While I agree with the need to phase out coal I consider the suggested alternatives to be fantasies. Carbon capture and storage seems unable to get past the pilot plant stage. I suggest that there isn't enough underground storage space, the extra coal needed is prohibitive as are the steep carbon taxes needed to make it viable. Long term leakage of CO2 is another concern. Commercial wind and solar appear to be utterly dependent on subsidies, mandates and gas fired backup. Take the props away and they will flounder beyond say 20% grid penetration.

There is precious little evidence that nonvolcanic geothermal can replace coal. I believe the realistic alternatives to coal are nuclear with near zero emissions and combined cycle gas with 50% CO2 savings. However gas is needed for many other things including fertiliser and oil replacement. Australia is one of very few countries with long term gas supplies. Like the UK we risk squandering our gas reserves.

The perverse result is the longer we wait for wind, solar, carbon capture and geothermal to save us from traditional coal the longer we will continue to rely on it. The green fantasy pushers are condemning us to much higher priced or less reliable electricity with very little emissions savings.

For once I agree, mostly, with Taswegian. Perhaps John Le Mesurier should wait until geothermal sites are actually genrating useable electricity, beofre writing so confidentally about how they will replace coal.

Whether you really believe other alternatives will replace coal or not, ramping up the sector to take over entirely from coal fired plants is a huge ask. Won't happen for decades.

In the mean time, a $30 carbon tax will not push out coal completely but will will result in a lot of gas fired plants being built, and boost electricity prices.

Agree with Taswegian, a rare occurrence for me ..

Without Nuclear, we have no alternative to coal.

I expect the Green/ALP/Indies will try to force the issue with huge taxes, but that will only last as long as the electorate tolerates such idiocy and we still have no solutions (say 2 terms, including this one as a maximum).

Then the electorate will reject the "alliance" and insist the new government puts back in place adequate supplies of electricity, regardless of how it is generated.

The current alliance seems to be forgetting it is the duty of government to deliver services, not to punish the community and become tyranical .. the Greens and Indies of course have never had power before and lacking experience cannot wait to start telling everyone what to do.

Thermal power, is just another folly, the people implementing the research and tests are making all the money now, as no one will ever make money in Australia from thermal power without massive subsidies .. if it ever delivers anything at all.

All those who voted for the alliance, I sure hope you enjoy what you are getting.

Burning coal in Australia contributes very little to CO2 in the atmosphere. Most coal burning occurs in other countries.

For example: -

Australia produces about 6% of the world's saleable black coal and is ranked fourth after China (45%), USA (19%) and India (8%).

Australia produces about 8% of the world's brown coal and is ranked fifth largest after Germany (22%), Russia (10%), USA (9%) and Greece (8%).

http://www.australianminesatlas.gov.au/education/fact_sheets/coal.jsp

As well, most of the coal mined in Australia is exported.

It is more worrying if other countries reduce their consumption of Australian coal that so much helps to provide the money to pay the loans to pay for Australia's trade deficit.

Our thermal coal exports should be subject to the proposed carbon tax if the destination country doesn't levy the same amount (and with appropriate oversight).

The worst thing about articles like this is that the mere fact that they are published gives them a level of credibility they just don't deserve.

Unfortunately not enough people bother to learn the truth about these failed tecknowledgies.

Anyone who has followed the argument knows that those countries rash enough to rush into them are now all backpedaling as fast as they can go.

Spain is now a basket case, Denmark has to buy nuclear generated power from France, & sell off their wind power when they have any to Sweden to pump water. Their grid can't handle it.

Even the Germans have been unable to make it work, & are reducing subsidies at a great rate.

Of course, as the big players are retreating, with third degree burns of the fingers, no less than that great thinker, & Queensland premier, Anna Bligh is jumping on the band wagon. I have had 4 calls trying to sell me the Queensland government subsidised domestic solar power system.

Yes it is a great investment, but I can't sign up for something that I know is a con on the tax payer, even if it would save me money, by way of the huge subsidy.

Agreed on geothermal. Lets see one work reliably for a few years.

Regarding a carbon price why not use $30/tonne and lower income tax accordingly. Assuming Australia produces about 500 million tonnes of CO2 per year that can be relatively easily counted, that would raise a paltry $15 billion per year in tax revenue. Income tax raises about $200 billion per year. $15 billion is about 7.5%. Lower the income tax rates by 7.5% across the board. Treasury does those kind of caluclations in their sleep.

