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Why more gas supply won’t reduce gas prices

RenewEconomy - Fri, 2017-05-19 12:12
Most of the gas that is ‘cheap’ to extract has been or is being extracted, so ensuring more supply won't bring the price of gas down.
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The case for modernising the Victorian budget

RenewEconomy - Fri, 2017-05-19 12:03
The Federal Coalition's refusal to tackle climate change means we need to see more political leadership from state governments such as Victoria. 
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Australia’s first large-scale solar farm to quadruple in size

RenewEconomy - Fri, 2017-05-19 11:57
Greenough River, the first large-scale solar farm to be built in Australia, is going ahead with plans to quadruple in size.
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Rapid greening of Antarctic Peninsula driven by climate change

ABC Science - Fri, 2017-05-19 10:02
FAST CHANGE: The Antarctic Peninsula is not only getting warmer, it's getting dramatically greener with a sharp increase in plant growth over the past 50 years.
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AEMO and ARENA to pay electricity users to cut their usage in 'demand response' trial

ABC Environment - Fri, 2017-05-19 08:05
Would you like to be paid to use less electricity? That's the idea behind a new trial of a concept known as "demand response", launched by the energy market operator AEMO and the renewable energy agency ARENA
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Commonwealth endorses 'revolutionary approach' to cutting carbon

ABC Environment - Fri, 2017-05-19 06:49
A new approach endorsed by a meeting of the Commonwealth secretariat overnight would cut carbon emissions while still accelerating economic growth and development.
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Climate Council: climate, health and economics are against Carmichael mine

The Conversation - Fri, 2017-05-19 06:15
Many banks are worried that coal investments could be left stranded on their asset books. Rasta777/Shutterstock.com

Despite the overwhelming evidence that fossil fuels are killing the Great Barrier Reef and making many extreme weather events worse; despite the emphatic thumbs-down from the finance sector; and despite the growing awareness of the serious health impacts of coal, the proposed Carmichael coal mine staggers on, zombie-like, amid reports it has been offered a deferment of A$320 million in royalty payments.

A new Climate Council report, Risky Business: Health, Climate and Economic Risks of the Carmichael Coalmine, makes an emphatic case against development of the proposed mine, or of any other coal deposits in Queensland’s Galilee Basin, or indeed elsewhere around the world.

Burning coal is a major contributor to climate change. Australia is already reeling from the escalating impacts of a warming climate. Heatwaves and other extreme weather events are worsening. The Great Barrier Reef has suffered consecutive mass bleaching events in 2016 and 2017. Climate change is likely making drought conditions worse in the agricultural belts of southwest and southeast Australia. Our coastal regions are increasingly exposed to erosion and flooding as sea level rises.

If we are to slow these disturbing trends and stabilise the climate at a level with which we might be able to cope, only a relatively small amount of the world’s remaining coal, oil and gas reserves can actually be used.

The majority must be left unburned in the ground, without developing vast new coal deposits such as those in the Galilee Basin.

On budget

The amount of fossil fuels we can burn for a given temperature target (such as the 1.5℃ and 2℃ targets of the Paris climate agreement) is known as the “carbon budget”.

To give ourselves just a 50% chance of staying within the 2℃ Paris target, we can burn only 38% of the world’s existing fossil fuel reserves. When this budget is apportioned among the various types of fossil fuels, coal is the big loser, because it is more emissions-intensive than other fuels. Nearly 90% of the world’s existing coal reserves must be left in the ground to stay within the 2℃ budget.

When the carbon budget is apportioned by region to maximise the economic benefit of the remaining budget, Australian coal in particular is a big loser. More than 95% of Australia’s existing coal reserves cannot be burned, and the development of new deposits, such as the Galilee Basin, is ruled out.

The health case

Exploiting coal is very harmful to human health, with serious impacts all the way through the process from mining to combustion. Recently the life-threatening “black lung” (coal workers’ pneumoconiosis) has re-emerged in Queensland, with 21 reported cases. Across Australia, the estimated costs of health damages associated with the combustion of coal amount to A$2.6 billion per year.

