Supporting the Development of Low Emission Brown Coal Technologies in Victoria, Australia

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1 Supporting the Development of Low Emission Brown Coal Technologies in Victoria, Australia Michael O Brien Minister for Energy and Resources State Government of Victoria, Australia

2 Strategic Location Australia: Land mass 7,687,000 sq km Population million GDP US$1,200 billion Victoria: 3% Australia s land mass 25% Australia s GDP 25% Australian population The South Eastern states comprise: 67% of the population 65% of all economic activity

3 Land Size & Population Victoria 237,000sq km 5.5 million people Japan 378,000sq km 127 million people

4 Victoria Competitive and Dynamic Business Environment Victoria has a strong record of sound economic management. Consistently achieved AAA credit rating from Standard & Poor s and Moody for the past decade. Consistent growth throughout the Global Financial Crisis Year Operating Surplus (A$million) Credit rating (S&P) Economic Growth Rate $795 AAA 3.0% $825 AAA 3.0% $1,335 AAA 4.3% $1,647 AAA 4.0% $251 AAA 0.8% $395 AAA 2.3% $872 AAA 3.3% Source: Victorian Budget Papers, Victorian Budget Update and ABS

5 Infrastructure Planning Victoria - a world class network of port, rail & pipeline infrastructures Victorian Ports Significant potential for bulk commodity or product export Numerous opportunities for new ports & infrastructure Studies underway including coal and product export Portland Geelong Port of Melbourne Hastings Port Expansion Other Options?

6 Victoria s Energy Sector Victoria s privatised energy market (since 1996) Current installed electricity capacity is 9,500 MW Large international and national owners of generation and distribution assets Coal resources Brown coal is Victoria s primary energy source Capacity to supply Victoria for 500 years Sustainable resources Hydro, solar, wind, wave, biofuel, geothermal

7 Victoria s Energy & Climate Change Policy Supporting an affordable, competitive and dynamic energy sector Maintain Victoria's competitive advantage provided by our secure, reliable and internationally competitive electricity and gas markets; Maintain Victoria's reputation as a stable and attractive investment environment, and ensure the ongoing development of Victoria's investor owned electricity and gas markets; Maximise the development opportunities for our world class energy resources; and Facilitate a phased, well managed, transition to a low carbon future.

8 Victoria s World Class Energy Resource

9 Major World Brown Coal Resources

10 Victoria s Coal Resources Source:

11 Victoria s Brown Coal Roadmap 1. Increased opportunities for Coal in a Changing World Traditional uses (power generation) are being challenged In new energy/carbon price scenarios, there may be export opportunities for coal derived products 2. As Victoria has: A large underdeveloped coal resource Potential carbon storage site and Numerous options for other products CTX 3. Coal Roadmap aims to build on the alignment between Industry and Government We need to identify potential pathways for brown coal in the 21 st century as a global resource in a carbon constrained world.

12 Coal Roadmap Horizons Moving Forward Horizon 1: What can we do with existing assets to reduce emissions. ( 0 to 10 years) Horizon 2: What would we replace current power assets with? (+5 years to build) Horizon 3: What new approaches do we need to continue to use coal in a sustainable manner? (new approaches 10+ years)

13 Victorian Government Support Energy Technology Innovation Strategy - ETIS Over $430m toward driving pre commercial technologies to market uptake. Including for brown coal $193.5m for large pre commercial demonstration projects ($110m for CCS) $32m for R&D including $16m for Brown Coal Innovation Australia $6m for a pilot Carbon storage project 65,000 tonnes stored Recently announced $41m for a broad based Low emissions energy technology support (including coal)

14 Victoria s Brown Coal and CCS Potential World class Carbon storage potential 10 s of billions of tonnes of brown coal here Some of Australia's highest emitting power stations

15 CarbonNet Storage Capacity Australia Carbon Storage Taskforce has ranked the Gippsland Basin as Australia s premier potential geological carbon storage basin The Carbon Storage Taskforce report says simulations indicate that injection capacity for 50 Mtpa for 25 years available now Further significant storage has been identified

16 Exploration for Storage Storage Sites Under Evaluation Coal Fields Shows relative size / thickness of sandy sequences potentially suitable for CO 2 storage in the on-shore to near-shore areas

17 CarbonNet - Multiple Capture Options Pre Combustion Capture TRU Energy Post Combustion Capture Loy Yang Power/ Mitsubishi Australia & TRU Energy Lakes Entrance Traralgon Pipeline Concept route only Longford Pre Combustion Capture HRL ( Dual Gas Ltd) 20 km

18 ETIS & CarbonNet: In a Low Emission World Working with companies wanting to produce low emission fuels: Kawasaki Heavy Industries - "CO2-Free" Hydrogen Supply Chain Nippon Steel Engineering - ECOPRO gasification technology with carbon capture Kyushu Electric Power Company - Letter of Intent on R&D collaboration and demonstration Mitsubishi Heavy Industries - Brown Coal Drying

19 Victoria is Open for Business Thank You