Making COP26 a success

COP26 can be a success if it changes the rules so that they drive the actions that need to be taken. A couple of the current rules are a hindrance to achieving the outcome that is required.

The real aim of this conference is to set in place a situation where global average temperatures since industrialisation are held to +1.5C. Yet there is a danger that this aim will be lost by mantra of reducing CO2e emissions to net zero by 2050. This mantra cannot be achieved except by burying vast amounts of CO2 underground. This will be a very expensive operation, being one that also adds an additional level of risk for future generations. It is also a diversion from the real action, which should be capping or reducing the atmospheric level of greenhouse gases.

The net zero objective is not built around the “real aim” of the conference, but seems to be designed to encourage nations to take actions that it is hoped will achieve that “real aim”. Yet there are other direct actions that will really work to achieve that aim. Why are these not being taken instead of the risky “bury CO2” strategy that is being proposed by the UK? Perhaps nations are being held back by two rules that hide the real impact of their actions and encourage them to take the wrong actions.

The consumption of coal for all purposes has been relatively stable, so why is it still being demonised, whereas nothing is said about the growing use of natural gas. For coal use analysis, check out this page! We will look at natural gas in the next section.

New Methane rule at COP26

The biggest hindrance to achieving a cap of +1.5C is the continuing growth in the atmospheric level of methane. This is almost entirely due to the continuing increasing growth of the consumption of natural gas, as can be seen here.

Part of the reason for this growth has been the demonising of coal, as well as an IPCC rule that serves to mask the immediate impact of the increasing use of this gas on global average temperature.

Natural gas has been cited as a “transition fuel”. This has been a false promise since the main outcome has been to delay the move to a new fuel economy for electricity generation. Worst still, for the first five years, even with old style coal-fired generation, it could have increased the global average temperature (with the normal amount of fugitive emissions associated with natural gas). It is even worse if coal-fired generators with the new HELE technology were used instead of natural gas.

The immediate problem with the IPCC rule for methane is that it estimates the lifetime impact of methane, but in doing so, it hides the immediate impact. This serves to make natural gas a better option than burning coal and hides the fact that it is significantly worse in early years.

The longer term problem with the IPCC rule for calculating CO2e emissions is that it fails to take into account the benefit from cutting methane emissions. The bizarre result is that methane emissions can never reach zero, even if the atmospheric level of methane is rapidly falling. This is nuts. It means that the current method of calculating CO2e for methane can and must be changed.

A more realistic approach would be to measure the immediate impact of methane emissions, taking into account the actual emissions in the current year to which can be added the climate impact of all previous emissions. This can easily be handled by adding up the emissions that have not yet decayed to the present emissions. This is not a hard task.

For each year the balance not yet decayed can be calculated by multiplying the estimated emissions for that year by a transition factor of 0.925 raised to the power of the sum of years before the current year + 0.5. Add these up for all years starting from 1990, when numbers were first established, until the present. Finally, deduct the total calculated so far with the total calculated for the previous year using the same methodology. The result can be positive or negative. Convert this value, as a value for methane, to CO2e, using the relative forcing for each gas and the relative percentage of each gas finding its way into the atmosphere, as determined by the IPCC. It is simple! It just needs a new rule.

Burning trees to make electricity

At present, under IPCC rules, it is allowed to burn trees to make electricity but to exclude the CO2 produced by this process on the assumption that these trees will be eventually replaced some decades later.

It is like “legal tax avoidance”. Burning trees does have an impact on the CO2 emissions in that year and thus it should not be excluded. If required, the regrowth can be deducted when it happens to the degree that it has happened. This can be allowed to the country that does the regrowing.

This is a rule that is crying out to be changed in the way described.

Setting targets at COP26 is not enough

Our long-term ambition should be that electricity generation in the future will consist of intermittent plus storage plus a backup generating source when these two cannot deliver.

We know that intermittent supply of electricity, via renewables, is better for the environment than using fossil fuels, but they endanger security of supply. Therefore, it should be an agenda item to discuss how 100% renewables can be used with confidence in regard to the security of supply. Yes we know that storage can manage normal fluctuations in supply, but we have no path forward for security of supply when wind and sun do not deliver as expected.

COP26 could call upon all nations to set out their plans for managing supply security when fossil fuels are removed from the equation. At present there are options available for providing some measure of security of supply using either coal or nuclear. We would all benefit from learning what other nations are planning to do.

