south australia:south australia: energy poor, energy rich? gy , gy · 2016-07-22 · energy poor,...
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South Australia:South Australia:Energy Poor, Energy Rich?
Graeme Bethune
gy , gy
Graeme BethuneChief Executive Officer, EnergyQuest
Hyatt Regency, Adelaide Friday, 31st March 2006
EnergyQuest
• Market analysis and d limodeling
• Strategic analysis of emerging issues
• Business development
• FinancingFinancing• Communication
The four E’s of energy
• E1: Economic growth• E2: Energy security• E3: Environment• E3: Environment• E4: Equity
Growing demand
• Millions of people b i lift d tare being lifted out
of poverty by growth i Chi d I diin China and India
High prices
• Now 124.9• LNG prices doubled• Coal prices up 2.5xp p• Uranium prices up
4x4x
Climate change concerns
Air Pollution in China. Source: World Bank.
Our land abounds in nature’s giftsgifts..
Abundant coal• Abundant coal• Abundant gas • Abundant uranium• Falling oil productiong p• Greenhouse
challengeschallenges
Energy rich
Source: Australian Government (2004), Securing Australia’s Energy Future
But how does SA rate?
• Fossil energy poor/uncompetitive• Peak oil: 1989• Peak gas: 1989• Peak gas: 1989• Importing power since early 1990s• End of oil refining 2003
Poor quality coal• Poor quality coal• Car industry based on traditional fuelsy
Cleaner energy but higher prices
Power generation mix (04/05)
Australia SAmix (04/05)
Coal 76% 36%
Oil 1% 6%
Gas 15% 51%Gas 15% 51%
Other 8% 7%
Retail prices (01/02)c/kWh
10.16 13.16c/kWh
Source: ABARE, ESIPC
Coal cheapest but dirtiest
250
260
270
Photovoltaic
100250
per
MW
hag
e co
st, $
per
Wind
BiomassIGCC + Geosequestration
BCIGCC + GeosequestrationSupercritical brown + Geosequestration
50ng r
un a
vera
g
NuclearGeothermal
BiomassIGCC + GeosequestrationSupercritical black + Geosequestration
30
50
Long
Subcritical brown coal
Subcritical black coal
Supercritical brown coal
Supercritical black coal
IGCC BCIGCC
Combined Cycle Gas Turbine
300 200 400 600 800 1000 1200
Emission intensity, t CO2-e/MWhEmission intensity, kg of CO2-e per MWh
Source: Allen Consulting
New entry generation i ith beconomics with carbon
80
100Gas
Brown Coal
Gas $10/t
40
60
$/M
Wh
Gas $10/t
Brown Coal $10/t
PEAK INTERMEDIATE BASELOAD
0
20
030% 40% 50% 60% 70% 80% 90% 100%
Load Factor
Source: Origin Energy assumptions with $3/GJ gas
Cooper gas declining…Cooper Basin Gas Production
300
250
300
150
200
PJ Cooper Basin Gas Production
50
100
0
50
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Distance less a tyrant
Source: ENA
East coast gas reservesSource 2P Reserves (PJ)
Eastern Queensland (3%) 400
Cooper (11%) 1,500
Gippsland (50%) 7,100
Otway/Other Gippsland (11%) 1 600Otway/Other Gippsland (11%) 1,600
CSM (25%) (Qld/NSW) 3,500
Total (100%) 14,100
CSM Potential 3,000+
PNG 7,000+
Gas prices
E t C t A t li i f th h t t idEast Coast Australian gas is some of the cheapest gas outside Russia, the Middle East, Argentina:
• US: US$7.39/mcf (A$10)LNG US$6 50/ f (A$8 85)• LNG: US$6.50/mcf (A$8.85)
• Europe: US$12.20-17.50 (A$16.50-23.75)• Ukraine: Russian attempt to lift from A$1.80 to A$8.50• PNG gas: A$3• Australian conventional gas: A$3.00-3.50• Victoria (Feb): A$2.48( ) $• Queensland CSM: A$2.00• WA prices increasing
Cooper Oil ProductionCooper Oil Production
25 0
20.0
25.0
15.0
00 b
bls/
d
Oil
5.0
10.0'00
-1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Uranium• Back on the agenda• Uranium price has increased 4x since 2003• Uranium price has increased 4x since 2003• 23 nuclear reactors under construction
globally 39 planned 98 proposedglobally, 39 planned, 98 proposed.• Two under construction and 8 planned in
