Energy Law and the Environment Part 2 pptx

OVERVIEW: ENERGY PRODUCTION AND USE 5The role of renewables in the Australian energy market mirrors that in the rest of the world, except that the mandatory target MRET set by the Renewa

4 ENERGY LAW AND THE ENVIRONMENT

other than hydro, will need to increase about 60% above 1997 levels to a pointwhere 9500GWh of renewable energy is generated

The mix of renewable energy technologies, as at 18 August 2003, is thefollowing: hydro – 36%; solar hot water heaters – 26%; wind – 11%; bagassecogeneration – 10%; landfill gas – 8%; wood waste – 4%; black liquor – 4%;and sewage gas – 1% These figures demonstrate that a wide range of renewableenergy technologies have entered the electricity market since the introduction

of the MRET For example, largely due to the MRET, the solar hot water systemhas grown by 30% per annum from 19 000 to 30 000 systems The wind industryreported an annual growth rate of 118% between 1999 and 2002 Wind power isexpected to grow 16% a year from a small base over the entire outlook period and

to contribute around 36% to the additional renewable energy generated between2001–02 and 2010–11 Electricity generated from biomass is expected to increase

by 10% per year, accounting for 33% of the total growth over the same period.Sales of renewable electricity, equipment and services for 2002–03 wereapproximately $1.8 billion, of which 14.5% are expected to be exports, amount-ing to $226.5 million These sales are less than half of the Renewable EnergyAction Agenda target (discussed below) of $4 billion sales in 2010 Projectedemployment is 6189 people Installed capacity for this period was 7616.4MWwhich, when large hydro generation is removed, amounts to 680MW

By September 2003, it was suggested that $900 million of investment in able energy projects had occurred with another $1 billion committed or planned.However, a number of investors are concerned that investment will cease after

renew-2007 because the capacity to deliver the 2010 MRET target will have alreadybeen installed Also there is no commitment on the part of the Australian govern-ment to continue the target beyond 2010 This reduces the payback period forinvestments, which is typically 15 years

1.3.1 The Allen Consulting Group’s Sustainable Energy Jobs Report

A report prepared by the Allen Consulting Group in 2003 gives an excellentoverview of the sustainable energy industry (SEI) in Australia The Group findsthat unless there is government intervention in the energy market, the outlook

to 2030 for SEI and renewables is limited This is as a result of market failureand other difficulties that block the development of the industry Governmentsaround the world are taking action to address this problem, in particular to reducegreenhouse gas emissions and stimulate the renewable energy industry Manygovernments are doing this for energy security and to ensure that their economiesare familiar with a wide range of energy technology options They regard supportfor emerging renewable technologies as an important strategy for ensuring long-term energy competitiveness The potential for the technologies to grow jobsand export markets, as well as deliver environmental benefits, has also beenrecognised In Australia, the SEI export market is likely to be in the Asia-Pacificregion as it resumes its rapid development trajectory

OVERVIEW: ENERGY PRODUCTION AND USE 5

The role of renewables in the Australian energy market mirrors that in the

rest of the world, except that the mandatory target (MRET) set by the Renewable

Energy (Electricity) Act 2000 (Cth) has seen a high growth rate in renewables.

However, because of the low target set under the legislation, non-hydro ables are only expected to supply 3.6% of Australia’s electricity in 2020 The keymessage is that unless the negative externalities associated with fossil fuel gen-eration are factored into the price of electricity, renewables will not significantlyincrease their share of domestic energy supplies

renew-Renewable energy technologies face considerable competitive challenges as

a result of market failure, regulatory failure and the costs of development Thismakes renewable energy more expensive than that generated by fossil fuels Inspite of this there is evidence to show that biomass and biogas are close to beingcompetitive with fossil fuel technologies, and wind-powered electricity is movingcloser to competitiveness

While renewable energy technologies are likely to impose a financial cost onsociety, these can be mitigated through concerted policy action which involves

a mixture of renewable energy and demand management approaches and othermeasures

The report focuses on seven sustainable energy technologies and makes keyobservations about their development They are: commercial–industrial energyefficiency; industry–small cogeneration; dry agricultural wastes; wind power;solar photovoltaic; waste coal mine gas and vent air technology; and biodiesel.The report emphasises the importance of supportive public policies, like theMRET scheme, in the development of these technologies

