig Chambers, GridX Power<br />
Craig Chambers described GridX Power as the ‘lone ranger’<br />
in Australia pushing the distributed energy (DE) ‘barrow’.<br />
GridX Power is a vertically integrated utility and a licensed<br />
DE provider that builds combined heat and power systems<br />
burning natural gas from the mains in an internal combustion<br />
engine for onsite production <strong>of</strong> electricity and heat. In<br />
partnership with Mirvac, GridX has created Australia’s<br />
first residential housing estate powered by natural gas using<br />
trigeneration technology which generates three forms <strong>of</strong><br />
energy (cooling, heating and power) from a single source.<br />
This showcase project is small though highly scalable and<br />
saves 4–7 tonnes <strong>of</strong> CO2-e per house annually. Mr Chambers<br />
explained that in the past 12 to 18 months sustainability<br />
has become the new driver for GridX’s DE systems, and<br />
that building codes, including BASIX and ABGR, have now<br />
become the single biggest driver. GridX views the current<br />
increasing network constraints as another significant driver<br />
and believes its distributed energy systems are an elegant<br />
solution. The benefits <strong>of</strong> the solution are: no noise or visual<br />
impact; higher power reliability and quality; provides lower<br />
cost energy; and results in a reduction in emissions. It is also<br />
possible to upgrade sustainability ratings by installing GridX<br />
power systems; this upgrade would be isolated to the plant<br />
room and is less expensive than GreenPower.<br />
The DE program in APP<br />
By John Jende, Director – Renewable <strong>Energy</strong> Policy, AGO<br />
John Jende provided an update on the work <strong>of</strong> the<br />
Renewable <strong>Energy</strong> and Distributed Generation Task Force.<br />
He commenced with a background on the Asia-Pacific<br />
Partnership on Clean Development and Climate (APP) and<br />
its emphasis on “practical partnerships to develop, deploy<br />
and transfer cleaner, more efficient technologies”, noting that<br />
“private sector engagement is recognized as a key ingredient<br />
<strong>of</strong> success”. Mr Jende described the APP’s Renewable <strong>Energy</strong><br />
and Distributed Generation Task Force (REDGTF) <strong>of</strong> which<br />
Korea is the chair and Australia the co-chair. The goals <strong>of</strong><br />
REDGTF are to accelerate the deployment <strong>of</strong> renewable<br />
energy and DE over the next five years; to identify market<br />
and policy barriers and implement mechanisms to overcome<br />
them; and to close the gap between the cost <strong>of</strong> renewable<br />
energy generation and conventional generation. Australia<br />
is leading a number <strong>of</strong> projects in REDGTF that address<br />
market barriers. There are three broad categories <strong>of</strong> projects:<br />
deployment, market enabling, and RD&D. Examples <strong>of</strong><br />
projects receiving APP funding include: High Efficiency Solar<br />
32 ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong><br />
Power Stations for Affordable <strong>Energy</strong> led by Solar Systems,<br />
Identifying High Value Geothermal Resources in China,<br />
Pursuing Clean <strong>Energy</strong> Business in India, and Building<br />
Expertise in Solar <strong>Energy</strong> Engineering led by UNSW. Mr<br />
Jende also highlighted IEA projections <strong>of</strong> electricity demand<br />
by region and contrasted this with current generation and<br />
renewable electricity. Given the large projected increases in<br />
demand in India, China and the US, he does not believe that<br />
renewable energy generation can keep up with this increase<br />
in demand, let alone replace current sources <strong>of</strong> conventional<br />
generation.<br />
MCE Code <strong>of</strong> Practice<br />
By Ryan Thew, <strong>Energy</strong> and Environment, DITR<br />
Ryan Thew’s presentation focused on the economic efficiency<br />
<strong>of</strong> DE and what the national government was doing to review<br />
rules and change the law in order to help the economic<br />
case <strong>of</strong> DE. The Ministerial Council on <strong>Energy</strong> (MCE) was<br />
established in 2001 to reform the national energy market. The<br />
reform <strong>of</strong> the energy market is not driven by environmental<br />
concerns but rather by economic efficiency. The MCE has<br />
established a renewable energy and distributed generation<br />
working group to examine wind energy policy, the code<br />
<strong>of</strong> practice for embedded generation and to improve grid<br />
accessibility. The stated aim is not to bias DE and renewable<br />
energy but rather to level the playing field by removing<br />
barriers and disincentives. The MCE wants to ensure that<br />
connection arrangements are not unduly complex for micro<br />
DE systems. Fundamentally the MCE recognises the need for<br />
equivalent incentives for investment in DE as an alternative<br />
to network investment.<br />
Figure 1: DE Around the World<br />
Source: WADE Annual World Survey <strong>of</strong> DE 2006
Global Opportunities for DE<br />
By David Sweet, WADE<br />
David Sweet is Executive Director WADE (World Alliance<br />
for Distributed <strong>Energy</strong>), which has <strong>of</strong>fices in Edinburgh,<br />
Washington, Edmonton and Beijing. WADE is a non-pr<strong>of</strong>it<br />
research, promotion and advocacy organisation started in<br />
1997. Their mission is to accelerate the worldwide deployment<br />
<strong>of</strong> high-efficiency cogeneration, on-site power and DE<br />
systems. WADE works with a number <strong>of</strong> organisations from<br />
all over the world to promote this mission. In Australia, DE<br />
represents just over 5% <strong>of</strong> total electricity generation — 7th<br />
lowest out <strong>of</strong> the 41 countries surveyed.<br />
WADE is interested in the replicated development <strong>of</strong> economic<br />
models to prove DE. Mr Sweet started his presentation by<br />
stating that he believes energy is the number one factor for<br />
the economy in the future, and that our energy future and<br />
the future for civilisation in general are inextricably linked.<br />
Therefore, there is a need to find alternatives to coal and oil.<br />
He pointed out that DE technology is ready now and able to<br />
improve the environment and the bottom line. <strong>Energy</strong> prices<br />
and climate change will accelerate DE deployment worldwide<br />
and distributed technologies have led to major market shifts in<br />
other areas, such as computing and telecommunications. Mr<br />
Sweet and gave examples <strong>of</strong> these analogies such as mainframes<br />
versus the Internet and landlines versus mobile phones.<br />
Figure 2: Decentralised Technologies. Source: WADE<br />
WADE’s work is cited in the IPCC 4th Report on Climate<br />
Change Mitigation in a section on “Decentralized <strong>Energy</strong>”.<br />
Benefits cited include:<br />
• Reduced need for costly transmission systems<br />
• Shorter lead times<br />
• Substantially reduced grid power losses<br />
• Deferred costs for upgrading transmission and distribution<br />
infrastructure<br />
• Improved reliability<br />
• Increased total energy recovery from 40–50% up to<br />
70–85%, with corresponding reductions in CO2 emissions<br />
<strong>of</strong> 50% or more.<br />
Mr Sweet concluded that DE is a win-win form <strong>of</strong> power<br />
generation which has great potential to reduce CO2<br />
emissions and reduce overall costs <strong>of</strong> supplying power. The<br />
barriers tend to be policy barriers.<br />
Figure 3: Fossil Fuel Emissions by Technology<br />
Source: WADE (based on IEA and DIDEME data)<br />
Plug-in Vehicles<br />
By Richard Hunwick, Hunwick Consultants Pty Ltd<br />
Richard Hunwick’s presentation focused on the potential<br />
future role <strong>of</strong> plug-in vehicles (PEVs) as storage <strong>of</strong> power in<br />
the electricity grid. Mr Hunwick considers storage to be a form<br />
<strong>of</strong> DE, albeit expensive. Up until recently people have only<br />
really looked at stationary forms <strong>of</strong> storage, though emerging<br />
technologies such as PEVs now beg the question: What about<br />
transport? There is potentially large storage potential in<br />
PEVs. Power can flow both ways — grid to vehicle (G2V) and<br />
vehicle to grid (V2G) — and this can be very favourable for<br />
renewable energy by absorbing and storing some <strong>of</strong> the energy<br />
produced. PEVs could also eliminate peak capacity and defer<br />
the need for generation, transmission and distribution capacity<br />
augmentation. They can supplement shortcomings <strong>of</strong> grid<br />
supply to host buildings providing UPS and ‘high nines’ supply<br />
reliability. The business case for distributed storage is yet to be<br />
made, with batteries being the limiting factor. However they<br />
are improving all the time and the cost is halving each year. Mr<br />
Hunwick believes that if incumbent car manufacturers resist<br />
the trend then demand will be met by Chinese and Indian<br />
manufacturers. Combined with smart meters and appropriate<br />
control s<strong>of</strong>tware, PEVs promise to have a disruptive but<br />
positive effect on our electricity supply system.<br />
The Intelligent Grid<br />
Stuart White, <strong>Institute</strong> for Sustainable Futures, UTS<br />
Stuart White’s presentation outlined the interdisciplinary<br />
project that he is leading which involves collaboration<br />
between CSIRO and several <strong>Australian</strong> universities. The<br />
project integrates and to the greatest extent possible<br />
harmonises a number <strong>of</strong> research and development projects<br />
and aims to increase the understanding <strong>of</strong> the real benefits<br />
<strong>of</strong> DE; develop a robust and transparent model to measure<br />
the value <strong>of</strong> DE options in network development (such as<br />
avoided network costs); and effect more public debate on<br />
the role <strong>of</strong> DE. The intelligent grid will use information<br />
and communications control technology to integrate the<br />
electricity network with DE resources, and will enhance<br />
network stability and control. Broadly there are three<br />
dimensions <strong>of</strong> research: technological, economic and<br />
social. The research is focused on generating solutions and<br />
addressing and overcoming the myriad barriers that are<br />
preventing optimal economic and environmental outcomes,<br />
thus moving us closer to best practice.<br />
ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 33
ETIS & IDGCC<br />
<strong>Energy</strong> Technology Innovation and Hrl<br />
Presentation by Dr Peter Redlich, Director <strong>Energy</strong> Technology Innovation,<br />
Victorian Department <strong>of</strong> Primary Industries, and Gordon Carter,<br />
Managing Director, HRL Limited, to Melbourne Branch on 27 February <strong>2008</strong>.<br />
Dr Redlich explained Victoria’s <strong>Energy</strong> Technology<br />
Innovation Strategy (ETIS) program and Mr Carter provided<br />
an overview <strong>of</strong> the 400 MW Integrated Drying Gasification<br />
and Combined Cycle (IDGCC) project proposed for the<br />
Latrobe Valley.<br />
ETIS<br />
The <strong>Energy</strong> Technology Innovation Division <strong>of</strong> the Victorian<br />
Department <strong>of</strong> Primary Industries is responsible for the<br />
ETIS program, which manages the cross-government<br />
investment <strong>of</strong> over A$180 million in precommercial energy<br />
and related greenhouse gas reduction technologies. ETIS<br />
ensures that Victoria’s total investment is coordinated and<br />
delivers the best commercial and environmental outcomes<br />
for the state.<br />
A position paper in 2004 set out the Victorian Government’s<br />
strategy to reduce greenhouse emissions from the stationary<br />
Figure 1: ETIS brown coal projects<br />
34 ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong><br />
energy sector. It included support for:<br />
• a national emissions trading scheme (ETS);<br />
• low-emission technologies (ETIS);<br />
• a strong renewable energy industry (VRET); and<br />
• enhanced energy efficiency.<br />
Collectively these commitments affect all aspects <strong>of</strong> energy<br />
supply and demand, including household end-use. A primary<br />
objective <strong>of</strong> the ETIS program is to drive energy and related<br />
greenhouse gas reduction technologies down their respective<br />
cost curves to optimise Victoria’s economic development<br />
and security <strong>of</strong> supply in a carbon constrained world. ETIS<br />
facilitates a coordinated approach to the advancement<br />
<strong>of</strong> precommercial low-emissions energy technologies<br />
across brown coal (see Figure 1) and sustainable energy<br />
technologies. It does not operate in areas that have no<br />
technical risk (ie commercial projects).
