Energy in a changing climate Conservation Council of South Australia Summit Dr Chris Riedy 5 th February 2009

1. INSTITUTE FOR SUSTAINABLE FUTURES Energy in a changing climate Conservation Council of South Australia Summit Dr Chris Riedy 5th February 2009 THINK. CHANGE. DO

2. Energy in a changing climateIntroduction “The debate on climate change has shifted dramatically over the past five years. The strong evidence presented by the scientific community through the Intergovernmental Panel on Climate Change (IPCC) process has largely settled the discussion about whether the world needs to respond. The question now is what shape such a response should take”. ~ The McKinsey Global Institute, 2008 Beinhocker, E., Oppenheim, J., Irons, B., Lahti, M., Farrell, D., Nyquist, S., et al. (2008). The carbon productivity challenge: Curbing climate change and sustaining economic growth: McKinsey Global Institute.

3. Energy in a changing climateClimate scientists are stressing urgency “Recent evidence reveals a situation more urgent than had been expected, even by those who were most attuned...It will be necessary to take actions that return CO2 to a level of at most 350 ppm, but probably less, if we are to avert disastrous pressures on fellow species and large sea level rise”. ~ Dr James E. Hansen, Director NASA Goddard Institute for Space Studies, November 2008 “We are on our way to a destabilisation of the world climate that has advanced much further than most people or their governments realise ”. ~ Hans Joachim Schellnhuber, Potsdam Institute for Climate Impact Research, December 2008

4. Energy in a changing climateArctic sea ice is disappearing “The Arctic is often cited as the canary in the coal mine for climate warming. Now as a sign of climate warming, the canary has died. It is time to start getting out of the coal mines”. ~ Dr Jay Zwally, NASA National Snow and Ice Data Center

5. Energy in a changing climateClimate change in South Australia • Temperature • Up 0.96ºC, 1910-2005 (faster than Australian average) • Up 0.2-1.8ºC by 2030 • Up 0.5-5.5ºC by 2070 • Rainfall • Up to 45% decrease in coastal areas by 2070 • 25% increase to 45% decrease inland CSIRO Marine and Atmospheric Research Suppiah, R., Preston, B., Whetton, P.H., McInnes, K.L., Jones, R.N., Macadam, I., Bathols, J. & Kirono, D. 2006, Climate change under enhanced greenhouse conditions in South Australia. An updated report on: Assessment of climate change, impacts and risk management strategies relevant to South Australia, Undertaken for the South Australian Government by the Climate Impacts and Risk Group, CSIRO Marine and Atmospheric Research, Aspendale, Victoria.

6. Energy in a changing climateClimate change impacts in South Australia • More intense heat waves, floods and bushfires • Increased potential for infectious diseases • Threats to coastal infrastructure from sea level rise • Impacts on lifestyle, biodiversity, primary production and water supply Buckled railway lines during southern Australia heatwave "Eleven of the hottest years in history have been in the last 12, and we also note, particularly in the southern part of Australia, we're seeing less rainfall…All of this is consistent with climate change, and all of this is consistent with what scientists told us would happen.” ~ Federal Climate Change Minister Penny Wong

7. Energy in a changing climateEnergy is a central issue – although not the only one • Stationary energy is not so dominant in South Australia – low greenhouse intensity of electricity supply due to natural gas and wind • South Australia is a net sink for land use change and forestry • Transport has greater relative importance

8. Energy in a changing climatePeak oil • Human civilisation relies on oil, a finite resource • When demand exceeds supply, prices will rise and shortages will occur • Despite recent easing of oil prices, peak oil may be even more urgent than climate change • Some estimate that peak was reached in 2008 • Solutions to climate change and peak oil are similar but need to focus more strongly on the interaction between stationary energy and transport Association for the Study of Peak Oil, December 2008

9. Energy in a changing climateWe must change the way we use energy “The world’s energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable — environmentally, economically, socially. But that can — and must — be altered; there’s still time to change the road we’re on”. ~ World Energy Outlook 2008, p.37

10. Energy in a changing climateDeep cuts needed for an effective response • The IPCC/UNFCCC consensus • Need to limit temperature rise to no more than 2-2.4°C • Stabilise GHGs at 445-490ppm CO2-e • Global emissions need to peak by 2015 at the latest and fall by 50-85% by 2050 (relative to 2000 levels) • Developed countries – 25 to 40% reduction by 2020, 80-95% by 2050 (relative to 1990 levels) • This is an economic transformation on the scale of the Industrial Revolution but in one third of the time (Beinhocker et al 2008) • And some scientists say this is not enough… United Nations-Sigma XI Scientific Expert Group on Climate Change. (2007). Confronting climate change: Avoiding the unmanageable and managing the unavoidable (Report). Scientific Expert Group Report on Climate Change and Sustainable Development, Prepared for the 15th Session of the Commission on Sustainable Development: United Nations Foundation, Sigma XI. IPCC 2007, Climate Change 2007: Synthesis Report, An Assessment of the Intergovernmental Panel on Climate Change. Beinhocker, E., Oppenheim, J., Irons, B., Lahti, M., Farrell, D., Nyquist, S., et al. (2008). The carbon productivity challenge: Curbing climate change and sustaining economic growth: McKinsey Global Institute.