The report recommends a combination of approaches to support the opment of SEI These include demand management measures; increasing theMRET scheme to 5%; and establishing a leveraged fund to achieve various SEIinitiatives

devel-More specifically with respect to wind generation, the report notes that wide turnover for wind generation equipment is US$1.5 billion per year, whilethe total industry turnover is between US$5 billion and US$10 billion It is clearthat global growth in wind energy is supported by government policies and costimprovements in association with technology-led productivity gains There isalso a significant regional annual export market to China, the Philippines andNew Zealand Large areas of NSW have been shown to have top wind speedsthat are comparable with those in Denmark and Germany, world leaders in windgeneration However, without sufficient policy support the wind market will notreach its potential

world-1.4 Renewable Energy Action Agenda

In addition to the measures prescribed by law under the Renewable Energy

(Elec-tricity)Act2000 (Cth), the Australian government developed a Renewable Energy

Action Agenda in 2000 as a joint initiative with industry The Agenda is to be

6 ENERGY LAW AND THE ENVIRONMENT

implemented by the Renewable Energy Action Agenda Group In October 2002,

the Group released the Renewable Energy Technology Roadmap report4 whichreflects the views of industry, research and policy-makers, and participants to pro-vide ‘pathways’ for the development of Australia’s renewable energy industry Thereport concluded that five key factors determine renewable energy innovationand technology development: international climate change commitments; gov-ernment policies and programs; economic and social drivers; renewable energyresources; and research and development capability

The report suggested that while Australia has acknowledged strength inrenewable energy research, greater emphasis is required to complete the inno-vation cycle to capture commercial benefits from the resulting research break-throughs This observation was made in the context of rapid international growth

in renewable energy technology following public and academic concern aboutthe impact of global warming

The report classified the Australian renewable energy sector into 10 nology sectors: biomass energy; cogeneration; enabling technologies; fuel costsand hydrogen fuels; geothermal energy; hydro-electricity, tidal energy and waveenergy; photovoltaics (PV); remote area power supply (RAPS); solar thermalenergy; and wind energy

The analysis used in the report assumes that commercially successful nologies must be technically developed, appealing to the market, cost com-petitive and supported by a significant resource base In order to promote theAustralian renewable energy industry, five technology development strategiesare proposed:

tech-● Ongoing development – entails focusing on increasing the technology ket uptake and reducing costs to become more competitive with fossil fuels,for example bagasse energy;

mar-● Development and commercialisation – where activity in R&D and marketdevelopment is required, but the focus is on addressing barriers to commer-cialisation, for example geothermal energy (hot dry rocks and geothermalheat pumps);

● Import foreign technologies – where for various reasons the best option isfor Australia to purchase the necessary technology;

● Monitor international developments – entails monitoring internationaldevelopments and focusing on ancillary technology and associated ser-vices, for example the emerging hydrogen economy; and

● Monitor commercial developments – where Australian resources are ited, the limited resources be adopted for development, for examplehydrothermal technologies

lim-Regarding environment and planning legal issues, the report calls for the opment of standards for each renewable energy technology In particular, the

devel-4 Available at

<http://www.industry.gov.au/assets/documents/itrinternet/RETRSplitVersion2ch4-lesspage.pdf> (accessed 15 August 2005).

OVERVIEW: ENERGY PRODUCTION AND USE 7

report notes that Australia needs to participate in the development of tional standards in order to minimise the non-tariff barriers to Australian exports.Further, the report calls for the establishment of a renewable energy technologyand innovation network to promote a culture of market-driven innovation in therenewable energy industry

interna-The targets for the Group in 2005–06 are: to advise the Minister for Industry,Tourism and Resources on the development of the renewable energy industry;

to assist with the implementation of the government’s Energy White Paper,5ticularly the Solar Cities and Wind Energy Forecasting initiatives; and to prepare

par-a report to the Ministeripar-al Council on Energy on rule chpar-anges thpar-at par-are required inthe National Electricity Market6to get rid of barriers and maximise the benefits

of renewable and distributed generation

1.5 The role of biofuels

Biofuels, as discussed in Chapter2, are regarded as environmentally friendlytypes of fuel On a fuel cycle basis, greenhouse savings of up to 5% can be gainedfrom the use of E10 (which is petrol blended with 10% ethanol) However, theuse of 100% biodiesel made from waste oil can achieve 90% cuts in greenhousegas emissions compared with diesel Biofuels currently provide around 50 to 60