Figure 2: Estimated Latrobe Valley CO2 Emissions and Water Use<br />
IDGCC<br />
Victoria is fortunate to have access to some <strong>of</strong> the world’s<br />
largest and cheapest reserves <strong>of</strong> brown coal. However,<br />
Victoria will face some serious policy issues when emissions<br />
trading is introduced in 2010. There are a number <strong>of</strong><br />
options facing industry and government. For example, we<br />
could replace current older brown coal power stations with<br />
state-<strong>of</strong>-the-art new ones; shut down all energy-intensive<br />
industries; convert the existing brown coal power stations<br />
to using lower emissions imported black coal; and/or build<br />
new very-low-emission brown coal power stations with new<br />
technology, such as HRL’s IDGCC technology.<br />
IDGCC is a new highly-efficient process for generating<br />
electricity from brown coal. It combines pressurised drying<br />
and gasification <strong>of</strong> the coal with gas turbine combined cycle<br />
power generation. Brown coal is pressurised and dried in a<br />
dryer using the heat in the gas generated by the gasification<br />
process. It is then converted to a combustible gas in the<br />
fluidised bed gasifier. Inside the pressurised dryer the coal<br />
comes into direct contact with hot gas leaving the gasifier.<br />
This dries the coal and cools the hot gas at the same time. The<br />
cooled gas is cleaned prior to combustion in a gas turbine to<br />
produce electricity. The water vapour released from drying<br />
the coal forms part <strong>of</strong> the gas going to the gas turbine. The hot<br />
exhaust gas from the gas turbine still contains useful energy<br />
which is recovered by a heat recovery boiler and steam turbine<br />
to produce extra electricity in the combined cycle process.<br />
To demonstrate the potential <strong>of</strong> the technology, consider<br />
replacing all existing brown coal power generation in the<br />
Latrobe Valley with new technology like IDGCC. Figure 2<br />
shows the impact on CO2 emissions (and water usage).<br />
The IDGCC technology is capable <strong>of</strong> reducing CO2 emissions<br />
from brown coal power generation by up to 30% when<br />
compared to the current most efficient brown coal power<br />
generation in the Latrobe Valley, and by over 40% when<br />
compared to the older power stations. If the current existing<br />
brown coal power plants in the Latrobe Valley were replaced<br />
with IDGCC brown coal power generation, the potential<br />
impact on emissions and water consumption would be<br />
significant. CO2 emissions would fall from about 57 to 35<br />
million tonnes (Mt) per annum, and water consumption would<br />
fall from about 98 to 43 gigalitres per annum. The addition <strong>of</strong><br />
carbon capture and dry cooling reduces annual emissions by<br />
a further 25 Mt (down to about 10 Mt per annum) and water<br />
consumption is negligible.<br />
Replacing all the current existing brown coal power<br />
stations in the Latrobe Valley with natural gas combined<br />
cycle technology (NGCC) would also reduce emissions<br />
significantly to about 17 Mt per annum, and would achieve<br />
about the same reduction in water consumption as IDGCC<br />
(without carbon capture and dry cooling).<br />
This scenario analysis, although simplistic, demonstrates<br />
what is technically achievable, and demonstrates that<br />
IDGCC has an important role to play in achieving the state’s<br />
goals. There are three building blocks to get to where we<br />
need to go with new technology: efficient and cheap power<br />
generation; efficient and competitive carbon capture; and cost<br />
effective sequestration. With IDGCC technology, the cost <strong>of</strong><br />
generation is expected to be lower than alternative generation<br />
technologies currently available. The challenge is to reduce<br />
the cost <strong>of</strong> carbon capture and overcome the legal and<br />
regulatory issues <strong>of</strong> carbon transport and sequestration.<br />
And, that’s another story! (Ed.)<br />
ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 35
The IEA<br />
The IEA: <strong>Energy</strong> Security and Sustainability<br />
Presentation by <strong>No</strong>buo Tanaka, Executive Director, International <strong>Energy</strong> Agency<br />
(IEA), to Canberra Branch, 17 March <strong>2008</strong>.<br />
The IEA is an energy policy advisor to its 27 member<br />
countries and was founded during the first oil crisis. The<br />
initial role was to respond to oil supply emergencies. But<br />
during the last decades, energy markets have changed, and<br />
so has the IEA. In now focuses beyond oil security to broader<br />
energy issues, including climate change, market reform,<br />
energy technology collaboration and outreach. Mr Tanaka<br />
took over as Executive Director last September and aims for<br />
the IEA to become known as a truly global comprehensive<br />
energy policy body.<br />
Environmental concerns, ongoing high prices and energy<br />
security considerations, are stimulating support for measures<br />
that could increase the uncertainty over the longer-term<br />
demand for oil. However, there is no need to close the<br />
valves on the oil pumps just yet. After all, IEA analysis<br />
continues to demonstrate that even if measures to moderate<br />
demand growth are introduced, and are a success, there is<br />
relatively little doubt that demand will remain robust over<br />
the foreseeable future. That is not to say that these policies<br />
are not worth pursuing, but simply reflects the time they<br />
will take to make an impact. Although the situation in 2030<br />
or 2050 is less certain, the investment decisions that will<br />
deliver supply at that time need not be taken for decades to<br />
come, particularly as the planning horizon for incremental<br />
capacity can be relatively short if investors have access to<br />
the resource base.<br />
However, while we are sure that the demand will be there,<br />
there are growing doubts on the supply side in the shortto-medium<br />
term. For this reason the IEA remains adamant<br />
that there is an urgent need to strengthen the flow <strong>of</strong> capital<br />
into upstream oil. After all, surging prices, diminishing<br />
discoveries and, in some cases, poor data on remaining<br />
reserves are fuelling concerns amongst some about the<br />
availability <strong>of</strong> the hydrocarbon reserves base. We remain<br />
comfortable with the adequacy <strong>of</strong> the world’s hydrocarbon<br />
reserves, but we are anxious to mitigate the above ground<br />
risks that complicate today’s markets.<br />
The EU countries, Japan and Canada have pledged to reduce<br />
emissions by 50% in 2050. The leaders <strong>of</strong> the G8 countries<br />
agreed at their summit in Heiligendamm in July 2007 that<br />
they would ‘seriously consider’ to follow suit. This push for<br />
action gained momentum last December in Bali when 178<br />
countries at the UN climate conference signed <strong>of</strong>f on the ‘Bali<br />
Roadmap’, which will take up where the Kyoto treaty leaves<br />
<strong>of</strong>f. After witnessing firsthand the negotiations in Bali, I am<br />
extremely grateful that the IEA’s job is not to broker deals on<br />
climate change. However, while the entire world’s attention<br />
36 ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong><br />
has been focusing on negotiations to set the reduction target,<br />
it is important that we do not lose sight <strong>of</strong> the fact that a<br />
target alone will not miraculously solve the problem. What<br />
is needed is practical action to transform our energy system.<br />
To this end, the IEA has analysed the steps that would be<br />
required to actually achieve a 50% cut in emissions, which<br />
corresponds to the IPCC’s scenarios <strong>of</strong> limiting the increase<br />
in global temperatures to 2.4°C. To understand the extent <strong>of</strong><br />
this challenge we first need to appreciate the current level <strong>of</strong><br />
emissions and the outlook for their growth.<br />
CO2 emissions from the energy sector currently stand at<br />
27 gigatonnes (Gt). One gigatonne <strong>of</strong> CO2 emissions is<br />
equivalent to the emissions produced each year by 300<br />
coal-fired power plants, each <strong>of</strong> 500 MW, operating at base<br />
load. According to the World <strong>Energy</strong> Outlook 2007, in the<br />
absence <strong>of</strong> strong policy action, emissions will rise to 42 Gt<br />
in 2030 and 62 Gt in 2050, and we will be on track for an<br />
increase in global temperature <strong>of</strong> 6°C. In contrast, to achieve<br />
the goal <strong>of</strong> cutting emissions by 50%, emissions would have<br />
to peak during the next decade and decline to 14 Gt in 2050<br />
a reduction <strong>of</strong> 48 Gt from the reference. An upcoming<br />
IEA publication, titled <strong>Energy</strong> Technology Perspectives<br />
<strong>2008</strong>, will outline what would need to be done in practical<br />
terms to achieve this goal. It will show that improving<br />
energy efficiency is top <strong>of</strong> the list. Next we would need to<br />
decarbonise electricity generation. And finally, we would<br />
need to revolutionise the transportation sector.<br />
<strong>Energy</strong> Efficiency<br />
Improving energy efficiency is fundamental. However,<br />
currently it is not happening. The improvement in energy<br />
efficiency in IEA member countries in the past ten years has
een poor, and only about half the rate <strong>of</strong> improvement in<br />
previous decades. A fundamental turnaround is needed. To<br />
achieve the 50% cut in emissions we would have to improve<br />
energy intensity from the current rate <strong>of</strong> just 1.6% annually<br />
to 2.7 % annually. Thankfully, we know what to do. The IEA<br />
has identified 16 concrete recommendations for improving<br />
energy efficiency covering all energy end uses. These were<br />
endorsed by leaders at the past two G8 Summits and, if fully<br />
implemented, they could save up to 5.7 Gt CO2 by 2030.<br />
<strong>Energy</strong> efficiency is a ‘triple win’ solution. Firstly, it delivers<br />
the same service to the user, at lower cost. Second, it leads<br />
to lower dependence on imported fuels. Third, it improves<br />
the environment. Based on this triple win, I have some very<br />
blunt advice which is applicable to all countries, whether or<br />
not they are ready to adopt greenhouse gas targets: “We have<br />
shown you the policies to improve energy efficiency, now it<br />
is up to you to implement! implement! implement!”<br />
Power Generation<br />
Any meaningful emission reduction in coming decades<br />
implies a virtual decarbonisation <strong>of</strong> the power generation<br />
sector. After all, the rapid growth in CO2 emissions from<br />
coal-fired power stations led to the surge in global emissions<br />
in the past few years. China alone added over 70 GW <strong>of</strong> new<br />
coal-fired capacity in 2007 — the equivalent <strong>of</strong> a new unit<br />
every two-and-a-half days. Thankfully, its new units are large<br />
(500 MW) and are mostly state-<strong>of</strong>-the-art technologies.<br />
Deployment <strong>of</strong> carbon capture and storage (CSS) will<br />
therefore be vital as coal will undoubtedly remain the lowest<br />
cost and most accessible fuel for some <strong>of</strong> the most dynamic<br />
developing economies. The IEA has calculated that, given<br />
the growing demand for electricity, 38 coal and 20 gas-fired<br />
power plants would have to be fitted with CCS technology,<br />
each and every year between 2010 and 2050. In addition, we<br />
would have to build an additional <strong>26</strong> new nuclear plants each<br />
year throughout that period. Furthermore, renewables would<br />
have to play a much stronger role. For example, wind capacity<br />
would have to increase by 17,500 turbines each year.<br />
Transport Sector<br />
To achieve a 50% cut in emissions we would also have to make<br />
an eightfold reduction <strong>of</strong> the carbon intensity <strong>of</strong> transport.<br />
This represents the most difficult and costly step due to the<br />
ongoing rapid demand growth and limited potential based on<br />
existing technology. Cost effective efficiency improvements<br />
<strong>of</strong> up to 50% are already possible, provided that the trend<br />
towards heavier vehicles can be contained. But we would<br />
also require the widespread deployment <strong>of</strong> new technologies.<br />
Advanced bi<strong>of</strong>uels and hydrogen fuel cells, and advanced<br />
plug-in hybrid and electric vehicles fuelled by carbon-free<br />
electricity, are possible options, but it is hard to tell which<br />
technology or combination <strong>of</strong> technologies will prevail.<br />
The Challenge<br />
IEA preliminary analysis suggests that investment <strong>of</strong> around<br />
US$50 trillion would be needed for a 50% reduction in<br />
emissions, on top <strong>of</strong> what would be required under a business<br />
as usual scenario. This amounts to roughly 1% <strong>of</strong> total GDP<br />
from 2005-2050.<br />
The impact would be more significant for certain sectors,<br />
regions and countries. Predictable and long-term incentives<br />
alongside stable government policy would be needed to<br />
empower industry to accept the risk associated with this<br />
huge investment. However, there are other challenges<br />
which may prove to be more difficult than attracting<br />
investment. Technical issues have to be overcome before<br />
many <strong>of</strong> the promising new energy technologies could be<br />
widely deployed. The public would also have to become<br />
more accepting <strong>of</strong> living with wind farms in their backyards,<br />
not to mention nuclear reactors. We would also have<br />
to dramatically boost the numbers <strong>of</strong> engineering and<br />
technical graduates. Questions exist on the availability<br />
<strong>of</strong> sufficient geological formations for captured CO2 or<br />
geologically stable sites for nuclear reactors or waste storage.<br />
In short, meeting the target <strong>of</strong> a 50% cut in emissions<br />
represents a formidable challenge. We would require<br />
immediate policy action and technological transformation<br />
on an unprecedented scale. We would also need the<br />
participation <strong>of</strong> all major economies. It would essentially<br />
require a third industrial revolution, or an energy revolution,<br />
which would completely transform the way we produce and<br />
use energy and entail painful adjustments.<br />
Governments have a key role to play in this new energy<br />
revolution. They must be prepared to invest in researching<br />
and developing key technologies that are not yet commercial.<br />
This will not be easy — energy research budgets <strong>of</strong> IEA<br />
governments have declined both absolutely and as a<br />
percentage <strong>of</strong> GDP since the early 1980s. But in the end, it<br />
will be left to industry to consider the policy options and then<br />
put them to work to deliver the desired results. Government,<br />
industry, financial markets, and consumers will all have to<br />
work together.<br />
Time to Act<br />
The world’s energy economy is on a pathway that is not<br />
sustainable, on many fronts. This statement is not new. But<br />
it is nevertheless shocking, particularly given the political<br />
capital that has been devoted to improving the situation<br />
in recent years. In terms <strong>of</strong> the short-to-medium-term oil<br />
market, the situation is not sustainable as we continue to<br />
remain in a period <strong>of</strong> high and volatile prices, low spare<br />
capacity and low stock coverage. There is an urgent need for<br />
investment to ensure an adequate cushion between supply<br />
and demand. At the same time, the energy economy is not<br />
sustainable from an environmental perspective. But things<br />
can change. The IEA has identified policies and technologies<br />
that can lead to very substantial savings in energy<br />
consumption and CO2 emissions. For these to be achieved,<br />
decisions have to be taken now and implementation has to<br />
begin now. The primary scarcity facing the planet is not <strong>of</strong><br />
natural resources or money, but time. We will need to start<br />
putting our words and commitments into actions. Delay is<br />
no longer an option. It is time to act.<br />
Mr Tanaka’s presentation to the AIE was sponsored by ACIL<br />
Tasman, one <strong>of</strong> Australia’s leading economic and policy<br />
consultants.<br />
ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 37
<strong>Energy</strong> and Water<br />
<strong>Energy</strong> and Water in Tasmania<br />
Presentation to Melbourne Branch, by Andrew Catchpole, Hydro Tasmania,<br />
as part <strong>of</strong> the afternoon discussion with key industry representatives <strong>of</strong> the<br />
“Increasing Interactions between <strong>Energy</strong> and Water Markets” on <strong>26</strong> March <strong>2008</strong>.<br />
Hydro Tasmania owns and operates 29 hydropower stations,<br />
59 major dams, 188 headwork gates and valves, 22 canals,<br />
19 tunnels, 43 pipelines, and 63 generators. Its hydropower<br />
generating capacity <strong>of</strong> 2,<strong>26</strong>0 MW is supplemented by 228 MW<br />
<strong>of</strong> gas-fired thermal capacity at Bell Bay. Hydro Tasmania<br />
generates 10,000 GWh per annum, which is about half <strong>of</strong><br />
Australia’s renewable energy and more than twice the energy<br />
output <strong>of</strong> the Snowy scheme (from half the installed capacity).<br />
It is also 50% owner <strong>of</strong> R40s: Woolnorth (130MW); Musselroe<br />
(129MW, proposed); Cathedral Rocks in South Australia;<br />
Waterloo in Victoria; and 11 overseas (nine commissioned or<br />
under development in China and two in India).<br />
Tasmania has valuable water resources but rainfall distribution<br />
is uneven in both location and time. Rainfall is predominantly<br />
from the west, and mostly in winter and spring. The catchment<br />
area <strong>of</strong> 21,000 square kilometres (total area <strong>of</strong> Tasmania is<br />
64,000 square kilometres) receives around 15,000 GL (gigalitres)<br />
annually. The long-term average yield is 10,000 GWh per<br />
annum, and on-island annual demand <strong>of</strong> approximately 11,000<br />
GWh is met by hydro, gas and Basslink imports. Increasingly,<br />
hydro systems are becoming peak load suppliers.<br />
38 ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong><br />
Basslink is the world’s longest undersea high voltage direct<br />
current cable. It allows Hydro Tasmania to take the place <strong>of</strong> a 600<br />
MW peak generator in Victoria, and allows Tasmania to import<br />
up to 450 MW in <strong>of</strong>f-peak energy. Since commissioning in April<br />
2006, 3,568 GWh <strong>of</strong> energy has been imported to Tasmania,<br />
while 921 GWh has been exported to Victoria. Victoria avoids<br />
the cost <strong>of</strong> building generation to meet peak demand and<br />
Tasmania avoids the cost <strong>of</strong> building generation to meet energy<br />
load and insures against drought.<br />
Other uses <strong>of</strong> water in Tasmania are irrigation (204 GL in<br />
2005–06) and industrial (48 GL in 2004–05); but by far the<br />
biggest user <strong>of</strong> water is hydropower generation (38,162 GL in<br />
2004–05, including multiple use through two or more power<br />
stations. Hydro Tasmania is Australia’s biggest water manager,<br />
and is affected by the current drought. Although this year’s<br />
rainfall is only 20% down on average, it comes on top <strong>of</strong> 10 dry<br />
years. This highlights the value <strong>of</strong> fuel diversity through hydro,<br />
wind, gas and imports. It is not just hydropower generation that<br />
is affected. We need to manage a range <strong>of</strong> environmental and<br />
stakeholder impacts, including threatened species, recreational<br />
fishing, water quality (eg algal blooms), other recreational uses,<br />
and visual amenity.<br />
For the past 30 years, we have received 5% less rain than the<br />
long-term average; and in the past 10 years, 5% less again. Is it<br />
climate change? We don’t know, but it is prudent to act just in<br />
case it is. Adapting to climate changed involves changing the<br />
business model, finding the ‘lost’ energy in the system and the<br />
Tasmanian Climate Futures Project.<br />
As the value <strong>of</strong> water rises, peak generation becomes more focused<br />
towards higher prices. This biases the business model towards<br />
peak generation and away from base load generation. Generating<br />
to meet peak load requires much less water than base load supply.<br />
However generation for shorter periods means asset cost must be<br />
recovered over a shorter time period. This is achieved by selling<br />
contracts, such as caps — insurance for retailers, with very short<br />
periods <strong>of</strong> export to back the contract portfolio.<br />
The major areas <strong>of</strong> focus to recover 1000 GWh <strong>of</strong> energy in the<br />
Tasmanian system are:<br />
Canal maintenance Dam raising<br />
Conveyance upgrade Dam construction<br />
Major redevelopments Storage increase<br />
Catchment diversions Small hydro<br />
Turbine runner improvements.<br />
Tasmanian Climate Futures Project is a 3-year partnership<br />
working with a range <strong>of</strong> scenarios to 2100. Partners are:<br />
Antarctic CRC CSIRO<br />
Tasmanian Government Hydro Tasmania<br />
University <strong>of</strong> Tasmania Bureau <strong>of</strong> Meteorology<br />
Tasmanian state emergency services<br />
Tasmanian Partnership for Advanced Computing<br />
Tasmanian <strong>Institute</strong> <strong>of</strong> Agricultural Research<br />
Commonwealth Environment Research Facilities Programme<br />
Geoscience Australia.