Fully EVs are a leap too far for many nations

It will be possible to cut fossil fuel use for cars by as much as 60% by simply favouring the electric options: EV, PHEV and hybrid. Yet it would seem that battery costs are too high for everyone to have an EV, even in developed nations. Perhaps they will fall in price over time, but potential supply shortages of components for electric motors and batteries may bring that dream to an end.

Certainly, COP26 could suggest that nations take a more modest approach and include PHEVs and hybrids in their favoured options, rather than setting a too-high target and not finding the cuts in oil-based fuels that they desire due to a poor take-up of fully EVs.

HCFC-22

This gas is now a very serious greenhouse gas in its own right. If possible, it should be removed from all new refrigerators and industrial processes by 2023.

A report on the progress of the implementation of the Montreal Protocol for this gas can be expected at COP26, but one wonders whether significant progress has been made.

A successful outcome

If COP26 is nothing more than simply setting targets, as appears to be currently envisaged for COP26, we can expect that global average temperature will be +1.5C before 2030, with greater than +1.6C reached by 2040. The trend of data suggests that this is almost inevitable, given the past history of the linking of emissions and temperatures. Fluctuations due to ENSO and volcanos will see results around ± 0.1C, or more, occasionally appear,

However, if the extra actions proposed here are initiated at this conference, it should be possible to limit global average temperature growth to 1.5C out to 2050 (subject to the same yearly fluctuations of ± 0.1C ). After this date, temperatures will fall marginally.

A graph showing the historical, modelled, current COP26 trajectory and proposed COP26 trajectory if the extra actions suggested here are taken.
Suggested alternative outcomes

Time will tell whether these simple to implement rule changes and removing the impediments to more drastic action will bring about the improvements I am predicting, but who will be brave enough to urge the nations to continue on the higher trajectory?

Now is the time for the leaders of the governments of the world to step up to the plate and make the changes suggested here. They cannot hurt.

AEMO Pricing is making the grid unstable

AEMO pricing, which is designed to achieve the lowest wholesale price for electricity gives no weight to maintaining baseload capacity and gives no consideration to reducing CO2 emissions. These things could be fixed to the addition of a baseload element to the pricing model.

In doing all of these things, the objective to be kept in mind is an end result of global average temperature stabilising at 1.5C over pre-industrial levels.

AEMO pricing model should give priority to baseload generation

Once the medium term baseload demand has been set, those generators that can provide supply that is not dependent on the wind or sun should not be put out of business just because there is a cheaper option. That is current situation. It has already happened with the Pt. Augusta generators where the Chinese-owned operator has demolished the plant so that it can never be used again, even in a crisis.

Unless a change is made in the AEMO pricing model the grid is in danger of all baseload operators being shut down solely to meet the short-term economics of the current model. In this case, the entire grid will be dependent upon the vagaries of the wind and the cloud cover. Even with storage, this will mean that, at times, there will be virtually no electricity supply at all. This should not be allowed to happen.

Wind and solar cannot provide true baseload capacity. This is because it is dependent upon the prevailing climatic conditions, even with storage. The underlying baseload capacity should not come from natural gas: that power source is better suited to meeting demand peaks and is priced accordingly. Hydro and pumped-hydro should also not count, since that depends upon climatic conditions. That is to say, a long drought can knock out hydro and an extended climate event can knock out pumped-hydro.

In a 1.5C world, true baseload capacity can only come from geothermal or nuclear electricity generation. In the current Australian configuration, it can only come from coal-fired generation. These generators can be phased out as “nearly zero” CO2 generators come on board; until that happens they are needed!

Choosing the level of Baseload Capacity

We can start with the smallest level of demand across the grid. Using South Australia experience (which I examined in an earlier piece), average baseload demand was 2/3rds of average daily demand and minimum baseload daily demand was 45% of peak demand.

On this basis, as a rule of thumb, we could say that baseload demand should be set at 45% of average demand, with renewables and natural gas to compete for supplying the rest of the demand. In the event of climate crisis knocking out renewables, storage can be partly replenished on a daily basis by running any natural gas peaking demand on a 24/7 basis. Added to this, government mandated demand management could be used to help the community to power through such an event.

To make all of this work, Australia needs a “baseload protection plan”. We cannot rely upon current AEMO modelling and pricing to deliver on this without some changes to the model.

