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Ladies and gentlemen,
Thank you very much for the opportunity to be with you tonight at the first ever international symposium on the sustainable use of low rank coals.
This is a very important subject for Australia - nowhere more so than right here in Victoria - where we have economic demonstrated reserves of brown coal that, at today's production rates, would last for around 500 years.
Before I say more about that, let me also welcome you to Melbourne - and Victoria - wearing my hat as Minister for Tourism.
While you are here in Melbourne, I encourage you to make the most of what this city has to offer.
Within walking distance, you will find Southgate and Federation Square overlooking the boulevards along the Yarra River - and offering a diversity of places to dine or shop.
You might also choose to see an exhibition at the National Gallery of Victoria, or catch a show at the spectacular Princess or Regent Theatres.
The importance of coal
When it comes to the world's energy needs, coal provides 41 per cent of global electricity today and that will grow to 44 per cent by 2030.
Here in Australia, more than three-quarters of our electricity is generated using coal.
And more than 90 per cent of Victoria's generation is fuelled by brown coal.
There is no doubt that the amount of the world's electricity supplied by gas, nuclear and renewables will grow in absolute terms over the coming decades.
But the forecast scale of global economic growth is so large that coal will still have to grow, not only in absolute terms, but proportionally as well.
Therefore, as the world demands cleaner energy supplies we all know that the way we use coal must change.
This symposium is about how we make that change and find new ways of making coal more environmentally sustainable - including low rank coals such as our enormous brown coal resources here in Victoria.
Just as we are investing in technology research, development and demonstration to drive down the costs of renewable energy, we must invest to drive down the costs of low emissions coal technology as well.
In the Australian context - coal is integral to national energy security, the international competitiveness of many of our industries, and it is a vital source of national income through exports.
While coal's share of Australia's total energy supply will fall in the coming years, it will still continue to provide the majority of our energy requirements well into the future.
Alternative sources of energy are going to increase in the years ahead in Australia, but they are going to complement, rather than replace, our coal generation capacity.
The reality is that intermittent wind or solar power technologies today can't replace baseload coal fired power.
To replace just 1 gigawatt of Australia's 30 gigawatts of coal fired power with solar photovoltaic (PV), you would need more than half of the 7.5 gigawatts of solar PV capacity installed worldwide last year.
Why 4 gigawatts to replace just one? That's what it would take to provide the same level of reliable output from flat plate solar PV as from coal.
Coal is also Australia's largest export commodity.
Coal exports earned Australia more than $50 billion last year and the coal industry is the lifeblood of many regional communities, including the Latrobe Valley here in Victoria.
Low emissions future
While maintaining energy security and our international competitiveness, Australia is also responding to the community's desire to address pollution and climate change.
Air quality, water quality, and the natural environment generally, are in good shape in Australia compared to the rest of the world, but there is still plenty of room for improvement.
Globally, the health of over a billion people is compromised by polluted air, water or soil.
The World Health Organisation estimates that 25 per cent - 1 in 4 - of all deaths in the developing world are directly attributable to environmental factors.
Acute respiratory infections alone kill an estimated 2.2 million people every year, about 2 million of them children under 5 years of age.
Sixty per cent of acute respiratory infections are directly linked to environmental factors like the pollution of air - both indoors and out - from burning wood or biomass for cooking and heating.
So, there is a lot to be said for large-scale baseload electricity - but in many parts of the developing world - old coal fired technology and poor operating practices are also contributing to air, water and soil pollution.
In Australia and the developed world, today's focus is on reducing greenhouse gas emissions to address climate change because the pollution problems of harmful gas emissions, ash and wastewater have largely been alleviated over the last three decades.
But in the developing world, these issues remain of enormous concern and must also be front and centre when we talk about the environmentally sustainable use of coal.
Before I come back to this important issue, let me say a few things about carbon capture and storage (CCS).
Carbon capture and storage
There is no doubt carbon capture and storage has a critically important role to play in the future.
In fact, the International Energy Agency (IEA) says it's the only technology available to reduce greenhouse gas emissions from large-scale fossil fuel use.
The Australian Government has established the Global Carbon Capture and Storage Institute (GCCSI) and is investing $100 million a year in it to advance CCS technologies and their deployment globally.
The GCCSI has been a great success and now has over 200 members, including 26 national governments, and a large number of leading corporations, non-government bodies and research organisations.
The Australian Government is also investing $2.4 billion in a domestic CCS Flagships Program to support construction and demonstration of large-scale integrated CCS projects in Australia.
One of the shortlisted projects is the CarbonNet integrated multi-user capture, transport and storage project here in Victoria.
This project aims to store between three and five million tonnes of carbon dioxide (CO2) a year from emissions-intensive power stations and industries in the Latrobe Valley - more than one per cent of Australia's total annual greenhouse gas emissions from the energy sector.
The project is near both potential geological storage sites - onshore and offshore - and a large aggregate industrial source of CO2 emissions.
