With the CPRS kicked to touch for now, there is still an opportunity for some emissions reduction work to be done. By Richard Collins.
Standing out amid the sound and fury of the emissions trading debate is a line from online commentator Business Spectator, ripped from Clint Eastwood’s 1988 classic Dirty Harry: “Opinions are like assholes, everybody has one”.
After countless studies that revealed nothing but the biases of the modelers, after increasingly hysterical comments from lobby groups on both sides of the issue, after hectares of newsprint dissecting every twitch and tale, the Carbon Pollution Reduction Scheme (CPRS) fell over at the final hurdle.
The Federal Government will have another go in February, while the opposition will unveil an alternate scheme. Either way, carbon is still in the political gunsights. The few big minerals companies directly liable under the CPRS – with a mine or facility that emits more than 25,000 tonnes of CO2e a year – will have done their sums.
Having gone this close, it is an opportunity for the long tail of non-liable firms to reduce their exposure to a carbon price on their inputs. Under the proposed model capping permit prices at $10 for the first year, the pass-through of the cost will be modest. For example, energy specialist Energetics puts it at 2.5c a litre of diesel and up to $24 per tonne(*) of thermal coal.
But when that defaults to the market price after year one, Treasury predicts the permit price would go to $26 – others expect it to be more like $35-40. The good news is research and real world experience have shown there are many cost-effective opportunities to cut energy use now, even without the carbon price.
The Energy Efficiency Opportunities scheme requires big energy users to prepare and publish a report on potential energy savings. Energetics last year analysed the 165 reports that had been completed at the time, representing 934 petajoules of energy use a year. Less than a third of the reports came from companies in oil, gas, mining and mineral processing, but they accounted for more than half the energy use, 469.91PJ.
The 51 firms reckoned they could save 5.9% of that energy, 27 gigajoules, through measure s with payback inside four years. Energetics CEO Tony Cooper remains baffled by the “[lack of] pace of action and rigour” in pursuing energy savings.
“Business in general has slowed up its drive to improve the efficiency of operations, which I find surprising given some of them have lost their top line [revenue] in the last year,” he said. “When that happens, companies often go looking for low hanging fruit in terms of process gains to offset that, but activity has only been lukewarm.”
Energetics is helping a gold mine in western NSW assess the potential of onsite wind generation, but many of the early opportunities will actually be simple steps with short paybacks.
In 2007-09, mining contractor Thiess convened a series of workshops at site and management level to explore ways to reduce its 7.63PJ a year energy use. Most of that came from diesel engines in its mobile equipment. It whittled 206 ideas down to 46 potential projects based on their impact, cost, risk and effort.
Four will be implemented: payload management, automating mobile lighting equipment plant idle-time management and turbo idle-down time. Thiess estimates these will deliver energy savings of 150,800GJ per annum, some 3.9 million litres of diesel that is equivalent to 10,600 tonnes of CO2 a year.
This represents a 1.7% reduction in total energy use, saving $3.7 million a year through investments with a simple payback in less than two years.
Another example is Xstrata Cooper’s refinery in Townsville. It is relatively small, using about 0.5PJ a year, and the process is relatively simple, making it ideal for a pilot. It found a range of energy saving opportunities.
For example, improved cleaning of the contacts in the copper electrolysis process reduced the voltage drop across the cells for a given current flow by 2%, saving electricity use worth more than $100,000 per year.
Switching out a pump for a variable speed drive model to circulate coolant water for the re-melt furnace is expected to cut energy use by up to 80% and pay back the $20,000 investment in a year.
A $1600 compressed air audit found leaks that cost $5000 to repair. That cut running costs by some $22,000 a year.
“It will be interesting to see what happens when the government releases that data points gathered through the National Greenhouse and Energy Reporting scheme, and for once people will have the basis for apple to apples comparison,” Cooper said. “That’s when it will really get interesting.”
* Please note the original article stated that 'up to $1.80 per tonne of thermal coal' would be the resultant cost following the introduction of a $10 per tonne carbon price. However, this figure is incorrect and the correct figure has been inserted.