1. Energy scenarios for Australia under carbon pricing and implications for the Hunter Paul Graham Carbon Futures Theme Leader Exploring the Future Energy Role of the Hunter Region 15 June 2011 Energy Transformed Flagship

2. Presentation outline Carbon price range Changing perspectives on the impact of carbon pricing on coal demand Australias power sector Transport fuel opportunities

3. Carbon price profiles Source: Adapted from Commonwealth of Australia (2008)

4. Modelling found Australian coal production will grow with and without a carbon price – How? Answer 1: Developing country demand to hold up Answer 2: CCS becomes large part of electricity generation mix Source: Adapted from Commonwealth of Australia (2008)

5. Next 10-20 years – coal demand may be supported by developing country demand Contraction & convergence towards common emission per capita target Allows for developed countries to continue to increase emissions in the medium term Source: Garnaut Review (2008), Commonwealth of Australia (2008), CSIRO analysis One of many possible abatement sharing arrangements

6. International electricity generation – CP-Low Source: CSIRO projection

7. Levelised Cost of Energy – CP-Low Source: CSIRO

8. Australian electricity generation CP-Low Source: CSIRO projection

9. Australian electricity generation – CP-High Source: CSIRO projection

10. Transport Hunter Small to mid-sized cities Low density High passenger vehicle use Significant rail freight GHG and energy saving opportunities in this region will need to suit the car and rail freight

11. Transport fuel consumption CP-Low Biofuels, electricity & LNG likely to expand

12. Point where electric vehicles are broadly emission saving Source: Assume 0.18kWh/km times retail electricity emissions intensity, ALPF & Green Vehicle Guide Light vehicle fleet average ~215 gCO2e/km

13. Key messages In facing a potentially carbon constrained world coal trade may still continue to expand Developing country demand may continue if they successfully argue to allow their emissions to rise for a period If successful, coal with CCS will allow coal to deliver low emission base load power Other local opportunities Renewable technologies and research Vehicle electrification, HFR, biofuels, roof-top solar

14. Thank you Paul Graham Carbon Futures Theme Leader Phone: +61 2 49606061 Email: paul.graham@csiro.au Contact Us Phone: +61 3 9545 2176 Email: Enquiries@csiro.au Web: www.csiro.au