11. Energy in a changing climateThe Rudd Government response • Carbon Pollution Reduction Scheme • 5-15% reduction in emissions between 2000 and 2020 depending on international response • Falls short of what is needed to stabilise at 450ppm • Many concessions to industry, including free permits • Removes any incentive for voluntary action • National Renewable Energy Target – 20% by 2020 • Makes sure renewable energy plays a part in the CPRS right from the start • National Strategy for Energy Efficiency (COAG)

12. Energy in a changing climateThe Rann Government response • Climate Change and Greenhouse Emissions Reduction Act 2007 • Commitment to 20% renewable electricity by 2014 • Solar feed-in tariff • Net, not gross • Improve energy efficiency of dwellings by 10% by 2014

13. Energy in a changing climateNew McKinsey curve

14. Disinterest Disarray Confusion Energy in a changing climateBarriers to distributed energy Lack of information Ignorance Split Incentives: landlord/ tenant etc Cultural barriers Impatience Maladministration High discount rates Regulatory barriers Mispricing Dunstan, C and Daly, J, 2008, Institutional Barriers to Intelligent Grid: A Discussion Paper, Institute for Sustainable Futures, www.igrid.net.au. Externalities and price structures

15. Disinterest Disarray Confusion Energy in a changing climateExample: Demand management in distribution networks Suppliers don’t have good data on opportunities Conservative network businesses that know how to build more wires Network businesses can’t capture all benefits from DM Ignorance Prohibitive network connection requirements and costs Impatience Maladministration Uncertainty, lack of experience leads to high hurdle rates Mispricing Dunstan, C and Daly, J, 2008, Institutional Barriers to Intelligent Grid: A Discussion Paper, Institute for Sustainable Futures, www.igrid.net.au. Averaged tariffs that don’t reflect real marginal cost

16. Energy in a changing climateResearch response: CSIRO Intelligent Grid Cluster • Collaborative project involving five universities and CSIRO (2008-2011) • Seven projects seeking to hasten the emergence of an intelligent grid • Highly efficient use of power • Distributed energy resources • Advanced communication and control technologies • Deliver electricity more cost-effectively, with lower greenhouse intensity and in response to consumer needs. A smart grid is “a more intelligent, resilient, reliable, self-balancing, and interactive network that enables enhanced economic growth, environmental stewardship, operational efficiencies, energy security, and consumer choice”. ~ Electricity Advisory Committee, US Department of Energy

17. Energy in a changing climateCSIRO Intelligent Grid Cluster: Lochiel Park • Intelligent grid in a new housing development • UniSA project • Monitoring of distributed energy at Lochiel Park Green Village • Reduce GHG emissions by 74% • 7.5 star energy rating • Solar hot water and electricity • Smart metering • Load management trial • Use planning system to drive emission reduction at State/local level

18. Energy in a changing climateDistributed Energy Roadmap • DE Roadmap • Provide practitioners and policy makers with practical guide and strategic plan for removing institutional barriers to distributed energy • Intensive stakeholder engagement during 2009 and 2010 • Industry Forum in Adelaide in December 2008 • What can South Australia do? • Contribute to DE Roadmap process • Lobby through COAG for the National Strategy for Energy Efficiency to adopt a coordinated approach to barriers • Energy efficiency in own operations • Use planning approval process

19. Energy in a changing climateRenewable energy • SA has excellent access to top three alternative energy sources – wind, solar thermal and geothermal • Note low ranking for CCS, hydrogen and ethanol • NRET is a positive move • Will deliver a lot more wind power in SA • Fixed GWh target, so risk that it will deliver less than 20% • SA feed in tariff • Another positive move but successful overseas models pay for gross generation Jacobson, MZ, 2009, Review of solutions to global warming, air pollution, and energy security, Energy Environ. Sci. • What is SA’s role in supporting RE? • Facilitation • Support for R&D&C • Centre of excellence for alternative energy?