Developments in oil and gas<br />
Special Feature<br />
As the price <strong>of</strong> crude oil hovers around US$130 per barrel, it is timely<br />
to consider what is happening in the upstream petroleum sector in Australia.<br />
According to the February <strong>2008</strong> <strong>Energy</strong>Quest Quarterly<br />
Report, “the <strong>Australian</strong> petroleum sector grew strongly in<br />
2007, reflecting continuing high oil prices, surging world<br />
LNG demand (and prices) and higher domestic demand for<br />
gas-fired generation to <strong>of</strong>fset reductions in hydro and coalfired<br />
generation. <strong>Australian</strong> petroleum production grew by<br />
4.6% in 2007, almost reaching the 2000 record <strong>of</strong> 474 million<br />
barrels (MMbbl) <strong>of</strong> oil equivalent. Oil production increased<br />
by 3.2%, the first increase in <strong>Australian</strong> oil production since<br />
2000. Production <strong>of</strong> natural gas increased by 6.0% to a<br />
record 1,705 petajoules (PJ). Coal seam methane production<br />
climbed by 40.2% to reach 113 PJ, representing 17.4% <strong>of</strong> east<br />
coast production.”<br />
However, these record levels <strong>of</strong> production are not expected<br />
to last. As the Hon Martin Ferguson, Minister for <strong>Energy</strong>,<br />
pointed out: “With only about a decade <strong>of</strong> known oil<br />
resources remaining at today’s production rates, Australia<br />
is looking down the barrel <strong>of</strong> a A$25 billion trade deficit in<br />
petroleum products by 2015.”<br />
Mr Ferguson was speaking at the <strong>Australian</strong> Petroleum<br />
Production and Exploration Association (APPEA) conference<br />
in April <strong>2008</strong>. At the conference, under the theme Energising<br />
Change, Mr Ferguson pointed out that, “… together with<br />
increasing concern about climate change, the insatiable thirst<br />
for energy means that energy security is one <strong>of</strong> the big issues<br />
confronting Australia and the world today”.<br />
“Access to energy resources is the key to continuing economic<br />
growth and the challenges <strong>of</strong> meeting global energy demand<br />
– in a sustainable way – are daunting,” he said.<br />
“Australia not only has to look to its own future when it<br />
comes to energy security and cleaner energy sources and<br />
technology, it has to be part <strong>of</strong> the solution to economic<br />
growth in the region – and its environmental impact.<br />
Almost 20% <strong>of</strong> our total exports are energy resources – and<br />
that is growing. ‘Energising change’ is about seizing the<br />
opportunities we have to unlock the wealth <strong>of</strong> Australia’s<br />
vast resource potential, particularly our natural gas — not<br />
only for the benefit <strong>of</strong> the <strong>Australian</strong> community but for our<br />
friend, Japan, which has been with us from the beginning<br />
in developing the <strong>Australian</strong> resources sector; and for the<br />
hundreds <strong>of</strong> millions <strong>of</strong> people being lifted out <strong>of</strong> poverty in<br />
developing Asian nations, such as China and India — also<br />
highly valued and growing trade and investment partners.<br />
“The <strong>Australian</strong> Government knows that we face strong<br />
competition from other nations <strong>of</strong>fering alternative petroleum<br />
exploration and project development opportunities. It is a<br />
real challenge to find the next Bass Strait — or anything<br />
like it. The <strong>Australian</strong> Government is looking to focus<br />
the exploration industry’s attention on new frontiers.<br />
Geoscience Australia’s current precompetitive work is highly<br />
respected by the petroleum exploration industry for its<br />
provision <strong>of</strong> leading-edge, low cost, high-quality information.<br />
We are committed to Geoscience Australia’s continuing<br />
work in this area and it will form part <strong>of</strong> the exploration<br />
incentives package I have asked my Department to prepare<br />
in consultation with the industry and the Treasury.<br />
“It is vitally important to encourage exploration in our<br />
frontier basins because they are the most likely places<br />
where a big new oil province may be discovered. Energising<br />
change is also about expanding the ways in which we use<br />
our gas resources — for LNG exports, as a domestic fuel<br />
for <strong>Australian</strong> industry and power generation, and for new<br />
export industries like ultra-clean GTL (gas to liquids) diesel.<br />
Balancing our desire to grow exports while ensuring there is<br />
sufficient gas available at a fair market price to meet the needs<br />
<strong>of</strong> <strong>Australian</strong> industry and consumers is a great challenge.<br />
New gas developments such as Kipper, Blacktip and Reindeer<br />
will help meet Australia’s domestic gas demand. But more<br />
needs to be done, particularly in Western Australia, and I<br />
intend to work closely with the industry to facilitate more<br />
commercial domestic gas projects in the next few years.”<br />
This special feature focuses on activity in Australia. The first<br />
two articles come from Geoscience Australia. Although fairly<br />
technical in content (which will appeal to the petroleum<br />
geologists in our readership), they demonstrate to all that<br />
there is still much to find out about the extent <strong>of</strong> oil and gas<br />
resources in <strong>Australian</strong> onshore and <strong>of</strong>fshore basins using<br />
the latest techniques.<br />
The importance <strong>of</strong> gas to the future mix is exemplified<br />
by the development <strong>of</strong> the Kipper Gas Project in the Bass<br />
Strait. Project Manager Peter Symes made a presentation<br />
to AIE Melbourne Branch on 16 April and a summary is<br />
reproduced here.<br />
Mr Ferguson also talked about the importance <strong>of</strong> a safe and<br />
secure working environment for all those involved in the<br />
oil and gas industry. The final article in this special feature<br />
covers the National Offshore Petroleum Safety Authority’s<br />
(NOPSA’s) safety awareness campaign.<br />
EN<br />
ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 39
Is Onshore <strong>Australian</strong> Really ‘Dry’?<br />
Opening the untapped oil and gas potential <strong>of</strong> old basins<br />
By Thomas Bernecker, Onshore <strong>Energy</strong> & Minerals Division, Geoscience Australia<br />
In response to the declining oil supply, the <strong>Australian</strong><br />
Government provided Geoscience Australia with funding<br />
for the <strong>Energy</strong> Security Program (2006-2011). The purpose<br />
<strong>of</strong> this program is to supply precompetitive data to stimulate<br />
exploration in under-explored regions <strong>of</strong> Australia,<br />
including assessments <strong>of</strong> uranium, thorium, geothermal<br />
and hydrocarbon resources. The Onshore Petroleum Project<br />
focuses on those sedimentary basins (outside the proven<br />
Cooper/Eromanga hydrocarbon province) that are thought<br />
to be prospective for oil and gas, as indicated by previously<br />
recorded hydrocarbon shows.<br />
Australia’s onshore basins contain elements<br />
<strong>of</strong> petroleum systems <strong>of</strong> Neoproterozoic to<br />
Late Mesozoic age, whereas <strong>of</strong>fshore basins<br />
host petroleum systems almost exclusively<br />
<strong>of</strong> Late Palaeozoic to Tertiary age. This<br />
difference in basin fill ages is likely to have a<br />
pr<strong>of</strong>ound impact on the overall distribution<br />
<strong>of</strong> commercially viable hydrocarbons as<br />
many <strong>of</strong> the geologically older onshore<br />
provinces were overprinted by at least<br />
one major orogenic phase. Therefore, the<br />
various preservation stages <strong>of</strong> generated<br />
hydrocarbons in these old basins are key<br />
issues that impact on prospectivity and are<br />
the subject <strong>of</strong> current investigations.<br />
Geoscience Australia’s newly acquired<br />
potential field data (aeromagnetics and<br />
gravimetry) provide modern images<br />
<strong>of</strong> basement terranes and associated<br />
lineaments that have a controlling influence<br />
on basin formation and evolution. Of<br />
special interest are the occurrence and<br />
distribution <strong>of</strong> sub-basins and depocentres<br />
that, so far, have remained hidden beneath<br />
thick sediment cover. The regional deep<br />
seismic program continues in <strong>2008</strong> with<br />
the acquisition <strong>of</strong> data across the Gawler<br />
and Curnamona cratons, which will<br />
include a section across the southern<br />
Arrowie Basin. Later in the year, a deep<br />
seismic survey will be acquired across the<br />
eastern Officer Basin as far north as the southern Amadeus<br />
Basin. Another major survey is planned for 2009–10 across<br />
the Kidson Sub-basin, possibly along the Canning Stock<br />
Route. It is anticipated that the processed data will allow the<br />
delineation <strong>of</strong> structural styles in great detail and highlight<br />
unconformities and reactivation surfaces.<br />
40 ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong><br />
The new data will be made available to industry to assist<br />
current and future explorers in their efforts to unlock the<br />
untapped hydrocarbon potential in these frontier regions.<br />
The challenge exists to overcome the perception that any<br />
hydrocarbon discoveries made in Australia’s old onshore<br />
basins are likely to be small. It should be noted that many<br />
older Palaeozoic basins around the world are proven<br />
hydrocarbon producers. These include the Tarim Basin in<br />
China (where the Ordovician source rock interval alone is<br />
believed to be able to produce 800 MMbbl <strong>of</strong> oil and 4 trillion<br />
Map showing sedimentary basins and generalised hydrocarbon distribution in<br />
onshore Australia. Insert at top right shows the petroleum wells drilled to date,<br />
highlighting the under-explored status <strong>of</strong> the continent<br />
cubic feet (Tcf) <strong>of</strong> gas), and the onshore Oman salt basins<br />
(where a 50,000 square-kilometre Cambrian source rock area<br />
produces up to 2,200 MMbbl <strong>of</strong> oil and 24 TcF <strong>of</strong> gas). There<br />
is still a lot <strong>of</strong> ground to cover in onshore Australia!<br />
renew your Membership online<br />
http://www.pams.com.au/aienat<br />
EN
Offshore <strong>Energy</strong> Security Initiative and Core Petroleum Program<br />
An update <strong>of</strong> future surveys and new directions<br />
By Peter Southgate, Edward Bowen, Barry Bradshaw, Marita Bradshaw, Dianne Edwards,<br />
Robert Langford, Nadege Rollet and Jennie Totterdell, Petroleum Prospectivity & Promotions<br />
Group, Petroleum & Marine Division, Geoscience Australia<br />
The <strong>Australian</strong> Government’s Offshore <strong>Energy</strong> Security<br />
Initiative (2006-2011) will provide precompetitive data and<br />
information to stimulate petroleum exploration in Australia.<br />
The forward program has been developed in consultation<br />
with industry and the respective state and territory geological<br />
surveys. It will focus on three <strong>of</strong>fshore frontier regions:<br />
remote frontiers in <strong>of</strong>fshore eastern Australia, south-west<br />
margin; and southern margin.<br />
Petroleum systems modelling in producing regions will form<br />
part <strong>of</strong> the ongoing core petroleum program. These studies<br />
are aimed at improved resource estimates and stimulating<br />
further exploration. Negotiations are currently underway<br />
with a number <strong>of</strong> organisations to partner with Geoscience<br />
Australia to deliver these models.<br />
Remote Eastern Frontiers<br />
Between December 2006 and January 2007, Geoscience<br />
Australia acquired approximately 6,000 kilometres (km) <strong>of</strong><br />
industry standard 2D seismic data in the Capel and Faust<br />
basins, 800 km east <strong>of</strong> Brisbane. The survey identified<br />
numerous depocentres, some 150 km in length and 40 km in<br />
width, with up to 7 km <strong>of</strong> sediment fill. Initial interpretation<br />
has identified a potential pre-rift succession, three synrift<br />
phases (clastic/volcanic), two post-rift carbonate<br />
packages, and episodes <strong>of</strong> post-rift igneous activity. Possible<br />
correlations with the Capricorn, Great South and deepwater<br />
Taranaki basins have been suggested.<br />
In late 2007 the RV Tangaroa completed a marine<br />
reconnaissance survey <strong>of</strong> the Capel and Faust basins.<br />
Geophysical datasets acquired on this survey included<br />
gravity, magnetics, multibeam sonar, and sub-bottom<br />
pr<strong>of</strong>iler data. An accompanying seafloor sampling program<br />
acquired geological and biological samples from potential<br />
seepage sites and representative areas <strong>of</strong> the sea floor,<br />
to search for indications <strong>of</strong> active petroleum systems<br />
and to document marine biodiversity and habitats. The<br />
multibeam sonar revealed seafloor features that appear<br />
to reflect the underlying basin structure. The gravity and<br />
magnetic coverages are expected to significantly improve<br />
the delineation <strong>of</strong> depocentre boundaries. Seafloor sampling<br />
and camera footage provided information on the substrate<br />
composition and potential fluid escape sites. Current work<br />
involves interpreting and integrating these datasets to define<br />
the rift basin architecture and tectonostratigraphic history to<br />
better understand the region’s petroleum prospectivity.<br />
South-West Margin<br />
Between <strong>No</strong>vember <strong>2008</strong> and March 2009, Geoscience<br />
Australia will undertake two major surveys to investigate the<br />
Mentelle, north Perth and southern Carnarvon basins and<br />
Abrolhos, Houtman and Zeewyck sub-basins.<br />
Seismic acquisition in the Mentelle basin will infill the 50<br />
km grid interpreted under the New Petroleum Program,<br />
to provide a dataset with a line spacing <strong>of</strong> 20–30 km. The<br />
improved seismic grid will provide critical data on basin shape<br />
and sediment architecture, permitting petroleum systems<br />
models to be developed at the regional scale. The schedule<br />
for seismic acquisition, processing and interpretation suggest<br />
a 2010 date for release <strong>of</strong> acreage in the Mentelle basin.<br />
The deep water Houtman and Zeewyck sub-basins and the<br />
north Perth and south Carnarvon basins will be the focus for<br />
acquisition <strong>of</strong> new 2D seismic and the reprocessing <strong>of</strong> open-file<br />
industry seismic. As the petroleum exploration well information<br />
is limited in the deeper water Houtman and Zeewyck subbasins,<br />
open-file seismic data from the shallow water Abrolhos<br />
sub-basin will be used to constrain the stratigraphies.<br />
The Wallaby Plateau is a poorly understood fragment<br />
<strong>of</strong> continental crust located in the southern parts <strong>of</strong> the<br />
Carnarvon basin. It has been suggested that a reconnaissance<br />
seismic acquisition grid and geological sampling program<br />
would provide insight into the location <strong>of</strong> potential<br />
depocentres and whether or not gas-producing stratigraphies<br />
<strong>of</strong> the Exmouth Plateau may extend to the southwest.<br />
Southern Margin<br />
The southern margin synthesis study aims to integrate the<br />
results <strong>of</strong> earlier studies to better understand the breakup<br />
history between Australia and Antarctica, resolve<br />
outstanding stratigraphic correlation problems and permit<br />
improved resource prediction.<br />
A cooperative National Geoscience Agreement project<br />
between Geoscience Australia and the Tasmanian Geological<br />
Survey is funding the acquisition <strong>of</strong> about 104,000 line km<br />
<strong>of</strong> airborne magnetics data at a line spacing <strong>of</strong> 800 metres in<br />
the Bass and Sorell basins, <strong>of</strong>fshore Tasmania. Acquisition<br />
commenced in January <strong>2008</strong> and will be completed by April.<br />
The new data will permit improved resolution <strong>of</strong> <strong>of</strong>fshore<br />
