Wholesale natural gas prices – driven largely by demand in Asia – are more than double the prices modelled by many economists back in 2011. And while the Australian government has applauded the booming Liquefied Natural Gas (LNG) industry in Queensland in its energy green paper for becoming the “first in the world to bring onshore coal seam gas [CSG] to export markets”, this development will see domestic gas prices increase significantly.
“There was this view that we would have a gas boom like the US did,” says Professor Chris Greig, Director of the University of Queensland’s Energy Initiative. “That’s not a reality… It’s too expensive in Australia and the value opportunities are too significant in Asia. The nature of most gas developments in Australia is going to be such that we’re never going to have an abundance of super cheap gas that can realistically compete with coal.”
Yet investment in the sector is booming. According to the energy green paper, almost $200 billion in capital investment has been committed for new LNG projects across Australia.
Petroleum engineer Brian Evans from Curtin University in Western Australia expects that CSG will be produced and used for electricity for the next 30–50 years – and possibly longer given the number of untested basins.
From an emission-reduction standpoint, shale gas is the preferred option. It’s much deeper underground than CSG, which means extraction is less likely to affect shallow groundwater tables. And the process by which shale is deposited doesn’t create carbon dioxide, meaning when the gas is burned, there is next to no CO2 emitted. “The production of shale gas in the US has single-handedly reduced the country’s greenhouse gas outputs,” says Evans.
Australia boasts enough discovered shale gas reserves to easily power the country at its current population for the next 100 years – possibly up to 300 years as the potential to recover more gas improves. Evans expects it will be at least 10–15 years before shale gas is making any real impact to Australia’s electricity generating capacity because of the costs associated with extraction and set-up, as the gas is located in remote regions where there’s no infrastructure, such as pipelines and roadways. The mission of the Energy Pipelines CRC, set up in 2010 and with an additional five years of funding to date, is to facilitate such an expansion by supporting the energy pipelines industry within Australia.
In order to deploy any of these technologies, develop a new gas market, or assist the transition toward renewables, Greig says the government needs to incentivise the corporate sector to invest on projects with 40–50 year outlooks.
“What we’re seeing from government is very short-term decision making,” he says. “Somewhere in government, someone needs to develop a long-term vision for the energy sector, and the electricity sector, which has bi-partisan support. And only then can we build policies that enable us to move toward that long-term vision.”
Roll of the DICE
A report by the Climate Council, an organisation reconstructed through crowd funding from the abolished Climate Commission, suggests that by 2030 more than 65% of the country’s coal-fired power stations will be more than 40 years old. These will need to be either retired or replaced.
In an opinion piece for Business Spectator, Climate Council executives Tim Flannery and Andrew Stock suggested this is “the ideal time to begin phasing out inefficient power stations and fundamentally rethinking our energy system” by ramping up our renewable energy generation and storage capacity.
“A well-conceived energy policy for the electricity generation sector would see ageing, low-efficient plants replaced with high-efficiency ultra-supercritical [coal] plants,” says Professor Chris Greig, Director of the University of Queensland’s Energy Initiative.
These plants have lower emissions simply by virtue of their efficiency, and could achieve emissions reductions of 25% compared to existing plants, says Greig.
Another option in reducing emissions and continuing to rely on coal is to replace ageing power plants with smaller, modular facilities that use a technology called the Direct Injection Carbon Engine (DICE). First demonstrated by US engineers more than 20 years ago, the DICE is a modified diesel engine that can generate electricity by burning coal that has been finely ground-up and mixed with water.
With the DICE, air is compressed inside a cylinder by a rotating piston. As the air is being compressed, the slurry is directly injected into the chamber at a precise moment.
The heat of the pressurised air causes the slurry to combust and the intense heat and pressure inside the engine creates mechanical energy, which can drive a turbine and generate electricity.
This is similar to the way heavy fuel oils are injected into conventional diesel engines on transport trucks, and ensures good control over the heat release rate, as well as high-efficiency combustion of slurries made from varying qualities of coal. Carbon capture systems can also be integrated onto the engines to minimise emissions.
The CSIRO has developed methods to produce more cost-effective fuels that work inside much larger engines. Their work has sparked renewed interest in DICE systems for a range of electricity generation applications.
Louis Wibberley, the principal investigator, says DICE systems are more efficient than conventional coal-fired power stations and can achieve up to 40% emissions reductions with black coal, and up 50% reductions with brown coal.
– Myles Gough