China• Nuclear increasingly likely to play role in
energy portfolio• BHPBilliton take-over of WMC• ASX uranium float frenzy
Australia
• 37% of world’s low-cost uranium, worth about A$100 billionA$100 billion
• Smaller producer than Canada but twice Canada’s reservesCanada s reserves
• Record production in 2005 of 12.4 kt (A$573m)(A$573m)
• 2005 LNG exports A$3.7b, thermal coal A$6 9bA$6.9b
• 2005 net petroleum imports A$4.7b
Three Mines
Production Reserves
Olympic Dam 40% 86%y pSARanger 50% 9%RangerNT
50% 9%
BeverleySA
10% 5%
Source: UIC
Olympic Dam
• World’s largest uranium resource• 70 year mine life• A$5b expansion FEED• A$5b expansion FEED• Uranium production to increase from
4,500 tonnes pa to 15,000 tonnes• Target date: 2013• Target date: 2013
Political issues
• “I don’t believe as a Labor politician and I think I can safely• I don t believe as a Labor politician, and I think I can safely speak for the conservative side of politics, that the nation is ready to enter the debate about nuclear power. The push for energy supplies will come from renewable energy ” Kevin Foleyenergy supplies will come from renewable energy.” Kevin Foley (8 March)
Geothermal• Potential to provide geo
thermal energy forthermal energy for clean base load power generation
• Large potential renewable resource
• Commercially and• Commercially and technically possible but not proven
• Needs GHG policy to be competitive
Source: ANU
Progress
Source: Geodynamics
Geothermal potential
Source: Geodynamics
Wind• Growing source of energy
•Generation costs have fallen 50% in 15 years
•Growth generally driven by government programs
•SA wind capacity about 10% of supply capacity
•World leader in wind share
Solar
•Global sales of solar panels US$11b this yearpanels US$11b this year, up from $7b.
G i i t t b•Growing investment by major energy companies
•BP investments in solar, including manufacturing in Australia
Origin Energy solar PV manufacturing plant, Adelaide
in Australia
•Origin investment in SLIVER t h lSLIVER technology
Bio Fuels
• Ethanol (from sugar and starch) and biodiesel (from vegetable oil and animal fats)(from vegetable oil and animal fats)
• Benefit from import protection and an excise advantage but viable at oil prices> US$45/bbladvantage but viable at oil prices> US$45/bbl
• Have been slow in gaining acceptance, <1% of marketof market
• Recent labelling changesSAFF/A t li R bl F l• SAFF/Australian Renewable Fuels
• SA potential but Queensland first-mover
SA: energy poor/energy rich?• Historically fossil fuel poor and falling• But coal states and WA also face challenges• Can SA grasp opportunities to become cleaner energy rich?• Good access to cheap gas. How can we leverage to add value?• First-mover advantage in uranium but political barriers to addingFirst mover advantage in uranium but political barriers to adding
value• First-mover advantage in hot rocks but not proven • Early mover in biofuel a y o e b o ue• But only possibilities • Critical time for SA energy policy to position the state for new
energy worldgy
EnergyQuest
• Adelaide L10/ 60 Waymouth St Adelaide SA 5000• Melbourne L4/ 6 Riverside Quay Southbank Vic• Melbourne L4/ 6 Riverside Quay Southbank Vic
3006• Telephone 1300 658 966e ep o e 300 658 966• International +618 8431 7903• Mobile 0419 828 617• Fax +61 (0)8 8431 7903• Email [email protected]
www.energyquest.com.au
South Australia:South Australia:Energy Poor, Energy Rich?
Graeme Bethune
gy , gy
Graeme BethuneChief Executive Officer, EnergyQuest
Hyatt Regency, Adelaide Friday, 31st March 2006
South Australia:South Australia:Energy Poor, Energy Rich?
Graeme Bethune
gy , gy
Graeme BethuneChief Executive Officer, EnergyQuest
Hyatt Regency, Adelaide Friday, 31st March 2006