structure and distribution <strong>of</strong> volcanic rocks and intrusive<br />
bodies. In subsequent years <strong>of</strong> the program, 2D seismic is<br />
scheduled to be acquired in the Sorell basin and possibly<br />
over the South Tasman Rise.<br />
Between February and March 2007, a prospectivity<br />
validation survey <strong>of</strong> the Bight basin recovered source rocks <strong>of</strong><br />
Cenomanian-Turonian age, with TOC values <strong>of</strong> 2–6.2 % and<br />
HI values <strong>of</strong> 274–479. This clearly demonstrates the existence<br />
<strong>of</strong> a good quality source rock in the Bight basin and studies<br />
are underway to establish if possible correlations may exist<br />
between these rocks and the asphaltite strandings common<br />
on the southern margin. 2D petroleum systems modelling<br />
studies are also underway for the Bight basin to further<br />
support upcoming acreage release in 2009 and 2010. EN<br />
ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 41
Bass Strait Gas Rises Again<br />
By Peter Symes, Kipper Gas Project Manager, Esso Australia<br />
The first major hydrocarbon fields discovered in Australia<br />
were the Bass Strait gas fields — Barracouta in 1965 and<br />
Marlin in 1966. In those days, and until fairly recently, gas<br />
was always a consolation prize in the hunt for oil. Since those<br />
first discoveries a lot <strong>of</strong> oil has been found in Bass Strait and<br />
a lot more gas in the process.<br />
The Bass Strait fields fundamentally changed the economic<br />
outlook for Australia, and particularly Victoria. Over the past<br />
four decades, Gippsland oil and gas has contributed A$2.2<br />
billion annually to Australia’s real GDP and A$700 million per<br />
year to real business investment. It has contributed over A$300<br />
billion to <strong>Australian</strong> Government revenues since 1970 in<br />
present value terms. This equates to over 2% <strong>of</strong> all government<br />
revenues collected in the period. Overall Esso’s Gippsland<br />
operation is estimated to have stimulated more than 50,000<br />
jobs in the Victorian labour market and this includes 14,000<br />
jobs in Gippsland alone. With over A$13 billion invested in<br />
infrastructure, we are well into the process <strong>of</strong> transforming<br />
the focus <strong>of</strong> this from oil production to gas.<br />
West Tuna Platform, Bass Strait<br />
Local trends are consistent with increasing global demand<br />
for gas. At ExxonMobil, we believe that global demand will<br />
continue to increase by about 1.7% annually between now<br />
42 ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong><br />
and 2030. That demand is being driven by the dual forces <strong>of</strong><br />
economic development and the growing need for electric<br />
power. The situation is similar in Australia. There is rapidly<br />
growing demand for power generation and we see gas<br />
meeting an increasing proportion <strong>of</strong> that growth. Driving the<br />
increasing gas demand is a combination <strong>of</strong> favourable public<br />
policy and growing awareness that natural gas is a cleanburning,<br />
environmentally-friendly energy source. In fact, gasfired<br />
power generation produces up to 70% lower greenhouse<br />
gas emissions than coal and uses up to 80% less water.<br />
With this in mind, we are in a very fortunate position in<br />
south-east Australia in that the Gippsland Basin fields still<br />
have significant gas resources which have the potential for<br />
sale to customers in Victoria, Tasmania, South Australia<br />
and New South Wales via an existing network <strong>of</strong> pipelines.<br />
After almost four decades <strong>of</strong> production we have only used<br />
about half <strong>of</strong> the discovered gas reserves in our Gippsland<br />
fields, and we are continuing to build on these reserves.<br />
We have added a trillion cubic feet <strong>of</strong> gas to our reserves<br />
in the past four years. That’s enough gas to power a city <strong>of</strong><br />
a million people for 20 years. We are currently evaluating<br />
the untested deeper basin gas potential under our existing<br />
fields. This includes our current drilling program deep<br />
below the Snapper field. We are applying today’s advanced<br />
formation evaluation and drilling technology in order to<br />
get the maximum value from our extensive Gippsland<br />
infrastructure. Over the past 10 years we have also invested<br />
over half a billion dollars in upgrading our onshore gas<br />
processing and liquids extraction plants at Longford and<br />
Long Island Point to position them for their important role<br />
into the future. This includes the installation <strong>of</strong> the latest<br />
production-optimisation process control systems as well as<br />
a range <strong>of</strong> integrity upgrades. <strong>No</strong>w we are investing <strong>of</strong>fshore<br />
in opportunities to extend and increase gas production in<br />
the face <strong>of</strong> the growing demand.<br />
In 2002 we installed a new gas pipeline to our Bream field<br />
with the capacity to produce 200 million cubic feet per day.<br />
Then last December we announced the go-ahead for the<br />
billion dollar Kipper Gas Project — one <strong>of</strong> the largest gas<br />
developments to come on stream in Victoria since discovery<br />
<strong>of</strong> the initial Bass Strait fields. Kipper contains 620 billion<br />
cubic feet <strong>of</strong> gas and 29 million barrels <strong>of</strong> condensate<br />
and LPG. The Project is being pursued by a joint venture<br />
between subsidiaries <strong>of</strong> ExxonMobil (Esso Australia, 32.5%,<br />
Operator), Santos (35%) and BHP Billiton (32.5%) together<br />
with arrangements with Gippsland Basin Joint Venture<br />
(ExxonMobil subsidiary Esso Australia and BHPB). This in<br />
itself represents a new era for our Gippsland operations. For<br />
more than 40 years we have been operating under a 50:50<br />
joint venture with BHP Billiton in Bass Strait. The Kipper<br />
Unit Joint Venture production will be the first gas to use<br />
the Gippsland facilities that has third-party ownership with<br />
the involvement <strong>of</strong> Santos. Commercial arrangements were<br />
agreed in 2006, paving the way for front-end engineering
design and a full funding decision in 2007, followed by<br />
the awarding <strong>of</strong> major equipment supply and installation<br />
contracts in April <strong>2008</strong>.<br />
The Kipper field, located in 100 metres <strong>of</strong> water about 45<br />
kilometres <strong>of</strong>fshore, will be developed by the installation <strong>of</strong><br />
a number <strong>of</strong> subsea wells with production piped onshore to<br />
the existing plant at Longford. The Kipper wells will be tied<br />
back to the West Tuna platform and new 450mm diameter<br />
gas pipelines will be constructed from West Tuna to Marlin<br />
and from Marlin to Snapper. The gas will be delivered from<br />
Marlin and Snapper to Longford via existing trunklines.<br />
Illustration <strong>of</strong> Kipper subsea wells<br />
The new pipelines will also help to efficiently produce over<br />
500 billion cubic feet <strong>of</strong> gas remaining in the Tuna field. In<br />
addition to these projects, we are in the process <strong>of</strong> completing<br />
the front end engineering design on another major project<br />
National Safety Awareness Campaign<br />
By Louise Dumas, External Affairs Officer, NOPSA<br />
Ageing facilities and lifting operations are a concern for<br />
Australia’s <strong>of</strong>fshore petroleum safety regulator NOPSA<br />
(National Offshore Petroleum Safety Authority).<br />
NOPSA is conducting a national awareness campaign to<br />
alert employers and workforce <strong>of</strong> two major classes <strong>of</strong> risk<br />
currently facing the industry. Ageing facilities and lifting<br />
operations on <strong>of</strong>fshore petroleum installations are the focus<br />
<strong>of</strong> the campaign. Ageing facilities pose an increased risk <strong>of</strong><br />
hydrocarbon releases, while lifting operations increase the<br />
risk <strong>of</strong> injury to individuals.<br />
The CEO <strong>of</strong> NOPSA, John Clegg, said that ageing facilities<br />
in the oil and gas industry were a global problem and had<br />
the potential to heighten risk. “Many operators are using<br />
facilities on a ‘life extension’ basis which means that the<br />
operating life <strong>of</strong> the facility has been extended beyond its<br />
original ‘use by date’. Because <strong>of</strong> this, operators undertake<br />
risk assessment and improvement programmes.” He said the<br />
scope <strong>of</strong> NOPSA’s facility integrity national programme is<br />
to facilitate the industry operator’s inspection, testing and<br />
maintenance arrangements to prevent loss <strong>of</strong> containment<br />
<strong>of</strong> petroleum fluids that may arise from failure <strong>of</strong> <strong>of</strong>fshore<br />
production topside structures, process equipment, piping<br />
aimed at producing gas from the Turrum field situated below<br />
Marlin. We also plan to build a new gas conditioning plant<br />
at Longford to process the gas from Kipper and other future<br />
developments such as Turrum. This would be located east <strong>of</strong><br />
the existing gas plants at Longford on existing land already<br />
cleared for such a purpose. Front end engineering design is<br />
scheduled to begin next year. Key construction contracts<br />
have been awarded for the Kipper Gas Project and we expect<br />
construction to start from the second half <strong>of</strong> this year. This<br />
will keep us on schedule to deliver first gas to South-East<br />
Australia in 2011.<br />
Illustration <strong>of</strong> Bass Strait oil and gas fields with Kipper<br />
EN<br />
and systems. Lifting operations on <strong>of</strong>fshore facilities are<br />
some <strong>of</strong> the most ‘routine’ <strong>of</strong> tasks carried out yet have been<br />
recognised globally as carrying significant risk. “We need a<br />
continued focus to improve safety in these risky but routine<br />
<strong>of</strong>fshore operations,” Mr Clegg said.<br />
NOPSA’s lifting operations program inspects operator’s<br />
lifting procedures and arrangements for inspections,<br />
maintenance and testing <strong>of</strong> lifting equipment. The scope <strong>of</strong><br />
this programme covers loads freely suspended from a crane<br />
or winch – including personnel and man-riding. Indications<br />
from data collected suggest that personnel competency<br />
and the management <strong>of</strong> lifting and crane operations are the<br />
main areas <strong>of</strong> concern. Mr Clegg said that the <strong>Australian</strong><br />
<strong>of</strong>fshore petroleum industry generally manages the hazards<br />
associated with its operations very successfully but there is<br />
no room for complacency.<br />
“NOPSA aims to deliver world class health and safety<br />
regulation for the <strong>Australian</strong> <strong>of</strong>fshore petroleum industry<br />
and this entails working closely with industry to identify<br />
risks and improve health and safety outcomes.”<br />
EN<br />
ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 43
Articles<br />
An overview <strong>of</strong> Advanced<br />
Clean Coal Technologies<br />
By B. Moghtaderi (FAIE), Deputy Director, Priority Research Centre for <strong>Energy</strong>,<br />
Chemical Engineering, University <strong>of</strong> Newcastle<br />
Fossil fuels currently contribute to 64% <strong>of</strong> global anthropogenic<br />
greenhouse gas (GHG) emissions. Over one-third <strong>of</strong> global<br />
CO2 emissions are the result <strong>of</strong> stationary power generation<br />
from fossil fuels. The anticipated increase in the world’s<br />
population together with the expected growth in energy<br />
demand from fossil fuels will undoubtedly cause a steady<br />
rise in GHG emissions unless novel energy technologies<br />
combined with effective national and international energy<br />
policies are introduced and implemented. More than 80% <strong>of</strong><br />
the emission cuts in the power generation sector are expected<br />
to be the results <strong>of</strong> fuel switching to renewable resources and<br />
the introduction <strong>of</strong> Clean Coal Technologies (CCTs) featuring<br />
CO2 capture and storage (CCS) capabilities. This article<br />
provides a techno-economic assessment <strong>of</strong> CCT options.<br />
Advanced Power Generation Technologies<br />
There are a host <strong>of</strong> near-zero and zero emission (NZ&ZE)<br />
technologies that either exist or are being developed<br />
for power generation from fossil fuels and combustible<br />
renewable resources such as biomass. As Figure 1 illustrates,<br />
the nature and techno-economic characteristics <strong>of</strong><br />
NZ&ZE technologies are underpinned by options <strong>of</strong> fuel,<br />
fuel conversion technology, CO2 mitigation strategy, and<br />
products which can range from heat and power to hydrogen,<br />
transportation fuel and chemicals. The fuel option <strong>of</strong> interest<br />
in this article is coal, although biomass, natural gas and oil are<br />
also <strong>of</strong> significant importance in a more general context.<br />
Figure 1: Basic elements <strong>of</strong> NZ&ZE technologies<br />
Fuel conversion technology options currently under research,<br />
development, demonstration and/or deployment comprise<br />
a series <strong>of</strong> first and second-generation technologies. First-<br />
44 ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong><br />
generation technologies which are either at demonstration<br />
and/or deployment stage are:<br />
(i) pulverised coal power plants fitted with flue gas<br />
desulphurisation facilities (PC+FGD);<br />
(ii) super-critical and ultra-super-critical pulverised coal<br />
power plants equipped with desulphurisation units<br />
(SC/USC+PC+FGD);<br />
(iii) natural gas combined cycle power plants (NGCC);<br />
(iv) integrated gasification combined cycle power plants<br />
(IGCC); and<br />
(v) integrated drying gasification combined cycle plants<br />
(IDGCC).<br />
Second-generation conversion technologies consist <strong>of</strong><br />
chemical looping combustion (CLC) and chemical looping<br />
gasification (CLG). CO2 mitigation options underpinning<br />
NZ&ZE technologies are essentially based on either CCS<br />
or fuel switching strategy (ie part replacement <strong>of</strong> fossil fuels<br />
with biomass). There are three CO2 capture approaches: precombustion,<br />
post-combustion, and oxy-firing. These options<br />
are discussed in more details in the following sections.<br />
Advanced CCT Options<br />
(Pre-Combustion Capture <strong>of</strong> CO2)<br />
The pre-combustion capture approach can be tailored so<br />
that the main product is hydrogen or electric power or<br />
both (polygeneration). In either case, the process begins by<br />
gasification <strong>of</strong> the fuel to syngas (H2 and CO mixture) followed<br />
by a water gas shift reaction to produce H2 for heat and power<br />
and a concentrated stream <strong>of</strong> CO2 ready for sequestration.<br />
Therefore, in the pre-combustion capture the CO2 is<br />
captured after the gasification stage but before combustion<br />
<strong>of</strong> H2. Gasification can be achieved by conventional methods<br />
(coal gasification) or advanced technologies such as IGCC,<br />
IDGCC, and CLG with NZ&ZE footprints. IGCC and IDGCC<br />
are essentially combined cycles in which the electricity is<br />
generated by both gas (Brayton) and steam (Rankine) cycles.<br />
IDGCC is very similar to an IGCC but has a dedicated<br />
drying unit upstream <strong>of</strong> the gasifier. As such, IDGCC is more<br />
suitable for low rank coals such as lignite. Both IGCC and<br />
IDGCC are more efficient and environmentally superior to<br />
their combustion-based counterparts, with typical thermal<br />
efficiencies in the range <strong>of</strong> 50–60%. However, IGCC and<br />
IDGCC -based systems have not been commercially deployed,<br />
primarily because <strong>of</strong> their high capital costs and technological<br />
challenges associated with: solid handling issues, optimisation<br />
<strong>of</strong> the gasification process; oxygen separation, and separation<br />
<strong>of</strong> hydrogen from CO2.
