THE AUSTRALIAN ADVANTAGE
REDUCING GREENHOUSE GAS EMISSIONS FROM FOSSIL FUELS IS VITAL FOR THE TRANSITION TO A MORE SUSTAINABLE ENERGY FUTURE.
Australia’s commitment to R and D in the field of clean coal technology provides an excellent opportunity for new companies to invest in the Australian market.
Abundant, Cost Competitive and High Quality Natural Coal Reserves
Australia is the world’s largest coal exporter and the 4th largest producer of coal behind China, the US and India. It currently produces around 280mt of coal a year, with around 215mt (or 77 per cent) of production exported overseas.Queensland and New South Wales have large deposits of black coal with over 200 years of total identified resources. At current rates of production, Victoria has around 500 years of brown coal resources.
Export coals from Australia are highly regarded in traditional markets as cost-competitive and equivalent - or better quality - than many competing sources. Australia’s industry has an excellent record and reputation for consistency and reliability of supply. Australia has an abundance of cheap energy in coal and coal seam methane, providing industrial electricity prices that are amongst the lowest in the world1.
Environmental advantages of Australian Coals
Australian coals have a high energy content, are low in sulphur and have low levels of trace elements. In Queenland, the Surat Basin thermal coals are amongst the lowest greenhouse gas emissions intensity of all thermal coals worldwide.
Innovative Culture with Excellent R and D
The Australian Government has committed itself to supporting research efforts to develop clean power generation technologies. A number of CRCs have been established to develop new clean coal technologies, including Clean Power from Lignite, Coal in Sustainable Development and Greenhouse Gas Technologies.
Coal-related technologies currently under research in Australia include Ultra Clean Coal; Integrated Gasification Combined Cycle; Oxy-Fuel Combustion; Drying of Brown Coal; Coal Bed Methane; and Geological Sequestration.
Supportive Government Policy
The Australian Government’s focus on the development of a competitive energy market will strengthen competition and encourage investment in Australia’s energy industry. Supportive Government policy on the environment and greenhouse gas issues encourages the transition to more sustainable energy systems such as low emission coal technologies.
The Australian Government has committed A$11.8 billion to a national land transport plan “AusLink”, including a massive upgrade of Australia’s east coast road and rail systems. The Australian Rail Track Corporation (ARTC) will invest A$872 million in the east coast rail system as a result of its lease of the New South Wales interstate and Hunter Valley rail systems. Strategic planning is underway to improve the capacity and efficiency of Australia’s coal transport infrastructure along the coal supply chain.
Through removal of coal export controls and government reforms in workplace relations, competition policy and tax reforms, Government and industry have been working together to continually improve the international
competitiveness of the industry by:
- reducing costs and charges;
- improving industry efficiency; and
- developing more effective and
lower cost ways to improve health and safety and address environmental issues.
Large expansions in capacity and increased productivity are measurable signs of the benefit of these reforms. Since 1996/97, productivity has increased by more than 65 per cent. The driving force has been reforms in workplace relations allowing flexible working conditions, productive use of existing equipment and greater responsiveness to local mining conditions. In the medium to longer term, ABARE has forecast that the Australian coal industry will continue to increase productivity at a rate of about 5 percent per year to 2010.
Strong Economic Credentials
For the third consecutive year, the Australian economy is the most resilient in the world2. In the past decade, Australia’s real GDP growth has consistently exceeded the OECD average. With forecast economic growth of 3.7 per cent in 2004 and 4.0 per cent in 2005, compared to an OECD average of just 3 per cent, Australia will continue to expand more rapidly than most other OECD economies3.
Cost Competitive
Australia ranks as one of the lowest cost business locations in the industrialised world4. Remuneration levels for senior management staff are substantially lower in Australia than in the US, the UK, Germany, France, Hong Kong and Singapore5. Australia’s overall tax burden as a share of GDP is significantly lower than the OECD average6.
Access to Key Markets
Australia’s ease of interaction and cultural affinity allows businesses to seamlessly integrate business activities while operating within the same time zone as major Asian markets. The time difference between Australia and much of Asia, including Singapore, Hong Kong and Malaysia, is only 2 to 3 hours. The ability of companies to service their Asian clients in ‘real time’ is an attractive advantage.
Combined with advanced transport and communications networks, Australian-based companies have the edge in servicing Asian markets quickly and effectively.
Dalrymple Bay Coal Terminal
Source: Prime Infrastructure Management Ltd
STATE ADVANTAGES
QUEENSLAND
BACKGROUND
Australia is the world’s largest exporter of seaborne traded coal, and Queensland (QLD) contributes the majority of these exports, particularly of high grade coking coals. All of the coking coal produced in QLD comes from the Bowen Basin (Permian age) in central QLD. High volatile thermal coals are mined in southern QLD from the Walloon Coal Measures of the Clarence-Moreton and Surat Basins (Jurassic age).
The premium low and medium volatile hard coking coals from the Bowen Basin are widely acknowledged as among the best coking coals in the world. Despite 40 years of continuously expanding production, the Bowen Basin still contains around 21 billion tonnes of defined black coal resources with mining potential. This includes prime hard coking coals, semi-hard, semi-soft and soft coking coals for blending, coals suited to direct injection into the blast furnace (PCI coals), and a wide range of thermal coals for power generation and industrial use.
The availability of a wide range of coals is a strong point for the marketing of QLD coals. Sulphur contents of QLD export thermal coals are generally less than 0.8 per cent and mostly less than 0.6 per cent on an air-dried basis. Investigations of the trace element content of QLD thermal coals by the CSIRO indicate significantly lower levels of mercury and selenium compared to many other internationally traded coals.