ML (or 0.3%) of road transport fuel Most of this is manufactured from wheatstarch produced in New South Wales, although about 5 ML of ethanol is producedfrom C molasses feedstock in Queensland A biodiesel plant using waste oil wasrecently established in New South Wales with a capacity of 14–17 ML In 2003,

a 10% limit on the contribution of ethanol to petrol came into force, while anethanol fuel labelling standard came into effect in 2004 The legislation, princi-

pally the Fuel Quality Standards Act 2000 (Cth) which regulates the use of fuels, and the Energy Grants (Cleaner Fuels) Scheme Act 2003 (Cth) which provides

bio-funding to support the development of biofuels, is discussed in greater detail inChapter4

It is interesting to note the September 2005 findings of the Biofuels Taskforce7

established by the Prime Minister The Taskforce has found that potentially theremay be greater health benefits from ethanol use than previously envisaged; thatprevious research findings that ethanol may provide greenhouse and regionalbenefits should be supported; that there are considerable market barriers to thebiofuels industry including low consumer confidence and high commercial risk;and that on a business as usual basis Australia is unlikely to meet a target of atleast 350 ML of biofuel production by 2010 The Prime Minister has neverthelessreaffirmed the government’s intention to reach this target

5 See Chapter 7 6 See Chapter 5

7 Available at<http://www.dpmc.gov.au/biofuels/final report.cfm> (accessed 16 October 2005).

8 ENERGY LAW AND THE ENVIRONMENT

1.6 Is there a place for nuclear energy in Australia’s future energy mix?

As discussed in Chapter2, the possibility of establishing a nuclear fuel industry

in Australia has long been dismissed on environmental grounds However, inMarch 2005 the Minister for Industry, Tourism and Resources established aninquiry into Australia’s uranium resources As a result of global climate change,the global demand for uranium resources has escalated because nuclear energy

is a non-fossil fuel source of energy It is regarded as being a ‘greenhouse friendly’type of fuel, although critics state that the greenhouse intensity of building andoperating nuclear power stations is often not factored into the overall calculation

of intensity The Federal Minister for Industry and Resources has indicated that

he will be disappointed if uranium exports do not double or triple over the next

10 years, possibly creating a $2 billion export industry

As mentioned earlier he has requested the Commonwealth House of sentatives Standing Committee on Industry and Resources to inquire into thestrategic importance of Australia’s uranium resources

Repre-There seems to be considerable support within the current Australian ernment for reopening the debate about a future nuclear energy industry inAustralia The Prime Minister has welcomed the debate,8while Deputy Whip ofthe Liberal Party, Alan Eggleston, said Australia should consider using nuclearenergy to reduce its reliance on coal for electricity He has stated that with 40%

gov-of the world’s uranium reserves, Australia could not continue to be so reliant oncoal.9The Minister for Education, Science and Technology, Brendan Nelson, hasmeanwhile stated that Australia will need to use nuclear energy within the next

50 years to help drive down the growth in greenhouse gases.10

In spite of this support from the government, considerable concerns havebeen raised with regard to the use of nuclear energy in Australia.11First, nuclearpower itself generates greenhouse gases because of the significant use of energyrequired to mine, mill and enrich the uranium for the fuel rods Even wherehigh-grade uranium ores are used, it takes 7 to 10 years to ‘pay back’ the energyused in the construction and fuelling of a typical reactor Secondly, for a large-scale deployment of nuclear power to be sustainable in the long term, breederreactors would have to be used, which create their own fuel in the form of pluto-nium To date, these reactors have not generated sufficient new fuel Ultimately,this would result in plutonium, a highly hazardous radioactive material, beingtransported around the world in increasing quantities The risks associated withnuclear terrorism are clear Thirdly, despite significant government support forthe nuclear energy industry globally, it remains one of the most expensive ways

8See ‘Howard Welcomes Debate on Nuclear Power’, The Age, 10 June 2005.

