Slashing carbon an epic endeavour

Madu Venkatesan has no reservations about setting an ambitious expectation for Western Australia to cut carbon emissions, a view shared by many of her politically active peers.

“(We need) a really radical shift in the way we as a society operate,” 21-year old green advocate Ms Venkatesan said.

“Dreaming big and aiming high, possibly beyond our means, is vital. 

“There’s not enough time to be timid on this stuff.

“I’d like to see net negative (carbon emissions) by 2030.”

Net negative emissions would mean WA absorbs more carbon emissions than it produces, through abatements and sequestration below ground.

(click to view a PDF version of the full 12-page special report)

In WA, emissions were about 92 million tonnes in 2018, with almost 40 per cent produced by the energy sector.

“It’s absolutely possible, feasible,” Ms Venkatesan said.

“(US politician) Alexandria Ocasio-Cortez said it best; we have the technology, the expertise to take the leap.

“We have no other option.

“Either we have uncomfortable conversations now, or in 50 years the planet will be unliveable.”

Ms Venkatesan is also among those young activists who are sceptical of capitalism.

A poll by The Centre of Independent Studies in 2018 found 59 per cent of millennials believed capitalism had failed and governments should exercise more control of the economy. 

While Ms Venkatesan would be considered Generation Z, not a millennial, she said capitalism had an “extractivist” mindset, and criticised the way wealth was distributed.

“I think capitalism arose for a specific reason at a specific time,” Ms Venkatesan said.

“It’s clear capitalism will not lead us out of this.

“Capitalism is inherently exploitative and dangerous.”

The local example perhaps provides an interesting counterpoint.

Businesses and environmentalists alike have despaired at the federal government’s inability to settle on a consistent, credible energy and climate policy.

The WA government has also been criticised in some circles for a lack of ambition on emissions cuts.

Meanwhile, businesses are pursuing long-term plans, some of which are detailed below.

But there are calls for more.

Green lobby group Clean State has been rolling out a series of 25 ideas for emissions reduction in WA, which it claims will create 240,000 jobs over the medium term.

To put that into context, it represents more than a sixth of the WA labour force.

Director of research and policy Chantal Caruso said Clean State believed a big program to cut emissions would create more jobs than many alternative post-pandemic stimulus proposals.

“Decarbonising the economy is the single biggest exciting opportunity before us,” Ms Caruso said.

The policies announced so far are in the areas of social housing and tourism, while more suggestions will be released in coming weeks.

Ms Caruso said part of the plan was for the government to build 15,000 new social housing premises with 7.5-star energy efficiency, and to retrofit 44,000 existing dwellings to improve energy efficiency.

Examples include replacing gas cooking equipment with electric, improving insulation and installing solar panels.

She said this would create jobs, reduce emissions, house the homeless and reduce bills for people in public housing.

WA should take inspiration from the European Union, Ms Caruso said, which announced a €500 billion ($824 billion)  green stimulus package in response to the economic impact of the COVID-19 pandemic.

So far, the state government has announced $66 million for renewables in response to the crisis.

Clean State is also critical of plans to build two new major offshore gas projects, Woodside Petroleum’s Scarborough and Browse, which will be tied back into existing processing facilities near Karratha.

Ms Caruso said WA needed to cut emissions 7.6 per cent annually to reach the aspirational Paris agreement objective, so the Woodside expansion and life extension plans at Karratha were incompatible with a safe climate.

“Climate change is our single biggest threat, globally and locally,” she said.

“(Industry is acting) as if you can keep driving at the wall and take your foot off the pedal just before we hit the wall.

“We don’t think new (developments) such as Burrup Hub are compatible with net zero by 2050.”

Ms Caruso said the existing system of emissions regulation for the LNG industry was ineffective, and that a strong policy framework would ensure businesses and the community were clear about which direction they were heading in.

Chantal Caruso says WA should take inspiration from Europe for pursuing a green stimulus strategy. Photo: Gabriel Oliveira

The International Panel on Climate Change’s most recent report forecasting mitigation pathways does expect continued, albeit decreasing, use of fossil fuels in decades ahead.

“By 2050, renewables (will) supply a share of 52–67 per cent of primary energy in 1.5 degree (warming) pathways with no or limited overshoot; while the share from coal decreases to 1–7 per cent, with a large fraction of this coal use combined with carbon capture and storage,” the report said. 

