Challenges for Policy Makers

This section provides an overview of issues facing energy policy makers in Australia and internationally, thus presenting a context for the Monash Energy project.

The International Energy Agency’s latest analysis from their flagship World Energy Outlookseries indicates that on the then current policy global primary energy demand is set to increase by 1.6% per year from 2004 to 2030.

Fossil fuel energy sources will remain dominant, even slightly increasing their share of world primary energy demand from 80% to 81%.. Natural gas demand will grow the fastest, but oil will remain the largest individual fuel source.  Though new, renewable forms of energy will grow rapidly, they start from a small base and cannot displace fossil fuels as the over-riding source of energy in this timescale.

Increasing Carbon Dioxide Emissions

Global energy-related emissions of carbon dioxide will grow slightly more quickly than primary energy supply, at 1.7%.  They are projected to  reach 40.4 billion tonnes in 2030, an increase of 14.3 billion tonnes, or 55% over the 2004 level.. China accounts for 39% of the increase, becoming the world’s largest emitter before 2010.

With this forecast, policy makers must confront a number of challenges for the future. They must:

• Improve the standard of living of the majority of the world’s population by expanding access to low cost energy
• Substantially reduce global emissions of greenhouse gases to combat climate change
• Prepare for a world where conventional crude oil reserves become more restricted
• Ensure that secure access to energy does not threaten global security

No Simple Solution

Clearly there is no single simple solution to these challenges; however a range of different approaches may in combination, achieve the objectives over time. These include:

• Improving the energy efficiency of homes, buildings, transport, appliances and industrial processes
• Using renewable energy sources including wind, solar, tides and biomass
• Developing unconventional energy sources including coal to oil, tar sands and shale oil in environmentally sustainable ways
• Reducing the carbon emissions associated with power production, currently forecast to account for 44% of total emissions by 2030.

The bulk of the emissions from power production come from coal-fired power stations, and therefore a critical element in their reduction is the introduction of clean coal technologies.

A power station which incorporates two critical clean coal technologies, coal gasification and carbon capture and storage (CCS), could achieve emissions reduction of 75-85% against current benchmarks.

Monash Energy  can make a contribution to the energy challenges outlined above, by developing a Coal to Liquids (CTL) project based on clean coal technologies.  Investment in coal gasification can help spur the development of new-generation power stations referred to as Integrated Gasification Combined Cycle (IGCC), and the investment in carbon capture and storage (CCS) creates infrastructure suitable for sharing with other emitters.