9See Sydney Morning Herald, 17 August 2005, available at <http://smh.com.au/articles/2005/08/17/

1123958110562.html?oneclick=true>.

10See Sydney Morning Herald, 11 August 2005.

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OVERVIEW: ENERGY PRODUCTION AND USE 9

to reduce greenhouse gas emissions At no time has the same level of supportbeen forthcoming to support the development and commercialisation of energyefficiency and renewable energy technologies Finally, with the well-known dif-ficulties of disposing of the waste associated with nuclear energy, the technologymay well exacerbate, rather than solve, environmental problems Perhaps one

of the greatest concerns is that a focus on a nuclear energy industry in Australiawill detract support and funding for the nascent sustainable energy industry

As we describe in Chapter2, energy efficiency and renewable energy gies are proven technologies designed to significantly reduce greenhouse gasemissions

technolo-Not surprisingly on 7 September 2005, Greenpeace, the Australian tion Foundation (ACF) and the Australian Greens called on the Australian gov-ernment to rule out nuclear energy They released a report challenging claimsmade by various senior Coalition leaders that nuclear power is clean and a poten-

Conserva-tial solution for curbing greenhouse gas emissions The report is entitled Nuclear

Power: No Solution to Climate Change.12The report states that a doubling of thenuclear power industry by 2050 would only reduce greenhouse gas emissions

by 5% while there is a significant danger that nuclear power plants could beused as nuclear bomb factories Alternative approaches, such as a greater uptake

of energy efficiency measures and renewable energy technologies, offer a cleanenergy future without the associated dangers President of the ACF, Professor IanLowe, also claims that the real cost of nuclear energy is far higher than for renew-able energy technologies Meanwhile, the Australian Greens Senator for Tasma-

nia, Christine Milne, called on the Prime Minister not to amend the Australian

Radiation Protection and Nuclear Safety Act 1998 (Cth), which currently prevents

the licensing of a nuclear power plant, so as to allow such licensing

12 Available at<http://archive.greenpeace.org/comms/no.nukes/nenstcc.html> (accessed 16 October

2000 of the link between energy use and production and sustainable ment, the United Nations Development Programme, the United Nations Depart-ment of Economic and Social Affairs and the World Energy Council declared in

develop-their report, World Energy Assessment: Energy and the Challenge of Sustainability (hereafter referred to as World Energy Assessment) that there are two impor-

tant features of the link between energy production and use and sustainabledevelopment:

One is the importance of adequate energy services for satisfying basic human needs, improving social welfare, and achieving economic development – in short, energy as

a source of prosperity The other is that the production and use of energy should not endanger the quality of life of current and future generations and should not exceed the carrying capacity of ecosystems 2

In its chapter on energy resources and technological development, the World

Energy Assessment went on to consider the appropriate options available for using

energy in ways supportive of sustainable development consistent with addressingenvironmental concerns The report identified three major options:

● Greater use of energy efficiency, in terms of energy use in buildings, electricappliances, motor vehicles and industrial production processes

● Increased reliance on renewable energy resources.

1World Commission on Environment and Development, Our Common Future, OUP, Melbourne, 1987, at 8.

2 United Nations Development Programme, United Nations Department of Economic and Social Affairs and

World Energy Council, World Energy Assessment: Energy and the Challenge of Sustainability, United Nations,

New York, 2000, at 31.

