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Some Inconvenient Truths

I had a long career in the Electricity Industry. I was a leading proponent for renewable energy and concerned to be as environmentally responsible as I could.

But it seems to me that the debate about these things has often been skewed by those taking idealistic, extreme and sometimes uninformed positions.

Let me give you an example.

In the mid-nineties the town of Maryborough was suffering from the fact that the local foundry was closing and the town was facing high unemployment. But there also a sugar factory and sawmill in Maryborough. We were looking for opportunities to do co-generation projects with the sugar industry. These projects had the potential of using a sugar waste product, bagasse, as a fuel to generate electricity. Such biomass projects are legitimate renewable energy projects because they, in effect recycle carbon dioxide. The carbon dioxide emitted in the burning of the fuel is taken up again by the crop when it is regrown so that there is no net addition to atmospheric carbon dioxide.

One of the features of the project was to try to improve the capital productivity of the sugar factory. Sugar mills normally only operate for five or six months of the year when sugarcane is being harvested. There are obvious improvements in the economics if that period could be extended. The sugar factory was virtually located across the road from the sawmill, and of course the waste product of sawmills is sawdust. The sawmill disposed of its waste by burning it in large pits. It seemed to us that was indeed a great travesty because we could burn that sawdust as a fuel in the sugar factory boilers and produce electricity. Any energy we generated in this way would likely displace more coal-fired generation with an obvious greenhouse gas benefit.

This supplementary fuel would have provided two benefits. Firstly it would mean that the sugar factory boilers could be operational for most of the year by using the sawdust as supplementary fuel, thus enhancing capital productivity. Secondly it would have enabled the disposal of the sawdust to produce electricity rather than just being burnt where it added needlessly to the carbon dioxide burden in the atmosphere.

But while we were trying to finalise the project a prominent environmentalist went to the Labor Government and complained that our project, by helping the sawmill dispose of its waste was somehow encouraging them to cut down more trees! Despite our protestations the Government compelled us to abandon the use of sawdust as supplementary fuel and without this the project couldn’t stack up financially.

Surprisingly the senior official we were dealing with didn’t seem to think this posed great dilemma for us. He had recently toured western Queensland where he saw that Prickly Mimosa was a problem for pastoralists and he suggested we could use that instead of sawdust. He seemed surprised when I told him our studies had shown that we couldn’t afford to cart good quality fuel more than 100 kilometres let alone cart low grade fuel (like Prickly Mimosa) over 1500 kilometres to use as supplementary fuel!

Thus a nice little project that would have had good social, economic and environmental outcomes was canned. And this seems typical of those who pursue environmental issues like religious zealots – ideal environmental outcomes are pursued at any cost. It could be rightly said that the pursuit of the perfect prevents many good things from happening.

In this essay I would like to pursue how such an approach is working to our detriment in two significant but related areas, viz climate change and the move to renewable energy.

The move to establish an international approach to deal with climate change began in 1992 with the UN Intergovernmental Panel on Climate Change (IPCC) Conference on the Environment and Development held in Rio de Janeiro. It resulted in the Framework Convention on Climate Change. Since then there have been a number of international conferences hosted by the United Nations, culminating in the most recent event in December last year in Paris. According to the UN press release, under the Paris Agreement, “all nations have agreed to combat climate change and to unleash actions and investment towards a low carbon, resilient and sustainable future that will keep a global average temperature rise well below 2 degrees Celsius with the accepted international aim of working to limit it to 1.5 degrees Celsius.”

I guess it might be wise at this stage to declare my own beliefs on the subject. I am not a climate change denier, in fact I justified my organisation’s commitment to renewable energy as a prudent response to climate change. But I am not a climate change catastrophist and unlike the catastrophists I believe it is misleading to say the science is settled. I have seen little work that attempts to differentiate between the natural cyclical variations in climate and the anthropogenic component. And because I don’t hold extreme views on climate change I believe we should be circumspect in how we spend taxpayers’ money in response to climate change. We need to carefully consider our expenditure on mitigation, which is hugely costly and may be of minimum impact, and adaptation, which will often provide better returns on our investment, and of course balance them against the other competing demands on our limited funds.