In India, the country to which coal from the proposed Carmichael mine would likely be exported, coal combustion already takes a heavy toll. An estimated 80,000-115,000 deaths, as well as 20 million cases of asthma, were attributed to pollutants emitted from coal-fired power stations in 2010-11. Up to 10,000 children under the age of five died because of coal pollution in 2012 alone.

Compared with the domestic coal resources in India, Carmichael coal will not reduce these health risks much at all. Galilee Basin coal is of poorer quality than that from other regions of Australia. Its estimated ash content of about 26% is double the Australian benchmark.

This is bad news for children in India or in any other country that ends up burning it.

The economics

The economic case for the Carmichael mine doesn’t stack up either. Converging global trends all point to rapidly reducing demand for coal.

The cost of renewable energy is plummeting, and efficient and increasingly affordable storage technologies are emerging. Coal demand in China is dropping as it ramps up the rollout of renewables. India is moving towards energy independence, and is eyeing its northern neighbour’s push towards renewables.

All of these trends greatly increase the risk that any new coal developments will become stranded assets. It’s little wonder that the financial sector has turned a cold shoulder to the Carmichael mine, and Galilee Basin coal development in general. Some 17 banks worldwide, including the “big four” in Australia, have ruled out any investment in the Carmichael mine.

From any perspective – climate, health, economy – the proposed mine is hard to justify. And yet the project keeps on keeping on.

The Conversation

Hilary Bambrick has previously received funding from the National Health and Medical Research Council, the Victorian and NSW Governments, the United Nations Development Programme, and the World Health Organization. She sits on the research committee of The Australia Institute.

Will Steffen does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

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Cylindrical space for a crab to call home | Brief letters

The Guardian - Fri, 2017-05-19 04:30
Brown hares and hunting | Water in Bagno Vignoni | 35mm film canisters | Letter from the Tories | Granny Seaside and Granny Cat

A repeal of the 2004 Hunting Act would accelerate the demise of our iconic brown hares, already listed in 2011 for potential extinction by 2050 (May pledges free vote on hunting, 10 May). One third of the hunts (with dogs) in England and Wales target these declining hares, not foxes. The act outlaws hare coursing, but a repeal would further encourage this intrusive and destructive activity, already so distressing to farmers and problematic to police forces countrywide.
John Rimington
Technical liaison officer, Hare Preservation Trust

Related: Washing your hair with mineral water or champagne – what lengths would you go to?

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Trump 'can't escape climate change' impacts says Fiji PM

BBC - Fri, 2017-05-19 01:17
Whether or not the US is involved in global talks, the US will also feel the impacts of climate change.
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Nasa seeks experiment ideas for Europa lander

BBC - Fri, 2017-05-19 00:58
Nasa is seeking the best ideas for experiments to fly on a mission that will land on Jupiter's moon Europa.
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Sea level rise will double coastal flood risk worldwide

The Guardian - Fri, 2017-05-19 00:10

Small but unstoppable increases will double frequency of extreme water levels with dire consequences, say scientists

Small but inevitable rises in sea level will double the frequency of severe coastal flooding in most of the world with dire consequences for major cities that sit on coastlines, according to scientists.

The research takes in to account the large waves and storm surges that can tip gradually rising sea levels over the edge of coastal defences. Lower latitudes will be first affected, in a great swath through the tropics from Africa to South America and throughout south-east Asia, with Europe’s Atlantic coast and the west coast of the US not far behind.

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Product designers 'must reduce Pringles factor' to boost recycling

The Guardian - Thu, 2017-05-18 19:17

Recycling Association chief cites crisp brand as one of worst examples of multiple materials being used in single product

Product designers need to retreat from “the Pringles factor” in order to make their packaging more recyclable, an environmental expert has said.

Simon Ellin, the chief executive of the Recycling Association, which represents recyclers, pointed to the snack tube as a prime example of the failure to consider recycling in design – and listed a range of other offenders from Lucozade Sport drinks to whisky packaging.

