domestic electricity demand/supply Presentation to the Hunter - - PowerPoint PPT Presentation
The outlook for coal exports and domestic electricity demand/supply Presentation to the Hunter Business Chamber quarterly Hunter Business Mining lunch Greg Evans Executive Director - Coal, Minerals Council of Australia and Greg Evans Chief
Greg Evans Greg Evans Executive Director - Coal, Minerals Council of Australia and Chief Executive, ACA Low Emissions Technologies Ltd (the COAL21 Fund)
23 February 2018
$57 billion of export revenue in 2017. A new record and Australia’s second largest source of export income 200 million tonnes of thermal coal and 172 million tonnes of metallurgical coal exported in 2017 51,500 people employed across Australia & 120,000 related jobs $6 billion in wages paid to Australian workers, particularly in regional areas $5 billion in royalties paid in 2016-17 Source of 75% of Australia’s National Energy Market electricity
95% of Australia’s coal exports are from the Sydney & Bowen basins
Note: Mining includes minerals, petroleum and refined metals.
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Abbot Point 2017 Capacity – 50 Mtpa 2017 Throughput – 27.8 Mtpa Hay Point and Dalrymple Bay 2017 Capacity – 130 Mtpa 2017 Throughput – 86Mtpa Gladstone & WICET 2017 Capacity – 102 Mtpa 2017 Throughput – 82 Mtpa Newcastle (PWCS & NCIS) 2017 Capacity – 198 Mtpa 2017 Throughput – 160 Mtpa Port Kembla 2017 Capacity – 18 Mtpa 2017 Throughput – 5.5 Mtpa Brisbane 2017 Capacity –.10 Mtpa 2017 Throughput – 7.2 Mtpa Billion tonnes recoverable black coal resource: Australia >42, Bowen Basin >15, Sydney Basin >13.5
By industry, 2017
10 20 30 40 50 60 70 A$ billion
Coal exports were a record high $57 billion in 2017. Coal was one of Australia’s largest sources of export revenue in 2017. Coal exports exceeded exports of both rural goods and manufactured items.
Source: ABS Cat No. 5368 International Trade in Goods and Services Note: Mining includes minerals, petroleum and refined metals.
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Value and volume
10 20 30 40 50 60 50 100 150 200 250 300 350 400 450 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Export value, A$ billion Export volume, Mt Thermal Volume Metallurgical Volume Total Value
Despite a drop in metallurgical coal export volumes in 2017 due to the impact of Tropical Cyclone Debbie, coal export values reached a new record high. Australia exported 172 million tonnes of metallurgical coal worth $36 billion in 2017. Australia exported 200 million tonnes of thermal coal worth $21 billion in 2017.
Source: ABS Cat No. 5368 International Trade in Goods and Services; Department of Industry, Innovation and Science; Resources and Energy Quarterly – December 2017
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2016-17
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 A$ million
Thermal Coal
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 A$ million
Metallurgical Coal
Source: Department of Industry, Innovation and Science; Resources and Energy Quarterly – December 2017
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20 40 60 80 100 120 140 160 2013 2014 2015 2016 New South Wales Queensland
In 2016 Australia exported 202 Mt of thermal coal. This included:
Wales
These exports were valued at $15.8 billion.
Source: Department of Industry, Innovation and Science
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Source: IEA, COAL 2017: Analysis and Forecasts to 2O22, December 2017
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IEA New Policies Scenario
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 OECD Non-OECD Electricity Generation TWh 2016 2030 2040
The International Energy Agency (IEA) forecast low growth in world coal consumption out to 2040 in its 2017 World Energy Outlook. But their were very different
OECD countries. Declining coal consumption in OECD Europe and North America will be offset by growth in highly populated Asian economies. Australia is well positioned to supply the growing coal demand in the non-OECD countries of Asia.
Source: International Energy Agency, World Energy Outlook 2017
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New Policies Scenario
2,000 4,000 6,000 8,000 10,000 12,000 Electricity Generation TWh 2016e 2030 2040
Coal is expected to remain the largest source of electricity generation in the long-term. Wind and solar are forecast to grow, but are expected to supply less than half the electricity provided by coal in 2040.