“From 2020 to 2050 the primary energy supplied by oil declines in most pathways (−39 per cent to −77 per cent).

“Natural gas changes by −13 per cent to −62 per cent, but some pathways show a marked increase albeit with widespread deployment of carbon capture and storage.”

Chevron operates a carbon capture and storage facility at the Gorgon LNG plant on Barrow Island, although its effectiveness has been the subject of wide debate.

While Clean State’s target is ambitious, there could be challenges in implementation.

For example, it would require a huge portion of the state’s labour force to be redirected from value-creating industries towards emissions reduction, while the government would need to tax or borrow to fund the program.

All of that would have flow-on impacts, including through spiking wages in some sectors, reducing availability of workers for other sectors of the economy, and increasing prices.

A longer-term consequence of such a big program would be shifting capital away from its most productive uses, with much economic research finding stimulus programs lead to lower GDP over the long term.

But Ms Caruso is confident the community ultimately supports green investment. 

“People know in their hearts, they want their kids working in renewables,” she said.

A change in policy direction was flagged last year by the Environmental Protection Authority, proposing big companies fully offset emissions for new investments.

The final version of the guidelines, released in April 2020, was that proponents of big projects should have a plan to achieve net zero emissions by 2050.

After the EPA took the lead, the state government also announced a net zero by 2050 target.

Internationally, businesses such as BP have since adopted similar objectives.

Chairman Tom Hatton told Business News the state government and EPA had moved forward in parallel, and there was a lot of work to be done to get the state’s emissions down.

“Absolutely it can be done, it’ll take a lot of work, investment and innovation,” Mr Hatton said.

But action was vital.

“We have to (do better), we being the whole community,” Mr Hatton said.

“Everybody has to do better, it’s unambiguous.”

Energising grid transition

The energy sector is already undergoing transition, with distributed solar, batteries and hydrogen all highlighted as playing a role to reduce emissions.

For the year to July, coal produced about 44 per cent of electricity generated in WA, gas 42 per cent and wind 12 per cent, with those numbers excluding behind-the-grid rooftop solar production.

In the theme of ambitious plans for emissions reduction, some local activist groups have been calling for renewables to account for 100 per cent of electricity supply in WA by as soon as 2025. 

That would involve three economic challenges.

The state’s South West power grid has more than 4,700 megawatts of capacity certified for non-renewable generation, with about 36 per cent for gas power and a further 33 per cent for coal.

Renewable capacity is about 1,170MW, with a further approximately 1,200MW of rooftop solar, forecast to grow to 2,600MW by 2030.

To put the aspiration in context, fully replacing the fossil fuel capacity would require about 50 new wind farms the size of Alinta Energy’s $700 million under-construction Yandin wind farm, adjusting for capacity factor.

Intermittent renewable capacity would need to be backed up by storage.

It would also mean the state never uses the full value of its other potential energy production sources, which would need to be written off.

Views differ about an appropriate time frame for a transition of this scale.

Curtin University professor of sustainability Peter Newman said he was confident WA could reach 100 per cent renewables by 2040.

Rooftop solar, batteries and internet connectivity of units across the grid would be key, he said, and WA already had one of the highest penetrations of rooftop solar in the world.

“Those three together are an extraordinary combination and they’re sweeping the world in their ability to replace coal and gas,” Professor Newman said.

“We can lead the world in how we (adapt the grid), it’s a business opportunity.”

Responding to concerns about storage needs, Professor Newman had a range of suggested alternatives beyond utility-scale batteries and home batteries.

Electric vehicle batteries could contribute to grid management, he said, with parked cars being used as a rapid-response spinning reserve option for grid stabilisation, if they were connected.

About 100,000 cars would provide 500MW of storage, Professor Newman said.

While batteries are excellent for rapid response, they have capacity limitations for longer-term storage for periods when solar and wind are both unavailable for many hours or days.

Professor Newman highlighted the possibilities of pumped hydro storage, and hydrogen, which can also be used to store electricity.

For Alinta Energy, the Yandin wind farm will be firmed up by the company’s existing fleet of gas-peaking generators, which can kick into operation faster than alternatives such as coal, providing a backstop to intermittent renewables.

Alinta has installed a 30MW battery at Newman and is building 60MW of solar capacity, plus transmission, for Fortescue Metals Group’s iron ore mining operations.