Coal-fired Baseload electricity

At present, the only option for baseload electricity is coal-fired electricity, even though to meet the 1.5C objective, it must be progressively phased out. Based on published emission intensity data, in NSW, Liddell should not be included in any “baseload protection plan”; in QLD, Gladstone should not be included; and in Yallourn should not be included. These generators are not needed in a “baseload protection plan.” If these three power stations were taken out of operation, if the remaining operations were guaranteed a market share mandated at 60% of capacity, this would generate enough energy to meet baseload capacity requirements.

Under this plan, 60% of the total 24 hour capacity of the “favoured” generators would be sold into the electricity market at an AEMO calculated cost price plus a risk and profit margin, with a total price of around $A60 MWh. (The current AEMO pricing operation would not apply to this “guaranteed market”; AEMO pricing would apply to all other supply that is not included in the “baseload protection plan.”)

Under this plan, as alternative low-emissions supplies come on stream, these coal-fired generators will begin to lose their guaranteed status, one at a time, until none were included.

Geothermal as a Baseload resource

There have been several abortive attempts to get geothermal up in Australia, with the failure of these projects clearly attributed to economic viability, not on technological grounds. They could not survive under AEMO pricing, despite having the ability to provide electricity at a relatively low cost, assuming that were run 24/7.

European economists have calculated that the wholesale cost of enhanced geothermal electricity is likely to be €50 MWh. This is approximately $A80 MWh. With a small margin for risk and profit, an AEMO fixed price could be $A85 MWh. This compares with the current average price of coal-fired generation of around $A60 MWh. It is trivial for most consumers, being $0.025 per kWh on 45% of the supply, with discounts on various tariffs being as high as $0.23 per kWh. Go figure the angst!

Every MWh of electricity that can be produced on 24/7 by the designated baseload suppliers should have priority in supplying to the grid, with its output being sold at a fixed price before any other electricity generators are able to bid for the remaining electricity demand.

Geothermal should be the first option for Baseload supply and should provide Australia with the mechanism to wind-down the use of coal-fired generators. With Australia’s vast land-mass, it likely that they are many opportunities for geothermal electricity, as the following figure shows.

Hot prospects for geothermal-sourced electricity in Australia.
Hot prospects in Australia for geothermal energy

Nuclear as a Baseload resource

The kind of nuclear that may be acceptable in Australia (using a modular molten-salt reactor) is not yet commercially available. When this kind of reactor has been successfully installed elsewhere, it should be considered here, especially if geothermal does not prove to be a satisfactory solution.

Baseload and Storage

Setting up a “baseload protection plan” doesn’t of itself normally require storage, since this supply is planned to be always available, with the quantum being pitched at the lowest level of demand over a weekly cycle. However, there is a good possibility that, when coal-fired electricity has ended and geothermal and nuclear supply have taken over, there will be occasions when supply will be greater than demand at a particular moment in the cycle. To cover these occasions, rather than curtailing production, it would be preferable if the surplus electricity were stored in a large-scale facility, like Snowy 2.0 pumped-hydro. In this situation it could be sold to that facility at a very low price, such as $A5 MWh, thus providing a negative incentive to owners of the baseload power not to provide more baseload power than is required.

It is recognised that storage is needed to handle the daily and weekly cycles of demand. This disconnect between demand and supply is a natural functions of drawing much of the supply from intermittent renewables. Ironically, the 6 pm peak demand arrives at the very time that solar-generation is quite weak, even on a cloud-free day in Australia.

In addition, a case can be made for some level of natural gas peaking demand, for something like one hour a day. Such a facility could be run 24/7 during any climate event that stops renewables producing electricity, which would reduce the severity of such a crisis in terms of electricity production.

In the normal event, storage from liquid air and batteries can probably handle the week-day cycles, with Snowy 2.0 taking up the surplus supply over the weekend.

Conclusion

Our collective objective should be to manage our use of fossil fuels so that global average temperature stabilises at 1.5C over pre-industrial levels.

The changes suggested here can be undertaken almost immediately and will measurably contribute meeting expectations that Australia’s fossil fuel usage can be drastically cut. (Ethanol for oil is the other limb to this strategy.)

However, to successfully navigate a change of this size, it is necessary to change the AEMO pricing structure to protect coal-fired baseload capacity and to ensure that baseload power in the future is not undermined by aggressive pricing and lobbying on behalf of the operators and owners of wind and solar assets.