CCS: The planet-saver that's still just a pipe dream  

The Brisbane Times has a jaundiced look at the shimmering mirage of clean coal, quipping that comparing clean coal to large scale renewables "(is) not a reasonable comparison, though, because solar thermal and wind power actually exist" - The planet-saver that's still just a pipe dream.

THERE may be a few forced smiles when Martin Ferguson dishes out $2.4 billion in funding for a handful of "flagship" carbon capture and storage projects (CCS), intended to clean up carbon dioxide emissions from coal-fired power stations.

As the Energy and Resources Minister knows, these CCS projects have taken one helluva time to get up and running - and it will be a long while yet before they make any significant contribution to Australia's CO2 emission reductions.

For at least a decade, the coal industry has promoted a range of clean coal technologies, including CCS, as an alternative to renewable energy. But as necessary emission reduction trajectories get deeper and steeper, the industry has been tardy - stubborn, even - about paying for it.

Instead the public will foot most of the bill for CCS, and will wear the liability if it goes wrong.

CCS projects have a conspicuous history of failure - here and overseas. Put simply, nobody has yet integrated power generation with carbon capture and storage at scale to create clean electricity, anywhere in the world.

And many experts, including from within the energy industry, believe CCS will remain prohibitively expensive and risky compared with known baseload power sources such as nuclear, or renewable sources such as geothermal or concentrating solar thermal which do not leave vast underground stores of carbon dioxide for future generations to worry about.

In April the CSIRO's energy chief, David Brockway, told a federal parliamentary inquiry on climate change that while he did not have a crystal ball, over the next 15 years wholesale electricity costs would roughly triple from the present $40/MWh, as CCS is incorporated into coal-fired power generation. That would bring it, he said, roughly into line with solar thermal - about $160-$200/MWh but falling fast - and wind energy, likely to remain stable at $100-$110/Mwh (other estimates are lower) because it is a mature technology.

It's not a reasonable comparison, though, because solar thermal and wind power actually exist. Iain MacGill, the joint director of the Centre for Energy and Environmental Markets at the University of NSW, says "all prices for CCS are projections right now, because they haven't actually done it yet. Until they can make CCS work, they're on a different planet."

The executive director of the Australia Institute, Richard Denniss, says he would love to see CCS work. But if it doesn't, he asks, "what's plan B?"

Federal and state governments are keen to support the coal industry, which provides cheap power, claims to employ 30,000 Australians directly and was our biggest export earner in 2008-09, with about $50 billion in combined overseas sales of metallurgical and thermal coal.

Especially vulnerable are the coal-reliant communities of the Hunter Valley and Victoria's Latrobe Valley. In both regions, local councils, environment groups and sections of the union movement are working to develop ''just transition'' plans to create green collar jobs - and avoid job losses - as part of an orderly switch to gas-fired or renewable power.

Not even the Greens are proposing, in Kevin Rudd's parlance, to "shut down the coal industry by Thursday" and abandon these communities.

The Institute for Sustainable Futures estimated annual national financial assistance for coal was more than $1.2 billion in 2005-06, in terms of direct subsidies, cheap fuel and accelerated depreciation. The industry pays cheap royalties to the states under a regime which is the envy of the gas lobby.

There is also infrastructure funding designed to ease years of capacity constraints - for example, last year's $1 billion-plus in federal rail funding to help double export capacity from the Hunter Valley coal chain by 2014, and the NSW budget's $205 million to expand Eraring power station on the Central Coast.

The Federal Government is proposing to issue $3.9 billion worth of free permits to coal-fired power generators under its carbon pollution reduction scheme, and is being urged to compensate power station owners for the anticipated loss in the value of their assets if or when such a scheme is introduced.

On top of that, in May the Federal Government announced $2.8 billion would be set aside to fund clean coal initiatives, including $2.4 billion to fund between two and four ''flagship'' coal- or gas-fired power stations with CCS over the next nine years.

The CCS flagships funding was part of a broader clean energy initiative, including $1.5 billion to part-fund a number of flagship solar power stations under a separate process, and a $500 million fund to support emerging renewable technologies such as wave and geothermal.