Working Papers

Working Papers by Members of the College.

A short-lived gas shortfall

Authors: Tim Forcey, Dylan McConnell

Abstract: With the publication of the 9th March 2017 Gas Statement of Opportunities (GSOO), the Australian Energy Market Operator (AEMO) cautioned that within 18 months, “shortfalls” of gas supply could lead to shortfalls in the supply of electricity generated by burning gas. AEMO suggested solutions to potential shortfalls that included the construction of new pipelines or Coal Seam Gas (CSG) fields.

Our report investigates AEMO’s gas-and-electricity-system modelling results as well as the communications that followed. We explore reasonable alternate conclusions that can be drawn by analysing AEMO’s published modelling inputs, assumptions, and results, and by contemplating future real-world events.

We find that although a “gas-price crisis” exists in eastern-Australia, a gas-supply shortfall is very unlikely to occur. Our review finds that the size of AEMO’s forecast shortfall is very small, amounting to no more than around 0.2% of annual supply. 
In addition, only eleven days after announcing its supply-gap concerns, AEMO essentially closed the gap when it published, on its website, updated (lower) electricity-demand forecasts that therefore lead to less demand for electricity generated by burning gas. 
In this report we also consider alternative solutions to gas shortfalls, and find that there is no need to expand gas-supply infrastructure.
The full report can be downloaded here.

The risk of migratory methane emissions resulting from the development of Queensland coal seam gas

AuthorsDimitri Lafleur and Mike Sandiford

Summary: In sedimentary basins migration of methane and other fluids occurs naturally in response to multiple factors. Natural methane surface seeps are well known in many gas provinces. The pathways for such seeps can be enhanced and new pathways created through subsurface resource developments, leading to so-called induced migratory emissions. Distinguishing induced migratory emissions from natural emissions is important for a range of considerations, including resource recovery efficiency and safety, carbon budgets and environmental impacts.

As a companion to a more extensive paper on the measurement and reporting of methane emissions of unconventional gas, this paper reviews the current understanding of migratory emissions associated with CSG developments in eastern Australia. The paper forms part of series of contributions from the Melbourne Energy Institute’s Sedimentary Basin Management Initiative aimed at providing new approaches to optimising the value of subsurface sedimentary basin resources.

The current paucity of publicly available data makes it impossible to definitively assess the impact of coal seam gas (CSG) production has had, if any, on the creation of new migratory emissions pathways and the enhancement of known methane seeps, such as in the Condamine River in Queensland. Similarly, in the absence of thorough baseline data, the cumulative impacts of water production from various aquifers for multiple purposes would compromise unique attribution of cause and effect in any observed enhancement of such seeps.

The full report can be downloaded here.

The Paris Agreement global goals: What does a fair share for G20 countries look like?

Author: Yann Robiou du Pont12
1 Australian-German Climate and Energy College
2 EU Centre on shared complex challenges
Download full report here.

This report reviews the literature to compare the socio-economic implications and climate impacts of achieving each of the Paris Agreement temperature goals: 1.5 °C and 2 °C. Drawing on a recent publication (Robiou du Pont, Jeffery, Gütschow, et al., Nature Climate Change, 2017) and its related website Paris-equity-check.org, this report then examines the scenarios to reduce greenhouse-gases (GHG) emissions consistent with the Paris global goals.

Finally, this report presents greenhouse-gases (GHG) emissions targets for G20 members consistent with the five effort sharing categories contained in the latest report of the Intergovernmental Panel on Climate Change (IPCC), and compares the equity performances of their climate pledges against their own declarations on equity.

