Don't be a blacksmith. Start retooling

It’s easy to get caught up in the news when it comes to dealing with our environmental challenges.

You’ll read today’s story about emissions rising for the nth month in a row. Or about another company closing down its old, inefficient operations.

But behind these stories are broader trends sweeping the globe.

Trends like the rapid falls in the cost of renewable generation and batteries. Trends like politicians unable to keep up with the market and with the public mood. Trends like the electrification and automation of the vehicle fleet. Trends like the growth of AI and the InternetOfThings and their impacts on industrial plants

The firms that succeed won’t be distracted by the day to day. They’re preparing for the long haul. They’re watching the long term trends and making sure their businesses are set to be competitive in a decade, not just next quarter.

The firms who try to adapt by lobbying government are missing the point. The world is changing and moving on, regardless of what governments want.

Over a century ago, the best blacksmiths found themselves out of horseshoe customers as the automobile destroyed their livelihoods. The same thing is happening across the world in many sectors.

Don’t be a blacksmith. Start retooling for the new world that’s emerging.

Emissions policy - Industry, what are you waiting for?

The ALP’s policy on emissions reductions was released yesterday. In short, it will call on industrial businesses to do much more to control and reduce their greenhouse gas emissions, or to pay for offsets if they won’t.

It remains to be seen how much of this policy will be implemented. Labor would need to win the forthcoming election, draft the policy, overcome vigorous opposition and industry campaigning, and finally get legislation through a senate of currently unknown composition.

The final legislation could look very different to the ALP’s current policy.

Despite this uncertainty, there is still good reason for industry to start preparing now. The political mood on addressing climate change is shifting. The very high costs of electricity and gas already give you a strong incentive to start looking at energy efficiency, fuel switching, renewable energy supplies, battery storage, and a myriad of other options.

Addressing high energy costs will also address your climate impact. It is a key future driver of competitive advantage. If you are prepared ahead of any policy changes and your competition isn’t, that’s a good place to be.

So what are you waiting for?

Labor's emissions policy to be announced shortly

The Australian federal election is just around the corner. For those of us in the environment/energy/carbon space, it means the result may have very big impacts on the regulatory environment we work in.

Labor is about to announce its climate and energy policy (link).

A key change will be the broadening of the existing Safeguard Mechanism to many more businesses. Presently, facilities emitting >100,000 tonnes CO2e are covered (211 facilities in FY17/18). Electricity generation is exempt.

Labor’s policy would extend to facilities emitting >25,000 tonnes. This will add hundreds of new industrial and other facilities to the scheme.

The effects will be significant:

  • Hundreds of new baselines will need to be developed, audited and approved.
  • There will be genuine pressure to contain and reduce GHG emissions in many industrial facilities
  • for plants unable to stay under their baseline, there will be new demand for ACCUs. Given the current ACCU market is quite thin, it’s reasonable to expect significant market impacts as a result to this step change in demand.

It will be interesting to see the political debate over this policy direction in coming weeks.

Industrial heat from renewables - promising research

Industrial heat from renewables - promising research

Industrial heat is one of the key challenges in our response to climate change.

The demands of industry for heat are high:

  • high temperatures (often above 500ºC)
  • high heat rates
  • 24-hour operation

These needs have historically been met by fossil fuels, especially natural gas. Although it is possible to use electric heating to provide industrial heat, it has not been economically viable outside niche applications.

Researchers Rhys Jacob, Martin Belusko, Ming Liu, Wasim Saman, and Frank Brunoat at the University of South Australia are hoping to change this. They have developed a promising system to deliver solar heat to industry, recently published in the journal Renewable Energy.

Their system involves a combination of either CSP (concentrating solar thermal) or solarPV (photovoltaic) with phase-change materials for thermal energy storage (TES). Their work suggests that 1 MW thermal can be provided at 610ºC using this system. Jacob says the system is modular and could be scaled up easily with more units. Here’s an approximate flow diagram from the paper:

Solar Industrial Heat Flow Diagram

Their work indicates that systems like this could be competitive with natural gas at $15/GJ, not far off current Australian prices, and competitive if we see a return of a carbon price.

Reducing greenhouse gas emissions is a complex, multi-faceted problem. Renewables won't be enough

Reducing greenhouse gas emissions is a complex, multi-faceted problem. Renewables won't be enough

Greenhouse gas emissions reduction is a much more complex and multifaceted challenge than it first seems. It’s about much more than switching power production to renewables.

Here are some other significant contributors to our emissions:

  • Aviation; modern jet aircraft run almost exclusively on crude-oil based fuel. Biofuels are being trialled but have their own challenges, such as competition with land used for food production and with available water.

  • Industrial heat; industrial furnaces and reactors often require high temperatures (> 500C). This is currently provided by coal or natural gas. Finding economically viable emissions-free options for industrial heat is a challenge.

  • Fugitive emissions; so long as we produce coal and gas, we will release methane into the atmosphere. Finding better ways to capture and abate this will be necessary so long as we continue to use these energy sources.

  • Metals production often uses coal, not only as a heat source but as a “reductant” to drive the reaction. Alternatives exist but are a long way from widespread use.

  • Synthetic fertilisers enable us to feed 7.6 billion humans. They produce high nitrous oxide emissions as they break down after being used. We need alternatives that don’t cut food production.

Let’s get to work.