Ben Beattie is an electrical engineer who has spent the last two decades in the power and coal seam gas industries. He will discuss all of the energy realities and options available to us in Australia.
We will learn how we get electricity, what is the National Electricity Market, and HOW WILL NET ZERO AFFECT US.
TRANSCRIPT:
(This is derived from an automated process. The video recording is authoritative.)
So tonight I'm not gonna be political. Uh, I'll save that for the q and a. Um, my, my talk is, uh, thank you Jewel for having me, and thank you for listening. Uh, I must say this is, my wife very much appreciates this because after the first year of talking about this, her eyes glazed over. The second year, she started throwing things at me.
So it's, uh, it's very good to be here. Uh, so we're gonna go through a bit of a journey through, uh, carbon dioxide emissions, uh, what, what some of the numbers are. We're not gonna get, uh, about who's doing it, uh, straight away, but I'm gonna put Australia's emissions into context. Uh, you don't often see this in the mainstream media, unfortunately. Uh, and I think once, once you see where we sit and how we produce those emissions, uh, then we'll go on to, uh, where, where we get those emissions from and what we do with them in our domestic and our resources markets, and how that happens. Uh, I'm gonna talk a little bit about the electricity market.
Just a couple of real basics, because when I, when I talk to people about the, uh, national electricity market, it's, uh, there's a couple of things which, uh, people don't often realize. It's not intuitive unless you know it.
So apologies if you already know that. But I, I feel, uh, being an electrical engineer with an audience, I must talk about that. Um, and then we'll go on to what, uh, some of the implications may or may not be.
Uh, mostly, mostly my intent tonight is to bring some of these, uh, figures and some of these facts to your attention and where to find the information. Uh, like I said, we don't often talk about it in the mainstream media. Uh, and if you talk about it in social media, get labeled it not a Deni. Uh, so I'm, I'm quite proud to be a Deni, even though I'm not. Uh, I'm just very skeptical and cynical, especially after a, a couple of years of, uh, talking about this stuff now. Okay.
Uh, so first of all, what is net zero? Well, according to the illustrious, uh, CSIRO, uh, it's a balance. So there's emissions we produce and emissions that come out.
Now, of course, uh, being intelligent people, we all know that emissions come, human emissions come from burning fossil fuels, and that's fine. Uh, but emissions do come out through the natural carbon cycle. And we're gonna, I'm gonna show you some numbers on that as well. So it is easy to say zero, but the, the net part is, is where it gets very confusing and very, it's a bit of a gray issue. So, uh, let's, uh, let's talk about some of that. So this is also from the CSIRO.
Uh, here we talk about, uh, 2011. This is a, a blog post from 2014, and there was quite a lot of rain back then. Obviously, we had the 2011 floods, uh, and I must say, not dissimilar to what we've had 10 years later, really in the last, uh, sick eight months, really. So in that perspective, and, uh, I must have another, uh, disclaimer, there will be a lot of numbers tonight. Uh, I'm an engineer, uh, so I do feel comfortable in an area, but if, if I do, uh, run over too many numbers, just throw something at me and I'll, and I'll stop.
Um, so in this particular year, record breaking rains and Australia became a global carbon sink. So, out of that Australian environment, soaked up 840 million tons of CO2 outta the atmosphere. Uh, and why is that? Why is that important? Well, As Australia as a country, total only produces 500.
So in that year, in this part of the environment, we were a, a global sink. Uh, another one, a few words on this one, but a from nasa this time, another well-respected scientific organization, um, in this case, they're talking about a, a 2016, uh, spike in c o two. Now, this had nothing to do with people. This was caused by an El Nino heat and drought.
So in three particular rainforests across the world, you can see here, uh, Southern America, central Africa, and Asia over there, uh, two and a half gigatons of CO2 above the normal amount, an increase of two and a half gigatons, 2,500 million tons.
So five times of Australia in one year was released from the natural environment. Now, this is, this is, uh, recorded by NASA's, uh, orbiting Carbon Observatory, a satellite that's up in the, uh, in space, looking down on earth, measuring all the c o two that's coming out. Now, you'd think this would be a, um, interesting news story because hang on a second, if you just shut off five Australia's, it wouldn't have made any difference that year. So in, in the context of Australia's 500 million tons, two and a half thousand tons increase over normal, uh, is, is an interesting point, even if you can't do anything about it.
So, uh, we talk about c o two emissions, and this is, this is, uh, one of the, uh, pretty, pretty famous, uh, what do I call it, A website.