The Paris Agreement global goals: What does a fair share for G20 countries look like?Key findings

  • The pledges of the G20 members are collectively insufficient to meet any concept of equity
  • Collectively, G20 pledges for 2030 should be lower by 39 percent (of 2010 levels) to align with the average of the five equity concepts under the 2 °C goal, and 63 percentage lower under the 1.5 °C goal
  • The G20 can close the 2030 mitigation gap towards 2 °C and considerably reduce the gap towards 1.5 °C by adopting the average of the five equity allocations
  • Brazil and Mexico are the most ambitious countries towards the 2 °C goal with pledges within the range of four out of five equity allocations, followed by the EU whose 2030 pledge is within the range of three
  • The pledges of Russia, China, Turkey and Saudi Arabia are weaker than any equity allocation

Submission to 2017 Review of Australia's climate change policies

Lead Author: Annabelle Workman1,2,3
1 Australian-German Climate and Energy College
2 EU Centre on shared complex challenges
3 School of Earth Sciences
Download full report and list of authors here.

Workman et al. Submission to 2017 Review of Climate Change Policies cover
Recommendations

To protect Australia’s national interests, it is recommended that the Australian Government:

  1. establish an achievable, equitable and economically responsible 2030 greenhouse gas emissions target of 60 percent below 2000 levels alongside a long-term goal of net-zero emissions by 2046;
  2. foster the RET scheme to successfully reach its first target in 2020, and extend the scheme with broader competition, competitive capacity allocation, and effective financing;
  3. reinstate an economy-wide carbon pricing mechanism;
  4. create climate policies that use additional methodologies, such as the social cost of carbon; and
  5. support state and local government initiatives that reduce emissions and increase renewable energy generation.

Value of Aligning Dispatch and Settlement

Author: Dylan McConnell12

1Melbourne Energy Institute (University of Melbourne)

2Australian-German Climate and Energy College (University of Melbourne)

Download full report here.

Summary Points
  • More storage capacity is required with 30-minute settlement to realise the same value as under 5-minute settlement.
  • The impact of forecast errors has a substantial impact on the value of storage under 30-minute settlement.
    • The value of storage under 5-minute settlement is generally 60-80% higher than under 30-minute settlement.
    • 5-minute settlement also significantly improves the value of storage in real world cases when the occurrence of price spikes is not perfectly known. Approximately 80%-90% of the 'perfect value' can be captured with 5-minute settlement. By comparison, only 40%-60% of the 'perfect' value is captured under 30-minute settlement.
  • 30-minute settlement increase cap contract prices from storage by up to 30% relative to the 5-minute settlement case.
  • Cap contract penalty payments can substantially erode the value of providing fast response.

Imagineering Australian climate futures

Author: Anita Talberg1

1 Australian-German Climate and Energy College (University of Melbourne)

Download full report here.

Geoengineering is the collective term for a diverse set of techniques and technologies that aim to manipulate the planet’s environment to address climate change. Many of the methods that sit under the geoengineering umbrella engender severe risks and potentially irreversible impacts, both environmental and social. To date, Australia has not engaged heavily with the geoengineering debate. However, Australia has a lot at stake in any discussion of geoengineering. Will geoengineering present a risk or an opportunity for Australia? How can Australia contribute to geoengineering decision-making? 

This project sought to explore how Australia and the world might manage climate change in 2050 as a way to understand the diversity of situations in which geoengineering might be deployed. A workshop was held to produce multiscale scenarios to 2050. The four scenarios that were produced—‘Corporatocracy’, ‘The Purge’, ‘1984’ and ‘Spaceship Earth’—illustrated four very different worlds and worldviews. Drivers or uncertainties that were identified as determinants of how the world manages climate change in 2050 were:

  • Global geopolitical stability
  • Cultural acceptance of geoengineering
  • Social and political pressure to act on climate change
  • The role of private technology and financial interests in acting on climate change and in developing geoengineering technologies

The drivers of Australia’s management of climate change were seen to be:

  • The effectiveness/longevity of the Paris Agreement
  • Generational change: the potential for a new cultural paradigm
  • Climate change impacts and our ability to adapt
  • The potential for major socio-economic or ‘ecosystem’ events
  • National security views of climate change
  • Role of the media in Australia

Submission to Senate Environment and Communications References Committee inquiry: Retirement of coal fired power stations

Author: Dylan McConnell12

1 Melbourne Energy Institute (University of Melbourne)

2 Australian-German Climate and Energy College (University of Melbourne)

Download full report here.