“We are making a lot of investment into renewables,” Alinta general manager WA Chris Campbell told Business News.

“The state is in a really good position for renewable investment.

“We’ve got existing infrastructure in gas (generation) that’s flexible and can accommodate renewables.

“There’s (also) a pretty large opportunity to decarbonise the Pilbara.”

Mr Campbell said WA’s characteristics supported renewables, and predicted ongoing moves by the state government to close down coal-fired generation would support a continued switch.

Improving economics and technological change were pushing momentum behind renewables, but there was still some way to go.

“We’re going to need a mix of generation sources for some time yet,” he said.

“We’re seeing rapid change at the moment.”

WA Independent Power Association chairman Richard Harris cautioned that the focus should be on setting up a market which could deliver the best outcome, rather than picking winners.

“We need to set up a system that can cope with change, all we know is that it is going to change,” Mr Harris said.

“Technology comes quicker than we think.

“Governments are not the (best) ones to make investments, they usually get it wrong and it’s far more expensive than it needs to be.”

He said he expected an increasing uptake of battery storage in WA in the next five years, which would help smooth out solar power production to match peak demand.

“We don’t need much more energy of any sort, what we do need is to smooth it out,” Mr Harris said.

“You have to design a market that sends the right signals for those investments.“

Some of the challenges of a more rapid transition were that WA’s grid was isolated from the rest of the country; and that it would make existing assets redundant, he said.

Wood Mackenzie principal analyst Robert Liew said moving completely to renewables would be a challenge with the current state of technology, although he said Australia could do much more than it was by developing a clear, long-term vision.

“No country has 100 per cent renewables,” Mr Liew said.

“It’s very difficult to upgrade.

“Unless battery systems are in place to support solar and wind for days or weeks, it’s very hard.”

Hydrogen

While renewables are being used to reduce the emissions profile of electricity, hydrogen is touted as the alternative to natural gas.

The hydrogen industry is still in its infancy in WA, and around the world.

One early development was at gas distributor ATCO Australia’s Jandakot headquarters, where solar panels are powering electrolysers which transform water into hydrogen.

ATCO general manager business development Russell James said hydrogen would have an increasing role in the gas system.

“We wanted to show what the long-term future of gas networks were,” Mr James said.

The site has 300 kilowatts of solar capacity installed, which charges batteries during the morning and is used for hydrogen production at peak times in the day.

“We take the excess solar and put it through an electrolyser,” Mr James said.

“It’s another way of capturing renewables, similar to a battery.”

Whether by battery or hydrogen, the power can be stored for later use, with a small level of energy loss.

Hydrogen could then be blended into the existing natural gas distribution network, to be used in appliances or potentially accessed later for electricity production.

The existing network could easily handle a 10 per cent hydrogen blend, Mr James said, while most household appliances could operate with up to 15 per cent hydrogen.

There is historical precedent for a higher gas blend, he said.

When WA was mostly powered by town gas, which was made from cracked coal, hydrogen content had been as high as 50 per cent, Mr James said.

Atco also developed a blending station for Jandakot which had been used as a model for a project in Canada.

Mr James said hitting a 10 per cent blend would be the first step in developing a local hydrogen industry, which could then export.

While there have been calls to transition away from gas through increased electrification, he said that would be capital intensive, and hydrogen blending was complementary to other methods of emissions reduction. 

“One of the ways to look at it is, there’s already a lot of existing infrastructure in the ground,” he said.

“Gas networks are very reliable.”

Blending hydrogen and increased electrification would be complementary ways of transitioning, Mr James said.

Curtin’s Professor Newman said hydrogen could be used to replace gas for industrial purposes, both in the Pilbara and for manufacturers in Kwinana or Kemerton.

“They can all use hydrogen,” he said.

“It’s a cleaner fuel that can easily be made.”

Hydrogen production would also be distributed, and perhaps not channelled through the existing gas grid, he speculated.

“It’s best produced right next to where it’s needed,” Professor Newman said.

There’s still much work which will need to be done to make hydrogen competitive, however.

Australia’s National Hydrogen Strategy estimated a breakeven price of $1.20 per kilogram would make hydrogen competitive against natural gas.

That would mean the price of renewable hydrogen would need to fall below a quarter of its current level.