QLD’s coal mines are connected by an extensive rail haulage network to six dedicated, deepwater export facilities along the coast. In principle, third-party access to the State’s coal haulage rail lines was established in 1997. QLD Rail maintains sole responsibility for rail operation in Queensland at present.
Under the Mineral Resources Act 1989, the normal path for exploring, developing and mining a coal deposit is through the grant of an Exploration Permit for Coal (EPC), followed by a Mining Lease (ML) when economic potential is proven and the decision to develop a mine is taken. As a form of holding tenure, a Mineral Development Licence (MDL) may be issued once a resource has been identified and defined, but prior to a decision being made to advance to development.
OPPORTUNITIES
Bowen Basin
(Coking and Thermal Coals)
The resource base in the Bowen Basin stands at some 21 billion tonnes of identified, and as yet undeveloped, coal resources covering a wide range of coal types. There remains significant potential for new developments and new discoveries, particularly for lower volatile bituminous and semi-anthracite coals. Opportunities to develop new mines are constantly under review, and existing operations continue to expand to meet market demand.
At present, known coal-bearing land and all identified coal resources in the Bowen Basin are held under exploration and mining tenures, and opportunities for new investors are largely limited to joint venture participation in existing projects.
Surat Basin (Thermal Coals, Coal Gasification and Gas to Liquids)
The Surat Basin in southern QLD contains a known resource exceeding 4 billion tonnes of coal within the Walloon Coal Measures. The Basin also contains considerable coal seam gas reserves, with the potential for much more. To date, only the shallow margins of the Basin have been explored for coal, and the identified resources are all amenable to open cut mining. Much of the Basin remains relatively under-explored and is largely undeveloped.
Walloon coals are high volatile, reactive, and clean burning, and are used domestically for power generation, as well as being exported in small volumes. The characteristics of the coal are such that it is also well suited for gasification, and has proved suitable for conversion to liquid fuels by direct hydrogenation-liquefaction processes. The low greenhouse gas emissions profile of Surat Basin coals will assume increasing value in a future carbon-constrained world.
Currently, prospective land and known, shallow identified coal resources in the Surat Basin are largely held under granted mining and exploration tenures. For new investors, opportunities exist in joint venture participation in existing mines, development or exploration projects, or in coal-related infrastructure projects.
The vision for the ‘Surat Energy Province’ of the future rests initially with the development of the first stage of a rail link to connect Wandoan in the north of the Basin, to the existing Moura rail line connected to the port of Gladstone.
QUEENSLAND COAL MINES AND INFRASTRUCTURE
NEW SOUTH WALES
BACKGROUND
The coalfields of the Sydney-Gunnedah Basin contain almost all of the coal deposits in New South Wales (NSW), with smaller quantities of the resource in the Gloucester and Oaklands Basins. Recoverable coal reserves in this State total approximately 8 billion tonnes.
These reserves are contained within 56 operating mines and colliery holdings and 30 major development proposals. The major coal deposits in NSW range in rank from bituminous coking and thermal coals; to sub-bituminous thermal coals. The quality of thermal coals ranges from medium-to-high ash, low sulphur coal used for domestic power generation and cement manufacture; to medium to low ash, high energy and export quality coal. Prime, low volatile, hard coking coal and low ash, semi-soft coking coal, used for iron and steel production, supply both the export and domestic markets.
The rail network servicing the NSW export and domestic coal mines extends more than 1050km. Coal destined for export markets is currently being loaded at 26 rail loading terminals, most of which have balloon loops and rapid overhead loading bins able to load trains of up to 8,600 net tonnes.
Rapid loading and unloading facilities ensure cost effective transport and minimise delays at NSW’s three major coal export terminals: the Carrington and Kooragang Coal Terminals in Newcastle; and the Port Kembla Coal Terminal near Wollongong. Relatively healthy prices for export and domestic coal since 2000 have provided the impetus for companies to proceed with the approval for new developments or major expansions of existing mines.
OPPORTUNITIES
General
Recent improvements in the world economy, with particularly strong demand from China and India, have seen a firming of coal prices and steady increases in sales. NSW coal miners have benefited from the expanding market, but are now looking for enhancements to the coal transport infrastructure to allow them to meet export orders.
The NSW Government’s Statement of System Opportunities from 2001 indicates that significant new electricity capacity may be required in NSW within five years. The NSW Government, in conjunction with the CO2CRC, is assessing the underground carbon storage potential in NSW. If geological sequestration proves feasible, this will open up opportunities for investment in new generation power production using clean coal technologies.
In addition, the NSW Greenhouse Gas Abatement Scheme provides incentives for electricity producers and large users to reduce their greenhouse gas emissions.
There are two coal-related areas with potential investment opportunities:
Ultra clean coal
White Mining, through its subsidiary UCC Energy Pty Ltd, has been carrying out research for several years aimed at developing a process to remove virtually all the ash from coal. The research has succeeded to the point where semi-commercial trials of pulverised ultra clean coal in modified gas turbines have commenced.
The indications are that ultra clean coal is competitive with gas in this application, and represents a major upgrading in the energy-efficient use of coal for power generation. As the technology progresses toward commercialisation, there are likely to be opportunities for investment and collaboration by companies with an interest in power generation, chemical processing, or turbine manufacture. For additional information on UCC Energy Pty Ltd, please refer to the case study on page 26.