20. Energy in a changing climateSolar thermal • DESERTEC • Concentrating solar thermal could supply all of the world’s energy in a relatively small area • Could northern SA be a site? • Ausra • New 5MW plant just opened in California • 177MW facility under development • Developed in Australia by David Mills but left due to lack of support • Unlikely to benefit much from NRET • Support pilot and niche applications

21. Energy in a changing climateGeothermal • Huge potential in SA • 24 companies in exploration • Sufficient for hundreds of years • Geodynamics • Cooper Basin • 1MW by March 2009 • 50MW by 2011 • 10,000MW resource • Needs support for proof of concept and demonstration Steam flow at Habanero 3 March 2008. Courtesy of Geodynamics

22. Energy in a changing climateTransport – the future is electric • In 2008, ISF developed Australia’s first plug in hybrid vehicle (PHEV) • Electrification of transport system is more promising than hydrogen economy • Renewables and hydrogen vehicles = 24% efficiency • Renewables and PHEVs = 69% efficiency • Developing grid-interactive vehicles – take energy from the grid and supply to the grid • Vehicles can charge overnight and potentially help manage peak demand • Addresses peak oil and climate change Kendall, G, 2008, Plugged in: The end of the oil age, WWF European Policy Office, Brussells.

23. Energy in a changing climateVoluntary action • Carbon Offset Watch • www.carbonoffsetwatch.org.au • Ranked carbon offset retailers • Found a vibrant and growing voluntary carbon market • Outlet for those who want to go further than government policy

24. Energy in a changing climateProtect and enhance the space for voluntary action • CPRS • Options for voluntary action are reduced to • Purchase and voluntary cancellation of CPRS permits • International offsets • Other types of voluntary action by non-liable parties will not reduce aggregate emissions, only the carbon price • Energy efficiency • Green Power • Household solar • Domestic offsets (in CPRS and non-CPRS sectors) • Households or organisations that voluntarily reduce their emissions in these ways are easing the burden on liable parties (large industry) • CPRS rules should be changed so that voluntary action is above and beyond national targets – should be an outlet for those who think more needs to be done, not a way of taking advantage of people doing the right thing Department of Climate Change, 2008, National Carbon Offset Standard Discussion Paper, December.

25. Energy in a changing climateThe Green New Deal “The global economy is facing a ‘triple crunch’. It is a combination of credit-fuelled financial crisis, accelerating climate change and soaring energy prices underpinned by an encroaching peak in oil production. These three overlapping events threaten to develop into a perfect storm, the like of which has not been seen since the Great Depression. To help prevent this from happening we are proposing a Green New Deal”. ~ The Green New Deal Group, 2008 “The flip side of the coin is the enormous economic, social and environmental benefits likely to arise from combating climate change and re-investing in natural infrastructure - benefits ranging from new green jobs in clean tech and clean energy businesses up to ones in sustainable agriculture and conservation-based enterprises”. ~ Achim Steiner, UNEP Executive Director, 2008 The Green New Deal Group, 2008, A Green New Deal, New Economics Foundation.

26. Energy in a changing climateA Green New Deal • Make every building a power station – energy efficiency and DE • Train a ‘carbon army’ • Ambitious emission targets to drive innovation • Low-interest loans and incentives for efficiency (including insulation) • Re-regulate the finance sector to deliver sustainable outcomes • Australia has particular opportunities in • Renewable energy • Energy efficiency • Sustainable water systems • Biomaterials • Green buildings • Waste and recycling • Could deliver 850,000 jobs • Climate change response can be an opportunity The Green New Deal Group, 2008, A Green New Deal, New Economics Foundation. ACF and ACTU, 2008, Green Gold Rush.

27. Energy in a changing climateCultural change • 80-90% reductions will challenge some of our cultural practices

28. Energy in a changing climateCultural change • There are technological solutions but they come at a cost • As energy becomes more expensive, we must begin to contemplate lifestyle changes • Can we continue as a “consumer culture”? • Can we afford to waste energy? • We need to advocate the tools that will let people take control of their energy use • Smart metering, in-home displays • The Internet of Things

29. Energy in a changing climateCultural change • Dominant social marketing approach to behavioural change is failing • Simple, painless steps do not appear to lead to stronger action later • Inconsistency between scale of what is asked and what is needed to address the problem • Refusal to question materialistic values • Need new approaches that appeal to intrinsic goals and challenge deep value commitments • We must tackle over-consumption if we are to avoid dangerous climate change Crompton, T. 2008, Weathercocks & Signposts: The Environment Movement at a Crossroads, WWF-UK, Surrey.

30. Energy in a changing climatePriorities • Strengthen CPRS target to make it consistent with the science and reopen space for voluntary action • Lobby through COAG for a strong and coordinated National Strategy on Energy Efficiency and provide example through SA Government operations • Move to a gross solar feed-in tariff • Use planning system to drive local/State emission reductions • Provide support and facilitation for renewable energy that won’t benefit much from MRET – solar thermal and geothermal in particular • Support for electric vehicles – funding and fleet • A Green New Deal • Challenge over-consumption and provide tools for households to take control of their energy use