(Of course climate change zealots are not the only ones that seek to argue the special significance of their pet issue to access large amounts of government funding. Those championing healthcare, education, mental health, domestic violence and many other causes are convinced of the special importance of their issues and all clamour for greater access to the public purse. No doubt they are all worthy causes but governments are forced to prioritise all these competing demands and often get it wrong because they make political decisions about which organisations have most political clout and which electorates deserve special consideration.)

Bjorn Lomborg, the Danish researcher who believes in climate change was hounded out of Australia by the climate change warriors largely because he believes that government monies can often be spent in more productive ways than on climate change mitigation. This of course is a message that those with more extreme views on climate change can’t afford to hear.

Matt Ridley, the British journalist and science writer, rightly points out that the preponderance of research monies around climate change goes to researchers that that are seeking to prove that climate change is not only real but catastrophic. Such researchers will try to prove such assertions in anticipation of more such funding. And (because I have had a long association with the research community) I would predict that usually they will find some evidence to support the hypothesis on which their funding was based.

As some of my correspondents have commented after my impassioned pleas in support of free speech, it is not only politically incorrect opinions about indigenous policy, or same sex marriage or Islamist extremism that attracts the ire of the politically correct but also non-conforming beliefs about climate change. The zealots have come to the conclusion that the debate is a binary one – either you believe in catastrophic climate change or you are an ignorant denier who thinks it is all a hoax and whose opinion therefore is irrelevant and not worthy of debate.

But again, as Matt Ridley has pointed out, there is a third possibility they refuse to entertain. Is it not possible that climate change is real but its impact is not as disastrous as many of those who have taken up the climate change torch would have us believe?

I guess what gives me pause to be a little cautious here, in terms of climate change outcomes, is the unreliability of the climate change models. By and large the predictions about global warming have been generally overstated. Similarly the predictions about the increase in major weather events have largely failed to eventuate. Notwithstanding that, the climate change zealots are wont to use every storm, cyclone, hurricane, flood or heatwave as evidence of the catastrophic effects of climate change.

The most recent example was the storms in South Australia which blacked out the whole state. The more strident climate change voices said this was evidence of global warming. The Weather Bureau said it was a reasonably unexceptional thirty year event!

In 1990 the IPCC, which orchestrated the 1992 Rio de Janeiro conference referred to above, predicted that with the then current rate of carbon dioxide emissions and their projected growth in subsequent years global temperatures would rise 0.3C per decade. Carbon dioxide emissions have in fact increased faster than were predicted at that time, but now almost two and a half decades later global temperatures have risen only by 0.15C per decade based on surface measurement or 0.12C based on satellite data.

In Australia these temperature rises have been accompanied by changes in rainfall patterns across the continent with both increases and decreases depending on location. But the changes have not been nearly as rapid as the climate catastrophist would have us believe.

This relatively gradual change opens up opportunities to pursue sensible adaptation strategies. Indeed it necessitates innovation and the development of new technologies. It is in fact a window of opportunity where government and industry can come together to develop the means to insulate us from many of the worst effects of climate change. It would also provide other economic opportunities with the development of adaptation technologies.

(Since commencing this essay the CSIRO and the Bureau of Meteorology have published their biennial report on climate change reporting that Australia’s land and ocean temperatures have risen about 1.0C since 1910.)

So my considered position on climate change is that I think there is sufficient evidence to suggest it is a reality. I suspect its impact is considerably less than the catastrophists would have us believe. As well I believe it is as yet unclear how much of the effect is due to anthropogenic causes. Nevertheless it is prudent that we take reasonable steps to address the issue. In this regard abatement strategies are very expensive and as yet not very effective. Some researchers suggest that 20 years of climate policy has reduced emissions by less than 1%. Adaptation strategies would seem to me much more cost effective. And the zealots need to remember that as much as they would like it otherwise, their cause is but one of a host of others competing for funding from the public purse many of which have legitimate claims for funding as well.