That's the word I'm looking for. Uh, and they, they capture a lot of this, uh, information. And you can go there and it's free, and you can get all sorts of graphs. In this particular one, I've put the world and I've put Australia, Uh, And it really does tell a story, doesn't it? So here we've got, and this, this is, uh, per year. So obviously you can see as the, uh, as the world ramps up, its, uh, burning of coal, oil, gas, uh, and we get cars and refrigerators and planes and, and everything else that goes with it. Uh, we see that there's a lot more missions going into the atmosphere. Now, interestingly, there's a little dip at the end here, uh, around about that 2020, right? So we all know what that's about, um, In that sense. Uh, yeah. So global annual c o two emissions, they're up there at 36 billion roughly in Australia, down at the 500 million 0.5 billion. And that's our, that's our roughly 1.2% that we talk about. And that's, that's where it comes from. Um, in my notes here, uh, I've, I've just mentioned the top 10. So, China, United States, India, Russia, Japan, Germany, Canada, Iran, South Korea, and Indonesia.
So the top 10 are 67% of the world's emissions. Uh, and that's, that's not political. That's, that's not digging the data, that's just the facts. Um, and Australia has 0.5, but we're down at around about 14 or 15th in that, in that sort of area, along with a bunch of other countries as well. So let's, uh, let's talk about the dip. This little one at the top here.
Another well-respected, uh, scientific, uh, organization. Noah, something, something, something administration, American, I don't know, I knew it a couple of days ago, but they're, they're well known.
And they're the ones who produced the actual, uh, CO2 numbers for all the, all the places to use. Um, another interesting fact is that the, uh, the laboratory that measures the emissions is in Hawaii, uh, a few meters from an active volcano. And if you talk to people who, uh, know a bit more about it, they say, yeah, they have to do a lot of correction, because when the wind changes, their CO2 spikes go straight up and they can't be used.
So this is, uh, it was, it was, uh, not long after, um, Trump shut the borders into America from the, from Chinese in February, 2020, uh, that massively xenophobic move that he did, uh, and the rest of the world soon followed. So as a result, you had a huge reduction in the global economy, no travel, and that plane travel, I mean, I think plane travel accounts for nearly as much as Australia's emissions in total. Anyway, so they shut all that down, and there was a corresponding drop in emissions, uh, and everything else. Now, me being a curious sort, I thought, I wonder, Can we see a change in the c o two record because of the global lockdowns and the emissions reduction? Now, according to Noah, uh, if we could detect it, it would have to be more than the variable, the variation from nature. 'cause obviously natural variability, CO2 goes up and down. And, uh, we can see that in this graph. Now, I'll just explain this graph for a second. What we see is a, the red line is monthly, uh, the monthly average, and the black line is, uh, just a, a long, longer term average, I think over a, over a year or so.
So the red line's the interesting one for me. Um, and because what you see is, uh, c o two goes up, and now it's the northern hemisphere winter. And the reason that is, is there's a lot more landmass in the Northern Hemisphere. A lot more trees, a lot more photosynthesis. Uh, so when you have a northern hemisphere winter, you have less photosynthesis, shorter days, less sunlight hours.
So you get CO2 goes up, then you turn the corner and go into a northern hemisphere, summer CO2 comes down, and that's what it does. And it goes up and down quite a lot compared to everything else.
Now, in the, uh, This statement here is interesting.
CO2 emissions are dropped by 8% this year, and that's in 2021. So that's, that's a direct result of the covid lockdowns. Now, what I can see from here is that there's a massive drop in emissions because of the lockdown. I can really tell where it is. Can you guys see it?
That's my sarcasm. I'm, I'm very sorry. I'm not very good at it, but no, I, I can't see a drop in emissions and no one can. Um, and this, this statement here in the middle is, is quite interesting.
Um, The natural variations are large, and you can't tell that we actually locked down half the world and dropped emissions by 8%. Now, think about that 8% Australia is 1.2%. So again, another 5, 6, 7 Australias take it out. Everyone stops, turn all the PowerPoints off, and everyone just drops dead. And apart from the methane, from our decomposing bodies, you wouldn't notice.
And you could do that for Australia, for Canada, for New Zealand, for half the half the OECD, and you wouldn't notice. And that's, that's not even science, that's just measurements. It's, it's a sobering thought for me at least.
So a similar, a similar chart to one before, but, um, here we are.
I'm gonna tell a slightly different story. So, China in 2020 is roughly, roughly 20 times Australia's emissions. They're in the order of 11,000. We're in the order of 500, uh, mega tons of c o two equivalent. Now, interestingly, if you take our 2030 Paris target, our agreements, uh, that Australia's target boiled down to around about 400 million tons.
