Climate crisis update and cash for coal clunkers

2covershootHere are two useful items I want to highlight.

The first is a policy and review paper on climate change written by Katherine Wells, entitled “Recent Climate Change Science, Global Targets and the Global Climate Emergency“.

Katherine, a lawyer, is a former Chair of the South Australian Premier’s main environmental advisory board, the Premier’s Round Table on Sustainability, and a former National Vice-President of the Australian Conservation Foundation. She is currently a Climate Change Consultant in Adelaide. Her 19- page overview struck me as one of the more succinct, thoughtful and readable updates of the recent science of climate change — written in a manner suitable for an intelligent lay audience — that I have read. I thoroughly recommend that you download and read it. Here is the summary:

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Climate change impacts are occurring faster and with more severity than predicted only several years ago. At the same time, the world’s emissions are increasing at rates greater than predicted, and the alarming rates of emissions reductions required to avoid dangerous levels of climate change are becoming more apparent. The time-frames within which we can take effective action are shrinking rapidly, and now appear to be so tight as to require that we take world-wide emergency action, or prepare to face catastrophic levels of climate change.

This paper considers:

• some key findings of recent climate science

• some key climate indicators, and how they have been tracking recently

• whether a rise in the average global temperature of 2 degrees Celsius above pre-industrial levels is an appropriate threshold for ‘dangerous’ climate change

• what targets for atmospheric CO2e concentrations (ie, atmospheric concentrations of greenhouse gases) are necessary to limit the temperature rise to 2 degrees, and (alternatively) to stabilise the temperature at less than 1 degree above pre-industrial levels

• what targets for global emissions reductions, and other actions, are necessary to achieve these atmospheric CO2e concentrations targets, and

• the way in which time-lines in the climate change arena are shrinking:

– the impacts of climate change are getting worse more rapidly than predicted

– key climate indicators are providing great cause for concern

– the magnitude of the emissions reduction task is becoming more apparent

Key questions for consideration are set out at the end of each section of the paper. In summary, they are:

1. Is a rise in the average global surface temperature of 2 degrees above pre-industrial levels the appropriate threshold for ‘dangerous’ climate change? If not, what would a more appropriate threshold be?

2. Is a target for atmospheric greenhouse gas concentrations of 450 ppm CO2e appropriate, or should the world be aiming for a more stringent target? If so, what should this be?

3. Are global emissions reduction targets which are consistent with achieving atmospheric greenhouse gas concentrations of 450 ppm CO2e appropriate, or should the world be aiming for more stringent global emissions reduction targets? If so, what should these be?

4. Achieving the more stringent targets for atmospheric greenhouse gas concentrations is likely to require not just deep emissions cuts, but action in other areas, such as, from later in this century, negative emissions. Should we expand the current policy debate to encompass and address these issues?

5. Given the shrinking time-frames indicated by the latest scientific analysis in this area, is it reasonable to characterise the current climate situation as a climate emergency? If not, why not, and when would it be reasonable to characterise the climate situation as an emergency?

6. If it is a climate emergency, what should we do differently to address it?

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The second is a short opinion piece by Steve Kirsch, published on the Huffington Post, entitled “Cash for Coal Anyone?”. It’s a great idea, and we need out-of-the-box thinking like this. Oh, and if anyone is wondering, the renewable numbers Steve quotes were sourced by me and come from the BP Statistical Review of World Energy 2009.

Since the “Cash for Clunkers” program was so successful in stimulating demand for new autos, why not use the same concept to stimulate the demand for new clean power plants to replace our dirty coal plants?

How about a “Cash for Coal” program? The government will pay you for the residual economic value of your coal plant and offer to finance the construction of a new, carbon-free base load power replacement plant of equal or greater capacity provided the cost of the plant is under $2,000 per kW of average capacity (not nameplate capacity). Nuclear power (such as the CANDU reactor) has recently been installed in China for less than this, so the numbers are reasonable. Of course, any clean power technology would qualify so long as the price target is met; I’m just using nuclear here as an example.

We are installing clean power in the world at nearly 100 times slower than we need to avert a climate crisis (350ppm being the new goal which we’ve already exceeded). Cap and trade isn’t going to get us there fast enough. In fact, some influential thinkers, such as James Hansen, will tell you that that Waxman-Markey will actually slow down the rate we install new clean power.

To give you some idea of how far behind we are, consider that in 2008, for technosolar, peak capacity for solar was 13.5 GW and wind was 122 GW. The amount of wave power and hot dry rock geothermal is trivial (small scale demonstration only). Volcanic vent geothermal is 10.5 GW. Based on average capacity factors of 0.15 for solar, 0.25 for wind and 0.75 for geyser-derived geothermal, that represents a total average ‘renewable energy’ power (excluding biomass) of 40 GW, globally, in 2008.

