1. Australian Energy Scenarios Predicting Uncertainty
Professor Emeritus Frank Larkins
Chief Scientist Energy
Department of Primary Industries
Victoria
Presentation: Griffith Hack 17th June 2009

2. Australian Energy Scenarios Outline
Current Situation
Uncertainties
Electricity Resource Projections to 2050
Australian Energy Resources
Regulatory Environment
Energy Technological Advances
Technology Replacement Costs
Infrastructure Financing
Cost of Electricity Generation Technologies
Global Warming – Climate Change
Managing Community Perceptions
International Developments

3. World Energy Use by Fuel Type 85% of world energy is sourced from fossil fuels
37%
25%
23% 9% 6%
World energy demand has increase 2.6 times in 40 years

4. Energy Use per capita vs GDP per capita In GDP per capita terms Australia is an energy intensive economy

5. Australian Energy Fuel Mix 2005
Energy Consumption
By Fuel Type
Coal
41%
Oil
35% % Fossil Fuels
Gas
19%
Biomass
3.7%
Renewables
1.3%
Source: ABARE 2005

6. Australia’s Energy Consumption Coal, oil & gas supply 95% of Australia’s Energy needs
Energy End Use
Percentage
Electricity Use
Total
Electricity
30.8%
Transport
24.3% %
0.3%
24.6%
Manufacturing
22.6%
3.9%
26.5% %
Mining & Metals
6.2%
10.3%
16.5%
Residential
7.8%
8.2%
16.0%
Commercial
4.5%
7.9%
12.4%
Agriculture
1.8%
0.2%
2.0% low use
Construction
0.5%
Other
1.5%
Source: ABARE 2006

7. Australia’s Net Anthropogenic Greenhouse Gas Emissions 2006 Source: CSIRO 2006
Emissions Mt CO2-e
Percentage
ENERGY
400.9
69.6%
stationary energy
287.4
49.9%
transport
79.1
13.7% %
fugitive emissions
34.5
6.0%
INDUSTRIAL PROCESSES
28.4
4.9%
AGRICULTURE
90.1
15.6% second largest
WASTE
16.6
2.9%
LAND USE CHANGE
62.9
6.9%
FORESTRY
-23.0
TOTAL NET EMISSIONS
576.0
100%

8. Electricity Resource Projections to 2050 (%)
Coal
Gas
Oil
Nuclear
Renewables
Geothermal
World
2005 Treasury 41 22 7 14 16
2050 53 17 8 11
Australia 84 2 6
2050 Treasury
ATSE(1)
ATSE(2) 33 30 21 23 15 43 4
Victoria
2005
90+ 3
World electricity demand is expected to increase at least 3 fold by 2050
Australian electricity demand is expected to at least double by 2050

9. Australian Energy Resources
Black Coal 100+ years
Brown Coal 500+ years
Gas 65 years
Crude Oil 7-10 years?
Uranium 75 years
Geothermal 800 years ?
Solar/Wind/Wave/Tidal – renewable
Biomass – renewable
Source: The Heat is On: The future of Energy in Australia CSIRO 2006

10. Regulatory Environment
Australia and Victoria have ambitious sustainable energy targets
Australia
20 per cent of Australia’s electricity will come from renewable sources by 2020
To reduce carbon dioxide emissions by 60% by 2050 – HOW?
A national emissions trading scheme (CPRS) to begin in 2011?
CPRS insufficient stand alone driver for industrial change
Carbon Capture and Storage Legislation – Site Selection and Sovereign Risk
Victoria
Greenhouse gas emissions reduced by 60% by 2050 – HOW?
10 per cent electricity from renewables by 2016
Energy efficiency measures
CCS storage legislation
Carbon reduction targets have led to:
Funding opportunities for pre-commercial clean energy technologies
Government support through advice and facilitation
National Low Emissions Coal Council & R&D Body
Global CCS Institute
Access to storage sites for CO2
Renewables funding – Renewables Australia

11. Energy Technological Advances That Are Required
Brown Coal Drying and Efficient Combustion
Carbon Capture and Storage
Geothermal
Solar – Thermal
Solar – Photovoltaic
Energy Storage
Electric transportation
Nuclear ?
Wind, Wave, Tidal

12. Capital Cost to Replace10% of Australia’s Total Current CO2-e Emissions in 2020 & 2050 by Specific Technologies (i.e. 60 million tonne pa)
Technology
2020 A$ billions
2050 A$ billions
Coal - CCS 49 35
Gas 30 26
Biomass 25 20
Solar PV
174 70
Solar Thermal
104
Wind 46
Wave 42 36
Geothermal 60 40
Nuclear
Source: ATSE 2008

13. Infrastructure Financing
At least $6 billion on RD&D for new power generation technologies by 2020 (ATSE)
CCS at least $1-2 billion for demonstration per plant
At least $200 billion for new electricity generating plant by 2040 – 2050 to meet Treasury generation mix
$7billion pa for 30 years
From where will the capital be sourced?
Federal Budget - $4.5 b – Clean Energy Initiative
$2.4 billion - Low emissions coal technologies, CCS, 1 Mt CO2
$1.6 billion – Solar Technologies 1,000 MW, 4 plants
$465 million – Establish Renewables Australia
Expectation is for at least $2:$1 funding from industry and states resulting in $10 billion by 2020

14. MWh Cost of Electricity Generation Technologies Source: CSIRO 2006
Technology
Cost $/MWh
Brown Coal 29
Brown Coal+IGCC+CCS 57
Black Coal
30-48
Black Coal+IGCC+CCS 60
Gas + CCS 53
Nuclear 70
Biomass 88
Geothermal 89
Solar Thermal
196
Coal and Gas predicted to be the most economical sources

15. Managing Community Perceptions/Expectations
Energy GHG Climate Change Drought/Water
Will the community:
Accept CO2 Storage?
Accept the CPRS cost impost?
Change significantly their energy use practices?
Adopt sufficient energy efficiency measures?
Accept nuclear power v continued GHG pollution?

16. International Developments
Kyoto Protocol – A valuable framework ..but
Copenhagen Talks – late 2009
How likely an outcome with specific targets?
Positions adopted by USA, China, India will be critical.
Australia only 1-2% of world emissions, but coal exports of vital economic importance

17. Victorian Government New Energy RD&D Initiatives
Energy Technology Innovation Strategy
Stage
A$ 180m R&D & Large Scale low emission technologies A$ 1,600m total investment
Stage
A$ 72m pre-commercial demonstration of sustainable energy technologies
A$ 110m Carbon Capture and Storage
Seeking industry and Commonwealth funding for projects

18. Commercial (Deployment) Research & Development
Victorian Government Energy Technology Innovation Strategy 2 What stage in the RDD&D cycle will it support?
Demonstration
Commercial (Deployment)
Pilot
Supported Commercial
Research & Development
Sustainable
Large-scale
Applied
Strategic
ETIS 2 funds projects at the post-pilot stage in the
RDD&D cycle which still show technical risk

19. Concluding Remarks
There are many policy and planning uncertainties relating to future energy use. However:
What is certain is that
demand for energy in Australia will continue to increase;
there are sufficient energy resources available to meet demand for many decades.
What is uncertain is
how much of the global warming/climate change is due to anthropogenic factors, especially carbon dioxide emissions, and
whether sustainable energy technologies will be available in Australia at internationally competitive economic cost that are both environmentally friendly and acceptable to the community.