CLG technology is based on the concept <strong>of</strong> chemical looping<br />
which is a cyclic process. In this concept the loop (cycle)<br />
begins when an oxygen carrier (eg a metal oxide) provides<br />
oxygen to a reaction site (ie fuel reactor) and is reduced by<br />
oxidising the fuel. The reduced carrier is then reacted with<br />
air in a second reactor. This enables the reduced carrier to<br />
remove oxygen from air and regenerate itself (ie carrier is<br />
oxidised), hence, closing the loop. Depending on the type<br />
<strong>of</strong> the carrier, its reactivity and circulation rate, any desired<br />
reaction conditions can be achieved in the fuel reactor<br />
ranging from depleted oxygen environments suitable for<br />
gasification <strong>of</strong> the fuel to excess oxygen environments<br />
for combustion. For example, CLG can be employed for<br />
gasification <strong>of</strong> coal if CaSO4 is used as a carrier at circulation<br />
rates that provide about 5–8% oxygen concentration in the<br />
fuel reactor. The major challenges associated with CLGbased<br />
conversion technologies are: development <strong>of</strong> more<br />
effective oxygen carriers and more innovative reactor designs<br />
that allow smooth circulation <strong>of</strong> carrier particles with no gas<br />
leakage between the reactors.<br />
Advanced CCT Options<br />
(Post-Combustion Capture <strong>of</strong> CO2)<br />
By and large the selection <strong>of</strong> post-combustion capture<br />
technologies for CO2 removal depends on flue gas properties<br />
such as chemical composition, pressure, temperature<br />
and volume, which vary according to fuel type or power<br />
generation scheme. Typically the concentration <strong>of</strong> CO2<br />
in the flue gas <strong>of</strong> a PC type power plant is about 13% by<br />
volume, while for a NGCC plant the concentration is just<br />
over 3%. IGCC and IDGCC exhaust stream have typical CO2<br />
concentrations <strong>of</strong> about 7%.<br />
Post-combustion CO2 capture methods include:<br />
(i) solvent absorption;<br />
(ii) adsorption on activated carbon or other materials;<br />
(iii) cryogenic separation; and<br />
(iv) membrane separation.<br />
Solvent absorption relies on chemical and/or physical<br />
absorption. Chemical absorption is preferred for low to<br />
moderate CO2 partial pressures <strong>of</strong>ten encountered in PC<br />
plants. For applications at higher pressure (ie IGCC) physical<br />
absorption is preferred. The most common solvents used<br />
for chemical absorption are amine-based chemicals such<br />
as mono-ethanolamine (MEA), di-ethanolamine (DEA),<br />
and methyl-diethanolamine (MDEA). Solvents suitable for<br />
physical absorption are cold methanol, dimethylether <strong>of</strong><br />
polyethylene glycol, propylene carbonate, and sulfolane.<br />
Absorption-based CO2 capture systems are quite wellestablished<br />
and mature technologies and have been used in<br />
process, chemical, and oil and gas industries for over 70 years.<br />
These technologies are readily available and can be retr<strong>of</strong>itted<br />
into existing PC and NGCC power plants. The main issue,<br />
particularly in amine-based systems, is the considerable<br />
amount <strong>of</strong> energy required for the regeneration process.<br />
Absorption technologies also suffer from high degradation<br />
and corrosion rates in the presence <strong>of</strong> oxygen. As a result,<br />
the hardware associated with absorption technologies is<br />
relatively large and expensive. Absorption technologies also<br />
lead to higher operational costs because <strong>of</strong> efficiency losses<br />
associated with their energy demand. Furthermore, the<br />
presence <strong>of</strong> impurities, such as SOx and NOx may degrade<br />
the performance <strong>of</strong> absorption-based systems. This can be<br />
easily resolved if an FGD unit is retr<strong>of</strong>itted to the power<br />
plant. However, the capital investment associated with FGD<br />
may be quite substantial particularly in an <strong>Australian</strong> context<br />
where most <strong>of</strong> the power plants lack FGD units because <strong>of</strong><br />
low sulphur content <strong>of</strong> <strong>Australian</strong> coals.<br />
Physical adsorption <strong>of</strong> CO2 is another post-combustion<br />
capture technology which relies on adsorption <strong>of</strong> CO2 on<br />
the internal pores <strong>of</strong> a bed <strong>of</strong> high surface area materials,<br />
such as zeolites and activated carbon. Pressure swing<br />
adsorption (PSA), temperature swing adsorption (TSA), and<br />
electrical swing adsorption (ESA) are potential adsorption<br />
technologies for CO2 capture. While both PSA and TSA<br />
are commercially in use in various industries, they have not<br />
been yet deployed for large-scale post-combustion capture<br />
<strong>of</strong> CO2 because <strong>of</strong> their low operational temperatures and<br />
their lower selectivity and capacity for CO2 removal when<br />
compared with absorption-based systems. In terms <strong>of</strong> energy<br />
demand, adsorption systems are slightly less demanding than<br />
their absorption counterparts.<br />
In cryogenic separation, CO2 is liquefied at very low<br />
temperatures and, hence, selectively removed from the<br />
flue gas. Because <strong>of</strong> its energy demands the cryogenic<br />
separation process does not seem to be a viable option for<br />
large-scale post-combustion capture <strong>of</strong> CO2 from coal-fired<br />
power plants.<br />
Membranes rely on a barrier film to separate CO2 from the<br />
flue gas. The film allows selective permeation <strong>of</strong> CO2 and<br />
can be made from a host <strong>of</strong> different materials. Two types<br />
<strong>of</strong> membrane systems are most suited to post-combustion<br />
capture: gas separation and gas absorption membranes. In<br />
the former the selective transport <strong>of</strong> CO2 through the barrier<br />
film allows it to be separated from other gas species. In the<br />
latter the role <strong>of</strong> the barrier film is merely to provide contact<br />
between the flue gas and an absorption liquid which removes<br />
CO2 from the gas stream. Membrane systems hold a great<br />
deal <strong>of</strong> promise for post-combust capture <strong>of</strong> CO2. They are<br />
modular, simple and have been in commercial use for several<br />
decades. However, membranes have been predominately<br />
employed in liquid-liquid and liquid-solid separation. The<br />
use <strong>of</strong> membranes for gas separation dates to the early<br />
1990s and has yet to achieve a reasonable level <strong>of</strong> maturity<br />
and reliability. The use <strong>of</strong> membranes for large volumetric<br />
gas flow rates has also not been optimised yet. In addition,<br />
membrane systems suffer from low operating temperatures<br />
and high production costs.<br />
Advanced CCT Options<br />
(the Oxy-Firing Concept)<br />
The combustion <strong>of</strong> coal in air typically leads to a very<br />
dilute CO2 concentration in the flue gas stream (about<br />
13% by volume) rendering many post-combustion capture<br />
technologies economically unsuitable. Combustion <strong>of</strong> coal<br />
in an O2 environment — ‘oxy-firing’ — is one <strong>of</strong> several new<br />
technologies for enrichment <strong>of</strong> CO2 in the flue gas to levels as<br />
high as 95%. Oxy-firing can be accomplished through either<br />
the ‘oxy-fuel’ or chemical looping combustion.<br />
ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 45
In the oxy-fuel option, the O2 environment is typically<br />
generated by an air separation unit. However, to prevent<br />
excessively high flame temperatures and to minimise the<br />
volume <strong>of</strong> the flue gas to be treated, a significant portion <strong>of</strong><br />
the flue gas is recycled into the combustion chamber. Oxyfuel<br />
combustion is an enabling process that can be retr<strong>of</strong>itted<br />
to existing PC plants (Figure 2). It has the added benefit that<br />
by recycling the flue gas NOx emissions are considerably<br />
reduced. The major drawback <strong>of</strong> the oxy-fuel approach<br />
(apart from heat transfer and combustion related issues) is<br />
its need for an air separation plant which is expensive and<br />
energy intensive.<br />
Figure 2: Schematic — oxy-firing technology (oxy-fuel version)<br />
retr<strong>of</strong>itted to a PC boiler<br />
Source: CCSD<br />
CLC is one <strong>of</strong> several emerging combustion technologies<br />
which also facilitate the post-combustion removal <strong>of</strong> CO2.<br />
Fuel combustion in CLC takes place in the absence <strong>of</strong><br />
nitrogen ensuring that the main constituents <strong>of</strong> the flue gas<br />
are CO2 and water vapour which can be easily separated<br />
from CO2 by cooling the exhaust gas and removing the<br />
condensed liquid water. The CLC process is carried out by<br />
cyclic reduction and oxidation <strong>of</strong> a metallic oxide oxygen<br />
carrier (eg oxides <strong>of</strong> Fe, Cu, Co, Mn, and Ni) that is circulated<br />
between two interconnected reactors (see Figure 3). Thus,<br />
fuel and air never mix and CO2 does not get diluted by<br />
nitrogen. There is no energy penalty associated with CO2<br />
capture in the CLC process; an issue currently restricting the<br />
widespread deployment <strong>of</strong> CO2 capture options from dilute<br />
CO2 streams by solvent and membrane systems. The main<br />
limitation <strong>of</strong> CLC is that the process is currently suitable for<br />
gaseous fuels only. The wider acceptance <strong>of</strong> the CLC hinges<br />
upon extending the concept to coals using, for instance, an<br />
intermediate gasification process or direct injection <strong>of</strong> the<br />
solid fuel. R&D efforts focusing on these approaches are<br />
being undertaken across the world although to date it has<br />
been limited to bench and pilot-scale studies.<br />
Economic Assessment<br />
CO2 capture from combustion processes is rather expensive<br />
and energy intensive and, hence, is economically viable only for<br />
large and highly efficient plants. Efficiency losses due to capture<br />
and compression <strong>of</strong> CO2 at 100 bar are estimated to be 8–12%<br />
for first generation CCT options and in the order <strong>of</strong> 3–8%<br />
for second generation technologies such as CLC and CLG.<br />
46 ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong><br />
Figure 3: Schematic — CLC version <strong>of</strong> oxy-firing technology<br />
Efficiency losses imply that increased coal feeds are required.<br />
While the increase for conventional power plants fitted with<br />
post-combustion capture facilities could be as high as 35–40%,<br />
for the first generation CCT options the increase is expected<br />
to decline to 10–30%. Second generation technologies may<br />
need as low as 6% extra fuel. Based on all indicators, it appears<br />
that the most expensive component <strong>of</strong> the CCT options is the<br />
capture which may constitute up to 75% <strong>of</strong> the combined cost<br />
<strong>of</strong> the capture, transport and sequestration. According to the<br />
latest estimates by IEA, typical cost <strong>of</strong> CCS in coal-fired power<br />
plants range from A$34 to A$100 per tonne <strong>of</strong> CO2 avoided.<br />
The cost includes A$25–90/tCO2 for capture, A$1–12/tCO2<br />
per 100 km for transport, and A$2.5–12/tCO2 for storage and<br />
monitoring. The impact <strong>of</strong> CCS cost on electricity retail prices<br />
will roughly be 2.8 cents/kWh. However, using a combination<br />
<strong>of</strong> future technologies, new legislations, and tax incentives<br />
the total cost <strong>of</strong> CCS is projected to fall below A$30/t CO2 by<br />
2030. This, in turn, reduces the impact on the electricity price<br />
down to about 1.5 cents/kWh.<br />
References<br />
IEA, Key World <strong>Energy</strong> Statistics, 2005.<br />
IEA, World <strong>Energy</strong> Outlook 2006, Fact Sheets: “Global <strong>Energy</strong><br />
Trends” and “Alternative Policy Scenarios”.<br />
IEA, Solutions for the 21st Century — Zero Emissions Technologies<br />
for Fossil Fuels, 2002.<br />
IEA, IEA <strong>Energy</strong> Technology Essentials, Biomass for Power<br />
Generation and CHP and CO2 Capture & Storage, 2006.<br />
Cottrell A, Nunn J, Palfreyman D, Urfer D, Scaife P, Wibberley L.,<br />
Technical Assessment report 32; CRC for Coal in Sustainable<br />
Development (CCSD), 2003.<br />
Gurba L., Ikeda E. (eds), Techno-Economic Modelling <strong>of</strong> the<br />
<strong>Energy</strong> Systems, Proceedings <strong>of</strong> the Standard Modelling Group<br />
Workshop, CCSD, 2006.<br />
A more comprehensive version <strong>of</strong> this article is available as<br />
a downloadable pdf at www.aie.org.au
garnaut Climate Change review<br />
Interim Report and Emissions Trading Scheme Discussion Paper released<br />
The Garnaut Climate Change Review released its interim<br />
report on 21 February <strong>2008</strong>. Although it is too late to<br />
comment formally — submissions were due by 11 April<br />
<strong>2008</strong> — recommendations will not be finalised for the final<br />
report until later in the year. As the final report will influence<br />
future government policies, readers’ reponses are welcome<br />
through letters to the editor or short articles. Send to editor@<br />
aie.org.au<br />
“Australia is relatively well placed to do well in a world<br />
<strong>of</strong> comprehensive global efforts to reduce greenhouse<br />
gas emissions,” said Pr<strong>of</strong>essor Ross Garnaut. “We should<br />
promote strong global action on climate change and be<br />
prepared to match the commitments <strong>of</strong> other developed<br />
nations. Contrary to the conventional wisdom which<br />
has dominated <strong>Australian</strong> debate over the past decade,<br />
comprehensive global efforts to reduce emissions will play<br />
to Australia’s strengths. It is in Australia’s interests for the<br />
world to adopt a strong and effective position on climate<br />
change mitigation.”<br />
The Report states that Australia’s interest in strong global<br />
action stems from its exceptional sensitivity to climate<br />
change and its exceptional opportunity to do well in a world<br />
<strong>of</strong> effective global mitigation.<br />
“We have many resources and skills that will allow us to<br />
convert strong global action into an economic opportunity,”<br />
said Pr<strong>of</strong>essor Garnaut. “We have a first-rate skills base<br />
in areas related to innovation, management and financial<br />
services. We have rich renewable energy resources. We are<br />
among the world’s largest exporters <strong>of</strong> uranium and natural<br />
gas which can benefit from the low-emissions efforts <strong>of</strong> other<br />
nations, and our agricultural sector emits less than other<br />
developed countries. By contrast, Australia would be a big<br />
loser — possibly the biggest loser among developed nations<br />
— from unmitigated climate change.”<br />
“Australia is more vulnerable to climate change than most<br />
other developed nations as we are highly sensitive to climate<br />
variation, and we are surrounded by mostly developing<br />
Summary <strong>of</strong> <strong>Australian</strong> ETS model for discussion:<br />
Design decision Proposal<br />
Setting an emissions<br />
limit<br />
nations, which are likely to be adversely affected by rising<br />
temperatures,” he said.<br />
The review was commissioned by Australia’s Commonwealth,<br />
state and territory governments to examine the impacts<br />
and opportunities <strong>of</strong> climate change. It will put forward<br />
a national framework for action, with recommendations<br />
for medium to long-term policy options to minimise the<br />
environmental and economic impacts <strong>of</strong> climate change.<br />
Due to a sustained period <strong>of</strong> high economic growth — led<br />
by China and India — the world was moving towards high<br />
risks <strong>of</strong> dangerous climate change more rapidly than had<br />
been generally understood.<br />
“Faster emissions growth makes mitigation more urgent and<br />
more costly. The challenge is to end the linkage between<br />
economic growth and emissions <strong>of</strong> greenhouse gases,” said<br />
Pr<strong>of</strong>essor Garnaut.<br />
The interim report states that Australia should make firm<br />
commitments this year to both 2020 and 2050 targets that<br />
reflected similar adjustment costs to that accepted by other<br />
developed countries.<br />
“Australia should be ready to go beyond its stated 60%<br />
reduction target by 2050 in an effective global agreement that<br />
includes developing nations,” said Pr<strong>of</strong>essor Garnaut.<br />
The report also supports the development <strong>of</strong> bilateral and<br />
regional agreements to accelerate domestic and international<br />
action. Unilateral and regional efforts under way in parallel<br />
to global efforts might make for a ‘messy’ process, but it is<br />
one which has the highest chance <strong>of</strong> success in the short<br />
time available, according to the report.<br />
The interim report sets out some initial considerations for<br />
the design <strong>of</strong> Australia’s emissions trading scheme (ETS), due<br />
to come into effect in 2010. Further detail on the review’s<br />
proposals for ETS design was released in a discussion paper<br />
on 20 March <strong>2008</strong>. The elements <strong>of</strong> the proposed ETS design<br />
are summarised in the following table.<br />
Government should set the emissions limit for Australia. This emissions limit should be<br />
expressed as a trajectory <strong>of</strong> annual emissions targets over time, which define long term<br />
budgets.<br />
Trajectories<br />
Four trajectories should be specified upon establishment <strong>of</strong> the ETS. The first up to 2012 will<br />
be based on Australia’s Kyoto commitments. The other three for the post-2012 period reflect<br />
increasing levels <strong>of</strong> ambition. Movement between them should be based on determining the<br />
comparability <strong>of</strong> Australia’s response to international effort.<br />
The Review will provide advice to government on trajectories and interim targets for an<br />
