Time to end the clean coal charade

It’s time clean coal advocates admitted the obvious: subsidies will need to extend well beyond just a few demonstration plants. They’ll need feed-in tariffs and should stop pretending they are more worthy of support than the renewables sector.

Over the last ten years I’ve heard an incredible amount of nonsense from people championing carbon capture and storage (CCS), a.k.a. clean coal. This was usually because those pushing the technology actually had no genuine commercial interest in seeing it happen. They just saw it as a public relations tool to stop meaningful policies to reduce emissions.

This is an incredible pity, as the lack of honesty has led to government support programs with little to show for themselves after nearly a decade. Meanwhile we now have a huge installed base of coal-fired power stations in China and India, and no technology in immediate prospect that could be readily retrofitted to capture their emissions.

Some of the nonsense I’ve heard over the years included a Rio Tinto senior manager suggesting back in 2003 that until we had demonstrated CCS, there was no point implementing a price on carbon pollution.

“Taxes and emissions trading schemes cannot provide low cost abatement if abating technologies are not available....Technical solutions to greenhouse gas emissions from fossil fuels have been identified. What remains is the urgent task of demonstrating solutions on a commercial scale, to reduce risks and improve costs in a way that supports their deployment internationally...It seems logical that governments give priority to the technical solutions that go to the heart of the problem, before enacting taxes or trading systems that are intended to encourage the adoption of these technologies.”

This kind of ridiculous thinking led to the debacle that was the Low Emission Technology Demonstration Fund (see leaked notes of a meeting between Prime Minister John Howard and large emitters).

Then there was Ian MacFarlane as energy minister in 2005 claiming the technology was so cheap we didn’t need emissions trading because companies would adopt it voluntarily! Now he says clean coal is so expensive it should be abandoned and we should move to nuclear, which is hardly cheap itself.

But yesterday at the Climate Spectator webinar we heard some refreshing honesty from one of the leading suppliers of CCS technology – Alstom.  The webinar provided a number of reasons to be positive about CCS. But they were frank that it is not some costless fix, with best estimates suggesting costs are likely to be around 50 per cent higher than a conventional fossil fuel plant. And they were also forthright about what was holding back progress: the lack of intelligent government assistance.

While governments across the globe have been keen to announce large grants, these haven’t created the right incentives for follow-through to construct projects. Also, they don’t address the higher fuel costs of CCS compared to conventional fossil fuel plants. 

What did they propose as an alternative? Feed-in tariffs, just like what the renewables sector has argued for (although in the presentation they were called “preferential tariffs”). And in addition they pointed out that this was not a one-off exercise because learning by doing was essential to refining and improving the technology. Again this is just the same as what the renewables sector has argued.

I often find advocates for CCS in Australia like to think that somehow they are different or superior to the renewables lobby. While the renewable energy advocates are supposedly after perpetuating subsidies with no end, the clean coal policy lobby (Alstom excluded) tries to distinguish itself as merely needing a temporary leg-up. Something it justifies on the basis of being a ‘strategic’ technology to Australia’s economic interests.

Apparently all the technological foibles and high costs associated with CCS will be addressed in one fell swoop through just a few ‘demonstration’ plants, after which they’ll be miraculously cheaper than renewables. Perhaps I’ve misunderstood them, and what they mean by ‘demonstration’ is that the government bequests to them a large-scale, multi-billion dollar CO2 pipeline network for free (which is what some of them are pushing for). Otherwise they seem to think they can defy a century of experience with a wide range of power generation technologies. These have almost invariably involved very high costs at the demonstration stage, which were then whittled down after building more and more plants by learning how to make them better.

We all need to stop playing along with the delusions of a few economists who haven’t studied the history of technological development in the electricity sector. Back in 2008 I attended a lunch where the global head of General Electric’s Ecomagination initiative, Lorraine Bolsinger, gave a presentation on how they were investing in a range of green technologies such as wind power, solar and CCS. During that presentation she mentioned that CCS would require a carbon price in the realm of $100 per tonne of CO2 to be viable. At the conclusion of her presentation a man in the audience asked:

“These technologies like wind, solar etc. are all so expensive, are you proposing that government subsidise them?”

In delivering that question he said the word ‘subsidise’ like it was some kind of incredibly sour thing that he just accidently swallowed and had incredible difficulty swallowing.

She then looked up at the audience as a whole and said something along the lines of:

“GE effectively invented in the electricity industry. We’ve played a leading role in development of coal power stations, gas turbines, nuclear reactors and now we’re heavily involved in wind and other renewables. We’ve also played a leading role in a range of other major innovations such as aerospace. I can tell you that in all of these cases there has been a considerable amount of government support and subsidies provided over a long period of time to underpin our own innovation of these technologies.”

She then turned to the man who asked the question and concluded with:

“So get over it!”

Whether it be clean coal or renewables, if we are to reduce emissions over the longer-term at a politically tolerable cost, governments will need to provide support beyond a few one-off demonstration projects.