We need about a GW of new clean power each day for the next 25 years to avert disaster. So in our entire history, we’re 40 days into it. Let’s say we installed all that power in the last 4 years to be aggressive. So that’s 10GW /year or about 36 times slower than we should be.

But a “Cash for Coal” option could get us there at a rate of our choosing. If it doesn’t work fast enough, all Congress has to do is raise the incentive price until it does.

What could be simpler?

If we are serious about saving the planet and achieving 350ppm, this may be the most economical way to accelerate the rate of retiring coal plants.

If we cannot virtually eliminate the CO2 emissions from coal plants (either by replacing them or capturing all their CO2 emissions), then it is IMPOSSIBLE to hit 350ppm or even 450ppm no matter what else we do. The planet is lost.

If we develop new technologies to suck massive amounts of CO2 from the air and sequester it and then require all power plant operators to be carbon neutral, that would work too. In the absence of a proven technology to do this economically, at large scale for all coal plants, and without risk of accidental release, the Cash for Coal option may be our cheapest solution since it doesn’t generate the CO2 in the first place and ultimately is more cost effective.

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16 Comments

  1. Well I nominate the 240 MWe Playford B power station at Pt Augusta as the first clunker to go. It was judged the most decrepit in Australia. Note that yellowcake is loaded on the Darwin railway just a few kilometres away. Then Hazelwood (1600MW?) in Victoria with 1.25 kg of CO2 per kwe. I don’t know if these coal stations should be demolished or kept on standby; for example Maju at Collie WA helped out after the major gas pipe explosion.

    There may be a few problems with transitioning arrangements and finding the big bucks. After all the ETS was supposed to impose a steady squeeze on coal burners so their thoughts to low carbon replacements. The auction revenue was to pay for home insulation etc. That incremental approach should have easier on everybody. Instead big emitters lobbied for free permits and bogus offsets. Now what is needed is a ‘blunt instrument’, for example a straight $20 a tonne CO2 tax with no freebies. That could raise $10bn in the first year, enough to pay for an AP 1000 then some.

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  2. It´s dead sure we lower emissions only after really big catastrophes and such catastrophes to appear are taking 10 – 20 years. I mean completely ice free Arctic in September, some 10 000 km3 ice breaking from Greenland in one massive download etcetera.

    What a pity.

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  3. You could throw in Redbank at Singleton — more than 1.06 million tons of CO2 each year for only 151MW rated capacity. The 41 year old Lake Munmorah power station which now produces 5.56 million tons of CO2 each year for 660MW rated capacity sounds like a soft target too. Then there’s Vales Point Power Station — 9.32 million tons each year … total rated capacity 1320MW — built mainly in the early 1960s but added to in 1978. Wallerawang Power Station where the 1000MW is from units added in 1976 and 1980 — 7 million tons of CO2

    In Victoria we have the 40 year-old Anglesea Power Station which not only uses brown coal to emit 1.21 Million tons of CO2 producing just 160MW but draws water from an artesian bore to run an aluminium smelter.

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  4. Why change the name? Using ‘cash for clunkers’ you could easily morh it into a coal replacement idea. Especially as the cash for cluncker sprogram has had such a high visibility in the US. The only problem would be sustainaing it over the build time for new plants.

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  5. The symbolism of retiring a coal fired power station in its prime would be striking. However a snowball has a better chance of surviving hell. If the ETS legislation gets up I understand that the starting price for CO2 will be $10 per tonne from 1st July 2010. That should mean that electricity ex Hazelwood (the developed world’s dirtiest powerplant) will go up a whopping 1.25c per kwh. But brown coal burners get 90% free permits 2010-2015 I believe so there will be effectively no disincentive. Population growth and new energy demands like the 400 ML/day Wonthaggi desal will make it very hard to retire any brown coal power. Meanwhile the Federal government approves new black coal export terminals. But new coal fired stations in Queensland will be ‘carbon capture ready’.

    Politicians simply don’t have the cojones to impose meaningful carbon cuts. Something is needed to break the ice. A first nuke that takes ten years to approve then ten years to build won’t cut it.

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  6. I like the idea of a soft start to carbon pricing so people can wrap their thinking around it like the GST. If say your normal electricity bill goes up $1000 per year there should be a range of subsidised options like home insulation, a solar water heater or smart meter. All paid for by the carbon revenue. Meanwhile we learn to use less while power retailers switch to low carbon.

    However I doubt the ETS on its own will displace a gram of coal. Recalling the 2006 IEA figures hydro was 16,000 Gwh and non-hydro renewable (wind, solar, biomass) was 4,000 Gwh , total 20,000. We want to get to 45,000 Gwh by end 2020. I’d assume hydro is static and geothermal, wavepower etc will disappoint. From 4,000 in 2006 to 29,000 Gwh in 2020 (=45k-16k) for wind, solar and biomass is not gonna happen at the current snail’s pace. We must have a tough no-loopholes CO2 cap which forcibly drives conventional coal out the door, but also conserves gas reserves for the long run. IMO it simply can’t be done without fast build nuclear.