So we're gonna reduce by roughly 20%, uh, 20% of 500 is 100. We're gonna drop down to around about 400 China's Paris targets. We'll see them increase to 14,000 from 11,000.
So in 2020, China is 20 times Australia's emissions. In 2030, there'll be roughly 40 times Australia's emissions. So that's a, that's another interesting fact.
I'd quite like to share that one in. Makes you think so, recall that, uh, that 8% emissions reduction, um, if you take all the, the countries that are above Australia, um, that 8% is Australia, South Korea, Indonesia, Saudi Arabia, Brazil, and Mexico, sorry, that's with a, with Australia, slightly on in the chart above them. If you take the, the countries below, then you get 8%. And that's all the way down to Mexico.
If you put Australia on the bottom of the list, you've gotta go South Africa, Turkey, uk, Italy, France, Poland, Thailand, Taiwan, and Thailand. So that those countries combined add up to that 8%. So you take them off the, off the planet, you can't even tell from the ppms in the atmosphere.
So, yes. So as we, uh, as we get through the slide pack, we're getting closer and closer into Australia. We're getting away from the world. Uh, and so here's our official chart of our emissions. You can see our 500, uh, give or take a bit. And recall the CSIRO 2011, uh, globally, there was 4.1 billion tons reduction, and that was 2011. Well, what about 2022?
It's been very similar in terms of rain. Uh, not long after there was a two and a half billion tons increase. And El Nino, again, nothing to do with burning anything. Uh, and then again, in 2020, we had our 8%, which comes around about 2.8 billion tons emissions reduction.
And that was just from turning off airplanes and cars and, and, and transport. Uh, and there's, here's us with our me little, uh, 0.5 billion. It makes you think, doesn't it?
Diving into it a bit more, I won't d dwell on this sort of stuff too much, but I think it's important to show, uh, how it's all split up in the, in the official figures. And obviously this, uh, 30 odd percent is the target for the renewable energy lobby, as well as the, uh, the transport, uh, and some of this stationary energy.
So I'll just explain what some of they are. Uh, station energy, stationary energy, uh, direct combustion of fuels. Uh, so manufacturing, mining, residential and commercial. So this is, uh, say take Victoria. Um, 6% of the gas use in Victoria is in heating and cooking 'cause it's cold there and they're not electrified. Uh, and obviously we know what transport is. Uh, industrial processes is, again, mining and manufacturing, um, and producing chemicals, uh, agriculture. Uh, and then fugitive emissions is when we, uh, transport store and distribute, um, fuels. So when you're, when, when you get a good whiff of the petrol at the Bowser, that's your fugitive emissions. Um, so the, the slides to now, we've talked about emissions, uh, and, and what the numbers behind them and how it's split up.
Now we're just gonna talk about how we actually produce 'em. And I'm gonna turn to one of my favorite subjects, which is, uh, coal.
Uh, first of all, we'll, we'll start at the top and we'll look at our top 20 exports in, and you'll see that coal's in at number two. And that was 2019. 2020. Obviously big dip in 20 20, 20 21, coming back strong, I must say, in 2022. Uh, and you can see that of, of our list there, 13 of the top 20 are actually resources.
So this is, this is our economy in a nutshell. Um, We could be here for hours going through every detail, uh, but we're just gonna go into coal in particular because the, the misinformation and the way it's, I must have to say, I think the correct adjective is vilified in the media. Coal is, um, I was at a presentation today, uh, of the IAP and, uh, they had a couple of guys there who are coal miners, and, uh, they had some, they had some really interesting talks. And one of the guys said that, uh, the coal industry is, appears to have given away its social license. Uh, if you, if you know, if you know what the phrase social license is, it's, uh, it's where the community sort of, if you have good social license, the community gets behind you. If you lose your social license, it's all over.
So, 13 of the top 20 are resources. Now, it, you could go through this and you could pull out quite a few that the, uh, the greens party would like to get rid of. Uh, poor old meats down here, they don't like that very much. Um, well, there's beef up here, obviously, iron ore, coal, natural gas, gold beef, aluminum, crude oil, copper, more meat.
That must be, and that must be excluding, I dunno what any other meat is. I, you know, poor old sheep and chickens, pigs, Uh, wheat, aluminum awes. It's, it's, we're a, we're a, we're a resource rich country. This is, this is why people want to do business with us.