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Less than 1% of surplus food from farms and manufacturers used to feed hungry

The Guardian - Thu, 2017-05-18 15:31

A tiny proportion of excess food is being sent to charities and is instead ending up in landfill or left to rot, figures show

Less than 1% of edible surplus food produced by UK manufacturers and farms is being sent to charities to help feed the hungry, according to new figures.

Vegetables that are perfectly edible are being left to rot in the fields, and other foods not sold to retailers are put into anaerobic digestion or sent straight to landfill, the UK’s largest redistribution charity FareShare has warned.

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Plant hunters discovered 1,700 new species last year

The Guardian - Thu, 2017-05-18 15:01

From a Turkish parsnip to Madagascar coffee beans and roses in China, the discoveries offer the prospect of better crops, medicinal uses and new garden displays

From new parsnips and herbs to begonias and roses, the world’s plant hunters discovered more than 1,700 new species last year, offering the prospect of better crops and new colours and scents in the garden.

The State of the World’s Plants report, led by scientists at the Royal Botanical Garden Kew in the UK and published on Thursday, reveals a cornucopia of new plants and assesses the risk to the plant world from pests and invasive species.

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Rooftop solar: Sydney and other CBDs have barely tapped ‘solar goldmines’

RenewEconomy - Thu, 2017-05-18 14:48
Sydney's CBD has huge untapped rooftop solar potential that could save businesses and homes $70m a year on power costs, according to new study that has lessons for all Australia's capital cities.
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Toxin-tolerant plants take root in colliery's spoil tips

The Guardian - Thu, 2017-05-18 14:30

Middlehope Moor, Weardale Miners who left waste rock beside the burn created a perfect habitat for the spring sandwort

On a grey day in a tree-less landscape, buffeted by a bone-chilling north-easterly wind, only the calls of curlews and oystercatchers that had returned here to breed suggested this must be spring.

But when we reached the stony, undulating, ground near the entrance to the “governor and company’s level”, a mine tunnel driven into a hillside almost two centuries ago by the London Lead Company, we found an infallible floral indicator of the season.

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We don't have a gas shortfall worth worrying about

The Conversation - Thu, 2017-05-18 14:17

Australia was warned earlier this year that a shortage of gas could create an energy crisis. A report from the Australian Energy Market Operator (AEMO) suggested a shortfall could occur in 3 of the next 13 years.

This report was widely reported in the national media, with sensational headlines like “AEMO warns of blackouts as gas runs out”.

A couple of weeks ago, in a dramatic intervention, Prime Minister Malcolm Turnbull declared that there was a shortage of gas supplies for eastern Australia and that certain restrictions may be placed on gas exports.

But do we really need “more gas supply and more gas suppliers”? In a report published today, my colleague Tim Forcey and I review AEMO’s initial report and its results and recommendations. Our work finds there is a shortage of “cheap” gas, but not a gas supply “shortfall”. Moreover, high gas prices combined with falling renewable and storage costs mean that there are cheaper options than developing new gas resources.

What gas shortfall? AEMO forecast of electricity generated by fuel source, showing AEMO’s forecast supply gap as a thin red line at the top of the stack. Author

The AEMO report suggests that eastern Australia face a shortfall in 3 of the next 13 financial years – 2018-19, 2020-21 and 2021-22. The largest gap modelled by AEMO is equal to only 0.19% of the annual electricity supply, or 363 gigawatt hours.

In gas supply terms, this is equivalent to only 0.2% of the annual gas supply. But AEMO’s modelling considers a range of possible scenarios, with a variation of roughly plus or minus 5%, far larger than the possible shortfall.

Just 11 days after the report warning of a supply gap, AEMO published updated electricity demand forecasts. In this update, AEMO reduced its forecast electricity demand by roughly 1%. This reduction in demand is more than four times greater than the largest forecast shortfall.

