Wednesday 14 July 2010

$90bn needed to cut greenhouse emissions, says AGL boss

Weekend Australian
Saturday 1 July, 2010 Page: 27

AGL Energy chief executive Michael Fraser has estimated that as much as $90 billion worth of investment in new gas-fired power stations and renewable energy sources would be needed to slash Australia's greenhouse emissions by 15% on 2000 levels. Mr Fraser said the capital costs of the cuts could include $20bn to $30bn in building gas-fired power stations, $20bn to $30bn in complying with the government's target of 20% renewable energy by 2020, and a further $20bn to $30bn in providing electric cars. Mr Fraser said a broad-based emissions trading scheme was the best way to cut emissions.

While a comprehensive national energy efficiency trading scheme was likely and there was already a renewable energy target, the ETS was the missing piece of the puzzle, he said. Former prime minister Kevin Rudd shelved his emissions trading scheme after the failure of the Copenhagen climate talks. Julia Gillard is expected to detail her plans for combating climate change soon, although the Prime Minister has ruled out imposing a price on carbon emissions before 2012.

"This is a very long-term issue involving very large investments", Mr Fraser said at a business lunch in Sydney. "We also can't just turn off all of our coal-fired generation just like that. We need certainty and a sensible transition path. "We need to ensure security of supply and that we make the transition to a low-carbon environment in a measured fashion because price shocks and security of supply issues will only bring the politics of this undone". Mr Fraser said that greenhouse emissions were an issue that could not be ignored. "They won't just go away. They will just get worse", he said.

The costs would be lower and the benefits higher if Australia started moving to a low-carbon economy now, he said. Australia's energy exports could shift away from coal towards uranium and liquefied natural gas. But it was unclear whether these industries could reap the same economic Sllccess as coal exports, so it was important to invest in so-called clean coal technologies such as carbon capture and storage.

0 comments: