Guest Post by Peter Lang. Peter is a retired geologist and engineer with 40 years experience on a wide range of energy projects throughout the world, including managing energy R&D and providing policy advice for government and opposition. His experience includes: coal, oil, gas, hydro, geothermal, nuclear power plants, nuclear waste disposal, and a wide range of energy end use management projects.
You can download a printable 16-page PDF version of this post here (updated 1 June 2010). This includes 7 appendices not included in the web-based version below.
Hazelwood Power Station is Australia’s most CO2 emission intensive power station. Replacing it with cleaner technology could reduce Australia’s CO2 emissions by 12 to 16 Mt/a. The NGO Environment Victoria recently commissioned a report by Green Energy Markets Pty Ltd to consider options. But the report has a pro-renewables bias, avoids the best option (gas only), and contains many inconsistencies.
Emissions saved per year: 12.2 Mt/a versus 11.8 Mt/a;
Capital cost: $6-$7 billion versus $2 billion;
Cost of electricity: $103/MWh versus $55/MWh;
CO2 avoidance cost: $64/t CO2 avoided versus $22/t CO2 avoided.
The renewables option for replacing Hazelwood is a poor one. It is high cost and yet yields only small extra emissions savings.
The significance of this analysis for governments is:
- It highlights the pro-renewables bias endemic in NGO environmental groups.
- It highlights the irrational decisions that some environmentalist advocates are causing.
- Federal and Victorian governments should reject the renewables option and implement the ‘gas only’ option.
- The nuclear option would be even better if it was available.
Hazelwood Power Station is Australia’s most emissions-intensive power station. The NGO Environment Victoria contracted Green Energy Markets Pty Ltd to consider options for replacing Hazelwood Power Station. The report “Fast-tracking Victoria’s clean energy future to replace Hazelwood Power Station”  was published by Environment Victoria in May 2010.
The project brief was (bold is my emphasis):
… to undertake an assessment into the options and opportunities for replacing the
Hazelwood Power Station by the end of 2012. This report assesses a combination of clean energy technologies to replace the generation capacity provided by Hazelwood in a way that maximise emissions reductions, whilst also maintaining energy security and minimising any increase in electricity bills.
Does it actually meet these criteria? The scenarios it considers are described as follows:
Scenario 1 – Supply side only option: this scenario involves bringing forward 1180 MW of combined cycle gas turbine plant running at 65 per cent capacity factor and 1500 MW of renewable generation (predominantly wind) at 30 per cent capacity factor; and
Scenario 2 – Supply side and demand side option: this scenario involves bringing forward 970 MW of combined cycle gas-fired generation running at 50% capacity factor initially, then declining over time, as well as 1500 MW of renewables. It also incorporates additional residential, commercial and industrial energy efficiency options that replace around 25 per cent of Hazelwood’s annual generation as well as 100 MW of Demand Side Management.
I have reviewed the report and my findings are provided in the following sections.