The coal industry will scream but it will have the effect of reducing the demand for high carbon energy and making renewables cheaper. That is a good thing not just for climate change but for preserving fossil fuels which have lost of other uses than for burning. There will be criticism that it is implemented too quickly. I say implement it over 5 years at $6/tonne the first year, $12 the second, $18 the third up to $30. At the same time reduce income tax by 1.5% the first year, then 3.0% the second, 4.5% the third etc.

Eric,
I would agree that coal should be preserved, as there may be other uses for coal in the future. There are even some experiments underway to produce a form of oil from coal.

However, we are extremely dependant on coal to keep our economy alive, and not have the IMF knocking at the door.

So, what would be done with the tax cuts? Allow people to spend them on imports?

I think not. I would think any extra revenue from the burning of coal should go towards stimulating Australian manufacturing, so we don't become so dependent on selling coal in the future.

Vanna -

The tax cut will have to go to paying higher energy prices. The reduction in income tax will equal the increase in the carbon tax.

Promoting manufacturing is a very difficult job. I'm not even sure that the government is capable of doing it efficiently.

The le Mesurier article points out that if a price is placed on CO2 emissions (most likely as a result of government introducing an ETS), it will have three effects.

1, It will increase the price of electricity produced by existing highly polluting power stations.
2, It will make electricity produced from renewable sources (including nuclear) much more competitive with coal and gas burning power stations.
3, this will reduce domestic use of coal to generate electricity and our ability to sell the stuff overseas when major coal using countries are forced to price carbon – or pay a carbon tariff on their exports.

The effect on coal production over the next decade is predicted to be initial growth then a decline for domestic use and export over the next decade. Seems a reasonable argument.

For political (ALP opposition) and planning/building (15 year time span) reasons, this appears to rule out nuclear electricity generation in Australia, though not in countries which import our coal, such as Japan, China, India etc.

The idea that Australia can overcome its difficulties with nuclear by expanding its use of other renewable electricity, include geothermal, seems to offend some commentators as unrealistic.

The Australian government apparently thinks otherwise. It has provided several grants to assist companies mining for geothermal energy, including $90m to assist with building the first commercial 25MW power station, expected to start in 2013.

By deciding that a price will be placed on CO2 and by stipulating low emission standards for new power stations, Government at State and Federal levels has given power station proponents encouragement to use lower emitting gas rather than coal.

This too gives support to the argument that coal production in Australia may expand in the short term but, in the longer term, is destined to contract.

Agnostic, the gas you want to burn, instead of coal, is a much more valuable resource for use in manufacturing. It is ridiculous to replace coal with gas for power generation, when billions of dollars has been wasted on trying to pin CO2 with some environmental damage, totally without success.

Until someone can come up with something even resembling proof that coal fired power has a detrimental effect on the environment, it is industrial vandalism to burn gas, when coal is available.

Vanna, you are a bit out of date there, with your coal to petrol "experiments". Germany fought the second world war using petrol synthesised from coal, & South Africa have been producing a moderate percentage of their liquid fuel that way for years.

Still it makes no sense to spend much energy converting coal to transport fuel, & burning gas in big boilers, [power houses], when we can burn coal in the boilers, with no waste energy, & use the gas for transport fuel, with little waste energy.

I guess by now, John Le Mesurier has got the message that he probably needs to do a bit more research into the electricity generating field so he can get a more informed view of what is actually possible.

A carbon price of $30 will actually have very little impact on the use of coal. Combined cycle gas probably needs something north of $35 to make replacing a coal plant worth considering. Only the RET scheme will encourage the build of renewable energy systems and solar thermal could need a carbon price north of $200 to replace coal plants. Others have discussed the highly speculative nature of engineered geothermal solutions. A 1 MW power plant is 3 orders of magnitude smaller than a typical new coal plant. It's no small feat of mechanical engineering to move relatively new technology 3 orders of magnitude.

The inconvenient truth for John, and the Australian government, is that there really is only one technology that can replace coal plants for a carbon price around $30. It's the one the government currently dismisses out of hand. I am hopeful that this will change over the next couple of years. As with the Americans, they will get it right in the end only after they have tried everything else first.

Hasbeen,
It is true that burning coal in power plants has minimal effect on greenhouse gases compared to the production of other greenhouse gases (about 20%). Burning natural gas can be a major waste, as natural gas can be used in the future as a feedstock for nanotechnology.