Summary:

• In order to meet the objectives of ‘Paris Agreement’ and keep global warming below 2◦C, requires emission from the electricity sector to dramatically reduce, to practically zero, by 2050.

• The majority of existing coal fired power stations in Australia will have reached the end of their technical lives by 2050.

• Renewable energy is competitive with new entry fossil generation. This is particularly true when comparing equitable emissions outcomes.

• Plant ages, the ‘Paris Agreement’ and renewable energy costs suggest significant retirements of coal, with concurrent replacement with renewable energy between now and 2050.

• Evidence from South Australia points to a need for coordinated system planning of transitional arrangements maintenance of electricity supply, affordability and security

A review of current and future methane emissions from Australian unconventional oil and gas production

Authors: Dimitri Lafleur1, Tim Forcey2, Hugh Saddler3 and Mike Sandiford4

1 Australian-German Climate and Energy College (University of Melbourne)
Energy Advisor, Melbourne Energy Institute (University of Melbourne)
3 Hon. Assoc. Professor, Crawford School (Australian National University)
4 Professor of Geology, School of Earth Sciences (University of Melbourne)

 

Download full report here.

Methane is a powerful greenhouse gas, 86 times more powerful than carbon dioxide when its atmospheric warming impacts are considered over a 20-year time period, and 34 times more powerful over a 100-year time period. Reducing methane emissions is therefore an important part of any strategy to avoid dangerous climate change, as agreed by world leaders at the December 2015 Paris conference. Given the vast growth potential of unconventional oil and gas in Australia, this review addresses the current understanding of methane emissions by that industry, referencing recent developments in overseas jurisdictions. If natural gas is to provide maximum net climate benefit versus coal, the release of methane to the Earth's atmosphere (both intentional and unintentional) must be held to less than about one per cent of total gas production. In this context, the commitment of the Australian CSG-LNG industry1 to limit methane emissions to no more than 0.1% of total gas production is commendable.

Our review finds that:

The winds of change

An analysis of recent changes in the South Australian electricity market

Authors: Dylan McConnell1 and Mike Sandiford2

1 Australian-German Climate & Energy College, The University of Melbourne

2 Melbourne Energy Institute, The University of Melbourne

Download full report here.

South Australia has one of the highest penetration intermittent renewable generation portfolios in a liberalised energy-only market. In the year to the end of June 30th, 2016 (FY16) wind generation contributed 37.6% to the total grid dispatch in South Australia, while domestic solar PV contributed an estimated 6% of total electricity production. The rise of renewable generation in South Australia over the last decade has been accompanied by the progressive withdrawal of baseload coal generation, and a changing role for gas generation and reliance on exchanges with the neighbouring state of Victoria. Along with the opening up of the interlinked Australian east-coast gas market to international gas pricing, the dynamics of the South Australian electricity market has shifted accordingly, making it a test case for understanding how to manage the transition to a high penetration renewable energy system in liberalised energy-only markets. In the winter months of 2016, South Australian wholesale electricity prices rose steeply, generating intense interest in its causes and the consequences of the South Australian energy transition.

TIMELINE: AUSTRALIAN CLIMATE AND CLEAN AIR POLICY INTERVENTIONS 2013-16

Developments under the Abbott-Turnbull government

Authors: Anita Talberg1 and Annabelle Workman12

1 Australian-German Climate and Energy College

2 EU Centre on shared complex challenges

Climate change remains a political issue both in Australia and internationally. This timeline is a record of Australian climate and clean air policy interventions from September 2013, when the Abbott Coalition government took office, to June 2016, as a new election looms. This publication builds on the Commonwealth Parliamentary Library’s similar timeline that covered such events up to the end of 2013.