Um, so there's some big numbers in the mining sector. Uh, 10% of GDP, two thirds of our total exports by dollars, more than a quarter of a million direct employees. Um, and of course, you can see here our big markets, uh, our big markets in resources are all in Asia. They're our closest neighbors.
One of the reasons that they like us is our, our coal is very, uh, relatively cheap to get to market compared to other countries. Um, if you look at, say, uh, Canada and Russia, Mongolia, um, places where there are resource rich, but they might have 2000 kilometers of rail before they can get it to a port.
Whereas where two or 300 generally we're pretty close. Uh, so it's, it is a lot cheaper. Um, and we're a lot more stable politically. Some would say, I had this, uh, I had this, um, I wasn't gonna get political. Save that for q and a. I had this chart from the chief economist. Uh, there's a, he does a resources quarterly, um, which talks about all those exports.
So if you want to get the actual facts in someone's, um, and you want to fact check somebody in the numbers, um, when, I'm sure when Juul emails this out, the, the link's in here, you can click on the link and it, and it'll open up that report, and you'll be able to see that.
And then you'll be able to look at where that comes from, and, and you can even subscribe to updates. They're really good. So here, the one I had before this, this, this chart got updated, uh, just the day before I sent this to Jewel. Um, the thermal coal had actually started ramping down in the previous quarter. That was their forecast. And obviously now thermal coals, you know, instead of, instead of being down in this area, is now up in this area.
And this is billion dollars. So quite a lot of income for the, uh, thermal coal industry. And, uh, there's been times when it's the, uh, the spot market's increased above metallurgical coal.
And we'll talk about those, those things in a minute. But, uh, needless to say, if you're a miner these days, you're looking pretty good. Except interestingly, um, iron ore, uh, who's, who's one of our biggest iron ore manufacturers or suppliers in Australia.
Anyone got a guest who's, who's the individual? Gina? Gina, yeah, there's another one as well. Wiggy Forest. Twiggy Forest. Thank you, sir. Uh, very interested in hydrogen is Twiggy. Next slide. The, uh, metallurgical coal and thermal coal. So here we go. Across the top, I've got metallurgical, and that's the, that's the coal that goes into the blast. Furnaces and, I don't know, does something with pig iron and turns into steel. Now. That's why it's so valuable.
At the bottom, we've got thermal coal. Thermal coal is what's burnt in power stations. Uh, or another word is, uh, caking coal and steaming coal. So I'll put these in here.
These are outta that same report from the chief Economist. Um, my, my tip here is look at the trends, not the numbers, uh, in the colors.
If you look at the gray bars in the middle, that's basically where we are now. And looking to the green ones is their predictions.
So when you look from the gray to the green, this is, uh, importing, uh, steel, making coal.
So China's gonna import about the same. Japan's gonna import about the same. South Korea's expected to want more Taiwan's about the same. India says, I'll have a lot more thanks very much. And the EU is going down a bit. No surprises. Now, when we look at who's exporting that product on that market, who's buying that product, uh, or where it's coming from, sorry, Australia.
Now Australia's often said we're one of the largest exporters of coal.
And we'll, we'll dive into that in a second. But here, you can see, as far as metallurgical coal, we have the best in the world. It's, uh, the best quality, it's the best quality control. It's easy to get stability, therefore, we, we sell a lot of it. Um, you can see the US also sells quite a bit, but their, their demand is flat.
Canada is also there. Mongol is there and expected to ramp up Russia's there. And Mozambique. Now, obviously everyone knows about Ukraine. Um, is, are the sanctions gonna hit Russia on this deal making coal? Possibly, I don't know. It's outta my, outta my territory.
But needless to say that if you are a shareholder or an owner or an employee in a, in a, um, steel or coal mine or industry, your future's looking pretty good, um, onto thermal coal. So this is, this is pretty much all for generating electricity. Uh, the people who import the most is China.
Now you can see China is expected to dip down a bit. Uh, Japan also is expected to dip down a bit. South Korea, Taiwan pretty flat. India's expected to, you know, Adani just started up, so I'm not sure why they're saying that that's gonna dip down, but the rest of Asia is expected to pick up. Um, and EU is meant to go down.
Now, where are they getting their coal from?
Obviously a lot of brown coal comes from Indonesia. So when people say that Australia's the largest coal exporter, partly true, we, we, we take the prize for metallurgical coal. Uh, we're second on thermal coal. Okay? Um, obviously Russia, again, like I mentioned before, Ukraine, is anyone gonna continue buying, uh, Russian thermal coal? We'll see.