Now one of the abatement strategies, which I mentioned at the beginning, is a need to moderate our reliance on fossil fuels by developing more renewable energy generation. Now, again I am a proponent of renewable energy but I caution the against the prevailing tendency encouraging us to rush off and build renewable projects in an unconsidered way.

Currently the dominant renewable technologies in Australia are hydroelectricity, wind power and solar technologies.

Of course hydroelectricity is the gold plated version of renewable energy because with water storage it can be used for both peaking and baseload power. Unfortunately most of the major sites available for large scale hydroelectricity have now been utilised. When I was in the electricity industry we were able to develop some mini-hydro projects but they were reasonably inconsequential in the scheme of things. And of course the very environmentalists that clamour for additional renewable energy are the very same people who oppose the construction of new dams that would give us access to large hydro development.

It is worth pointing out that biomass generation along the lines of the co-generation plant we were proposing at Maryborough can also provide base load generation if there is sufficient capacity to store fuel.

So at the current time, the major effort into developing renewable energy options is focussed on wind and solar, both of which are intermittent sources of power. It seems obvious that the amount of intermittent energy allowed on to the grid needs to be limited if security of supply is to be ensured. The recent South Australian event would suggest that state has already exceeded what would be reasonable without jeopardising acceptable standards of security.

Without going into the technicalities, intermittent renewable generation also poses problems relating to frequency and voltage control.

It is important also to recognise the additional cost of renewable generation. In most cases the most economical form of renewable generation is wind, but even that is far more expensive than traditional coal-fired generation and it wouldn’t be viable without the subsidy that comes from the renewable energy certificates (RECs) that it attracts.

Electricity costs have considerably increased across Australia in recent decades and the rush to renewable energy has been a major factor in that price hike. In the 1970’s Australia had some of the lowest electricity tariffs internationally. That facilitated high energy intensive industries like metals processing and manufacturing. Those cost advantages have long gone as has our international competitiveness in such industries.

Intermittent renewable energy would be a much more viable proposition if only we could learn how to store electricity economically.

More conventional forms of energy generation store their potential energy by storing their fuel. Coal fired power stations have coal bunkers and coal stockpiles that ensure they can generate continuously for long periods of time. Hydro power stations store their water in dams. Similarly gas, diesel and oil fired generators have little difficulty in storing fuel to ensure prolonged generation.

To get the same sort of continuous access to their outputs intermittent generators must store their outputs rather than their inputs. (You can’t store sunlight or wind!) Although there are some alternatives, this largely means an investment in battery technology.

Now you can see the problem arising from this. In order to allow expensive intermittent renewable sources to play a significant role in providing our electricity needs you have to spend more capital to provide expensive battery storage. Right now the sums don’t stack up. The zealots of course will point to a few small scale projects already in operation where these technologies are successfully combined. There may be the odd project where circumstances allow this. But let me state categorically that we are decades away from such projects being able to make a significant contribution to the grid.

The renewable energy cheer squad will also no doubt remind me of the reducing costs of battery storage. One study quoted in the press suggests that in the last decade of battery development, costs came down by 14% per annum. This is probably true, but coming off such a high base, energy storage costs using battery technology is still orders of magnitude greater than storing your energy in a coal stockpile! So, as much as I might wish it otherwise, as the South Australian incident has shown us, we are approaching the limits of intermittent renewable energy contributions if we are to be able ensure security of supply and deliver electricity at reasonable cost to consumers.

So what should we do?

Firstly we need to be a little more pragmatic. As much as the extreme proponents of renewable energy might want to think otherwise, we are going to have to rely on coal-fired generation for some time until renewable generation and battery storage technologies become much more economic. In the meantime the carbon intensity of our generation technologies would be greatly improved if we could promote more closed cycle gas-fired plant. Although still using fossil fuels such plants are much more energy efficient and would contribute to a considerable reduction in carbon dioxide emissions without the major cost impositions associated with renewable energy technologies. But this is unlikely to win the support of the climate change catastrophists because it still involves the use of fossil fuels. So again we are caught in the trap of preventing good things from happening because they are not the perfect solution.