Coal seam methane
NSW has major coal-bearing basins with very extensive resources of coal seam methane. Those methane resources have the potential to be an important source of energy on regional, state and national levels. The majority of the bituminous coal resources occur in the Sydney-Gunnedah-Bowen Basin and the Clarence-Moreton Basin along the eastern coast of Australia.
Competing land uses may limit exploitation in some areas. However, there are substantial volumes of coal unaffected by such restrictions. These coals have acceptable permeabilities, good lateral continuity, appropriate maturity, and are gas-saturated. In some of the lesser explored basins, there are tantalising glimpses of the potential.
The coal-bearing basins possess appropriate depositional settings, coal distribution, appropriate depths of cover, coal rank, gas contents, and attractive coal thicknesses. There are extensive and expanding government databases containing useful information for coal seam methane studies. Excluding areas of urban development, colliery holdings, and the National Park estate, Table 1 illustrates resources that have been established in the Sydney, Gunnedah, and Clarence-Moreton Basins.
This estimated potentially recoverable coal seam methane (511 billion m3) has an approximate energy content of 19,000PJ. There are also strong indications of the presence of substantial coal seam gas resources in the Gloucester Basin. Likely major gas and electricity markets in NSW, by coincidence, are either directly over those resources, or close to them.
In recent years, there has been a dramatic increase in interest by both the coal industry and the petroleum industry in these resources. Methane poses safety problems and limits high levels of productivity in underground coal mines.
Drainage of the gas is required to make the coal workings safe. In the future, the State’s coal production will increasingly rely on underground mining and existing mines will continue to extract coal at greater depths. As a result, these mining operations may need to remove increased amounts of gas in order to maintain safe working conditions and high productivity.
There are considerable commercial advantages offered by methane drained from coal seams as an energy resource, including a relatively low exploration and production cost, and convenient location close to major markets. The NSW Government is currently assessing opportunities and developing strategies to encourage the use of coal mine methane to produce energy.
VICTORIA
BACKGROUND
The brown coal or lignite resource in Victoria is vast by world standards. It is clean, low in ash, sulphur and nitrogen, and occurs in exceptionally thick seams under a relatively thin overburden. Investment opportunities involving more efficient and innovative uses of this resource are being encouraged.
Victoria’s Cainozoic brown coal is estimated to total 213 billion tonnes, to 500m depth, with recoverable reserves estimated at 62 billion tonnes. Roughly 83 per cent of the brown coal is located in the Gippsland Basin, with the principal seams occurring in the Latrobe Valley. These are up to 100m thick, but multiple seams give continuous brown coal thicknesses of up to 230m. Moisture contents range between 50 and 70 per cent, with most coals being in the low 60 per cent range.
The coal is clean with ash yields generally between 1.5 and 5 per cent on a dry basis, but locally as low as 0.5 per cent. In some areas the coals have relatively high sodium levels, over 4 per cent on a dry basis. Specific energy values range from 5.8 to 11.5 MJ/kg on a net wet basis or 23.5 to 28.0 MJ/kg on a gross dry basis. Overburden thicknesses are generally between 10m and 20m.
The Yallourn, Loy Yang and Morwell open cuts in the Latrobe Valley annually supply around 65 million tonnes of brown coal that is used to generate 85 per cent of the State’s electricity. Outside the Latrobe Valley, substantial resources are also located at Bacchus Marsh, Gelliondale, Kerang and Shepparton. Brown coal from Anglesea is used to generate electricity for the aluminum smelter at Point Henry. The potential for extracting methane contained in Victoria’s brown coal and Lower Cretaceous bituminous coal is currently being tested at a number of locations around the State.
OPPORTUNITIES
For the past 75 years, energy from brown coal has been the mainstay of the Victorian economy, providing low cost electricity to the State grid. Victorian brown coal is one of the world’s largest and lowest cost energy
fuels at around A$3 per megawatt hour. Competitively priced energy has contributed to Victoria being the manufacturing centre of Australia.
This role is likely to expand with investigations into pre-combustion technologies, including coal drying, combustion efficiency technologies such as gasification and carbon capture, and storage technologies with the potential to deliver greenhouse gas abatement, more efficient power generation and export products including dried coal and low sulphur diesel.
Exploration Licences have been granted to two companies through the tender:
• Australian Power and Energy Limited are proposing to use known technologies to produce 61,000 barrels per day of low sulphur diesel from brown coal. CO2 produced by the process will be geologically sequestered. Further information on Australian Power and Energy Limited is in the case study on page 28.
• HRL Developments Pty Ltd is proposing to construct a commercial power station using integrated drying and gasification combined cycle technology.
Focused research is also underway into pre-combustion, combustion efficiency and carbon capture and storage technologies. For example, if water can be removed from brown coal before it is burnt, the efficiency of the combustion process is greatly enhanced. The CRC for Clean Power from Lignite is a world leader in this research.
Additionally, geological sequestration is being investigated by the Cooperative Research Centre for Greenhouse Gas Technologies. Focused research is delivering opportunities for the development of sustainable and efficient industries producing export coal, power, diesel and hydrogen from Victoria’s world class brown coal resource.
SOUTH AUSTRALIA
BACKGROUND
Collectively measured and indicated resources for the major coal deposits in South Australia exceed 6 billion tonnes, with a further 14 billion tonnes of inferred resources. South Australia has an abundance of near-surface deposits of low rank coal in sedimentary basins of Permian, through Triassic, Jurassic to Tertiary age.
These coals are of variable quality often with high moisture, sodium, chlorine, sulphur and ash content. The Leigh Creek coalfield, which comprises deposits in four small Triassic basins in northern South Australia, is the only operating coal mine in the State. Each year it produces around 3 million tonnes of coal as fuel for electricity generation.