But there are other small players there. So this is, uh, this is, this is just the numbers on the coal. It's, again, it's not political. It doesn't mean anything except who's buying what. Uh, and you can read into it all sorts of things. But as far as the trends go, it's, uh, it, it tells quite a story. So there are some declines, but there's some increases as well.
Okay, now, people talk about Australia being the largest exporter of coal exporter. We are not the largest producer of coal by any means. That's China. So internally, China produces a whole lot of coal of their own. Out of, out of all that, out of all this, uh, coal trade, all of that stuff, everything that's exported, yes, we're a big player in the exports, but even with all that exports that we do, that's our total coal production, and that includes our domestic production consumption.
So when you look at how much Australian coal, let's cut off Australia coal and solve the, solve the climate problem, that's not a very good story. That doesn't, that doesn't win any prizes.
So unfortunately, um, and that's, yeah, so I don't know if, if someone says to you, the emissions from Australian coal are going to, uh, cause problems in the world, I would, uh, probably show them a chart like this and say, please explain.
Now getting into more detail, again, now remember this, this small sliver down here, this around about 500 million tons, roughly.
Unfortunately, this, this is the only chart I could find, and it's in pedes, but proportional proportionally, it's about the same. So this, this entire bar up here is, is that, and the red line is our domestic consumption down here.
So on this, our domestic consumption is down, right down the bottom there and means next to nothing. Uh, on the global scale.
Uh, yes, we export a lot more coal than we consume, and the other countries produce their own coal way more than they import, way more than we export. So in terms of that, uh, we're very lucky that we can get a premium for the coal we have. Uh, and we should continue to do that. Now, where do we use it? I promise we'd get off the, uh, those, those numbers and we're going to use it.
So electricity. So in these, in these couple of slides, uh, like I said, there's a couple I need to go through, just some basic fundamentals.
Like there's a phrase called the bid stack and how that, how that price is set. And I'm gonna explain that, and then we're gonna talk about capacity factor. And, uh, once I've got that, then we can go into our own local electricity system. So this is a, this is a bid stack.
So what happens is your electricity generators all basically tender their electricity output, uh, of, of volume, of electricity and megawatt hours at a certain price. Uh, the market operator, amo, excuse me, they, they build up how much generation they need using the cheapest generators first.
And at some point they'll have enough generation to meet the demand for that five minute period. Now that, that last generator that comes in is the most expensive for that period, they all get the same price. They all get that price.
That's how the spot market works. It's a clearing price. Uh, if you bid in a price, and if you're a wind farm and you bid zero, and if that five minute period, it costs $300 per megawatt hour to meet the demand, the wind farm gets $300 per megawatt hour as well. So that's how it works. Now, there, there's, there's good, there's good reasons for that, and, uh, you'd have to be an economist to explain it all, but just, just be assured that it's intuitively, uh, it's often not as, not as simple as you might think, but yes, uh, there's, there's a clearing price, uh, every five minutes, and it's set by the highest price generator, which is the cheapest way to run it, which is why it's not intuitive.
And I might have just stuffed up my explanation. So, uh, onto capacity factor. So this, this is like a, um, a utilization rate. So if you take the, uh, the generator, what, what it's total output in a year, how much it actually physically generates, not how much it could, how much it does. And then you take, divide that by how much it did you actually get a ratio of how much it operates compared to what it's capable of. Now, when you take a solar farm, and obviously a solar farm only generates during the day, uh, and it's a, it's a, it's a kind of a curve, and we'll see one in a minute, um, and it turns off at night, then it can't operate to its full capacity all the time. So it's, it's, it's like a de-rating factor as well. When you compare this Ning and solar farm. So this was roughly about the last 12 months.
It generated 205,000 megawatt hours across that year. Um, if, if it could generate at 102 megawatts for 8,007, 160 hours in a year, it would generate that much megawatt hours. But as a ratio, A over B is 0.22.
So we call that a 22% capacity factor. Uh, Kogan Creek Power Station, a good old, uh, just out in the outskirts of Dolby, uh, the largest single unit in the country, one of the newest and most efficient and, uh, lowest cost coal power generators probably in the world, to be honest. Uh, it's got an 84% capacity factor. So it's, it's operated flat stick the whole time, and it doesn't turn off unless there's an accident or they'd need to do maintenance, which is flat out.
So interestingly, um, one of the things about Queensland that's, that's so interesting in the power market is that nearly all the coal fired power stations, their mines, their, their fuel mines are not connected to an export market.