A day later, Shell announced it would proceed with Project Ruby, a gas field with 161 new wells. This was not included in the AEMO modelling process.

Alternatives to gas

Gas has historically been characterised as a transition fuel on the pathway to a zero-emissions power system. The falling costs of renewable energy and storage technologies combined with rising gas costs means this pathway and may indeed be a detour, particularly when taking into account Australia’s climate commitments.

This is also a sentiment increasingly reflected by the industry, with gas producer AGL suggesting that:

the National Electricity Market […] here in Australia could transition directly from being dominated by coal-fired baseload to being dominated by storable renewables.

Gas generation generally falls into two categories: open cycle gas turbines (OCGT) and combined cycle gas turbines (CCGT). These two technologies effectively play different roles in the energy sector. Open cycle turbines are highly flexible, and are used occasionally over the year to provide peak capacity. Combined cycle turbines, on the other hand, operate continuously and provide large amounts of energy over a year.

Each of these technologies is now under competitive threat from renewable generation and storage. Flexible capacity can also be provided by energy storage technologies, while bulk energy can be provided by renewable energy. These are compared below.

Energy: renewables vs gas

The chart below compares the cost of providing bulk energy with gas and renewable technologies. We’ve represented the price of new CCGT, PV (which stands for photovoltic solar) and wind as the cost of providing energy over the lifetime of the plant.

The other two gas generation costs illustrated, CCGT and Steam, represent the cost of energy from existing plants, at their respective thermal efficiencies. The steam thermal efficiency is similar to that of a highly flexible open cycle gas turbine.

Surprisingly – and depending somewhat on gas price and capital cost assumptions – new renewable energy projects provide cheaper energy than existing gas generators.

Comparison of energy cost from new and existing gas with new renewable energy generation. The range of solar (PV) and wind costs reflect different capital cost assumptions, while the range of gas costs reflects gas price assumptions. CCGT refers to Combined Cycle Gas Turbine. Author Flexible capacity: storage vs gas

The next chart compares the cost of providing flexible capacity from gas and storage technologies (again, taking the cost over the lifetime of the plant).

In this analysis we compare the cost of capacity from OCGT with that from diesel and various storage technologies, including battery and Pumped Hydro Energy Storage (PHES). As can be seen, storage technologies can compete with OCGT in providing flexible capacity, depending on technology and capital cost.

Comparison of flexible capacity cost from gas (OCGT), diesel and storage technologies generation, including battery and Pumped Hydro Energy Storage (PHES) . The range of costs reflect different capital cost assumptions. Author

Another option, not shown here, is demand response. This is the strategy of giving consumers incentives to reduce their energy use during critical times, and is cheaper again.

What is clear is AEMO’s forecast gas shortfall is very small, and that it may have already been made up by revised demand forecasts and new gas field developments. But the question of how Australia should deal with any future shortfall invites a larger debate, including the role of gas in our electricity system, and whether the falling costs of renewable energy and storage technology mean we’ve outgrown gas.


The short-lived gas shortfall: A review of AEMOs warning of gas-supply ‘shortfalls’ was prepared by Tim Forcey and Dylan McConnell.

The Conversation

Dylan McConnell has received funding from the AEMC's Consumer Advocacy Panel and Energy Consumers Australia.

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Time for the climate policy review we had to have

RenewEconomy - Thu, 2017-05-18 14:11
It’s time to get serious about climate policy, and set Australia up to make the most of the zero carbon transition that is undoubtedly underway.
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Coal plants failed in Queensland heatwave on day of record demand

RenewEconomy - Thu, 2017-05-18 13:46
Are Australia's coal and gas generators able to power Australia through next summer's heatwaves? The evidence of last summer suggests they cannot be relied upon, with a new report showing how coal plants melted in the Queensland heat on a day of record demand.
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Kangaroo Is. loses challenge to network plan that threatens renewables

RenewEconomy - Thu, 2017-05-18 13:36
Kangaroo Island loses first-of-kind protest against network decision, but regulator flags changes to favour decentralised options.
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