10

TECHNOLOGIES & SUSTAINABLE DEVELOPMENT 11

● Accelerated development of new energy technologies, in particular generation fossil fuel technologies Nuclear technologies could also beincluded if the environmental problems associated with nuclear energycould be resolved.3

next-Gaining a brief understanding of the type of technologies available commercially

at present under each of these three options provides an appreciation of therole that the law can play in promoting sustainable development in the energycontext

2.1 Energy efficiency technologies

2.1.1 Buildings4

A vast amount of energy is wasted in heating and cooling unnecessary spacedue to the energy inefficient design and construction of buildings This hasarisen because traditional building regulations have paid little, if any, attention toenergy efficient design Studies have shown that energy conservation potentials

of between 40% and 50% can be achieved merely by modification of building ulations.5A variety of conservation measures, such as the installation of ceilingand wall insulation, weatherstripping, water heater blankets, low-flow shower-heads, caulking, duct wrap and solar water heaters, can have a dramatic impact

reg-on the amount of energy creg-onsumed for heating and cooling purposes

In the case of owner-occupied buildings, the cost of installing energy efficientmeasures is compensated by the economic benefit resulting from the energysaved However, a particular problem arises where the buildings, whether resi-dential or commercial, are rented.6In rental buildings, neither tenants nor land-lords have any incentive to install energy efficiency measures Tenants and land-lords have different reasons for their reluctance to invest in energy conservation.From the landlord’s perspective, the benefit of saved energy will accrue to thetenant and the landlord will receive no economic compensation for the cost ofinstalling efficiency measures From the tenant’s perspective, as tenants do notown the premises they are extremely reluctant to make capital improvements

on the landlord’s property by installing energy conservation measures Any suchmeasures installed by the tenant in the rented premises will become fixtures

3UNDP et al, World Energy Assessment, at 12.

4For a general discussion of this issue, see J R Waters, Energy Conservation in Buildings, Blackwell Publishing, London, 2003; House of Commons, Select Committee on Energy, Fifth Report from the Select Committee on

Energy, <www.bopcris.ac.uk/bopall/ref17667.html> (accessed 18 July 2005); UNDP et al, World Energy

Assessment, at 54ff; Royal Institute of International Affairs, Emerging Energy Technologies: Impacts and Policy Implications, Dartmouth Publishing Co, Aldershot, 1992; Adrian J Bradbrook, Energy Conservation Legislation for Building Construction and Design, Canadian Institute of Resources Law, Calgary, 1992.

5 G Bergmann, R Bruno and H Horster, ‘Energy Conservation in Buildings’, in J F Kreider and F Kreith (eds),

Solar Energy Handbook, McGraw Hill, New York, 1981, ch 29.

6 See Adrian J Bradbrook, ‘The Development of Energy Conservation Legislation for Private Rental Housing’

12 ENERGY LAW AND THE ENVIRONMENT

under traditional common law rules and legal title will vest in the landlord.7Thelandlord is under no legal obligation to compensate the tenant for the value ofthe improvements.8

2.1.2 Domestic appliances9

This issue has received considerable attention in the United States as early asthe 1970s, where appliance efficiency standards and energy efficiency labellingrequirements have been enacted at both the Federal and State levels.10 InAustralia, the issue was not considered in detail until the late 1980s The scope fordramatic improvement in the efficiency of a range of appliances was discussed

by the Commonwealth Department of Resources and Energy in 1986 A ment report published that year found, for example, that in a range of two-doorrefrigerators tested in 1984–85 the energy consumption ranged widely from 4.9

Depart-to 10.5 watt-hours a litre of sDepart-torage space a day The cost of electricity at thattime to operate a refrigerator over a 14-year life span was estimated to be 160%

of the purchase price for the least efficient unit tested, as opposed to 60% of thepurchase price for the most efficient Similar findings were reported in respect

of a wide range of other electric appliances.11

Since then developments have occurred both in relation to the creation ofenergy efficiency appliance labelling requirements and for minimum energy per-formance standards for common specified domestic electrical appliances, such asrefrigerators, dishwashers and air conditioners Both types of measures can existconcurrently Manufacturers are required to comply with minimum performancestandards and are encouraged to achieve further improvements in energy effi-ciency standards by the product energy efficiency labelling requirements This is

an illustration of the ‘carrot and stick’ approach to reform

2.1.3 Road transport12

Over the past 30 years, under pressure from diminishing reserves of indigenous oiland global concerns relating to ecologically sustainable development and climatechange, Australia has taken giant steps towards substituting other sources of fuel

7 For a discussion of the common law rules relating to fixtures, see A J Bradbrook, S V MacCallum and

A P Moore, Australian Real Property Law, Thomson Lawbook Co, Sydney, 3rd edn 2001, ch 15.