So though Cogan Creek's mine, for example, can never pay export prices for fuel, it can only, it's, it's fuel cost is just what it costs to operate the mine. That's it. So it's, it's fuel cost is about $15 a megawatt hour
As opposed to the, uh, the, uh, quite high numbers of megawatt dollars per megawatt hour that we're seeing at the moment. So I hope, hope this, hope this works, 'cause this is the only piece of animation I've got in this slide, then it's gonna be there. That's that ghostly patch there.
So if we look at all the, uh, rooftop solar, large scale solar farms, wind farms, hydro power stations, there's a few sugarcane, biomass, uh, burners, gas turbines, and coal power stations in Queensland.
That's the total nameplate capacity that we have. Uh, this red line here is our record peak demand. I think it was in, uh, February, 2019, uh, 10,000 megawatts roughly. So on the, on the face value, you'd say plenty, plenty of capacity.
Unfortunately, once you allow for capacity factor, and I, I could be, if, if you had another engineer here, they'd argue with me about the capacity factors, but I've just taken some arbitrary numbers. Um, 80% for coal, uh, gas and diesel, 80% for biomass, 80% for hydro, 30% for wind. Now that's pretty close. Uh, large scale solar, 20%, we saw that before we calculated 0.22. And, uh, rooftop solar comes in at a fairly pathetic 10%.
You can see that it's actually pretty close, it's pretty marginal. So that's this, this little gap here. That's, that's pretty much all you've got.
So if you have something offline, for example, say a, uh, a 350 megawatt Calli C four, which blew up in May, 2021, then this, this bit drops down a bit and everything else has to be more reliable. And that's just, just to get to that line. So that, that's to be fair, that's a peak demand on a of record peak demand.
But I don't know, it doesn't, doesn't the science say that our weather's gonna get worse and hotter, so therefore we should install more weather dependent generators. Got cars running on electricity as well? Well, yeah, there's no, there's a, there's a little bit about the load going up too. So yeah, it's, uh, it's a, it's a worrying trend. So what does it look like in the, uh, in the other states? So here we can see, uh, Queensland, and that's that discrepancy I showed you before. Uh, the, the blue one is the nameplate capacity.
So if you just take what the rating of all the generators, add 'em all up, that's what it comes to. Uh, the brown one is that capacity factor allowance, and the gray one is the peak demand.
So you can see from the chart we had before Queensland, uh, just sneaks it in, uh, Tasmania just sneaks it in. What about Victoria? What about South Australia? Yeah. What about New South Wales? So this is a, um, I, I believe the energy ministers and the premiers all know about this quite well.
I don't think this is a mystery to them. Um, but yeah, they, they're intending to fill that gap with wind and solar and batteries and drop this down even further. Now, the plan, everyone, people might have heard about AMO and the ISP, the integrated system plan, which is a, it's a, it's a cost benefit analysis.
It's a justification for spending a lot of money on transmission lines purely to integrate more wind and solar. Now, um, they say that you're gonna need to replace all this as well as build the wind and solar. And, uh, when you, when you talk about the engineering behind that, um, yeah, it's, it's difficult.
And in engineering speak difficult means expensive and time consuming and risky and all the stuff that you wanna try and avoid. Uh, Queensland Solar, like I said, uh, solar farms are peaky. So in here, if you, if you've got good eyes, you can see two shades of yellow.
The dark yellow is the, the large scale solar farms, and the paler yellow is the rooftop solar. So you can see that there's, uh, large gaps and uh, it does vary.
So you can see here that must have been a cloudy day in southeast Queensland because, uh, bit of a gap there. So every time, every time this gap happens, something has to fill it in and it's not gonna be wind, 'cause you can't ask the wind to blow harder. I don't think the, uh, the Lord works in that way, not in a practical sense. So long, long term capacity factor, about 20% and you can see that there.
Wind is completely different story. Uh, you can see some days zero or really close to it, uh, long periods of, dunno what, and a couple of periods where it's blowing quite a lot.
Now wind is an interesting one because the way the, uh, the dynamics work on wind turbines, you can be, you need a certain threshold of wind before it'll start turning and generating. But then, uh, and it's quite linear between there, but once you get up to a certain amount of wind, they shut off because it's too much. The blades can go too fast and they don't like that they, they vibrate and fall apart.
So not enough wind or too much wind. Um, but you do get about 30% capacity factor outta wind farms. But again, you can't tell it when it's gonna demand, you can't tell it to generate during a peak demand period.
So why are we talking about all this? This is, uh, this is where we get to the nuts and bolts. So implications for me. Um, Tristan talked about, um, what did he say?