More recently, interest in coal seam methane and gasification as clean coal alternatives has seen applications lodged over most of South Australia’s coal deposits. These applications are currently under consideration, pending resolution of issues of conflicting rights under the South Australian Petroleum and Mining Acts.
OPPORTUNITIES
There are a number of opportunities to utilise many of South Australia’s coal resources using clean coal technologies including coal seam methane and gasification, which would see South Australia well placed to become a major producer of environmentally-friendly electricity in Australia.
Combustion uncertainties associated with some of the coal deposits will likely be resolved with the use of new technologies such as circulating fluidised bed combustion and integrated coal gasification combined cycle power generation. Preliminary scoping tests have been performed on a number of low-rank Tertiary coals (Lochiel and Bowmans coal) using Lurgi’s Circulating Fluidised Bed Combustion Pilot plant in Germany. These tests have indicated that the technology can be applied to both coals.
South Australia has large resources of low-rank brown coal (lignite), of middle-to-late Eocene age, distributed widely in Tertiary basins in the southern part of the State. Development of these deposits for power generation would have advantages of being conveniently located close to centres of demand for electricity and it could be mined cheaply by open-cut methods. Other possible uses include coal seam methane, gasification, liquefaction and briquetting. Applications are currently under consideration for exploration rights for coal seam methane and/or gasification over the following coal deposits: Bowmans, Lochiel, Beaufort, Whitwarta and Clinton.
Opportunities also exist to undertake large-scale developments of the sub-bituminous coal deposits in the Arckaringa Basin for use in conventional pulverised fuel power stations. Applications are currently under consideration for exploration rights for coal seam methane and gasification over these coal deposits:
Wintinna, East Wintinna, Murloocoppie and Westfield.
Coal at the Weedina Deposit is suitable for conventional, pulverised fuel power stations. Applications are currently under consideration for exploration rights for coal seam methane and gasification over the Lake Phillipson Coal Deposit. Additionally, applications are currently under consideration for exploration rights for coal seam methane and gasification over the Lock (Jurassic) deposit.
SOUTH AUSTRALIA COAL MINES AND INFRASTRUCTURE
Coal being stacked
Source: Anglo Coal Australia Pty Ltd
RESEARCH ORGANISATIONS AND INITIATIVES
CSIRO
COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION
BACKGROUND
With coal-based power generation accounting for more than 80 per cent of Australia’s electricity production, this low-cost fuel source is the dominant force in Australia’s energy industry. However, growing concern about the impacts of global warming caused by greenhouse gas emissions requires new approaches to ensure coal has a continued role in our energy future.
At CSIRO, researchers examine ways in which the generation and consumption of energy and power affects Australia and Australians. The Energy Transformed Flagship, a recent major CSIRO initiative, aims to provide a technology framework that could halve Australia’s greenhouse gas emissions and double the efficiency of the nation’s new energy generation, supply and end use, and position Australia as a future hydrogen economy.
The Energy Futures component of the Flagship examines the economics of Australia’s energy supply and demand to 2050 as a means of guiding strategic investment in partnership with coal users, coal producers and
other sectors. This modelling examines constraints of the energy system and forecasts different economic and
technology scenarios and their potential social and economic impacts for this multi-billion dollar industry.
CSIRO also works in partnership with industry to develop new markets for coal and coal products, resulting in reduced emissions. Examples include the use of coal for integrated gasification combined cycle, ultra clean coal and geological sequestration of carbon. CSIRO contributes to the increased efficiency and improved environmental performance of electricity production by optimising coal combustion and gasification processes and by improving emission control (air, water, and solid residues) for conventional and advanced power generation systems. CSIRO is the main research contributor and 32 per cent shareholder in the Centre for Low Emissions Technologies in QLD, which focuses on the demonstration of clean coal technology. CSIRO is also the main research contributor for the CRC for Coal in Sustainable Development.
OPPORTUNITIES
CSIRO actively seeks partnerships and joint ventures with research organisations, government, and industry to develop opportunities to reduce greenhouse gas emissions from the use of coal in electricity generation. Opportunities are currently available for partners to invest in the CSIRO Flagship programs in clean coal technology, CO2 abatement, gas separation research and energy storage, and issues associated with the uptake of technologies from economic and social perspectives. Each of these areas is driven by the development of down-to-earth demonstration projects.
As the Australian Government’s research organisation, CSIRO has a broad reach across economic, social and environmental issues, which impacts on all sectors of the energy industry. Partnering with CSIRO provides access to these resources, allowing partners to develop and share critical intellectual property and commercialisation opportunities.
RELEVANT TECHNOLOGIES
Advanced power generation
CSIRO assesses the performance of Australian coals in relation to advanced gasification processes such as the Integrated Gasification Combined Cycle. While the focus is mainly on entrained flow technologies, CSIRO capabilities are broad and apply to many other processes.
CSIRO’s work will help power generators in Australia and overseas move towards more efficient and environmentally friendly operations. It will also assist the Australian thermal coal export industry to take advantage of new market opportunities around the world.
PF power stations
CSIRO works with coal companies and domestic generators in the field of Pulverised Fuel (PF) power stations. CSIRO works to reduce environmental emissions through research into trace elements, fine particle capture, and environmental impacts. Particular attention is given to predicting and controlling the environmental performance of coals in these technologies, building on the high reputation of Australian coal as a low sulphur product with low levels of toxic trace elements.