And dare I even mention nuclear power?

But to summarise, yes, I believe in climate change. But it would seem to me that climate change is likely to occur at a slower pace than the climate change catastrophists would have us believe. As a result I believe that there is an opportunity to put adaptation strategies in place and these are likely to be much more cost effective than mitigation strategies, which to date have proved inordinately expensive and largely ineffective.

As for renewable energy, we again need to be circumspect about how it is pursued. A mindless rush to renewable energy will not only see our electricity costs needlessly increase but will also have undesirable impacts on the security of supply.

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  1. 11 Comment(s)

  2.   By Jack Taylor on Oct 29, 2016 | Reply

    Good stuff Ted………….Yours Jack

  3.   By Brad Carter on Oct 30, 2016 | Reply

    Hi Ted
    Your essay brought back many memories about an electricity generator that exemplified best practice in many areas from recruitment to efficient generation following those years of commissioning. I can vividly remember the many projects related to renewables (including the sugar mill and timber mill project) that were pursued vigorously and professionally. For some reason or other this focus seemed to change in later years where I suspect the generator may have been under pressure to provide greater returns and dividends to the government at the expense of corporate leadership in the area of renewables. I think that something was lost when you left this role.

  4.   By tedscott on Oct 30, 2016 | Reply

    Thanks Brad. And you are entirely right, my resignation flagged a major departure from the business strategy I was championing.But not wanting to complain, a new Board and Management were always going to want to make their own mark. It was disappointing but no complaints from me – they were entitled to do that.And my memories are largely fond ones!

  5.   By esther on Oct 31, 2016 | Reply

    Hi Ted.. quite a weight subject this week ..

    Not so fond memories of all those financial models for every renewable energy project that popped it’s head up.
    However it gave me a good overview of varying renewable energy prices and the ability to separate the truth from PR blurb.must be so confusing for people I think in general people have turned off the subject.
    In all the arguments for and against climate change I also can’t separate the natural cycle from the human effect, either way we need to adapt to water shortages, different food production methods and horror ..ways to use less energy which was always the cheapest way to minimise emissions.
    The 20 satellites tracking weather patterns and heat on earth are seeing changes in the oceanic currents.
    Dare I say the human population will diminish which can’t be a bad thing ..can it.
    It’s biodiversity the worries me more these days,in my lifetime… the species loss .. the bug loss ..not to mention the bees.
    Time to enjoy each day don’t you think?
    Funny animals these humans …

  6.   By Geoff Higgins on Oct 31, 2016 | Reply

    Thank-you Ted. We certainly live in interesting times. I often come back to the ‘strength in diversity’ perspective. Let’s not put all our eggs in the one basket, and let’s hope for politicians that can see past campaign contributions and the ubiquitous lobbyists.


  7.   By David HOOD AM on Nov 2, 2016 | Reply

    Hi Ted, This blog seems squarely aimed at me so I feel obliged to respond. There are so many points that require comment that I feel it more appropriate to embed comment on the blog itself and email it back to you. But a few good points for all your readers.

    Firstly you are far from alone in having had to confront bureaucratic blockages – I could add many similar stories from by career, particularly when I was Chairman of CBD Energy Limited trying to drive energy efficiency technology into the property industry. In the end I gave up on attempting to get our products into public service environments. The private sector was less resistive, but the FM personnel were almost as bad as public servants. Eventually we achieved penetration, but not sufficient to maintain profitability. I moved the company into other property services and to greater success.

