The Clean Energy Finance Corporation (CEFC) is being set up under the Clean Energy Future legislation (the carbon price package). It will provide $10 billion to support renewable and low-emissions energy.
That’s the message that most climate-concerned people have been hearing from the Labor government and the Greens.
Unfortunately, it now seems overly optimistic. The recently completed CEFC expert review shows it may give most of its support to gas projects.
Sadly, most people have missed this, distracted by worry over the CEFC being abolished or changed by a future Abbott government.
Even critics of the carbon price “Clean Energy Future” legislation thought the CEFC would deliver the sweetener in the package. I wrote in July last year: “We can be confident that this will deliver a significant boost to the construction of renewables.” My confidence was misplaced.
Half of the CEFC funds must go to renewable energy, while the other half can go to “low-emissions” technology, defined as causing at least 50% lower emissions than current electricity generation.
The “renewable energy” component of the plan is problematic. The CEFC review defines it this way: “Renewable energy technologies includes: (a) hybrid technologies; and (b) technologies (including enabling technologies) that are related to renewable energy technologies.”
“Hybrid technologies” means renewable energy in combination with gas. Is this cleaner than coal? It may be well under 50% the emissions of coal, but also has 100% less chance of going to 100% renewable energy over the 40-plus years lifetime of the gas infrastructure.
One example of a hybrid gas-renewables project is the power station proposed for Chinchilla in Queensland.
Instead of building a concentrating solar-thermal (CST) plant that can store significant heat and run overnight, the plan was to augment the sun’s direct daytime heat by burning gas.
Emerging information shows that gas fracking has high rates of leakage (sometimes called “fugitive emissions”). This leaking methane is a very powerful greenhouse gas — it has more than 100 times the effect of CO2 over a 20-year period. Chinchilla is in the heart of Queensland’s coal seam gas mining zone.
A possible “low emissions” technology that could also qualify as less than 50% of current emissions would be tri-generation (trigen). Trigen is a gas power plant that uses its waste heat to drive an old-fashioned absorption refrigeration plant and normal heating, to run city airconditioning systems.
Unfortunately trigen’s airconditioning system is not especially energy efficient when compared with modern heat-pump based building airconditioning, running on grid electricity. It's unlikely to actually have fewer emissions than simply upgrading these units and installing some renewables.
Trigen substitutes polluting gas pipelines for a potentially renewable electricity grid. It entrenches the gas industry deeper into our cities and our power supply. It may even help the gas industry to “greenwash” its public image.
Gas is not a new, emerging technology worthy of support. Gas power would keep Australia on a very high path of emissions compared with world averages.
No change to overall targets
Projects built with CEFC will not be additional to Australia’s existing renewable energy target. So any renewable energy built will not be extra; it might just be a different technology (such as photovoltaic solar panels instead of wind turbines, for example).
This could only be a good outcome if the CEFC supported concentrating solar thermal plants with heat storage (so they can run overnight) — this is the new technology that could be the bridge to 100% renewable energy.
It would take the building of a few initial solar thermal plants to bring their building costs down to a reasonable, commercially viable level.
But the CEFC is clearly not aiming at that result. It is expected to apply commercial principles in choosing between projects. Cheaper, less crucial renewable technologies, and of course “hybrid” technologies, are likely to be funded.
The best case for building a concentrated solar thermal plant is at Port Augusta, where the old Playford coal power station is likely to shut down soon anyway.
While this proposal has widespread community support, it will struggle to force the CEFC to back it.
In fact, because the CEFC has been set up to make it immune from political interference, its charter may mean that no amount of community campaigning can swing it to the really important jobs.
Greenhouse mafia in control
The conclusion is that the CEFC will probably do nothing to break the grip of the fossil fuel industry “greenhouse mafia” on Australia’s politics and energy supply.
First, because it has so much potential for supporting “clean” gas, not really clean renewable energy.
Second, because it is unlikely to support the one breakthrough technology — concentrated solar thermal with storage — that can begin to replace the “baseload” fossil fuel generators.