Sustainable use of coal
The sustainable use of coal for power generation and steel-making requires improvements to existing processes, development of new processes, and enforcement of more stringent environmental standards. CSIRO uses its expertise in analytical chemistry to research ways to reduce the environmental impact of coal use. A major focus is on aspects of coal-ash waste management, in particular the leaching of trace elements.
Coal preparation
CSIRO works closely with industry to deliver more efficient and cost effective ways to clean and de-water coal. This includes methods to control the size, composition and quality of the end product. Ultimately, CSIRO’s research helps coal suppliers guarantee product standards to power stations, steel makers and other international buyers. Higher quality coals command higher market prices and have less environmental impact.
Coal products
CSIRO has developed Ultra Clean Coal and machinery to create binderless briquettes. Ultra clean coal is a high-purity, chemically-cleaned coal with very low ash levels, potentially allowing it to be fired directly into gas turbines for high efficiency power generation. Binderless briquettes are made from the fine coal fraction and low-grade coals, and can be used for a variety of purposes.
CRC FOR CLEAN POWER FROM LIGNITE
BACKGROUND
The CRC for Clean Power from Lignite undertakes R and D into the development of technologies to reduce greenhouse gas emissions from lignite-fired power stations. The technologies under development relate to both current technology (pulverised coal-fired boiler) power stations and to high efficiency advanced cycles. About 100 research scientists, engineers and technical officers are involved in the Centre including more than 25 post-graduate students. The Centre’s R and D is undertaken at a number of facilities in Victoria and South Australia.
PARTICIPANTS
The participants in the Centre are:
Loy Yang Power Limited; International Power – Hazelwood; Yallourn Energy Pty Limited; Edison Mission Energy Pty Limited; NRG Flinders; Alstom Power Limited; HRL Limited; GHD Pty Limited; Monash University; University of Adelaide; Swinburne University of Technology; CSIRO Division of Minerals; and the Victorian Department of Primary Industries. The Australian Government provides support to the CRC through the Cooperative Research Centres Program.
PROGRAMS
The Centre is strongly focused on delivering commercial technology outcomes for the power generation and power engineering industries. It has a balanced program involving fundamental research, applied research, technology development and commercialisation.
A coal drying, dewatering and characterisation program addresses water removal, which is one of the key issues in improving the efficiency of lignite utilisation in power generation. High-pressure gasification and/or combustion reaction mechanisms and kinetics relevant to advanced cycles are studied. Fluidised bed process
development research is applied to gasifier and combustor fluidised bed dynamics, agglomeration, defluidisation, and scale-up of plant design through computational and physical fluid dynamic modelling. Research also focuses on thermal efficiency and operational improvements for existing lignite-fired power plant and an advanced process development program to develop high efficiency advanced power generation cycles.
The Centre is looking into the future with oxygen-blown fluid bed gasification of dewatered coal. This technology is a central and essential element on the path to a hydrogen economy and to zero emissions from power production.
CRC FOR COAL IN SUSTAINABLE DEVELOPMENT
BACKGROUND
The CRC for Coal in Sustainable Development (CCSD) brings together the majority of Australia’s coal research skill base as well as experts in sustainability. CCSD researchers are recognised internationally as being at the forefront of coal research in the international science community.
PARTICIPANTS
CCSD is an unincorporated collaborative venture between 18 core participants from coal producing and using industries and research organisations in QLD, NSW and Western Australia, including:
Australian Coal Research Limited; BHP Billiton Innovation Pty Limited; CNA Resources Limited; CS Energy Limited; CSIRO Energy Technology; Curtin University of Technology; Delta Electricity; Macquarie University; Rio Tinto Energy Pty Limited; Queensland Government’s Department of Natural Resources, Mines and Energy; Stanwell Corporation; Tarong Energy Corporation Limited; The Griffin Coal Mining Co Pty Limited; The University of Newcastle; The University of New South Wales; The University of Queensland; Wesfarmers Premier Coal Limited; Western Power Corporation; and Xstrata Coal Pty Limited.
PROGRAMS
Coal plays a prominent role in national and international energy supply. However, with increased pressures for sustainable development, Australia must make more efficient use of its non-renewable resources. The transition from a fossil fuel dependent world to a sustainable energy future requires a full assessment of the options, impacts, probability and extent of this change.
This can only be achieved with high quality research. CCSD’s research is underpinned by a focus on the three dimensions of sustainability - economic, social, and environmental. Research is conducted in six research programs that are organised to deliver outcomes that inform strategic decisions, improve environmental performance and understand coal performance in emergent technologies.
• Economic, Social and Environmental Assessment
This research program focuses on strategic options for coal in sustainable development and involves scenario
identification, risk, and life cycle assessments.
• Current Power Generation
The Current Power Generation program is designed to improve coal based power generation performance in Australian and export markets through research that addresses the management of environmental risk factors.
• Transitional Power Generation
The Transitional Power Generation research program provides research that supports the introduction and adoption of transitional power systems. It builds the Australian scientific capability for understanding coal performance in advanced power generation technologies such as integrated gasification combined cycle, oxygen-fired pulverised coal combustion in super critical pulverised fuel boilers, and fluidised bed technologies.
• Future Scenarios and Technologies
The research program investigates in detail the more innovative technology options for coal-based power generation. It takes a portfolio approach to energy and product delivery and sets out to identify long-term technology solutions, develop pathways for risk mitigation, and develop industry scenarios for coal-based electricity generation in an Australian context.