I made a note. Offshoring of energy intensive industries. So for me, I think that's a, that's a distinct possibility. Uh, if you look around, you've got one of our most energy intensive industries, uh, aluminum smelters come to mind. Uh, so the, the big one in New South Wales has to back off its load quite often. Um, and is in the news newspapers quite regularly talking about their electricity contracts. Um, that's a 900 megawatt load. A thousand employees roughly.
I believe if you're looking in Queensland, you're looking at Gladstone. Um, the Gladstone refinery by 2030 will be, what, 60 years old, roughly.
Um, and it'll come off contract before then for electricity. So that's a, that's a long-term contract. Uh, they're not paying anywhere near the market rates or so, so I suspect, and I think, uh, if they're looking in the future and they're looking at expensive electricity, they're gonna go to the government. Well, you must help us out or we, uh, we will look for other options.
Uh, so I, I believe that's a, I believe that's a distinct possibility. Sorry, Portland and Victoria. Yeah, Portland and Victoria as well. So, uh, aluminum is, yeah, pure electricity. It's, that's, you can't do anything without it. So in our, in our last couple of slides here, uh, Tristan actually had a couple very similar to this. Uh, but these ones are specific to Australia. Um, you can see the dark blue coal, oil, gas, and here's our renewables.
Now you can see it goes back to the seventies. So obviously we're talking snowy hydro and anything else that's that old, that's, that's really it. So the last, the last 10 or 15 years of wind and solar has done that, which is, uh, not that impressive, is it? And we've gotta go from, we've gotta go from that to net zero in another seven years, I believe.
Isn't that? No. Net zero by 2050. Sorry, we've gotta go to halfway. Halfway by 20, 32% by 2030.
Yeah, I mean we could, we could, we could get political and pull some arbitrary numbers out. Why not?
That'd be fun. Um, so in terms of, uh, total energy use, obviously this is not just electricity, this is driving cars, uh, mining anything else. Um, And this is, this is by the sectors. So again, if you're looking to, um, just do electricity and we're talking about renewable energy targets of 50%, okay, or 43 or 80% that's gonna come out of here. But at the same time, they're talking about electrifying industry and households and getting Victoria off gas.
So that's gonna come out of some of these other color bands and they're gonna make the electricity number bigger so they need more again.
So I dunno if they've thought that deeply about it. I'm sure some people have, I'm sure they're, that probably keeps 'em awake at night. Uh, not me. 'cause I, I don't think it'll ever happen, to be honest. I think what we'll see is, uh, a significant attempt, which will cost a lot of money, cost a lot of jobs, cost a lot of, uh, export dollars. And uh, sometime around there there'll be a change of government and it'll all be a waste of time.
There be a change. I black out top of that.
Yeah, exactly. Exactly. Um, so buy a generator, I think I actually, I actually don't think the the, the lights will go out. I think not, not straight away. I think what will happen is we'll get a, um, a series of price hikes and events kind of like we're going through at the moment. Um, like Tristan pointed out with is the geopolitical factors, uh, they're not going away. Um, I honestly think that, uh, Australia zigged when we should have zagged. Um, I think if, if our leaders were a bit more, uh, looking ahead, they would've seen what's gonna happen in America this year. And in 2024, I don't think anyone can walk away from that and say that it's gonna be, uh, the same story that it is now.
Um, and therefore we're gonna be diverging from our, our closest partners in that sense. Um, so I think one of the reasons why the, uh, the politicians are desperately trying to get it locked in at this stage through laws and and legal things, is, is why they is, why they want it. Not just a, just a target.
They talk about they want it in laws so they can sort of hang their hat on it and say, this is what we've done. But, um, I think in a couple of years the, uh, the entire system's gonna look a lot different.
Now how much have we spent so far? Yeah, I know.
It makes me wince too a little bit. So the Clean Energy Finance Corporation, so that's a green bank that was brought in by, I dunno if you remember, the long-winded talks, longer winded than this talk tonight, I must say, by, uh, Oakshot and Windsor when they took over and helped Julia Gillard get into government. Uh, I think it was around about that time that the Greens also made a deal and said, we'll support you, but you've gotta give us a green bank. So this, this directly supports wind and solar batteries, all, all that kind of stuff.
There's grants loans, uh, one of the recent projects, uh, a transmission project from north of Adelaide into Wagga, uh, project Energy Connect. Uh, it was meant to cost 1.4 billion. Uh, when they went to build it, they said, oh, it might cost about two and a half.
