Some light amid the gloom

THOUGH a report just released by Victoria University paints a bleak picture of Latrobe Valley’s future in a post-carbon tax economy, there is some light at the end of the tunnel.

Potential for a future characterised by “high growth”, however, relied on significant breakthroughs in clean coal technologies and government investment in the infrastructure required for carbon sequestration.

These developments, also touted by all levels of government as the Valley’s best hope for robust growth, would ensure the region had a technologically-advanced coal-based capacity and would transform coal-fired stations to gas, possibly with the addition of other energy sources including geothermal coal.

Together they would enable the Valley to develop its capacity to export to a national energy market at competitive prices, even in the face of a carbon tax, according to the report.

The scenario proposed would also see the Valley become the site for new gas storage facilities to meet peaking demand.

The challenge in seeing such a positive scenario ensue lay in its contingency upon advances in coal-related technologies which, to date, remain in pilot stages at best, the report said.

Massive investment would also be required for “infrastructural synergies” between coal and gas and other resources in the Valley.

While the report recognised the state and federal governments had already “made significant commitments” to developing ‘clean coal’ technologies to allow for alternative uses of brown coal, it identified a range of issues impeding carbon capture and storage in particular.

While CCS appeared “the most likely short-term means of reducing the brown coal sector’s emissions”, there was insufficient knowledge of its long-term effects and risks, the report said.

Issues around unforeseen costs and CCS’s energy efficiency were raised in the report. It also said debate about infrastructure costs in upgrading pipelines from the Valley to gas fields (necessary for carbon storage) and who should bear the cost, would need to be resolved.

The report said even if CCS was proven on a commercial scale, its testing and evaluation could take up to another 15 years and would “require billions rather than millions of dollars in research and development funding”.

To date the Federal Government has announced $100 million to study CCS in the Valley.

Even if the required funds were allocated to CCS development it may not prove cost-effective and critics claimed the emissions would still be high compared with renewable energy technologies, the report said.

CCS initiatives had been slow to emerge, according to the report.

In May 2010, BP Plc and Rio Tinto Group suspended a plan to build a carbon capture plant and in 2011 a ZeroGen project in Queensland also folded.

With CCS prospects still uncertain and potentially decades away from possible implementation, other projects seeking new uses of brown coal would require capital commitment from investors, and state and federal policy support, to advance.

Just last week the State Government announced a coal allocation strategy for the Valley which would see it call for expressions of interest in companies wanting access to this region’s coal reserves.

A number of coal technology firms have confirmed their interest in seeking access of up to one billion tonne of coal each.

Their proposals include using new technologies to process and dry the coal for alternative uses and potential export to Asia.

Critics have claimed the technologies are, so far, untested and unproven.