• Ironmaking
The ironmaking research program focuses on understanding the coal and coke requirements for making “stepchange” improvements in the efficiency and environmental performance of iron production.
• By-Products and Waste
This program addresses the environmental issues associated with waste management and opportunities for waste utilisation that arise from coal use.
CO2CRC
COOPERATIVE RESEARCH CENTRE FOR GREENHOUSE GAS TECHNOLOGIES
BACKGROUND
The CRC for Greenhouse Gas Technologies (CO2CRC) researches the logistic, technical, financial, and environmental issues of storing industrial CO2 emissions in deep geological formations. The CO2CRC also researches the capture and separation of CO2 from industrial systems.
Major support from industry, research parties and government organisations, along with international collaborators, is ensuring that CO2CRC has a strong role to play in the mitigation of CO2 emissions to the atmosphere.
The Centre’s GEODISC program has established that the geological features of Australia ensure it is well placed for geological storage of CO2. CO2CRC will build on these findings and plans to achieve a demonstration project within the term of CO2CRC.
PARTICIPANTS
The core research parties include Geoscience Australia, CSIRO, the University of Adelaide, the University of Melbourne, the University of New South Wales, Monash University and Curtin University. The CO2CRC’s core industry parties and government participants are:
ChevronTexaco Australia Pty Limited; Schlumberger Oilfield Australia Pty Limited; Shell Development (Australia) Pty Limited; BP Developments Australia Pty Limited; BHP Billiton Petroleum Pty Limited; Xstrata Coal Pty Limited; Stanwell Corporation Limited; Rio Tinto Coal Australia, through Technological Resources
Pty Limited; Australian Coal Research Limited; New Zealand Resource Consortium; the Victorian Department of Primary Industries; and Woodside Energy (Carbon Capture) Pty Limited. Supporting participants include URS, Process Group, CanSyd, Australian Greenhouse Office, University of Queensland, Meiji University, West Australian Department of Industry and Resources, and Whistler Research.
PROGRAMS
CO2CRC is undertaking leading edge research into carbon capture technology systems and carbon storage technologies, focusing on geological and mineral storage of CO2.
• Carbon Capture
Technology Systems Some of the capture technologies currently available are of limited effectiveness and can result in a major increase in the cost of power generation or industrial processes. The Centre researches existing and new-capture technologies to reduce the cost of capture and to assess and enhance their suitability for Australian industrial and power generation activities.
The Centre will carry out research into CO2 capture systems, including solvent-based capture systems, innovative membrane and pressure swing absorption systems, and hydrate and distillation systems. The Centre collaborates with overseas research groups to ensure that Australia has access to frontier research and leading edge technology. CO2CRC will also undertake research relevant to the development of new installations where process modifications can be incorporated that will enhance CO2 separation and capture.
• Geological Storage of C02
Geological storage of CO2, or geological sequestration, involves capturing CO2 and compressing it to a supercritical (dense phase, fluid-like) state. It is then transported by pipeline to a suitable geological site where it is injected at least 800m below the surface. Through careful site selection, the CO2 can be securely stored for long periods of time, ie for many thousands, to tens of thousands of years.
COAL21 NATIONAL ACTION PLAN
The COAL21 National Action Plan, launched in March 2004, identifies a range of actions for reducing or eliminating greenhouse gas emissions from the use of coal in Australia’s electric power generation. The Plan has been developed over the past year as part of the COAL21 program - a collaborative partnership between the Australian Government, state governments, the coal and electricity industries, and research organisations.
The measures outlined complement efforts to increase the uptake of renewables and rein in rapidly growing energy demand through measures to increase end-use efficiency. The Plan identifies a number of emerging technologies that hold the key to reducing - or even eliminating - emissions from coal. These include technologies to capture CO2 emissions from power stations and permanently store them in underground geological structures, a strategy the Plan identifies as the pathway to achieving near-zero emissions from coal.
Other priority technologies identified in the Plan include those that increase the efficiency of coal use and others such as coal gasification that may allow coal to one day provide large amounts of hydrogen gas for a future ‘hydrogen economy’.
Participants have included the Australian Government (through the Department of Industry, Tourism and Resources and the Australian Greenhouse Office), state government agencies from NSW, QLD, South Australia and Victoria, public and private research bodies, technology developers, electricity generators from QLD, NSW and Victoria, industry associations, and individual coal producers.
The Plan has been developed to provide input to policy making and as a valuable contribution to the national discussion around energy and greenhouse. It outlines actions that should be pursued in Australia to accelerate the development of each of the technologies. These actions are divided into two broad phases - an RD and D phase-out to around 2015, and a subsequent deployment phase.
There are opportunities for reducing emissions from all stages of the coal chain including production, utilisation and waste disposal. However, as more than 95 per cent of emissions occur at the point of combustion at power stations, these emissions represent the best opportunity for large scale abatement action. A number of promising technologies have been identified as being of particular relevance to Australia.
These include technologies that enable CO2 capture and storage (the pathway to near-zero emissions), higher
coal-efficiency, and hydrogen production. The range of technologies associated with CO2 capture and geological sequestration are identified as the key to achieving deep cuts or even near-zero emissions in coal-based electricity generation. Other technologies that meet one or more of the criteria include integrated gasification combined cycle, oxy-fuel combustion, lignite dewatering and drying and ultra clean coal. Ultra supercritical Pulverised Fuel (PF) technology meets the criterion of increased coal use efficiency, but has not been included in the Plan because it is unlikely that Australia could play a meaningful role in its further development.