Source: International Energy Agency, World Energy Outlook 2017
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200 400 600 800 1000 1200 1400 Capacity (GW) Under Construction Approved & Planned Over 300 GW of new coal fired capacity is currently under construction. There are plans to develop another 950 GW. Some of this will replace retiring older plants, but there will still be a net increase in capacity – and coal demand. In comparison, only 47 GW of wind and 17 GW of solar capacity are currently under construction around the world.
Source: Enerdata
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50 100 150 200 250 300
Number of Coal-fired Units in Construction and Planned in Asia (Total = 857)
Construction Planned
As at December 2017
Source: Platts
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Source: IEA, COAL 2017: Analysis and Forecasts to 2O22, December 2017
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Major exporters of coal by type
Source: International Energy Agency, Coal 2017 and World Energy Outlook, 2016 (New Policies Scenario)
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198 Mtce of metallurgical coal in 2022, dominating the market with a trading share of 72%
projected to increase from 177 Mtce in 2016 to 187 Mtce by 2022.
Australia’s share of the coal trade to increase from 34% in 2016 to 36%
have a combined capacity of 1200MW and a thermal efficiency of 45%.
pollutants as SOx, NOx and soot/dust from flue gas, using almost no water.
environmental performance:
Source: Power Engineering International
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Getting the facts out to the community:
trading opportunities in Asia and technological improvements making coal cleaner and more efficient
arguments
Australia can reduce generation sector emissions and improve energy security with new coal generation
1500 920 760 120 200 400 600 800 1000 1200 1400 1600 Hazelwood Supercritical plant Ultra-supercritical plant With CCS CO2 emissions per kW
Up to 40 to 50% emissions reduction by switching to USC Further 80% emissions reduction from CCS 22
a process whereby carbon dioxide (CO2) emitted from the use of carbon- based fuels or from industrial processes is:
– Captured, – Compressed, and – Permanently stored in suitable geological structures at least 800m below the surface
coal use by 90%
undertaken around the world for over 20 years
Photo courtesy of SaskPower
Boundary Dam CCS generation, Canada Petra Nova, CCS generation USA
Photo courtesy of Global CCS Institute Photo courtesy of Global CCS Institute
Abu Dhabi CCS from iron manufacture
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Historical trends
100 200 300 400 500 600 700 800 900 Dec- 1980 Dec- 1984 Dec- 1988 Dec- 1992 Dec- 1996 Dec- 2000 Dec- 2004 Dec- 2008 Dec- 2012 Dec- 2016 Index, Dec 1980 = 100 CPI Electricity price index
RET: 45 TWh RET: 33 TWh
Until the year 2000 Australia’s electricity prices increased in line with inflation. Since the year 2000 electricity prices have increased much faster than inflation. Renewable energy targets and carbon taxes have been key drivers of changes in electricity price growth.
MRET: 9.5 TWh Carbon tax starts Carbon tax repealed Source: ABS Cat No. 6401 Consumer Price Index, December 2016
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Historical trends
Source: ABS
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Options for Australia
cost estimate input
power stations delivering reliable, secure, affordable and sustainable base load electricity.
comparison for providing ‘firm’ generation
The reports are available from the MCA’s website: www.minerals.org.au
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Australia continues to need secure and reliable electricity from a fleet of power plants able to generate continuously and when required at an affordable cost.
The demand on the NEM exceeds 15 000 MW continuously, 24 hours a day 365 days a year, accounting for 66 per cent of the energy sent out to the grid.
For the year ending 31 March 2017, NEM min demand was 15.33 GW or 134.3 TWh per annum. This is equivalent to 66% of total energy demand (202 TWh) over the same period.
