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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 />

Advertising<br />

Members (and non-members) may place<br />

advertisements in ENErgyNews on behalf<br />

<strong>of</strong> themselves or their organisations. If you<br />

wish to use this opportunity contact:<br />

Joy Claridge<br />

PO Box 298<br />

Brighton, VIC 3186<br />

email: editor@aie.org.au<br />

Advertisements can include products,<br />

services, consulting, and positions vacant<br />

and required.<br />

Discounts are available for members and for<br />

all advertisements repeated in two or more<br />

issues.<br />

Subscription Information<br />

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 />

Level 1/613 Canterbury Road,<br />

Surrey Hills VIC 3127<br />

Postal Address<br />

PO Box 193<br />

Surrey Hills VIC 3127<br />

Telephone Toll Free: 1800 629 945<br />

Facsimile: (03) 9898 0249<br />

email: aie@aie.org.au<br />

Web Address<br />

http://www.aie.org.au<br />

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

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