<strong>Australian</strong> ETS. This will be informed by economic modelling currently underway and<br />
further analysis, and presented in the full reports.<br />
ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 47
Changes to the<br />
emissions limit<br />
Deciding to move from one trajectory to another should only be made on the basis<br />
<strong>of</strong> international policy developments and/or agreements (which should allow for new<br />
information and developments <strong>of</strong> an economic or scientific kind).<br />
Conditions which would lead to a movement from one trajectory to a more stringent<br />
trajectory would be specified in advance.<br />
Once on one trajectory, government provides five years notice before movement to another.<br />
Any gap between the domestic trajectory and international commitments during this period<br />
would be reconciled by the independent authority purchasing international permits.<br />
Coverage Gases: Six greenhouse gases as defined by the Kyoto protocol.<br />
Sectors: Stationary energy, industrial processes, fugitives, transport and waste from scheme<br />
outset. Agriculture and forestry to be included as soon as practicable.<br />
Domestic <strong>of</strong>fsets Domestic <strong>of</strong>fsets should be accepted without limits, but will have a small role, given broad<br />
coverage.<br />
Point <strong>of</strong> obligation Set at point <strong>of</strong> emissions where practical. Where transaction costs are lower than the cost <strong>of</strong><br />
distortions that may arise, upstream or downstream may be appropriate.<br />
Permit issuance<br />
(or release)<br />
International<br />
linkages<br />
Price controls <strong>No</strong>t supported.<br />
Permits released according to emissions reduction trajectory. All permits auctioned at<br />
regular intervals. (<strong>No</strong>te, some permits may be used in lieu <strong>of</strong> cash in providing transitional<br />
assistance to traded-exposed, emissions-intensive firms at risk.)<br />
Opportunities for international linkage <strong>of</strong> the <strong>Australian</strong> ETS should be sought in a judicious<br />
and calibrated manner.<br />
Inter-temporality Unlimited hoarding allowed. Official lending <strong>of</strong> permits by the independent authority to<br />
the private sector allowed, but may be subject to limits, in terms <strong>of</strong> quantity and time,<br />
determined by the independent authority.<br />
Treatment <strong>of</strong> TEEIIs Some industries rely significantly on emissions-intensive production processes, and are<br />
substantially unable to pass costs <strong>of</strong> emissions through to customers because price <strong>of</strong><br />
commodity or good is determined on international markets. Transitional financial assistance<br />
(possibly in the form <strong>of</strong> free permits) should be provided to account for distortions arising<br />
from major trading competitors not adopting emissions limits (or pricing).<br />
Governance Policy framework set directly by government.<br />
Scheme administered by independent authority.<br />
Compliance<br />
and penalty<br />
Use <strong>of</strong> permit<br />
revenue<br />
Penalty to be set as a compliance mechanism. Penalty does not replace obligation to acquit<br />
permits; a ‘make-good’ provision would apply. Alternatively, the use <strong>of</strong> revenue from a<br />
financial penalty could be used to purchase abatement.<br />
Auctioning <strong>of</strong> all permits will be the source <strong>of</strong> a substantial amount <strong>of</strong> government revenue.<br />
Governments will need to assess competing priorities for this revenue, which may include:<br />
• Payments to TEEIIs (to correct for market failures);<br />
• Payments to households;<br />
• Structural adjustment to support declining communities;<br />
• Payments to firms to correct market failures in relation to new technologies;<br />
• Support for public infrastructure; and<br />
• Cash reserves to purchase international permits/<strong>of</strong>fsets to reconcile domestic emissions<br />
with international commitments.<br />
The political acceptability <strong>of</strong> the introduction <strong>of</strong> the ETS would be enhanced by government<br />
commitment to transparently return to the community through the mechanisms outlined<br />
above or in other ways, all <strong>of</strong> the revenue generated by the sale <strong>of</strong> permits.<br />
Extract from “Emissions Trading Scheme Discussion Paper”, Garnaut Climate Change Review, March <strong>2008</strong>, www.garnautreview.<br />
org.au (extracted 19 April <strong>2008</strong>)<br />
48 ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong>
government scheme<br />
helps deliver cleaner energy<br />
By Sarah Stent, Corporate Affairs Manager, TRUenergy<br />
A new 400 MW power station is being constructed in<br />
Yallah, New South Wales, with the support <strong>of</strong> AusIndustry’s<br />
Enhanced Project By-law Scheme. The scheme provides duty<br />
free entry on eligible goods for major investment projects<br />
that provide opportunities for <strong>Australian</strong> participation.<br />
The scheme is aimed at projects in the mining, resource<br />
processing, food processing, manufacturing, agriculture,<br />
gas supply, power supply and water supply industries. It<br />
aims to encourage the development <strong>of</strong> major opportunities<br />
for local businesses.<br />
TRUenergy’s gas-fired Tallawarra Power Station will be<br />
completed in time for summer <strong>2008</strong>–09. It will use highefficiency<br />
combined cycle gas turbine (CCGT) electricity<br />
generation technology and will be the most efficient large<br />
scale gas-fired power plant in Australia, emitting 70% less<br />
CO2 per unit <strong>of</strong> electricity than conventional coal-fired<br />
power stations.<br />
The Enhanced Project By-law Scheme ensures that many<br />
<strong>of</strong> the project’s suppliers are <strong>Australian</strong>. Under the scheme,<br />
TRUenergy is eligible for duty relief on imported equipment<br />
when it cannot be sourced from <strong>Australian</strong> businesses.<br />
Tallawarra Project Manager Ge<strong>of</strong>f McEntee says the scheme<br />
has resulted in many major parts being sourced within<br />
Australia, rather than from China, Malaysia and Europe, as<br />
originally planned.<br />
Examples <strong>of</strong> how the Enhanced Project By-law Scheme has<br />
led to <strong>Australian</strong> components being used include:<br />
● the generator transformer, which was expected to come<br />
from China or Europe, and has now been sourced from<br />
Brisbane;<br />
● the water treatment plant, which was originally to be<br />
made in Malaysia, and is now being supplied by <strong>Australian</strong><br />
company, Osm<strong>of</strong>low, and<br />
Locally-built chimney stack in two parts<br />
● the chimney stack, which was to be shipped from Malaysia<br />
in many parts, but has instead been made by a local<br />
company, constructed in only two parts.<br />
“One <strong>of</strong> the advantages <strong>of</strong> using <strong>Australian</strong> suppliers is that<br />
delivery is much faster, and large parts, such as the chimney<br />
stack, do not have to be assembled from many smaller parts,”<br />
said Ge<strong>of</strong>f McEntee.<br />
“There are also quality control benefits. For instance, if one <strong>of</strong><br />
our parts needs servicing, the manufacturer is close by. In the<br />
energy business, we require extremely fast repair times. This<br />
is a lot easier if a parts manufacturer is just down the road.”<br />
Local suppliers have won contracts worth around $50<br />
million. Going forward and looking beyond construction<br />
and commissioning, the plan is to source employees from<br />
the local Illawarra area from operational support to<br />
engineering services.<br />
To find out more about AusIndustry’s Enhanced Project<br />
By-law Scheme, visit www.ausindustry.gov.au, call 13 28 46<br />
or email hotline@ausindustry.gov.au EN<br />
<strong>2008</strong> AIE National Postgraduate Student <strong>Energy</strong> Awards<br />
The <strong>2008</strong> National Postgraduate Student <strong>Energy</strong> Awards will be held in Sydney on 18 <strong>No</strong>vember,<br />
in conjunction with the AIE national AGM. These biennial awards bring together the winners from<br />
AIE Branches all over Australia to recognise and reward postgraduate student research in any field <strong>of</strong><br />
energy. In keeping with the format adopted in 2006, each Branch (or group <strong>of</strong> Branches) will hold its<br />
own competitions, selecting a winner to enter the national competition. Students will be required to<br />
prepare a poster <strong>of</strong> their work and to explain their research, and this will be judged by an independent<br />
panel. There will be generous prizes in a number <strong>of</strong> categories.<br />
If you are a postgraduate student in energy research and interested in participating in this<br />
competition please contact your local AIE Branch.<br />
The AIE is also seeking industry sponsorship for these awards. Interested organisations should<br />
contact Tony Vassallo on (02) 9810 2216.<br />
ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 49
Book Reviews<br />
The Handbook <strong>of</strong><br />
Biomass Combustion and Co-Firing<br />
Edited by Sjaak van Loo and Jaap Koppejan, Earthscan, ISBN: 978-1-84407-<br />
249-1, http://shop.earthscan.co.uk/ProductDetails/mcs/productID/589<br />
This handbook on the theory and<br />
application <strong>of</strong> biomass combustion<br />
and co-firing was the major output<br />
<strong>of</strong> the International <strong>Energy</strong> Agency’s<br />
(IEA’s) Bioenergy Task 32 — Biomass Combustion and C<strong>of</strong>iring.<br />
Australia, through the government-industry alliance<br />
Bioenergy Australia (http://www.bioenergyaustralia.org), was<br />
an active participant and contributor to this handbook.<br />
IEA Bioenergy (http://www.ieabioenergy.com) is an<br />
international collaborative program involving some 20<br />
countries, plus the European Commission, and operates via<br />
the conduct <strong>of</strong> a series <strong>of</strong> tasks. For the past decade Bioenergy<br />
Australia has been the vehicle for Australia’s participation.<br />
Some seven years ago, Task 32, Combustion and Co-firing,<br />
decided as part <strong>of</strong> its program <strong>of</strong> work to prepare an earlier<br />
edition with the same title, and this was published in 2002.<br />
The earlier edition was an immediate success, being translated<br />
into Chinese, and also being reprinted as an international<br />
student edition in s<strong>of</strong>t cover. Based on the success <strong>of</strong> the<br />
first edition, and some rapid developments in this field, the<br />
Executive Committee <strong>of</strong> IEA Bioenergy endorsed Task 32’s<br />
proposal to significantly revise and rework the handbook<br />
for its 2004–06 triennium work program. This handbook is<br />
the culmination <strong>of</strong> this collaborative task.<br />
The revision <strong>of</strong> the handbook has seen the text expanding<br />
from 348 pages in the first version, to 442 pages in the current<br />
edition, reflecting the addition <strong>of</strong> new sections and expansion<br />
<strong>of</strong> others. Areas which have received greater emphasis relate<br />
mainly to biomass ash characterisation and behaviour,<br />
environmental aspects <strong>of</strong> combustion, policies relating to<br />
biomass combustion, and research and development needs<br />
and ongoing activities.<br />
The handbook is likely to be <strong>of</strong> substantial interest in the<br />
current <strong>Australian</strong> setting. In the context <strong>of</strong> Australia<br />
expanding the Mandatory Renewable <strong>Energy</strong> Targets<br />
(MRETs) from the current target <strong>of</strong> 9,500 GWh per annum <strong>of</strong><br />
additional renewable energy by 2010, to an anticipated 45,000<br />
GWh by 2020, bioenergy is likely to play an important part<br />
in Australia’s future generation mix. Australia’s total current<br />
bioenergy capacity is presently approximately 700 MW, in<br />
which sugar cane bagasse combustion predominates. This<br />
is only a very small fraction <strong>of</strong> the national generation mix,<br />
but bioelectricity could potentially play a significantly larger<br />
role in the future, especially given that the global capacity <strong>of</strong><br />
modern bioelectricity generation is some 40 GW, <strong>of</strong> the same<br />
scale as Australia’s total coal-fired capacity. As such, a text<br />
<strong>of</strong> this nature is an essential resource for anyone interested<br />
in biomass combustion and co-firing as we advance into a<br />
carbon constrained era.<br />
50 ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong><br />
The Handbook <strong>of</strong> Biomass Combustion and Co-firing<br />
includes the following content: 1) Introduction; 2) Biomass<br />
Fuel Properties and Basic Principles <strong>of</strong> Biomass Combustion;<br />
2) Biomass Fuel Supply and Pre-Treatment; 3) Domestic<br />
Wood-Burning Appliances; 5) Combustion Technologies for<br />
Industrial and District Heating Systems; 6) Power Generation<br />
and Co-Generation; 7) Co-Combustion; 8) Biomass Ash<br />
Characteristics and Behaviour in Combustion Systems;<br />
9) Environmental Aspects <strong>of</strong> Biomass Combustion; 10)<br />
Policies; 11) Research and Development: Needs and Ongoing<br />
Activities; plus annexes elaborating on Mass Balance Equation<br />
and Emission Calculation; European and National Standards<br />
or Guidelines for Solid Bi<strong>of</strong>uels and Solid Bi<strong>of</strong>uel Analysis.<br />
Australia’s contribution to this handbook is evident in the<br />
Co-Combustion chapter. This chapter, authored by Pr<strong>of</strong>essor<br />
Behdad Moghtaderi <strong>of</strong> Newcastle University, with some material<br />
provided by Peter Coombes <strong>of</strong> Delta Electricity, contains several<br />
new sections dealing with materials handling and combustion<br />
issues. These new sections are based on research carried out in<br />
the CRC for Coal in Sustainable Development.<br />
The handbook is liberally illustrated with figures and tables.<br />
One disappointment is the quality <strong>of</strong> several <strong>of</strong> the black and<br />
white illustrations, especially after having seen an electronic<br />
preview <strong>of</strong> the book with colour images.<br />
The text is aimed at a range <strong>of</strong> readers, from highly informed<br />
technical researchers to those wishing to gain a broad<br />
appreciation <strong>of</strong> the many dimensions <strong>of</strong> biomass combustion<br />
and co-firing. While some aspects <strong>of</strong> the handbook are likely<br />
to be <strong>of</strong> lesser interest to <strong>Australian</strong> readers, such as domestic<br />
wood heating, aspects such as the co-combustion <strong>of</strong> biomass<br />
with coal in large utility boilers is likely to appeal to those<br />
seeking highly efficient, base load renewable energy, as cocombustion<br />
is one <strong>of</strong> the cheapest forms <strong>of</strong> renewable energy.<br />
The handbook points out that over 150 power station units<br />
worldwide now implement biomass co-firing with fossil fuels,<br />
mainly coal. Some <strong>of</strong> the newer technologies that receive<br />
attention in this edition are wood pellets for both domestic and<br />
industrial use, steam piston and steam screw engines, organic<br />
Rankine cycle units, closed gas turbines and Stirling engines.<br />
Overall, it is most pleasing to see the release <strong>of</strong> this definitive<br />
handbook, the fruition <strong>of</strong> the work <strong>of</strong> IEA Bioenergy Task 32<br />
over the previous triennium. I commend The Handbook <strong>of</strong><br />
Biomass Combustion and Co-firing to those with an interest<br />
in bioenergy as a form <strong>of</strong> renewable energy.<br />
Dr Stephen Schuck<br />
Manager, Bioenergy Australia, and IEA Bioenergy<br />
Executive Committee Member
Pinch Analysis<br />
and Process Integration<br />
A user guide on process integration for the efficient use <strong>of</strong> energy,<br />
by Ian C Kemp, Elsevier, 2006, rrP A$123.50. (<strong>No</strong>te, available direct<br />
from Elsevier Australia Customer Service, Tel: 1800 <strong>26</strong>3 951,<br />
Fax: (02) 9517 2249 or email customerserviceau@elsevier.com)<br />
Pinch technology was developed<br />
during the 1970s as a means<br />
for improving the efficiency<br />
<strong>of</strong> industrial process plants. It<br />
provides a methodology based<br />
on thermodynamics for analysing industrial or any heat<br />
transfer processes in order to minimise the total energy used.<br />
The prime objective <strong>of</strong> pinch technology is to minimise energy<br />
usage by better process heat integration. It is used to identify<br />
where process-to-process heat recovery can be made and<br />
therefore minimise external utilities (heating and cooling).<br />
The book explains how pinch technology provides insights<br />
which are neither obvious nor provided by common sense,<br />
and provides examples <strong>of</strong> this. In brief, pinch technology<br />
analyses a system by first identifying the changes in enthalpy<br />
(the first law <strong>of</strong> thermodynamics) <strong>of</strong> the process, or heat<br />
exchangers. It then uses the temperatures <strong>of</strong> the heating and<br />
cooling streams (the second law <strong>of</strong> thermodynamics states that<br />
energy can only flow from the hot to the cold body). This is<br />
then used to prepare composite heating and cooling curves on<br />
enthalpy versus temperature axis. The pinch is defined as the<br />
closest points between these two curves. It also represents the<br />
available temperature difference for heat transfer. Minimising<br />
the pinch will reduce the total energy use. Maximum savings<br />
can be determined by optimising the heat exchanger sizing.<br />
Pinch Analysis and Process Integration starts with sections<br />
on History and the Key Concepts. It is interesting to note<br />
that pinch technology was first developed when utility prices<br />
were very high. It seems appropriate that it should become<br />
