Winning the “fossil fuel word game” and other priorities for the next decade

There is no longer time to take incremental action. Expanding coal extraction is not only absurd, but attempting to do so will actually cannibalise jobs at existing fossil fuel sites and drive investment in risky projects vulnerable to premature shutdown. Avoiding expansion is doing the fossil fuel industry a favour. Photo by Dominik Vanyi on Unsplash

The summer bushfires were Australia’s wake-up call on the climate emergency, and now there’s no time to waste. Fortunately, the road to decarbonisation is becoming clearer, and it involves winning the “fossil fuel word game”.


I was in Europe during their 2018 summer. Northern Scandinavia was on fire. Buildings designed for winter became solar ovens. British water authorities begged consumers to cut water use, as their systems couldn’t cope. People realised climate change was here. The 2019–20 Australian summer was our tragic wake-up call.

There is no longer time to take incremental action. Expanding coal extraction is not only absurd, but attempting to do so will actually cannibalise jobs at existing fossil fuel sites and drive investment in risky projects vulnerable to premature shutdown. Avoiding expansion is doing the fossil fuel industry a favour.

Victorian Bayside Council’s December 2019 Climate Emergency Declaration committed to zero net emissions from its operations from 2020. Every emission-related decision made by council staff will either cut emissions or incur extra cost to buy carbon offsets. This effectively puts in place an internal carbon price. Every manager will see a cost for failure to cut emissions. It’s time for accountability within organisations, not just high-level policy commitments.

We must stop talking about net zero emissions by 2030 or 2050. We must commit to net zero emissions from today and ensure that carbon offsets, when needed, deliver social, economic and environmental benefits beyond properly documented emission reduction.

Looking forward: key actions for the next decade

Energy efficiency and productivity: As I have pointed out ad nauseam, the International Energy Agency’s view that energy efficiency is the first fuel is correct, even though for most Australians it is the forgotten fuel. The IEA recently stated: “We know that the technologies exist to raise the energy intensity improvement rate to 3 per cent, more than double today’s level, and that these technologies are commercially available and cost-effective. To drive their uptake, ambitious policies are required to drive a scale-up in investment.” (my emphasis, IEA 2019 Energy Efficiency 2019 foreword).

Our lack of attention to energy efficiency in energy policy is a tragedy, causing us to miss out on enormous economic, social and environmental benefits. Maybe an independent national energy efficiency agency funded by a levy on all energy sales could make a difference. Data analytics drives energy efficiency and productivity. The right information, at the right time, for the right person, in the right form, transforms energy use and underpins capture of enormous business value and social benefit. Reframing smart energy efficiency and management as a ‘toolkit’ to capture valued, tangible benefits and improve overall productivity will be key to capturing enormous cost-effective energy savings and emission reductions.

Managing the transition from coal generation: How do we manage the possible sudden loss of hundreds of megawatts of electricity supply capacity? This may be caused by unexpected failures of old generators or business models for operating coal plants becoming unviable as supply mix and demand profiles change. We need a combination of increased demand flexibility and “over-investment” in new supply and storage capacity that can be called upon to cover gaps.

Energy storage, short- and long-term: This includes distributed, regional and large-scale energy storage in different forms, such as batteries, thermal, mobile (electric vehicles) and “part-processed product”: where a product goes through several processes and one part can be delayed to reduce energy demand.

For example, in cement processing, a “part-processed product” is clinker, produced in kilns and then ground into cement powder; clinker can be stored for grinding when power is cheap. The scale of storage needed will depend on how efficiently and flexibly we deliver and manage energy services using demand response, demand management and targeted energy efficiency. We must deal with seasonal variations (both high and low) in demand, as supplying this is potentially costly.

Read more: Gas crisis? Energy crisis? The real problem is lack of long-term planning

This could include targeting high seasonal loads such as space heating and cooling, replacing inefficient appliances in holiday homes and tourism facilities, encouraging industries and businesses to utilise “excess” seasonal electricity capacity, and relocatable renewable generation and storage capacity. Hydrogen and very large pumped hydro will be useful, but are not ”silver bullets”.

Off-grid and microgrids: Many rural electricity consumers are served by long powerlines with significant electricity losses. They will increasingly need to be shut down at times to limit risk, or they may be damaged from bushfires. Maintenance costs are high. Western Australia seems to be leading, by offering fringe-of-grid consumers reliable, affordable stand-alone or microgrid alternatives. If only these were combined with aggressive energy efficiency and smart demand management.