    I can imagine a few “prominent environmentalists” that might have sought “perfection”. There are a few “blind zealots” that often frustrate me, and that leads me into my big concern with your blog – your constant referral to anyone who seriously accepts the science of anthropogenic global warming (AGW), and its consequent effect on our climate as “climate change catastrophists”, “climate change warriors”, or “climate change zealots” hell bent on pursuing their “pet issue” to obtain “large amounts of government funding”. Firstly accepting the seriousness of the situation does not make one a catastrophist, but rather a realist. And secondly nothing could be further from the truth regarding funding when one looks at the historic funding from governments that the fossil energy industry has received. Historically, and globally, for every $10 that renewable energy (and other green initiatives) has received from taxpayers, the nuclear industry has received $100, and the fossil energy industry $1,000. So please stop using the furphy that “climate change zealots” are getting wealthy on government grants. (can you name one climatologist that is anywhere near as wealthy as our coal barons).

    And just btw, you shouldn’t use the term “believe” in climate change. You either accept the science as advised by the experts, or you reject it. “Belief” is for gods, ghosts, fairies, and conspiracies (not science). And, as an engineer abiding by my Code of Ethics, I do not dabble in issues outside my competence. I accept what the experts are telling me, and I’ve read extensively across the peer reviewed science, and credible journals. When every national science academy in the world has accepted that GHG emissions are causing AGW, and changing our climate, I’m not about to disagree. Too often I see those not accepting the science as either ideologically driven, or in the thrall of vested interests.

    I strongly urge you and your readers to listen to “The Big Conversation” with Ian Dunlop that I hosted at UTS back in August. Go to Skip the introductions, and start at 34:00 minutes with Ian Dunlop.
    Best, David.

  8.   By tedscott on Nov 3, 2016 | Reply

    Lovely to hear from you Esther.You might not have enjoyed modelling all those renewable energy projects but you did a good job at it.You were a very valuable member of our business development team. I will always remember you with high regard.And it doesn’t surprise me in the least that an accountant would describe human beings as funny animals. You are probably right!

    And thank you too Geoff. I certainly share some of your concerns regarding politicians.

    As for David. I thank you for putting an alternative view to my provocative essay.

    You are wrong in believing that I wrote this essay to provoke you. As I said in my introduction a correspondent had pointed out to me that there seemed to be a difficulty in talking about climate change because those who did not fall into line and endorse the prevailing orthodoxy would frequently be discounted as being denialists and their opinions dismissed out of hand. He challenged me to put my view forward which is what I did.

    I would concede that I was probably wrong in labelling people like yourself as zealots, climate change warriors, climate change catastrophists or whatever.(I am still at a loss to what I should call such people – perhaps David Hoods?).

    I have criticised others for shutting down discussions by labelling people in a denigrating way, and that was not my intention. You should know me well enough to know that I encourage debate and are always happy to publish views that are contrary to my own. And I will always publish your views despite my misgivings about some of them because I know you are progressing your arguments with the best of intentions.

    But I would protest that if I do not accept the arguments that are so convincing to you it is not because i am “ideologically driven or in the thrall of vested interests”. At my stage of life neither of those motives have much sway over me. Being free now of any corporate interests and with no political affiliations whatsoever I have no other motivation than to describe the world as I see it, albeit sometimes misinformed which allows me to acknowledge that I could be wrong. I seldom see such acknowledgements from those who have opposing ideas. But I can’t bring myself to believe that they are any more certain than I am!

  9.   By Ian Herbert on Nov 3, 2016 | Reply

    Hello Ted, It is completely incorrect to label everyone who accepts the science of climate change as a catastrophist or a zealot. I cannot understand why you are still “at a loss to what I should call such people”. Such people include what I regard as a huge majority of thinking, sufficiently scientifically literate, people who accept the conclusions of scientists around the world and including our CSIRO. We don’t need a label, thanks, apart from David’s “realists”. Realists accept the science whichever way it falls. Zealotry is irrational.

    Also I cannot understand why you and Esther have difficulty in accepting the anthropogenic cause. (a) CO2 is a ‘greenhouse’ gas; (b)Increased CO2 in the atmosphere causes a glasshouse effect that will increase global temperatures; (c) For over 400,000 years CO2 concentrations in the atmosphere were between 200 and 280 parts per million. In the recent century it has increased dramatically and is now at 400 ppm; (d) The correlation between CO2 concentrations and temperature is extremely close; (e) Burning of fossil fuel since the days of the steam engine can easily account for the quantity of increased CO2 in the air, notwithstanding vulcanos. What is hard to understand about that? The evidence is overwhelming.

