The threat to and the dangers of coal

Geothermal energy

Geothermal energy is produced by the decay of radioactive substances contained in granites which heat it up to 300C. Unlike other countries, Australia has vast deposits of this granite just 3-5km below the earths’ surface and the technology to locate and delineate hot rock deposits and drill into them. Known deposits are sufficient to supply Australian electricity needs for several hundred years.

When water passes over hot granite it causes it to fracture, creating an underground heat exchanger and superheated steam under very high pressure. This forces the steam to the surface through wells drilled into the granite. The steam is piped through a surface heat exchanger, causing a separate fluid to heat producing steam which drives a turbine. The turbine turns a generator which produces pollution-free base load electricity.

On the basis of known costs, it is estimated that geothermal generating costs will be between $72-$90/MWh by 2020, the lower cost being associated with the hottest rock. The cost of generating electricity by burning fossil is estimated to be between $76/MWh for coal and up to $90/MWh for gas by 2020.

Generating costs from use of steam produced by geothermal rock or burning fossil fuels are similar, until adding on the cost of CCS technology or emission licences required by CO2 emitting fossil fuels. This makes geothermal electricity much cheaper than that produced from coal. Given a choice, the market will always purchase from the cheapest source and on an even playing field, geothermal is far cheaper.

This will attract investment into geothermal electricity, speeding up its development and ability to replace coal as the prime source of energy. By 2020 it can be expected that geothermal will have met our increasing demand for electricity (3 per cent/annum) and thereafter will eat into the domestic market for coal. By 2030 the domestic market will have been halved and by 2050 fully replaced by electricity produced from renewable sources, largely geothermal.

Sunlight

Sunlight is used to produce electricity directly using photovoltaic cells (PVC’s) or indirectly through concentrating its heat to produce solar-thermal steam to drive a turbine.

PVC domestic arrays convert 15 per cent of available sunlight into electricity although more efficient outcomes are achieved by concentrating sunlight onto very large PVC arrays, as proposed for the new power station at Mildura. Cost of production is presently well above that of burning coal and will remain so until significant improvements in PVC efficiency are achieved - an area of active R&D.

More efficient use of sunlight is achieved by using a large array of mirrors, a heliostat, concentrating sunlight onto an elevated heating chamber containing a substance which retains heat. The heat is used to produce steam, enabling electricity generation for over 18 hours a day. R&D into ways of bringing down costs are making rapid advances and are expected to make solar-thermal competitive with burning coal + CCS by 2018/23.

Countries dependent on coal, particularly coal importers, will opt for solar-thermal electricity generation as soon as costs are comparable. The effect on Australian coal exports will not be felt until about 2020, becoming more noticeable after 2030, dropping sharply thereafter and culminating in cessation of exports in the 2050s.

In conclusion, coal production for domestic use and export has a future of at least 20, at most 40 years. Domestic use of coal will be limited by the size and speed with which geothermal power stations can be built. Continued coal exports depend on the speed with which innovation reduces the cost of using solar energy. Rapid technological break-throughs would result in speedier decline of coal, though unlikely much before 2030.