topical today. The book then gets into detail with chapters<br />
on: Data Extraction and <strong>Energy</strong> Targeting; Heat Exchanger<br />
Network Design (for typical chemical process applications);<br />
Utilities, Heat and Power Systems (where all the heating or<br />
cooling cannot be provided by heat exchange and is provided<br />
by external utilities). Then complex plants are investigated<br />
Editor,<br />
with chapters on: Process Change and Evolution (where<br />
process change analysis is used to determine the effect a<br />
change <strong>of</strong> one process stream will have on the whole plant)<br />
and Batch and Time-Dependent Processes. The book finishes<br />
with chapters on Applying the Technology in Practice and<br />
Case Studies including examples on a hospital site and<br />
opportunities for cogeneration.<br />
I purchased Pinch Analysis and Process Integration prior to<br />
conducting a detailed thermal analysis <strong>of</strong> a brewery. I found<br />
the book more useful as a detailed text on the subject, rather<br />
than for use as a quick reference. It has some good examples<br />
on a variety <strong>of</strong> unusual applications, but they will probably<br />
require some reading and understanding. Knowledge <strong>of</strong> the<br />
contents <strong>of</strong> the book is essential for the efficient utilisation<br />
<strong>of</strong> heat in complex industrial facilities. It is a good reference<br />
for people attempting cogeneration, which is discussed. Heat<br />
recovery is nearly always cheaper than cogeneration systems.<br />
It is therefore much more economical to integrate the<br />
cogeneration plant into the system with heat recovery, rather<br />
than simply add it to the utilities. This can be analysed using<br />
pinch technology. With the application <strong>of</strong> pinch technology,<br />
both capital investment and operating cost can be reduced;<br />
emissions can be minimised; and throughput maximised.<br />
I believe the book has achieved its objectives, which are<br />
stated in the conclusion: “Ultimately process understanding<br />
is the key to safe, efficient and effective design and operation.<br />
If this book has helped you understand your plant, process or<br />
site better, it has succeeded in its task. Happy analysing.”<br />
Rod Hislop, Energeering Pty Ltd<br />
Rod Hislop is a mechanical engineer with nearly<br />
30 years experience in the design and installation <strong>of</strong><br />
utilities for buildings and industrial facilities.<br />
Energeering Pty Ltd specialises in the installation <strong>of</strong><br />
energy-efficient projects.<br />
Letters to the <strong>Institute</strong><br />
Murray Meaton, in his President’s Message — Interesting Times<br />
— in the March <strong>2008</strong> issue <strong>of</strong> ENErgyNews (Vol. <strong>26</strong>, <strong>No</strong>.1),<br />
comments on the challenges in meeting the “…ambitious target<br />
to cut greenhouse emissions by 60% by 2050”.<br />
He identifies the need for: research and development;<br />
business facilitation; and, investment in renewable energy<br />
sources. He describes two necessary conditions to be met if<br />
the fundamental objective <strong>of</strong> deriving cleaner energy from<br />
coal is to be achieved:<br />
1. substantial effort towards the “development <strong>of</strong> a broad<br />
range <strong>of</strong> policy options”; and<br />
2. “careful commercialisation”, after “examination <strong>of</strong> all<br />
energy sources, uses and impacts”.<br />
Based on the experience <strong>of</strong> my pr<strong>of</strong>essional life, I construe the<br />
term ‘business facilitation’ to refer to the development <strong>of</strong> robust<br />
business cases for making the very large scale investments in<br />
assets — both physical and human — and infrastructure,<br />
required to achieve the 2050 target. I take the term ‘careful<br />
commercialisation’ to refer to minimisation <strong>of</strong> the monetary<br />
ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 51
52 ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong><br />
National <strong>Energy</strong> Essay<br />
Competition<br />
Major prizes<br />
National exposure<br />
www.neec.org.au<br />
The NeeC, introduced in March <strong>2008</strong> issue <strong>of</strong> ENErgyNews, is now open. we are seeking young<br />
leaders, innovators and lateral thinkers who can bring informed and enlightened insights and<br />
potential solutions to the evolving energy demand and supply problems facing Australia.<br />
The competition is open to individuals and teams (maximum three members). All entrants must be<br />
<strong>Australian</strong> citizens or permanent residents, and under the age <strong>of</strong> 31 years at 30 <strong>Jun</strong>e <strong>2008</strong>.<br />
risks associated with stranded assets and infrastructure, or<br />
asset and infrastructure impairment, as consequences <strong>of</strong><br />
business and government decision outcomes.<br />
Mr Meaton rightly states that the <strong>Australian</strong> <strong>Institute</strong> <strong>of</strong><br />
<strong>Energy</strong> has a role to play. I submit that an element <strong>of</strong> that<br />
role is to contribute towards establishing broadly a shared<br />
understanding <strong>of</strong> the meaning <strong>of</strong> the terms ‘business<br />
facilitation’ and ‘careful commercialisation”.<br />
The publication ENErgyNews is consistently interesting<br />
and informative. I note, however, that the business <strong>of</strong><br />
elevation to commercial practice <strong>of</strong> strategic options open<br />
to regions <strong>of</strong> Australia, to meet the challenge <strong>of</strong> ensuring<br />
sustainable livelihoods — in the full sense <strong>of</strong> the meaning <strong>of</strong><br />
the word ‘sustainable’ — is not a topic that receives serious<br />
Dear Secretary,<br />
Thank you for the subscription reminder <strong>of</strong> 28 January. As<br />
explained in previous years, I am a proud member <strong>of</strong> the AIE,<br />
and almost an original founding member in Perth.<br />
I am aged 73. Over the past 8 years my wife and I have been<br />
missionaries working in Nepal. In 2003, I was appointed by<br />
Kathmandu University to be their Pr<strong>of</strong>essor <strong>of</strong> Mechanical<br />
Engineering. We ‘retired’ in October 2006 but returned for<br />
three months in 2007 (with expenses paid but no salary — their<br />
distinguished Vice-Chancellor only earns A$700 per month)<br />
to teach a final year subject no-one else could handle.<br />
We have just returned home from Nepal again; there this time<br />
mainly to help and guide my two research projects — Pico<br />
Go to www.neec.org.au to register your entry.<br />
entries now close 22 August <strong>2008</strong>. Don’t miss out.<br />
attention. Perhaps ENErgyNews could provide a forum<br />
in which key business entities and government agencies<br />
present the risk weighted costs and Expected Monetary<br />
Values <strong>of</strong> different investment options, to the degrees <strong>of</strong><br />
theoretical soundness (depth) and justifiability (breadth)<br />
associated with preliminary feasibility analysis. Decision<br />
analysis at the level <strong>of</strong> preliminary feasibility assessment<br />
can be based satisfactorily on public domain data and<br />
information. It is when the decision situation is decomposed<br />
to the level that consideration is given to a narrow range <strong>of</strong><br />
options for elevation to commercial practice that Proprietary<br />
Information Protection becomes an important aspect <strong>of</strong> the<br />
conduct <strong>of</strong> decision analysis.<br />
Regards,<br />
Dr Ge<strong>of</strong>f Whitfield<br />
turbines — 750 W and and 1.5 kW units generate sufficient<br />
output to light every house (using WLEDs) in a mountain<br />
village <strong>of</strong> 2,000 people; and Coolstores which can hold contain<br />
some 30,000 items <strong>of</strong> fruit. Apparently I am to be asked to<br />
return again next year for at least three months.<br />
As I intend to put FAIE after my name on the research papers,<br />
and because the AIE has been so understanding about my<br />
years <strong>of</strong> generally unpaid pr<strong>of</strong>essional service in Asia, I<br />
thought I should pay my AIE subscription this time.<br />
Best wishes,<br />
Dr John Cannel, FAIE
New Individual Members<br />
Name Grade Branch<br />
Mr John Marsiglio Fellow Melbourne<br />
Mr John Price Fellow Melbourne<br />
Dr Simon Wilson Member Melbourne<br />
Mr Aamir Iqbal Student Melbourne<br />
Mrs Tiffany Thomson Associate Sydney<br />
Mr Tony Baird Student Melbourne<br />
Mr Ronald Farra Ainge Associate Sydney<br />
Mrs Catherine Tierney Student Sydney<br />
Dr Idris F. Sulaiman Member Canberra<br />
Pr<strong>of</strong> Owen E. Potter Fellow Melbourne<br />
Ms Stephanie Rowland Member Perth<br />
Membership Matters<br />
The members’ section <strong>of</strong> ENErgyNews<br />
ENErgyNews welcomes contributions to Membership Matters, including member pr<strong>of</strong>iles, company<br />
member pr<strong>of</strong>iles, anecdotes, and advertising. Send ideas and contributions to editor@aie.org.au<br />
New Company Members<br />
Company Name Representatives Branch<br />
Thiess Pty Ltd Mr Jim Aquino Perth<br />
Mr Stephen Urquhart Perth<br />
Melbourne<br />
• Melbourne Branch visited Carlton Brewhouse to gain a<br />
better appreciation <strong>of</strong> energy use in the brewing industry<br />
on 14 February <strong>2008</strong>.<br />
• Dr Peter Redlich, Director <strong>Energy</strong> Technology Innovation,<br />
Department <strong>of</strong> Primary Industries explained Victoria’s<br />
<strong>Energy</strong> Technology Innovation Strategy program, and<br />
Gordon Carter, Managing Director, HRL Limited, provided<br />
an overview <strong>of</strong> the 400 MW Integrated Drying Gasification<br />
and Combined Cycle project proposed for the Latrobe Valley,<br />
at a lunch meeting on 27 February <strong>2008</strong>.<br />
● Afternoon discussion on the ‘Increasing Interactions<br />
between <strong>Energy</strong> and Water Markets’, with key industry<br />
representatives on <strong>26</strong> March <strong>2008</strong>.<br />
South Australia<br />
• Graeme Samuel, Chairman, <strong>Australian</strong> Competition and<br />
Consumer Commission, presented ‘Petrol Prices and<br />
<strong>Australian</strong> Consumers’ on 22 February <strong>2008</strong>.<br />
• Clay Wohling, Partner, Minter Ellison Lawyers, presented<br />
‘<strong>Energy</strong> Regulation: What’s on the Horizon for <strong>2008</strong>?’ on 27<br />
March <strong>2008</strong>.<br />
For Melbourne Branch events, see https://pams.com.au/aie<br />
New Members<br />
Name Grade Branch<br />
Mr Benjamin Grace Student Sydney<br />
Mr Mark G. Thompson Associate Sydney<br />
Mr Peter Halyburton Fellow Sydney<br />
Mr Murray Scott Halyburton Graduate Sydney<br />
Mr Brent Griffiths Member Sydney<br />
Ms Anntonette Joseph Member Sydney<br />
Mr Peter Giannopoulos Fellow Melbourne<br />
Mr Peter Murray Whittle Associate Melbourne<br />
Ms Samantha Wong Graduate Sydney<br />
Mr Andrew Barson Graduate Sydney<br />
Company Name Representatives Branch<br />
Worley Parsons Power WA Mr Barry Lake Perth<br />
Mr Steve Haddon Perth<br />
Around the Branches<br />
Sydney<br />
• At a four societies meeting on 5 March <strong>2008</strong>, Associate<br />
Pr<strong>of</strong>essor Keith Lovegrove, Solar Thermal Group Leader,<br />
ANU Dept <strong>of</strong> Engineering, presented ‘Future Prospects for<br />
Large-Scale Solar Thermal Power Technologies’.<br />
• Bede Boyle, AustCoal Consulting, and Richard Hunwick,<br />
Hunwick Consulting, presented ‘CCS and the Future<br />
<strong>of</strong> Coal-Based Power Generation in Australia’ on<br />
10 March <strong>2008</strong>.<br />
• Sydney Young <strong>Energy</strong> Pr<strong>of</strong>essionals hosted a meeting with<br />
Dr David Hemming, Manager Sustainable <strong>Energy</strong>, NSW<br />
Department <strong>of</strong> <strong>Energy</strong> and Water, and Dr Mark Diesendorf,<br />
UNSW <strong>Institute</strong> <strong>of</strong> Environmental Studies, who discussed<br />
the ‘Interface between <strong>Energy</strong> Technology Development and<br />
<strong>Energy</strong> Policy’ on 27 March <strong>2008</strong>.<br />
Canberra<br />
• Mr Nubuo Tanaka, Executive Director, International <strong>Energy</strong><br />
Agency, talked about the IEA’s role in addressing global<br />
energy challenges at an evening presentation sponsored by<br />
ACIL Tasman on 17 March <strong>2008</strong>.<br />
For all forthcoming AIE events,<br />
see http://www.aie.org.au/events.htm<br />
ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 53
Young <strong>Energy</strong> Pr<strong>of</strong>essionals<br />
This year is proving to be a very exciting year for the Sydney<br />
Young <strong>Energy</strong> Pr<strong>of</strong>essionals. They have recently signed Energetics<br />
as the platinum sponsor <strong>of</strong> the <strong>2008</strong> YEP Program.<br />
“Energetics is one <strong>of</strong> Australia’s leading energy, greenhouse and<br />
sustainability consulting firms, and this should be the beginning<br />
<strong>of</strong> a very productive time for both organisations,” said Sydney<br />
YEP Chair, Steven Nethery.<br />
“As the energy industry changes and becomes an increasingly<br />
exciting place to work, we hope that the YEP Program will be the<br />
place to learn and to develop careers in this innovative industry.<br />
The Sydney flagship event — a collaborative forum on energy<br />
efficiency — is coming up on 17 <strong>Jun</strong>e. The forum will involve<br />
presentations by experts and an interactive session, which will<br />
allow participants to contribute their views and interact with the<br />
experts. Participants <strong>of</strong> previous YEP Forums praised the format,<br />
so we hope to see many participants at the event this year.”<br />
To find our more about the forum and YEP, send an email to<br />
yepsyd@aie.org.au<br />
Sydney Seminar<br />
The Sydney YEPs held their first seminar for the year in March, under<br />
the title The Interface between <strong>Energy</strong> Technology Development and<br />
<strong>Energy</strong> Policy. Nick Florin sent in this summary.<br />
The topic gave strong emphasis to the urgent need for<br />
greenhouse gas (GHG) mitigation strategies from all levels <strong>of</strong><br />
government in order to halt the acceleration <strong>of</strong> global warming.<br />
Two very qualified speakers — Mr David Hemming and<br />
Dr Mark Diesendorf — presented two different perspectives<br />
across a range <strong>of</strong> critical issues, from solar hot water to the<br />
National Emissions Trading Scheme (NETS).<br />
David Hemming’s presentation provided a broad overview <strong>of</strong><br />
greenhouse and renewable energy policy in NSW and Australia,<br />
including: mandatory market-based instruments (eg MRETs)<br />
and voluntary options (including funding for deployment, and<br />
public education for consumer awareness). These options were<br />
presented in the context <strong>of</strong> the new central policy instrument,<br />
ie NETS. David argued that that complementary measures,<br />
such as: MRETs, RD&D and energy efficiency remain critically<br />
Branch Site Visit<br />
54 ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong><br />
important for meeting GHG emissions targets.<br />
Mark Diesendorf argued that the only way to achieve significant<br />
emission reductions by 2020 was with: the rapid deployment<br />
<strong>of</strong> renewable energy technologies, eg wind energy, electricity<br />
generation from biomass waste residues, and solar hot water;<br />
more efficient use <strong>of</strong> energy; and the transitional generation <strong>of</strong><br />
electricity from gas. Dr Diesendorf stressed the importance <strong>of</strong> long<br />
and short-term targets in order to meet emission reduction goals,<br />
and policy that targets the deployment <strong>of</strong> energy technologies that<br />
can reduce emissions now, eg significantly enhanced MRETs, and<br />
banning all new conventional coal-fired power stations.<br />
The presentations were very well received, provoking more<br />
questions and discussions than the time permitted. Parsons<br />
Brinkerh<strong>of</strong>f sponsored this event by providing the venue and<br />
a plentiful supply <strong>of</strong> refreshments and snacks, and the Sydney<br />
YEPs wish to express their gratitude for this support.<br />
Making meetings matter<br />
In April, Sydney YEPs learnt how to ‘make meetings matter’ in a<br />
workshop facilitated by Richard and Maria Maguire <strong>of</strong> Unfolding<br />
Futures. Richard and Maria led the group in a discussion <strong>of</strong><br />
facilitation dynamics and what makes a good or bad meeting.<br />
After comparing meeting horror stories, participants were<br />
introduced to the Objective Reflective Interpretive Decisional<br />
(ORID) discussion method. They learnt how this technique can<br />
be used to lead effective meetings that allow everyone to express<br />
their ideas and which result in well thought out decisions. The<br />
workshop was hosted in association with the NSW Section <strong>of</strong><br />
the <strong>Institute</strong> <strong>of</strong> Electrical and Electronic Engineers.<br />
Melbourne YEPs Gain Momentum<br />
There was standing room only for those that just rocked along<br />
without booking for the Melbourne YEP meeting on 15 May at<br />
the <strong>of</strong>fices <strong>of</strong> the Victorian Department <strong>of</strong> Innovation, Industry<br />
and Regional Development. Some 80 young energy pr<strong>of</strong>essionals<br />
gathered to hear the three wind energy engineers that organiser Mike<br />
Bagot had arranged to talk about their industry. Congratulations<br />
Mike on a very successful event. There will be a summary <strong>of</strong> the<br />
presentations in September issue <strong>of</strong> ENErgyNews.<br />
To kick start the year,<br />
Melbourne Branch visited<br />
Carlton Bre whouse.<br />
Attende es gaine d a<br />
better appreciation <strong>of</strong><br />
energy and water use<br />
in the brewing industry<br />
and, after the fascinating<br />
tour and presentation,<br />
enjoyed a tasting <strong>of</strong> the<br />
end product.