Transmission lines: Renewable energy resources are often located in different places from our existing generators. Multiple routes for electricity delivery will improve supply security and enhance potential for renewable energy.

Institutional change: Energy market rules and policy barriers are slowly breaking down. Traditional energy businesses and regulators need to be more responsive to emerging trends and issues, such as changing regulations to pay those who cut demand at critical times as much as generators are paid, and breaking down cultural and financial barriers within network operators so fringe-of-grid consumers are helped to go off-grid. The present “command and control” model used in the energy market simply won’t work when distributed energy solutions and emerging businesses allow millions of consumers to act to protect themselves from exploitation and interact with grids to make money.

Renewable energy superpower: Reframing Australia as a potential winner from the transition away from fossil fuels is an important psychological shift. But most of our economy involves services, light manufacturing and urban transport, and is low in energy intensity. So we must not be diverted from emission reduction across our economy. Nevertheless, superpower strategies may offer income, economies of scale and access to useful infrastructure and resources to support local transformation and energy-intensive industries.

Emission reduction beyond electricity: Australian energy policy has focused on electricity, but this only accounts for 182 megatonnes (Mt) of 2018 emissions of 532?Mt. Emissions from transport (101?Mt), heat (97?Mt, largely supplied by fossil gas), fugitive emissions (leakage) from fossil fuel production and supply (54?Mt, and rising fast) and industrial processing (35?Mt, mainly from chemical reactions) need stronger focus. Adaptation, rebuilding, re-afforestation and agriculture must be carefully managed for the long-term beyond zero emission outcomes.

The fossil fuel word game: When will governments understand the games of the fossil fuel industries? For example, the coal industry often quotes the International Energy Agency’s “new policies” scenario to claim global demand for coal will continue. The IEA recently renamed this as “stated policies”, consistent with 3–4?°C of climate heating—unsustainable and unrealistically high when compared with the IEA’s “sustainable development” scenario, based on Paris commitments to restrict warming to less than 2?°C. But how many people understand such subtleties of naming of scenarios?

Figure 1. Global demand for coal in million tonnes of coal equivalent (Mtce; 1tce equals 1 tonne of high quality coal) under the International Energy Agency’s predictions for 2030 and 2040. “Stated policies” are policies committed to so far in the Paris agreement, consistent with 3–4°C of climate heating; ‘sustainable development’ is based on Paris commitments to restrict warming to less than 2°C. Source: International Energy Agency 2019

Figure 1 compares global demand for coal under these scenarios. Demand for international coal trade seems likely to fall further as China and India reduce dependence on coal and shift to locally sourced coal, to maintain local jobs. If Australia builds more coal production capacity, but demand for our exports falls below unrealistically high scenarios, new low-cost, highly mechanised mines would cannibalise coal industry jobs.

Small numbers of Queensland jobs will destroy larger numbers of NSW coal jobs. State governments and unions will face new tensions. A federal government, whether Coalition or Labor, will face internal conflicts. And the longer reality is denied, the messier the problem will become.

For gas, the picture is a little different at a global level. IEA does see gas playing a role in the transition, but a small decline in demand by 2040. Fuel switching to zero emission electricity, cutting waste in industrial and building heating and structural change driven by high gas prices and economic transition can cut gas demand. We are really just beginning to focus attention on these issues. Using fossil gas from new gas fields and to produce hydrogen as a “transition path” to renewable hydrogen would increase emissions in the short term, eating into our very limited global carbon budget.

Biogas can make a useful contribution, while renewable hydrogen will eventually be useful. The gas industry also confronts some realities. Liquefied natural gas (LNG) and coal seam gas (CSG) both have higher emission intensities than traditional gas, due to higher methane leakage and processing energy use. Methane (gas) leakage has much higher short-term climate impact than CO2 from combustion. This drives much more climate heating over the next few decades. International accounting systems don’t yet factor this in. But it matters if we are to avoid “tipping points”.

Alan Pears, AM, is one of Australia’s best-regarded sustainability experts. He is a senior industry fellow at RMIT University, advises a number of industry and community organisations and works as a consultant. This article was first published in ReNew Magazine.

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