8 Note, however, that agricultural tenancies legislation in New South Wales, Queensland and South Australia allows the tenant of agricultural land a limited right to claim compensation from the landlord at the termination

of the tenancy for certain specified types of improvements to the extent to which the improvement fairly

represents the value of the improvement to an incoming tenant: Agricultural Holdings Act 1941 (NSW),

ss 7–12; Property Law Act 1974 (Qld), ss 153–167; Agricultural Holdings Act 1891 (SA), ss 6–22.

9See Royal Institute of International Affairs, Emerging Energy Technologies, ch 5.

10Federal legislation was enacted in the Energy Policy and Conservation Act of 1975, Pub L No 94–163, 89 Stat 871 See H Geller, National Appliance Efficiency Standards: Cost-Effective Federal Regulations, American

Council for an Energy-Efficient Economy, Washington, DC, 1995 The most legislatively active of the States

in this matter has been California, which has adopted appliance efficiency and labelling requirements in the

California Public Resources Code, ss 25000–25986.

11See Dept of Resources and Energy, Energy 2000: A National Energy Policy Review, Paper No 9, ‘Energy

Conservation’, Canberra, 1986, at 50–1.

12For a general discussion of this issue, see World Energy Council, Energy for Tomorrow’s World, Kogan Page,

TECHNOLOGIES & SUSTAINABLE DEVELOPMENT 13

in place of oil Thus, for example, oil is seldom encountered today as a source ofhome or office heating, and has been largely phased out in most of its variouscommercial and industrial uses, including power generation The most commonreplacement fuel has become natural gas, although a variety of other forms offossil fuels and renewable sources of energy have been used

The one major area where oil has not been effectively substituted has been

in the transport sector Various forms of fuel substitutes have been developed,but all vehicles designed to use these alternatives appear to suffer at presentfrom various disadvantages or inconveniences.13Thus, for example, distributionproblems exist in respect of methanol and ethanol, while the size of tanks andmechanical difficulties have retarded the widespread adoption of vehicles fuelled

by liquefied petroleum gas (LPG) or compressed natural gas (CNG) In the verylong term, hydrogen may prove to be the ideal substitute fuel, but even ardentproponents of the hydrogen economy concede that widespread replacement ofoil by hydrogen in the transport sector will not occur in the current planninghorizon

Although air transportation represents a very significant use of oil, the crux ofthe transportation energy problem appears to lie in the road sector, particularlyprivate passenger vehicles The reduction of fuel consumption by motor vehicles

is perhaps the most important of the various responses which will be required

by the Commonwealth government in its move towards stabilising and reducinggreenhouse gas emissions

2.1.4 Industry14

In relation to industry, the potential scope for energy conservation is very icant as manufacturing industry in Australia constitutes 34% of all energy use.15

signif-The Victorian Department of Industry, Technology and Resources reported in the

Green Paper on Renewable Energy and Energy Conservation:

Substantial energy savings are available in the industrial sector Gas and electricity ciency gains are available in boilers and process heating applications, mainly through:

effi-• cogeneration;

• better heating design; and

• lower heat requirements for some processes.

13For an analysis of alternative fuel sources, see F Winteringham, Energy Use and the Environment, Lewis Publishers, London, 1992; US Department of Energy, Assessment of Costs and Benefits of Flexible and Alternative Fuel Use in the US Transportation Sector, Report DOE/PE-0085, Washington, 1988 See also the US Department

of Energy, Alternative Fuels Data Center, available at<www.eere.energy.gov/afdc>(accessed 20 July 2005).