The nearby offshore reservoirs in the Gippsland Basin are highly prospective storage sites and the Australian and Victorian Governments have been working closely to explore their potential.
Last week Minister Batchelor and I announced the completion of a jointly-funded seismic survey in the Gippsland Basin, the first time in Australia that a large-scale offshore seismic survey has been specifically designed to test CO2 storage potential.
The challenge facing us all is to drive down the costs associated with these technologies and make CCS commercially viable on a broad scale.
Because, not only is transport and storage costly, but all the CCS processes available to us today - post-combustion capture, pre-combustion processes, oxy-fuel combustion - consume considerable energy, significantly reducing the output and efficiency of power generation.
Assessing the net greenhouse gas reduction benefits of CCS will require careful assessment of all these factors.
So, while we continue to invest in CCS, what else do we need to do to make coal more efficient and more environmentally sustainable, at the same time maintaining its affordability to help lift hundreds of millions of people out of poverty around the world?
Carbon capture and use
Just as CCS has become part of the lexicon over recent years, carbon capture and use is also making a name for itself.
It's a concept the community has long been asking about, and rightly so.
I'm pleased to announce tonight that the Australian Government will contribute additional funding of up to $40 million toward the Calera mineral carbonation project - Australia's first carbon capture and use project - if feasibility studies and a pilot plant prove successful.
The funding, from the $400 million National Low Emissions Coal Initiative, is part of the Australian Government's 2007 election commitment to invest in post combustion capture and storage on an existing power station in the Latrobe Valley.
The Australian and Victorian Governments are already providing an initial $3.5 million each for the Calera project.
The Calera project involves an innovative technology that uses CO2 captured from the Yallourn power station to make cement and aggregate material.
This technology converts, rather than stores, CO2 to make solid calcium and magnesium carbonate and bicarbonate minerals that can be used as valuable building materials.
The Calera project is very exciting and will allow us to test the world's first carbonation process on brown coal to produce useful building materials and reduce CO2 emissions from an existing coal-fired power station at the same time.
While geological storage will be required as part of the long term solution to disposing of large quantities of CO2, carbon capture and use projects will also be important and will help power stations and other industries offset the cost of installing capture technology.
In addition, significant reductions in CO2 - as well as NOX and SOX - emissions can be achieved through advanced supercritical plants and pollution control systems, but again, further reductions in CO2 emissions will rely on efficient carbon capture, use and storage processes.
The challenge for brown coal is to develop technologies that can deliver higher thermal efficiencies whether this be integrated gasification combined cycle (IGCC) technology or advanced pulverised coal supercritical systems.
The efficiency of brown coal IGCC, however, is a great challenge when the energy intensity of coal drying is taken into account.
Notwithstanding that, I encourage our Japanese colleagues here tonight who are looking at investing in a brown coal gasification demonstration project at Morwell in the Latrobe Valley.
Only through projects such as this will we ever make progress.
Brown coal drying
For Victorian brown coal, the biggest challenge is indeed the very high moisture content - 61.5 weight per cent.
By contrast, Hunter Valley black coal has a moisture content of about 7.5 weight per cent.
The development of efficient drying technology - down to about 12 weight per cent - really is the key to the sustainable use and higher thermal efficiency of brown coal.
As part of the National Low Emissions Coal Initiative, the Australian Government has committed $75 million to a new research agency.
A key focus of the Australian National Low Emissions Coal Research and Development Agency will be reducing emissions from brown coal power generation, particularly improving the efficiency of coal drying technology.
We are also investing in projects such as HRL's Integrated Drying Gasification Combined Cycle technology.
The Australian Government is providing $100 million through the Low Emissions Technology Demonstration Fund for this project and the Victorian Government is providing a further $50 million.
Other technology demonstration projects also hold significant promise, for example, Exergen.
There is no doubt that, if we are to make low rank coals such as Victorian brown coal, environmentally sustainable for the future, our most immediate challenge is to make big breakthroughs in drying technology, and the Australian Government will continue to invest in this important area.
Conclusion
Working alone, we will achieve little.
Working together, we will drive the international momentum needed to tackle not only climate change, but the pollution problems that are directly affecting the health of over a billion people around the world today.
So we need all our stakeholders to:
- Share expertise on technology;
- Support investment in technology demonstration projects; and
- Inject greater urgency to the challenge of not only reducing CO2 emissions from coal, but improving its overall environmental performance through higher thermal efficiencies, better pollution control to reduce harmful gas emissions and better wastewater and solid waste management practices.
Ladies and gentlemen, I thank my colleague, Minister Batchelor, and the Victorian Government for organising this important symposium.
I hope it becomes a regular event on the international calendar, and I thank all our overseas guests for coming.
As I said at the outset, this is a very important subject for Australia - nowhere more so than right here in Victoria - where we have economic demonstrated reserves of brown coal that, at today's production rates, would last for around 500 years.
Thank you.