Newcastle
Source: Mineral Resources NSW
UCC ENERGY PTY LTD
BACKGROUND
Coal is the world’s most accessible energy source capable of powering modern society. However in recent years, general awareness of the potential impact of greenhouse gas emissions on the global environment has cast a shadow over coal’s acceptability. After an initial backlash that called for the complete elimination of coal as an energy source, there has come a realisation that all practical energy scenarios in the next three decades would have coal as a major component. Consequently, there have been increased efforts to develop
systems that could generate power from coal with reduced greenhouse gas impact. The utilisation of coal using substantially more efficient technologies can have a major positive impact on the coal markets both in Australia and internationally.
PROJECT OVERVIEW
Ultra clean coal (UCC) is coal from which virtually all the mineral impurities have been chemically removed in a process invented and developed in Australia. UCC is sufficiently pure to be used as a replacement for natural gas in very high efficiency gas turbine generators. UCC is produced in a chemical leaching process with some similarities to the Bayer process for refining alumina. The process works through a series of steps that convert the minerals to soluble forms and then remove them to a point where the total remaining ash content is less than 0.2 per cent. The dissolved minerals are then precipitated predominantly as calcium sulphates and calcium aluminium silicates, for safe disposal or utilisation in other industries such as ceramics and building materials.
UCC was invented by CSIRO with financial support provided by The White Group. The UCC process and technology are now owned by UCC Energy, a subsidiary of White Mining Limited. UCC Energy is developing the technology into a commercial process. The White Group, with government support, has invested A$45 million (A$25 million from The White Group and its subsidiary, UCC Energy) in developing the technology up to a fully integrated continuous pilot plant in the Hunter Valley. The Australian Government,
through the Department of Industry, Tourism and Resources, contributed A$14.1 million to this project. UCC aims to reduce greenhouse gas (GHG) emissions in two ways. Firstly, UCC-fired turbines will achieve GHG
reductions through very high efficiency power generation. The increased efficiency substantially reduces the fuel required to generate electricity when compared with a conventional coal-fired generator of the same capacity, potentially reducing GHG emissions from the generator by 20 to 30 per cent.
Secondly, anticipating that geological storage of CO2 becomes economically and politically acceptable in the future, an oxy-fired UCC turbine will enable recovery of concentrated CO2 amenable to geological storage, without the need for expensive capture technologies using membranes or solvents. The system is well suited to oxy-firing, operating above atmospheric pressure to prevent nitrogen ingress and providing high pressure gas streams for efficient CO2 capture. The high efficiency of the UCC turbine also means that less CO2 needs
to be captured.
For production of electricity, the UCC-fired turbine retains the advantages of the gas-fired turbine in that it can be quickly brought on- and off-line and is thus suitable for peaking power generation. It can also be located close to the end user, reducing transmission losses and providing combined heat and power opportunities, while utilising a safe, low-cost and most widely available fuel - coal.
THE VICTORIAN POWER AND LIQUIDS PROJECT
BACKGROUND
Australian Power and Energy Limited’s Victorian Power and Liquids Project aims to build upon the unique geological inheritance of Victoria to create a truly 21st century worldscale energy undertaking with near to zero emissions - with coal as the fuel source.
By converting some of the vast high quality, low cost Latrobe Valley brown coal into a combination of synthetic liquids and co-produced power, the Project addresses the strategic energy security and economic needs of the region, state and nation. By incorporating carbon capture and storage in the nearby Gippsland Basin, the Project also addresses the threat of global warming and creates the infrastructure platform to extend this process to other current and future industries in the region.
By establishing the technical and commercial viability of the key technologies required to transform the brown coal into an economic, global-sized energy project that will significantly contribute to Australia’s energy needs, plus store the carbon produced in the process, the Project opens the way for a range of products - including a pathway to affordable, abundant hydrogen for a future hydrogen economy.
PROJECT OVERVIEW
The Project is located in the Latrobe Valley, centred on the town of Traralgon, some 160km east of Melbourne, Victoria. The Latrobe Valley is renowned for its vast resources of low sulphur, low ash, and readily-mineable, low cost brown coal. Since the first large scale commercial mining in the early 1920s, this resource has predominantly been used for generating electricity. The current reserve to production ratio is over 500 years.
Within 60km of the Latrobe Valley lies the offshore Gippsland Basin - the location of the Bass Strait oil and gas fields. This field originally had an identified resource of approximately 4 billion barrels of oil and 10 trillion
cubic feet of natural gas. The field is expected to be substantially depleted within 20 years. The depleting oil and gas reservoirs and the vast underlining offshore saline aquifer covering more than 20,000km2, are regarded as a highly prospective sink for the geological sequestration of CO2.
The key to linking these two great geological inheritances lies in process technology. Current and emerging brown coal drying and gasification processes lead to the creation of a hydrogen and carbon monoxide stream known as synthesis gas (syngas). The composition of the syngas can be altered by well proven technology to produce hydrogen contents from 30 to 100 per cent. The syngas can then be converted into a variety of products such as ultra high quality diesel, premium gasoline, methanol, very low emissions power, hydrogen and a wide range of additional products, including fertilisers and most chemical industry feedstocks. In this process, CO2 is captured as a by-product and, in the absence of any known way of using this chemical in high volumes, must be sequestered.
The Project seeks to tie together the geology and the technology in a Coal to Gas to Liquids process with geological sequestration of the by-product CO2. Power from the process is produced for internal use and the plant can be designed to produce additional low emissions power for sale to the market. Water use, recovery and reuse (including from external sources) is a key part of the project to minimise the need to impact the environmental flows of nearby river systems.