So then the, uh, the regulatory authorities with a cost benefit analysis said, well, that's not very good.
So the CEFC dropped in a cool 300 million and off we go snowy two. And that's been a news quite a lot. Everyone, everyone knows the story behind that. How do you, how do you turn, how does Malcolm Turnbull turn $2 billion into 10 billion Snowy tees? The answer, um, and of course, 6 billion is just for the hardware of the dams and the generators. That's, that doesn't even get all the, uh, all the power out to the, where it's needed.
Uh, there's all these other, this Climate Solutions package, um, who knows what's in that, but it costs a lot. Marus Link is the new transmission line that'll go to Tasmania, which will support this thing, which is battery of the Nation, which is a whole lot of other hydro stations in Tasmania.
So this is all what's required. Um, you've got this other thing, a emissions reduction fund on top of the Climate Solutions package. Uh, you've got Arena, which is another renewables agency, which hands out grants and funds and, uh, Morrison did the grid to liability fund at the, uh, in 2021, obviously there's a whole lot of hydrogen and that's gonna be another story. Um, and then you've got this other 600 million here for the gas power station, which will actually run on diesel because it, there's no gas pipeline there.
Yeah, yeah, there's a lot there now that, that's not even talking about.
That's just, that's just direct funding like that, that's not even talking about this, uh, hidden sort of subsidies like the renewable energy target. Now I've done a, a back of the envelope calculation based on how many megawatt hours, large scale wind and solar did 10 times to buy $40 a megawatt hour for the large scale certificates. And that's a, and that's a rough guide at some points, the, uh, the price was 20, sometimes it was 80 some, it's still about 30, so you can add another few billion there.
And actually it was 1.4 billion last year. So that's, uh, that's roughly what we've spent so far. And that's just the feds. Um, that's not including what the states have spent, which should be somewhere in the order of that as well. Um, still to come. Uh, we, we've heard about, uh, the Labor Party's $20 billion rewiring the nation. So that's transmission plan.
They've committed 20 billion to it.
The last time I heard someone commit 20 billion to something, it was the NBN. Love it. And look what happened to that, that cost 40. Um, obviously I think what they'll do is they'll, they'll just do it.
And there's a whole bureaucracy set up devoted to do that. Um, re the renewable energy target, obviously that's up for grabs. Uh, they can just extend that willy-nilly hydrogen, uh, one of the worst, uh, energy products you can find, no matter what they tell you, the, uh, the thermodynamics just do not add up. It, it, it consumes more electricity making it than he can get out of it.
Yeah, well if you go back to his iron ore chart, maybe he needs something to hang his hat on. I don't know.
And obviously we've got subsidies and, uh, lots of stuff for electric vehicles coming in. So that's, that's on the federal side. And obviously the states all have their targets and renewable energy zones and, and everything else, uh, that they're spending money on. So it's, it's a bit of a mess out there. Uh, but these are, yeah, these are not, uh, opinions, uh, oh q and a. So, yeah. Um, Tristan also mentioned nimby. So when we get to this stuff, I mean, we're trying to, this transmission, I dunno if you've watched the news, there's been quite a bit of pushback from the potato farmers and, um, uh, across Western Victoria.
They're not happy with the 500 KV overhead transmission lines going across their property. They said, please put it underground. The problem with putting, uh, overhead power lines underground is it cost five to 10 times more. And, uh, that's just not gonna happen. No one can afford that. Not even the, uh, not even the federal government. So there's a lot of pushback. There's, there's tractors in streets in, uh, is it Bendigo last weekend or the weekend before? Yep. Yep. So that's, that's the social license I mentioned at the start. Um, not in my backyard.
Yeah. Okay. So the, the TEALS and the, and the West Enders, apologies if there's any here from West End, but they, they want all this stuff to be in the country. Now. No one really wants to live next to a coal fired power station, but relatively few people live next to coal fired power stations compared to the number of transmission lines, wind farms and solar farms that we're expecting.
So, um, I was at a presentation by, uh, one of the Powerlink guys a couple of weeks ago, and I asked him exactly that. I said, uh, Mr. Simshauser is your, your, are you factoring in the difficulties that you're gonna have building transmission lines through people's farms and, and through their towns? And he said, yes. And then he went on to, uh, talk about they were going to kind of do it anyway. Didn't say it in those words, but that's, that's what he implied. Um, so apologies to Paul if you're watching. That's, that's the impression I got.
Um, yes. So that's my grim look, just in the numbers of our emissions resources, electricity, and, uh, what it might do to us. Net Zero.
It's not a pretty picture.