The big news is the 17th World Hydrogen <strong>Energy</strong> Conference which is being held in Brisbane 15–19 <strong>Jun</strong>e <strong>2008</strong>.<br />
In place <strong>of</strong> Hydrogen Matters for this and next issue, the September <strong>2008</strong> issue <strong>of</strong> ENErgyNews will include a special<br />
feature on hydrogen energy, based on the material presented at the conference.<br />
PRESIDENT<br />
Murray Meaton<br />
Economics Consulting Services<br />
Ph: (08) 9315 9969<br />
email: murray@econs.com.au<br />
VICE-PRESIDENT<br />
Tony Vassallo<br />
Ph: (02) 9810 2216<br />
email: tvassallo@invenergy.com<br />
TREASURER<br />
David Allardice<br />
Ph: (03) 9874 1280<br />
Mobile: 0418 100 361<br />
email: allad@bigpond.net.au<br />
SECRETARY<br />
Paul McGregor<br />
McGregor & Associates<br />
Ph: (02) 9418 9544<br />
email: paul@pmac.com.au<br />
Tony Forster<br />
Forster Engineering Services<br />
Ph: (03) 9796 8161<br />
email: forster@ozonline.com.au<br />
Rob Fowler<br />
Abatement Solutions – Asia-Pacific<br />
Ph: (02) 8347 0883<br />
Mobile: 0402 298 569<br />
email: rob.fowler@abatementsolutionsap.com<br />
Brisbane<br />
Dr Patrick Glynn<br />
Ph: (07) 3327 4636, Fax: (07) 3327 4455<br />
Mob: 0409 610 823<br />
email: Patrick.Glynn@csiro.au<br />
Canberra<br />
Ross Calvert (Acting Secretary)<br />
Ph: (02) 6241 2865<br />
email: rcalvert@homemail.com.au<br />
Hydrogen Division<br />
Bradley Ladewig<br />
ARC Centre <strong>of</strong> Excellence for<br />
Functional Nanomaterials<br />
Ph: (07) 3346 3813, Fax: (07) 3346 3973<br />
email: b.ladewig@uq.edu.au<br />
Malcolm Messenger<br />
Messenger Consulting Group<br />
Ph: (08) 8361 2155<br />
email: mjmessenger_aie@yahoo.com.au<br />
Colin Paulson<br />
Ph: (02) 4393 1110<br />
Mobile: 0422 030 830<br />
email: vivcol@adsl.on.net<br />
Paul Riordan<br />
Department <strong>of</strong> the Environment,<br />
Water, Heritage and the Arts<br />
Ph: (02) 6275 9250<br />
Mobile: 0403 399 439<br />
email: paul.riordan@environment.gov.au<br />
Dennis Van Puyvelde<br />
CO2CRC<br />
Ph: (02) 6120 1612<br />
Fax: (02) 6273 7181<br />
email: dvanpuyvelde@co2crc.com.au<br />
Gerry Watts<br />
Ph: (03) 6259 3013<br />
Mobile: 0418 352 543<br />
email: gapwatts@bigpond.com<br />
Melbourne<br />
Glenne Drover<br />
Regional Development Victoria<br />
Ph: (03) 9651 9360<br />
email: glenne.drover@rdv.vic.gov.au<br />
Newcastle<br />
Jim Kelty<br />
Ph: (02) 4961 6544<br />
email: jim.kelty@advitech.com.au<br />
Perth<br />
Dougal West<br />
WA Office <strong>of</strong> <strong>Energy</strong><br />
Ph: (08) 9420 5651, Fax: (08) 9420 5700<br />
email: Dougal.West@energy.wa.gov.au<br />
Hydrogen Matters<br />
AIE Board <strong>2008</strong><br />
BRANCH REPRESENTATIVES<br />
BRISBANE<br />
Andrew Dicks<br />
Ph: (07) 3365 3699<br />
email: adicks@eng.uq.edu.au<br />
EDITOR<br />
Joy Claridge<br />
PO Box 298, Brighton, VIC 3186<br />
Ph: (03) 9596 3608<br />
Mobile: 0402 078 071<br />
email: editor@aie.org.au<br />
SECRETARIAT<br />
<strong>Australian</strong> <strong>Institute</strong> <strong>of</strong> <strong>Energy</strong><br />
PO Box 193<br />
Surrey Hills VIC 3127<br />
Ph: 1800 629 945<br />
Fax: (03) 9898 0249<br />
email: aie@aie.org.au<br />
Branch and Division Secretaries<br />
South Australia<br />
Graeme Atwell<br />
Ph: 0418 776 616<br />
email: g_atwell@internode.on.net<br />
Sydney<br />
David Hemming<br />
NSW Department <strong>of</strong> <strong>Energy</strong> and Water<br />
Ph: (02) 8281 7406, Fax: (02) 8281 7451<br />
email: david.hemming@dwe.nsw.gov.au<br />
Tasmania<br />
Sue Fama<br />
Ph: (03) 6230 5305<br />
email: sue.fama@hydro.com.au<br />
ENErgyNews — <strong>Volume</strong> <strong>26</strong> <strong>No</strong>. 2 <strong>Jun</strong>e <strong>2008</strong> 55
Company Member Directory<br />
McLennan Magasanik Associates<br />
(MMA) is expert in electricity.<br />
MMA has over twenty years<br />
experience in consulting on<br />
natural gas issues.<br />
MMA has strong capabilities in<br />
economic analysis and modelling.<br />
MMA has worked widely on strategy<br />
involving the environment for<br />
governments and private companies.<br />
MMA specialises in market<br />
research associated with<br />
utilities and infrastructure.<br />
MMA has completed assignments<br />
on the valuation <strong>of</strong> water, on pricing<br />
strategies, and demand forecasts.<br />
www.MMAssociates.com.au<br />
Ceramic Fuel Cells Limited<br />
www.cfcl.com.au<br />
Acciona <strong>Energy</strong><br />
www.acciona.com<br />
Support<br />
the<br />
companies<br />
that<br />
support<br />
the AIE<br />
leadership in <strong>Energy</strong><br />
<strong>Australian</strong> <strong>Institute</strong><br />
<strong>of</strong> <strong>Energy</strong><br />
The <strong>Australian</strong> <strong>Institute</strong><br />
<strong>of</strong> <strong>Energy</strong> brings together<br />
pr<strong>of</strong>essionals concerned with<br />
the supply and use <strong>of</strong> energy<br />
in Australia. Its mission is to<br />
promote understanding and<br />
awareness <strong>of</strong> energy issues and<br />
the development <strong>of</strong> responsible<br />
energy policies in Australia.<br />
www.aie.com.au<br />
Minter Ellison has the<br />
largest specialist energy,<br />
resources and climate<br />
change legal practice<br />
in South Australia.<br />
Our local, national and<br />
international energy and<br />
resources experience spans<br />
electricity, gas, wind, water<br />
and alternative fuel.<br />
We place as much emphasis<br />
on the way we work with<br />
clients as on the quality<br />
<strong>of</strong> the solution we deliver.<br />
www.minterellison.com<br />
Testo Pty Ltd<br />
www.testo.com.au<br />
oFFICE oF TASMANIAN<br />
ENErgy rEgUlATor<br />
www.energyregulator.tas.gov.au
Company Member Directory<br />
Electricity.<br />
Some people make it,<br />
sell it or regulate it.<br />
ElectraNet,<br />
moves it.<br />
ElectraNet<br />
owns and manages<br />
the South <strong>Australian</strong><br />
transmission system<br />
in the National<br />
Electricity Market.<br />
www.electranet.com.au<br />
Company members,<br />
place your<br />
listing here<br />
Include your<br />
company’s name<br />
and logo, as well as<br />
up to 50 words <strong>of</strong><br />
promotional text.<br />
Send an email to<br />
editor@aie.org.au<br />
Connell Wagner is one<br />
<strong>of</strong> Asia-Pacific’s largest<br />
and most experienced<br />
multi-disciplinary engineering<br />
consulting firms.<br />
Its <strong>Energy</strong> Group provides<br />
engineering and technical<br />
advisory services to the power<br />
generation, substation,<br />
transmission and distribution,<br />
and oil and gas industries.<br />
We specialise in all facets<br />
<strong>of</strong> renewable and<br />
conventional energy projects:<br />
feasibility studies,<br />
project development,<br />
design, owner’s engineer<br />
and construction<br />
management, strategic<br />
technical advice,<br />
refurbishments, operations<br />
and maintenance.<br />
www.conwag.com<br />
Envestra Limited<br />
www.envestra.com.au<br />
<strong>Australian</strong> <strong>Institute</strong><br />
<strong>of</strong> <strong>Energy</strong><br />
www.aie.com.au<br />
Watermark is a leading<br />
<strong>Australian</strong> intellectual<br />
property firm,<br />
with <strong>of</strong>fices in Sydney,<br />
Melbourne and Perth.<br />
We have extensive<br />
experience and specific<br />
expertise in the protection<br />
and management <strong>of</strong> IP<br />
in the field <strong>of</strong> energy<br />
technology, including:<br />
oil and gas, renewable<br />
energy, power engineering,<br />
electricity generation<br />
and energy-efficient<br />
vehicle design.<br />
Call to explore how we can<br />
help you.<br />
www.watermark.com.au<br />
Division<br />
<strong>Energy</strong>Safety<br />
www.energysafety.wa.gov.au<br />
Company members,<br />
place your<br />
listing here.<br />
Send an email to<br />
editor@aie.org.au
Forthcoming AIE Events in <strong>2008</strong><br />
Calendar<br />
29 July in Sydney <strong>Energy</strong> in NSW <strong>2008</strong>; Supply and demand side prospects<br />
Venue: Sydney Masonic Centre Program and registration to be finalised<br />
18 August in Sydney Technical meeting with <strong>Energy</strong>Australia (EA), followed by a tour <strong>of</strong> EA’s new<br />
<strong>Energy</strong> Efficiency Centre in Homebush<br />
2 September in Sydney Site tour <strong>of</strong> Mt Piper Power Station<br />
For more information about Sydney Branch events, email sydney@aie.org.au<br />
13–14 August in Perth <strong>Energy</strong> in Western Australia <strong>2008</strong> In collaboration with WA Office <strong>of</strong> <strong>Energy</strong><br />
http://www.energy.wa.gov.au/conference<br />
If your branch has organised an event for the fourth quarter <strong>of</strong> <strong>2008</strong> or early 2009, send details to editor@aie.org.au to<br />
promote the event in the ENErgyNews. Allow for the lead time — events scheduled from October onwards need to be<br />
notified by the middle <strong>of</strong> August to appear in September issue.<br />
other Events <strong>2008</strong><br />
9–11 July in Singapore Asia Pacific Corporate Social Responsibility Conference<br />
http://www.apac-csr.com<br />
16–18 July in Darwin South East Asia Australia Offshore Conference http://www.seaaoc.com<br />
22–23 July in Sydney <strong>Australian</strong> <strong>Energy</strong> and Utility Summit http://www.acevents.com.au/energy<strong>2008</strong><br />
23–24 July in Sydney 2nd Annual Climate Change Summit http://www.climatechangesummit.com.au<br />
28–30 July in Palm Cove, Queensland Electrical <strong>Energy</strong> Evolution in China and Australia http://www.eeevolution.org/<br />
15–17 August in Sydney International Green Build, Design & Technology Show<br />
http://www.greentechshow.com.au<br />
21–22 August in Brisbane EESA National Conference and Trade Exhibition<br />
http://www.eesa.asn.au/events/national<br />
9–13 September in Husum, Germany HUSUM Wind<strong>Energy</strong> <strong>2008</strong> http://www.husumwindenergy.com<br />
13–14 September in Australia ANZSES Sustainable House Day www.sustainablehouseday.com<br />
23 September in Canberra ENA Gas Seminar http://www.ena.asn.au<br />
5–9 October in Buenos Aires, Argentina 24th World Gas Conference http://www.wgc2009.com<br />
6–8 October in Ljubljana, Slovenia Hydro <strong>2008</strong> http://www.hydropower-dams.com<br />
8–10 October in Paris, France International Gas Union Research Conference http://www.igrc<strong>2008</strong>.com<br />
9–12 October in Augsburg, Germany RENEXPO <strong>2008</strong> http:// www.renexpo.com<br />
13–16 October in San Diego, USA Solar Power Conference & Expo http://www.solarpowerconference.com<br />
30–31 October in Sydney EESA State Conference and Trade Exhibition Email eesa@tmm.com.au<br />
3–6 <strong>No</strong>vember in Paris, France World Ethanol <strong>2008</strong> Email conferences@agra-net.com<br />
24-<strong>26</strong> <strong>No</strong>vember in Gold Coast Clean <strong>Energy</strong> Council Conference & Exhibition <strong>2008</strong><br />
http://www.cleanenergycouncil.org.au<br />
other Events 2009<br />
22–24 March in Brisbane FutureGAS 2009 http://futuregas.com.au<br />
Please note that the events listed here are based on information sent to the <strong>Institute</strong> by event organisers. The AIE does not<br />
necessarily endorse the views <strong>of</strong> the speakers. The events are brought to the attention <strong>of</strong> members as potentially contributing<br />
to discussion on relevant energy issues. If you know <strong>of</strong> any conferences or other major events that would be <strong>of</strong> interest to AIE<br />
members and will be held from October <strong>2008</strong> to September 2009 please email details and web link to editor@aie.org.au