    Also totally agree with David’s criticism of your use of the term “believe”.

    It will be not enough to just adapt to climate change. We must do all we can to mitigate as well. A 2 degrees Celsius rise will be enough to irreversibly destroy the Great Barrier Reef. (The wags are saying that if we get rid of the GBR we might get some decent surf at Mackay and Townsville beaches – only joking.)

    Another issue with coal that is little understood: 70% of Qld’s coal exports are of coking coal which is used for making iron out of iron ore. Where we do have an option is with steaming coal which is used for power generation. That is why we must do as much as possible to find power alternatives because there is no alternative to using coking coal.

  10.   By esther on Nov 5, 2016 | Reply

    Dear Ian .. glad you are a caring sort .. however I don’t say lightly that I am uncertain about “cause” of GW.
    Try reading this book on which a $1M was spent on gathering expert views on climate change ; Poles Apart, author Garth Morgan .
    Views from both sides of the debate by various experts around the globe.
    My mother has been amounting books on the subject since the 1950’s which still reside on shelves in her extensive library, most of which I have read
    I too thought the percentage increases were scary considering previous estimates of CO2 concentration during great extinction periods.
    Until I learnt that CO2 is only 2% of the atmosphere and a 100% change would make it 4%.Plus modelling is an art not a science, the standard deviation of inputs and outputs is huge.
    I actually believe IF CO2 conc.,is making a difference a tipping point when the oceans start releasing will bring a very quick change .. but what concentration is the tipping point ? If you can measure all factors I’m in awe.
    In my view the earth self heals, with or without humans .. things wouldn’t be so bad with less humans around.. would it?

  11.   By Ian Herbert on Nov 6, 2016 | Reply

    Esther, Thanks. On one point, you state the CO2 is only 2% and a 100% change would make it 4%, implying that these are very small concentrations and therefore not important. Very small concentrations of all sorts of compounds can be extremely important. e.g. Chlorine is added to our water supply to make it safe at about 3 milligrams per litre. Very small concentrations of elements added to alloys of steel or aluminium make a huge difference to their properties. So I would say that the difference between 2% and 4% CO2 could be enormously significant.

    Yes, Ted (re your email response) I did reply with zeal. I follow scientific methods, use rational and reasonable (literally) debate with “enthusiastic diligence” i.e with zeal (Macquarie dictionary def.) Therefore I might be labelled a zealot (def 1) but not the 3rd definition of a zealot which is a religious fanatic.

  12.   By tedscott on Nov 6, 2016 | Reply

    Thank you Esther and Ian for great contributions.

    Coming from an engineering background I understand the science behind the greenhouse effect. Carbon dioxide is indeed a greenhouse gas and increasing its concentration in the atmosphere most likely provides some warming tendency. But the climate change model isn’t a simple one. For example methane and indeed water vapour are also greenhouse gases. We know that our oceans and our forests also provide carbon sinks. There is evidence of the world’s forests are increasing. Even in Australia,we know that rainfall has increased for example in Northwest Western Australia and forests are extending there. Then occasionally we get natural phenomena, eg volcanoes adding dramatically to the atmospheric carbon load.There are so many variables it must be very difficult to model (even more difficult than renewable energy projects, Esther). All the prognostications using climate modelling have so far proved to be unduly pessimistic.I don’t believe that our modelling of such a complex interactive system is significantly accurate to make policy decisions committing us to billions of dollars of expenditure and threatening the standard of living of many around the world, particularly in developing countries.That is why I urge caution. Let’s focus a bit more on adaptation until we have more confidence in our ability to predict the climate future.And when we commit to investment in mitigation, let’s be sure we are going to get a reasonable return on that investment considering all the economic and socials costs and benefits. (Spoken like like a true economist, don’t you think Esther?)

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