The Energy Policy Context for the Australian Energy Technology Assessment

Transcription

1 The Energy Policy Context for the Australian Energy Technology Assessment Drew Clarke Secretary, Department of Resources, Energy and Tourism Australian National University 30 October 2012

2 Outline I Energy Policy - drivers and opportunities II Electricity Markets - prices, demand and investment III Gas Markets - reserves, production and consumption IV Australian Energy Technology

3 Australian Energy Policy Key Variables Market drivers Price Security Energy Opportunities Sustained economic growth Higher standard of living Healthier environment Environment Policy drivers

4 Energy White Paper: Priorities Strengthening the resilience of Australia s energy policy framework Reinvigorating the energy market reform agenda (markets and energy productivity Developing Australia s critical energy resources particularly gas Accelerating clean energy outcomes

5 II. Electricity Markets

6 Electricity price, 1981/82 to 2011/ (index, 1989/90=100) Residential CPI Business Index Source: BREE; ABS

7 Australia s Projected Electricity Demand: NEFR 2012 vs ESOO 2011 Annual Energy

8 NEM Peak vs Average Demand Growth ENA 2012, AEMO 2011, AEMC 2012

9 NEM generation capacity by fuel 2000 and 2012

10 NEM Generation Development Combined cycle gas turbine Open cycle gas turbine Engine (gas fuelled) Black coal Biomass Geothermal Hydro Solar Wind Publicly announced 2,950 11, , ,228 13,427 Advanced 3 Committed

11 III. Gas Markets

12 Australia s Gas Resources tcm conventional gas coal seam gas

13 Australian Gas Consumption Consumption by Sector, Source: BREE 2012, AES Table C

14 Australia s Gas Balance to 2035

15 Australian LNG Production Capacity

16 World Unconventional Gas Outlook 2035: Ten Largest Producers in the Golden Rules Case

17 IV. Australian Energy Technology

18 World energy-related CO 2 emissions abatement Source: IEA, WEO 2011

19 Global investment in renewables Source: Bloomberg New Energy Finance (2011)

20 Australian Government support for renewable energy technology development

21 Australian Renewable Energy Agency

22 Australian Government funding in CCS Major government funding support flows from: CCS Flagships program ($1.7 billion) National Low Emissions Coal Initiative ($370 million), established in 2008 National CO 2 Infrastructure Plan ($61 million) Global CCS Institute ($315 million) Australian Government funding is aimed at providing the framework and investment support needed to accelerate the development and deployment of CCS.

23 Large Scale Integrated CCS Projects Source: GCCSI, 2012

24

25 AETA 2012 Timelines Project initiated on 4 October 2011 to assess LCOE for 40 different technologies by state (and some cases sub-state) for 2012, 2020, 2030, 2040 and Work undertaken jointly with AEMO (Stage I). WorleyParsons (WP) has been primary contractor to deliver component costs and LCOE. WP sub-contracted ACILTasman to provide fuel costs and CSIRO provided use of its learning rate model for long-term cost projections. Release of AETA Report and AETA Model 31 July 2012.

26 Levelised Cost of Electricity (LCOE) LCOE n I = t = 1 n t t = 1 + M (1 + r E t t (1 + r + ) ) t t F t

27 Key Assumptions AETA was developed to be consistent with the Australian Energy Market Operator s (AEMO) National Transmission Network Development Plan (NTNDP), and its planning scenario. Key assumptions include: (1) economic growth of 2.5%; (2) $23/tonne CO2-e leading to a 5% reduction in CO2 by 2020, and 80 % by 2050; (3) AUD moving to peak of 1.13 USD/AUD by and low of 0.86 USD/AUD by Capital costs are provided on the basis of an Nth-of-a-kind (NOAK) plant in Australia and at a utility-scale.

28 AETA Technologies 40 electricity technologies evaluated: Coal-based (14 options with different fuels & technologies) Gas-based (CCGT with various options) Solar-thermal (CLFR, parabolic trough, central receiver) Solar-thermal hybrid (solar-coal & integrated solar combined cycle) Photovoltaic (fixed and tracking) Wind (on-shore and off-shore) Wave (reaction point absorber) Biomass (landfill, sugarcane & other) Geothermal (HSA and EGS) Nuclear (Generation III)

29 AETA Common Technology Parameters Common Technology Cost Forecast Data Common Escalation Factors USER INPUT Year Units O&M Escalation rate 150% 150% 150% 150% 150% 150% % of CPI Carbon Price $/t CO2 Carbon Price Modifier (% of core price) 100% 100% 100% 100% 100% 100% O&M Improvement Rate 0.20% 0.20% 0.20% 0.20% 0.20% 0.20%

30 AETA: Specific Technology Parameters 16. Combined cycle plant burning natural gas (CCGT) Basis: Single F Class gas turbine Inputs Value Base Value Units Capital cost construction profile Plant Capacity (Net) MW Year 1 Year 2 Year 3 Year 4 Year 5 Plant Capacity Factor % 60% 40% Thermal Efficiency % Base: 60% 40% Auxiliary Load MW Emissions kgco 2 e/mwh (Net) Capital Cost Forecast Summary ($/kw) % Emissions captured % North Queensland First Year available for construction South Queensland Overnight Capital Cost $/kw NSW (including ACT) Fixed O&M cost Variable O&M cost 4 4 Local equipment and commodity split International Equipment split Labour split $/MW/ye ar Vic $/MWh sent out Tas % of Capex SA % of Capex Northern Territory % of Capex SWIS (WA) Discount Rate % Pilbara (WA) Amortisation Period (Life of Plant) years

31 Australian Energy Technology Assessment 2012 (for 2030)

32 Australian Energy Policy Key Variables Market drivers Price Security Energy Opportunities Sustained economic growth Higher standard of living Healthier environment Environment Policy drivers