TWh%
Cal Year 2006 Year to Mar 2017 Coal 87 75 Hydro 7.1 7.9 Gas 5.9 8.7 Renewables 8.6
Source: Desktop Study, Fig.6 p.14 Source: Desktop Study, Tab.5 p.14
66% of electricity demand never goes away – it is there 24/7
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NEM, Coal and gas power plants
5 10 15 20 25 30 35 40 2010 2015 2020 2025 2030 Capacity, GW NSW coal QLD coal Vic coal SA coal NEM Gas
14.2 GW of baseload capacity
3.5 GW of coal fired generation capacity has closed since 2010. A further 8.1 GW (or 33 per cent
to close by 2030. A further 2.6 GW of gas fired power plants are scheduled to close by 2030. To replace the lost output with wind turbines would not only create intermittency problems it would require over 25 GW of wind farms to be constructed due to their lower output per unit
At $2,400 per kW1 of wind farm capacity this would cost over $60 billion.
1Source: Jacobs, Modelling
Illustrative Electricity Sector Emissions reductions Policies, report for the Climate Change Authority, 2016
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New HELE plants have significantly lower capital cost requirements compared to “firmed” renewables.
Source: Desktop Study, Table 41 p.106 (ratio of high case estimates)
1 2.2 9.4 14.5 BLACK COAL HELE USC BLACK COAL HELE USC + CCS WIND + BATTERY SOLAR PV + BATTERY
Capex Ratio 2030 Deployment
power plant capital cost could be as high as $16.8 billion
power plant capital cost could be as high as $25.8 billion
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Estimated long-run marginal cost of new generation (2017)
100 200 300 400 500 600 700 800 900 1000 USC black coal Variable wind USC black coal with CCS CCGT Variable solar PV Wind & CCGT CCGT with CCS Solar & CCGT Wind & CCGT with CCS Solar & CCGT with CCS OCGT Wind & battery Solar & battery A$/MWh
Source: Solstice Development Services, Prospects for a HELE USC coal-fired power station, 2017
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“Japan are building ultra- supercritical clean coal plants that produce 40 percent less emissions, using Australian high quality coal. It would be a little silly for us to send our coal to Japan to use in clean coal plants but not even consider building them here.” Minister Matt Canavan
Federal Resources Minister
Townsville Bulletin, 07.01.2017
“As the world’s largest coal exporter, we have a vested interest in showing that we can provide both lower emissions and reliable baseload power with state-of-the-art, clean coal- fired technology.” The Hon Malcolm Turnbull MP
Prime Minister of Australia
National Press Club address, 01.02.2017
“Cleaner coal is part of the solution, it is a proven technology which has application in Australia.” Minister Josh Frydenberg
Federal Environment and Energy Minister
The Australian, 24.01.2017
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partnership with government and other investors
– Captured CO2 at Queensland’s Callide coal-fired power plant – Sequestered 65 000 tonnes of CO2 in Otway Basin in Victoria – Intensified the search for storage sites in Australia – Contributed to the international R&D effort.
http://www.minerals.org.au/resources/coal
Aerial view of Callide Oxyfuel project Otway project injection, CO2CRC, Victoria
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Gorgon Project
Commissioning underway First Injection 2017 Planned 3Mt/a
SW Hub Flagship
4 Wells Drilled 5th Well Planning
CarbonNet Flagship
Site selection completed Appraisal underway
CTSCo
1 well Drilled, 3D Seismic Completed Assessment underway
CO2CRC Otway Pilot
2C Experiment underway Phase 3 in planning
Callide
Oxyfuel demonstration completed
Precompetitive Exploration
Underway
Demand for Australia’s coal will be supported by the development of new electricity generation and steel-making capacity, particularly in Asia.
Australia is and will continue to be a major producer and exporter of coal. Coal has an important role in a secure and sustainable energy future in Australia too. Australia’s supply capacity, geographical location and coal quality ensure we are well- positioned to meet future demand in the region.
However in Australia there is considerable scope to do better by creating conditions to enable the use of advanced, cleaner, more efficient (HELE) technologies and CCS.
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Subcritical versus supercritical:
whereas subcritical involves a drum-type steam generator