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  7. I agree except for the soft option entry price. The price should be a lot higher so it really concentrates people’s minds. I agree with the assistance on solar water heaters, insulation and similar. It has to go onto transport too.

    With a high enough price we can build pumped storage and make wind and wave and solar despatchable and indeed, the wholesalers (even of coal-fired power) might see it this way.

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  8. Fran Barlow, #3, I’d like to build on what you said in comment #3.

    You mentioned a list of Australian coal fired power stations, up to 41 years old

    The “Cash for coal” suggestion is to pay the owners the residual economic value. Let’s make some assumptions for sake of discussion. Let’s assume our coal fired power plants were built on the assumption of a 40 year economic life. On that basis the government could argue that the power station that are 40 years and older have passed their ‘used by date’ and are now worthless. The owners and the investors (such as all of us who have superannuation), on the other hand, may argue that these power stations are worth more now than when they were built – in inflation adjusted terms. The truth is somewhere in between. However, the power station owners and investors (i.e.us) stand to loose value as a result of the growing threat to cut emissions. To get some perspective on this consider how much value the NSW generation fleet has lost in the past few years. Considering the risk of loss of value they longer they hold the assets, the power station owners are likely to accept a reasonable offer.

    How much will it cost the government to buy back these old coal fired power stations? Let’s assume the average age of the coal fired power station fleet is 20 years. And we plan to buy the older half as a first step. Therefore, the older half have an average age of say 30 years, so they have 25% of their original life left. We shall say they are worth 25% of their original cost (escalated) – say 25% of 1600/kW. Let’s say we intend to buy back 10 GW at $400/kW. The cost would be $4 billion.

    That looks like good value for Australia to buy back the older half of the coal fired power stations for $4 billion. To put this figure in perspective, we are spending $13 billion on the Murray Darling and making little if any progress; $43 billion on the broadband network; in the order of $5 billion for each new Defence weapon system (planes, ships, submarines). Importantly, many people believe the ETS/CPRS will have unforseen effects and higher costs to our economy than is being admitted or recognised. If we can find a better way than implementing the ETS/CPRS at this point in time, I would be very pleased. ‘Cash for coal’ looks like a great idea to me.

    There is another cost of course; but it is not to the public purse. We’d have to replace 10 GW of coal with 10 GW of brand spanking, new, clean, nuclear generation with a life expectancy of some 60 years and capacity factor of 90% (added for the benefit of some other readers). The settled down cost of this, if we can get strong public support and minimise bureaucratic involvement, would be some $40 billion. But it would be funded by investors. No need for public subsidies.

    The key to cheap nuclear power is strong public support, effective and efficient nuclear regulation, and minimal the opportunity for the bureaucracy to get involved.

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  9. Apparently David Mackay whose e-book “withouthotair” is linked to from here at BNC is to take on a role with the UK government.

    A CAMBRIDGE academic who has suggested importing solar energy from the Sahara and using Scottish lakes as giant batteries is to be named the government’s scientific adviser on climate change.

    David MacKay, a professor at the famous Cavendish Laboratory, has been recruited by Ed Miliband, the energy and climate change secretary. His appointment is due to be announced in a few weeks.

    He’s an eminently sensible chap, and so this would seem to be a step forward

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  10. Question: who owns these coal plants? Are they privately, investor owned or publicly owned?

    Comment: I’m against taxing carbon for one reason: the price gets passed onto working class people. It’s a regressive tax. Why not just come up with a plan that *mandates* targets with alternatives to coal? (like Peter’s suggestion of brand spanking new nuclear plants).

    Some of us on energyfromthorium.com have bandied about the idea of approaching various electrical jurisdictions (states, ISOs, etc) and specifically the TVA which is a rare multi-state jurisdiction and suggest the come up with a plan that says: we will build at designated coal plant, using their infrastructure, and build a nuclear plant over and above the current MW output of the coal plant. When the nuclear plant goes online, we pull the fires from the coal burner and bulldoze it. No taxes, no penalties, just a *plan*.

    David

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  11. John#7
    “From 4,000 in 2006 to 29,000 Gwh in 2020 (=45k-16k) for wind, solar and biomass is not gonna happen at the current snail’s pace.
    Wind power is presently producing 3,500GWh( increased by 1,500GWh last year). If wind build continues at present rate will have 20,000GWh from wind in 2020, thats almost half of the way to the 45,000GWh. A very modest rate of increase would bring that up to 30,000GWh from wind.
    I can’t see more than one nuclear plant coming on line by 2020, so perhaps we could have 8,000GWh from nuclear in 2020. It won’t be a problem in having a rapid nuclear and wind building program, we will still have lots of coal to replace.

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