Recently, the Balanced Enterprise Research Network (BERN) at the University of Sydney hosted a visit by Ben Caldecott, Director of the Stranded Assets programme at the Smith School of Enterprise and Environment at the University of Oxford. During his visit, Ben presented a number of very well-attended talks on the issue of fossil fuels as stranded assets and the implications for Australian investments in coal mining.
The major public event during Ben’s visit was a panel discussion organised in collaboration with the Sydney Environment Institute and Sydney Ideas on ‘The Future of Fossil Fuels in a Climate-Challenged World‘. This event featured Ben speaking on the issue of fossil fuels as stranded assets, followed by presentations by Blair Palese, CEO of 350.org in Australia, on fossil fuel divestment and Giles Parkinson, founder and editor of well known online publication RenewEconomy, on recent developments in renewable energy technologies. This was a fascinating evening with a great Q&A session afterwards which unpicked further complexities of our climate and energy future. You can view a video of the full presentations below:
On March 26th Ben also provided a more focused and technical presentation as part of BERN’s seminar series, where he outlined his recent research on the implications of subcritical coal-fired power for investors and policy makers. As part of a larger global report, Ben’s presentation focused on Australia’s large fleet of aging subcritical power plants and the way in which they contribute a disproportionate part of our country’s total carbon emissions.
Subcritical coal-fired power plants are the least efficient and most polluting form of large-scale power generation, producing 75% more carbon pollution than the average advanced ultra-supercritical (the most up-to-date form of coal-fired power station) as well as using 67% more water. They are also a major contributor to air pollution and account for more than 15% of global carbon emissions. The International Energy Agency (IEA) estimates that it will be necessary to close a quarter (290 GW) of subcritical capacity worldwide by 2020 to limit carbon emissions to a level consistent with 2°C of average warming globally – the internationally agreed target. For these reasons subcritical power stations are more at risk of becoming ‘stranded assets’ than other types of power generation.
Australia has the least efficient subcritical capacity of any major country. Indeed, Australia’s 22 subcritical power stations comprise 26 GW of capacity and account for approximately 24% of Australia’s total carbon emissions. One of the reasons for this is that a significant proportion of Australian subcritical capacity is either past or approaching the end of its working life (approximately 40 years). So, new regulation that would require capital expenditure for regulatory compliance could force the decommissioning and permanent closure of these assets and quickly mitigate our country’s carbon emissions.
Following Ben’s presentation, Tim Buckley, Director of Energy Finance Studies at the Institute for Energy Economics and Financial Analysis, provided a response exploring the possibilities for renewable energy technologies to supplant coal-fired power, the political battle over the Renewable Energy Target, how these polluting power plants can be most efficiently decommissioned and the vexed issue of potential compensation to energy companies they have knowingly bought into coal-fired power facilities. You can view the full seminar below: