Least cost, utility scale abatement from Australia's NEM (National Electricity Market). Part 2: Scenarios and policy implications
Introduction
When considering the decarbonisation of electricity, all aspects of the policy and technology debates have their proponents and opponents. On policy, some advocate different forms of carbon price, whilst others argue for RPSs (renewable portfolio standards), reverse auctions, direct regulation or other measures [1], [2], [3]. There is also significant disagreement as to what our abatement targets should be. Some argue that, for high income countries at least, zero emission and/or completely renewable electricity is essential [4], [5], [6]. Others argue that since cheaper abatement is available internationally [7], [8] or in other domestic sectors [9], we should therefore target less abatement in electricity as part of an overall, more cost-effective approach.
Australia is a case study of such differing policy views. In 2014, our Federal Government became the first government in the world to remove a legislated price on carbon; legislation that had been in place for only two years. It has also recently completed a lengthy negotiation on its legislated RET (Renewable Energy Target), which is the domestic form of a RPS, whilst implementing its ‘Direct Action plan’, which is a form of reverse auction that will pay for abatement across the economy [2]. Finally, even though Australia has one of the world's largest proved economic reserves of uranium and is a large uranium exporter, it does not produce any electricity from nuclear energy.
The technology debate is no less charged or confusing. In particular, it is common to find advocacy of specific technologies without fully acknowledging the difficulties that they face. At utility scale, these technologies include the several forms of renewable generation, CCGTs (combined cycle gas turbines), nuclear, coal and gas with CCS (carbon capture and storage) and different forms of energy storage, to name only a few. Of course, no technology is without problems. Even though the direct CO2e emissions of CCGTs are significantly lower than those of coal plant, the fugitive emissions of methane from the well to the plant remain a topic of debate [10], [11]. Intermittent renewables can create problems of network and market performance [12], [13], [14], [15], [16]. Biomass and biogas often face issues of resource availability [17]. Whilst some argue that nuclear power is significantly safer than alternatives, the public's perception of its risks – rightly or wrongly – remains a major challenge to its future prospects [18], [19], [20]. More broadly, some of these technologies are deployed at a significant scale and have a known record of performance, whilst others do not. Whilst these latter technologies may be very deserving of support for further research, development and demonstration, it is important not to overstate the role that presently undeployed technologies will play, particularly since any new energy technology usually takes decades to reach significant levels of deployment [21], [22].
Following on from Part 1 of this study [23], this second part therefore considers different technology, financial and policy scenarios for achieving abatement from Australia's NEM (National Electricity Market). These include cases where nuclear power generation and CCS (carbon capture and storage) are implemented in Australia, which is presently not the case, as well as a more detailed examination of how an extended RPS might perform. The effect of future fuel costs and different discount rates are also examined. Policy implications arising from these scenarios for both the nearer (i.e. to roughly 2030) and the longer term (i.e. to 2050) are then discussed. As detailed in Part 1, all model inputs are from the most current, publicly available and authoritative Australian sources and the results presented are therefore intended to be transparently derived and both policy and technology neutral.
Section snippets
Method
The method used in this paper was presented in Part 1 of this study [23]. This includes use of a constrained LP (linear program) that minimises the net present costs of the new build and operating costs from 2015 to 2050 subject to numerous constraints.
Part 1 of this study [23] also listed the existing and new build generation and storage technologies that are included in the model. For the cases where nuclear generation is considered, it can only commence generation in 2025 or after. Nuclear
Results and discussion
Let us first consider the annual GHG (greenhouse gas) emissions from any electricity system (t CO2e) expressed in terms of other parameters,
The first term on the right hand side shows the direct proportionality between annual demand – and therefore annual generation – and annual GHG emissions. However, electricity demand is exogenous at the utility scale, and is therefore outside the scope of the present study.
The second term on the right hand
Conclusions
This paper is the second of a two part study that considers least cost, greenhouse gas abatement pathways for an electricity system. Part 1 of this study [23] presented a bottom up model for determining these abatement pathways, and applied this model to Australia's NEM (National Electricity Market) as an example. Part 2 of this study examined several different scenarios for achieving abatement from Australia's NEM. These included cases where nuclear power generation and CCS (carbon capture and
Acknowledgements
This research was supported by the Australian Renewable Energy Agency (agreement number 2489) and completed whilst the first author was on sabbatical in the Department of Mechanical and Aerospace Engineering at Princeton University. We also acknowledge Mr. Daniel Marshman and Mr. Avishai Lerner for checking the results presented.
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