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Publisher's Letter

Electrical energy will cost more in the future

by Leo Simpson

Electrical energy will cost more in the future

So Australia has now ratified the Kyoto Protocol. This is a largely symbolic move but it is the start of many developments on the energy scene. The Federal Government has also promised to set up a carbon trading scheme by 2010 and following the Bali climate change conference, Australia will set greenhouse gas emissions targets, after a report by Professor Ross Garnaut. At this early stage, it looks as though the new Federal Government is taking a conservative approach but they could well turn around and set quite ambitious targets.

At the same time, the New South Wales government has just decided to sell its electricity generating assets to private enterprise and Queensland will probably follow within a few years.

All of these developments will inevitably mean that electricity and other forms of energy will be more expensive in the future. Regardless of how you view the prospect of rising energy prices, there will be some positive results. For a start, carbon emissions trading means all those carbon emissions will have a price. So private enterprise owners of power stations will look very carefully at their operations.

They are most unlikely to build any new coal-fired power stations; we at SILICON CHIP have been advocating this for years. They may well decide to shut down older less-efficient power stations too. In particular, Victoria’s brown coal power stations could well get the chop and quite soon. Ultimately, all coal-fired power stations will be phased out although that will probably take 30 years or more.

All new thermal power stations will be gas-fired and are likely to be much more efficient, particularly if co-generation is used, ie, waste heat from the gas turbines is used to run steam-powered alternators. In the longer term, we may also have nuclear power stations. Interestingly, if most of the electricity generated in the future comes from gas-fired stations, that will probably mean the end of "off-peak" power rates as we now know them. This is because, unlike coal-fired power stations, gas-fired power stations can be brought on line quickly and so there is less need to provide "spinning reserve" – which is why we presently have such cheap "off-peak" rates.

With the likely end of "off-peak" rates and generally higher charges for electricity, there will probably be a major move into solar hot water for all homes and apartment blocks. And so it will go. You will be less likely to use electric radiators in the future. Instead, home heating will be by gas or reverse-cycle air conditioning. We will also insulate our homes much better in the future.

We will probably see a lot more wind farms and solar thermal power stations too. And what about geothermal energy? This shows enormous potential but at the moment, it is just that: potential. If we are going to get any geothermal energy within the next decade, the companies concerned will need to make huge investments. If they succeed, Australia’s greenhouse gas emissions due to electricity generation could be greatly reduced.

That will leave transportation, industry, agriculture and mining as the big greenhouse gas emitters. And while much of Australia’s industries may well be able to make big reductions in emissions in the future, obtaining major cuts for transportation, agriculture and mining is likely to be far more difficult. Electric cars are bound to become commonplace (in spite of the doubters!) but even widespread use will not make a great difference to the total emissions from the whole of transportation.

All up, we regard theses developments as positive. There will be enormous investment in energy resources and power generation and at the same time, we will inevitably become more conservation minded – that can only be good.

Leo Simpson

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