The overall process is indicated in a simplified form in the following diagram;
The project development strategy is to adapt technologies which have already been commercialised. These technologies are being recognised globally as key processes for the future of clean coal technologies and are all likely to show economic improvements in efficiency and cost effectiveness similar to the last 10 year cycle of the Liquefied Natural Gas industry. Whilst not necessary for near term project commencement, this development strategy enables the acceleration of project implementation and reduces the technical and commercial risk. Examples of such technologies include:
• Fine-grain drying of brown coal with energy recovery, already demonstrated by RE GmbH at 30 tonnes per hour raw coal feed. A first commercial plant sized at about 220 tph raw coal feed is expected to commence in
September 2004;
• Entrained flow coal gasification, has already been demonstrated at commercial levels (Shell Buggenum, Prenflo Puertollano). Shell is currently planning to install up to eight coal gasifiers in China alone, with the first about to be commissioned; and
• Syngas conversion to Fischer Tropsch liquids or other products. Technology is already commercialised in South Africa (Sasol and Mossgas), Malaysia (Shell) and New Zealand (ExxonMobil) with very large scale plants currently being built in Qatar.
Other factors that are important to the success of the Project include the proximity to the market for key products, low market barriers to entry, available infrastructure and low political risk. In bringing together a combination of existing and emerging processes in a unique geological setting, within a politically stable developed country, the Project offers an exciting opportunity for Australia.
COAL TO GAS TO LIQUIDS
Source: Australian Power and Energy Ltd
AUSTRALIAN ENERGY POLICY
The development of a competitive energy market is a current priority for the Australian Government and state governments as they seek to build on the reforms achieved to date, and move towards a truly national and efficient energy market.
In December 2003, the Ministerial Council on Energy (MCE) finalised a suite of reforms to Australia’s energy
sector, comprehensively responding to the 2002 Council of Australian Governments’ (COAG) Energy Market Review. These reforms include:
• the MCE to be the single energy policy decision-making body in Australia;
• finalisation of an inter-governmental agreement and cooperative legislation for governance of Australia’s energy market;
• establishment of a single energy regulator - the Australian Energy Regulator (AER) - to replace the current arrangement of 13 electricity, and eight gas regulators Australia-wide;
• establishment of the Australian Energy Market Commission (AEMC) as the national market developer and rule-maker;
• implementation of electricity transmission reforms;
• development of a national approach to energy access;
• establishment of an agreed national framework for distribution and retailing; and
• improvement of user participation in energy markets.
These new arrangements will improve the governance, regulatory and institutional processes at work and promote a more appropriate balance between the development and implementation of energy market rules, industry regulation and general competition regulation.
The reforms will both strengthen competition and encourage investment in Australia’s energy market. The energy industry has estimated that investment of A$37 billion will be required over the next decade to ensure that Australia’s energy needs are met. Providing an attractive environment for these investments is a high priority for the Government.
In its Energy White Paper Securing Australia’s Energy Future, the Australian Government established a long-term policy framework that will support the energy investment needed to deliver prosperity, security and environmental sustainability to all Australians.
The goal of the Australian Government is to place Australia in a strong position to respond to the challenge of climate change and sustainable energy use, while maintaining a prosperous economy. A centrepiece of the Energy White Paper is the establishment of a A$500 million fund to stimulate greater investment in demonstrating low-emission technologies.
The Low-Emission Technology Fund is expected to drive total investment of more than A$1.5 billion in low-emission technologies, ranging from renewable energy to fossil-fuel supply technologies. The assistance will be available over a 15 year period and the key eligibility criterion will be the ability to deliver significant greenhouse abatement with commercial uptake in the long term.
In addition, the Australian Government (through the Department of Industry, Tourism and Resources and the Australian Greenhouse Office) has been an active participant in the activities of the COAL21 National Action Plan. The Plan is a collaborative effort between the Australian Government and state governments, coal and electricity industry representatives and research organisations, which focuses on the reduction of greenhouse gas emissions from the use of coal in power generation. The first phase of the COAL21 process, from March 2003 to March 2004, focused on the development of the Plan. The second phase, which commenced in 2004, is focused on implementing the measures identified in the Plan and fostering greater community awareness and understanding of the key issues.
In terms of international collaboration on clean coal technologies, Australia has been actively involved in the Carbon Sequestration Leadership Forum. The Forum aims to stimulate research into carbon sequestration technologies with the aim of developing geological sequestration as a practical greenhouse response measure. Signatories to the international charter on CO2 capture and storage include Australia, the EU, Brazil, Canada, Colombia, Italy, India, Japan, Mexico, Norway, China, Russia, the UK and the US.
There is significant support for R and D through the Australian Government’s Backing Australia’s Ability - Building our Future through Science and Innovation program. The A$5.3 billion package announced in May 2004 continues to support and strengthen the successful program through to 2011. To further support the growth of innovative enterprises, a new A$1 billion Commercial Ready program is being introduced to support competitive R and D, proof-ofconcept, technology diffusion, and early stage commercialisation activities.
Commercial Ready will help about 1700 small-to-medium sized businesses. It creates a one-stop-shop to access innovation support by combining the R and D Start program, the Biotechnology Innovation Fund, and elements of the Innovation Access Program.
The Australian Government remains committed to increasing business expenditure on R and D. The elements of the R and D tax concession introduced as a key part of Backing Australia’s Ability - including the 175 per cent Premium R and D Tax Concession and the R and D Tax Offset - will continue to 2011 at a cost of more than A$390 million.
Singleton
Source: Mineral Resources NSW