If Australia cannot resurrect its manufacturing base, then perhaps Australia could become a major carbon sink to earn carbon credits. We have vast areas that could be reforested, and I’m sure the wildlife would appreciate it (or what is left of Australian wildlife in many areas).

hasbeen

It is disappointing when commentators wrongly present their beliefs as fact, misleading fact at that.

Contrary to your claim, gas is rarely used in manufacturing. However, it is widely and increasingly used in Australia to generate electricity, specifically by power stations at Urangquinty and Colonga in NSW, Barcaldine, Condamine, Oakey, Braema and others in Qld, Osbourne and Torrens Island in SA, Bell Bay and the Tamar Valley in Tas.

Of the 15 new power stations approved prior to the new lower emission standards imposed by government, 5 will be fired by gas. Doubts about those 5 proceeding to construction arose because of their inability to compete with high polluting coal-fired generation. That problem is effectively overcome by placing a price on carbon.

Martin N.

Le Mesurier does not need to learn a bit more about power generation. A price on carbon increases the cost of using coal, making it relatively cheaper to use gas or renewable sources to generate electricity The article is correct in its argument. Your view that the best alternative to coal is nuclear is perfectly legitimate but for reasons I alluded to in my initial comment, that option is not on the table.

Agnostic, you must be a greenie.

It is usual for greenies to make bland statements like "high polluting coal-fired generation", with absolutely nothing to justify that statement.

After billions of dollars have been wasted on "climate science" trying to find some plausible evidence that coal, as used today, damages anything, it is no longer good enough to expect to get away with such rubbish. Please justify your statement, or withdraw it.

The list of power generation planed to use gas is an indictment of both our government, & the green movement. Please don't boast about the level of stupidity now reached.

Hasbeen

There is global recognition by governments, scientists, academies and other institutions that fossil fuel in general and coal in particular are the largest source of increased CO2 in the atmosphere. It is of course possible that they are all wrong and you are right. The earth may also be flat.

Google is a good search engine which you may care to use to reference the subject of concern to you – the source of CO2, rather than the subject of the article. And no, I am not a “Greenie” but unlike you, I try framing my observations on the basis of fact rather than fiction and address the topic which is the future of coal in Australia.

That tends to improve the commentary on OLO articles which has recently fallen to abysmal levels, wouldn’t you agree?

I think the author is overly optimistic; CCS will never be cheap enough even if a few luckily sited power stations might be able to successfully deploy it. There's more than 3 times as much CO2 as coal burned, it's a gas and it won't ever be cheap to separate, transport or pump underground. Geothermal has a lot of potential but in the R&D funding divvy up it got very little when the fossil fuel industry wants to keep up the pretence that CCS is the best way to go. What they want they tend to get. Nuclear should be getting real consideration but it's strongest proponents seem more interested in preventing renewables or a carbon price that might favour those in the short term - despite it favouring nuclear in the longer term - opposing any attempts to mitigate climate change by means other than nuclear. Large scale energy storage simply fails to rate as an important area needing serious R&D - even less than geothermal. Most of all keeping energy costs low wins over reducing emissions and cheapest of all - especially if you pretend away the accumulation of consequences and costs - is to keep burning fossil fuels.

It all seems to be about the lobbying power of various interests and in that game the fossil fuel industry has that game so sown up that we mostly get greenwash to keep those of us that are seriously concerned thinking we're going to get serious policy action.

Agreed Ken, Well put.

Ken Fobos

As you correctly observe, CCS is an expensive technology. It is also one to which government is committed since its use is, so far, the only way of continuing to use coal and bring down CO2 emissions.

The problem is that if fossil-fuelled power stations are obliged to reduce their emissions, they must use CCS to do so. That pushes up generating costs by $60-$70 per MWh making electricity generated this way more expensive than base load electricity generated from either nuclear or geothermal. Nuclear is not an option - yet, wind is not base load and solar is too expensive.

Geothermal produces base load power and is emissions-free and, if fossil fuelled power stations are forced to use CCS technology, it is cheaper. Demand for geothermal electricity will increase, as will investment in that sector and the speed of both its development and displacement of fossil fuelled power stations. Business doesn’t care how their electricity is generated, as long as it is the cheapest available.

The effect: reduced use of coal for electricity generation and reduced greenhouse gas emissions. Government wants the latter but not the former. The best it can hope for is that declining domestic use of coal results in greater exports – and it may, until international pressure for reduction of CO2 emissions and improved technology make use of coal too expensive to use. Then what happens to our proud title of being the largest exporter of coal and CO2 in the world?