14 For a general discussion of this issue, see United Nations Economic and Social Commission for Asia and

the Pacific, Promotion of Energy Efficiency in Industry and Financing of Investments, United Nations, New

York, 2001; A O Adegbulugbe, ‘Energy Efficiency in Industry: A Regional Perspective’, in S Karekezi and

G A Mackenzie (eds), Energy Options for Africa: Environmentally Sustainable Alternatives, Zed Books, London, 1993; A Almeda, P Bertoldi and W Leonhard (eds), Energy Efficiency Improvements in Electric Motors and Drives,

Berlin, Springer, 1997; E Gruber and M Brand, ‘Promoting Energy Conservation in Small and Medium-Sized

Companies’ (1991) 19 Energy Policy 279; World Energy Council, Energy for Tomorrow’s World, ch 4; UNDP et

al, World Energy Assessment, ch 6.

15Commonwealth Department of Primary Industries and Energy, Issues in Energy Policy: An Agenda for the 1990s, AGPS, Canberra, 1991, at 6.

14 ENERGY LAW AND THE ENVIRONMENT

Opportunities for electrical efficiency improvements are available in the use of motor drives, mainly through:

• use of higher efficiency motors;

• installation of variable speed drive systems;

• correct sizing of motors to suit the task.

Many of the opportunities for efficiency improvements are currently cost-effective A private consultant study suggests that cost-effective energy savings in the order of 15% are possible 16

Expanding on this theme, an American commentator has written:

Energy-intensive production processes often include specialized energy conversion equipment, such as heaters or electric motors, whose efficiency can be significantly raised, usually at the price of significant investment for upgrading or replacement Process heaters are particularly important in this category, since such a large fraction

of industrial energy is devoted to process heating The actual devices may be electrical resistance heaters, direct gas flames, or steam boilers, but whatever the source of heat, there are opportunities for installing improved burners, timers for starting up or shut- ting down in ways that reduce waste energy, controls on fuel and air supply for most complete combustion, and insulation of furnace walls 17

Emphasis has been given recently to developing generator efficiency standards.The stated purpose of this is to achieve best practice in the efficiency of fossil-fuelfired electricity generation and to reduce the greenhouse gas intensity of energysupply.18

One of the major means of improving energy efficiency in industry is by theuse of cogeneration plant and technology.19Cogeneration may be described asthe simultaneous production of electrical or mechanical energy and thermalenergy The California Energy Commission (CEC) explains this technology asfollows:

A cogeneration system operates at an overall thermal efficiency as much as 2.5 to 3 times that of conventional utility electrical generating systems The normally wasted exhaust heat is captured and partially used for thermal or electrical energy production This thermal and electric energy can be recovered and used in cogeneration system operation in a ‘topping’ or ‘bottoming’ mode In a topping system, thermal energy exhausted in the production of electrical or mechanical energy is used in industrial processes or for district heating or cooling More recent applications include use of the rejected energy in residential/commercial energy systems.

16Department of Industry, Technology and Resources (Victoria), Green Paper on Renewable Energy and Energy Conservation, Melbourne, 1990, at 43.

17R H Knapp, ‘Patterns of Energy Use and Conservation’, in R L Pirog and S C Stamos (eds), Energy Economics: Theory and Practice, Prentice-Hall Inc, New Jersey, 1987, at 238.

18 Australian Greenhouse Office, available at <www.greenhouse.gov.au/ges/index.html> (accessed

10 January 2005).

19 Cogeneration is sometimes referred to as ‘combined heat and power’ or ‘total energy plant’ For a

dis-cussion of cogeneration technology, see M Roarty, Cogeneration – Combined Heat and Power (Electricity) Generation <www.aph.gov.au/library/pubs/rn/1998–99/99rn21.htm> (accessed 20 July 2005); UNDP et

al, World Energy Assessment, at 15–16, 198–9, 281–4; California Energy Commission, Cogeneration Handbook,

TECHNOLOGIES & SUSTAINABLE DEVELOPMENT 15

Generator

Generator Turbine

Manufacturing, Heating and Cooling

Manufacturing

Electricity

Figure 2.1 Cogeneration operating cycles

Bottoming-cycle cogeneration reverses this process Fuel is consumed to produce the high-temperature steam needed in an industrial process such as paper production or aluminium remelting Heat is extracted from a hot exhaust waste steam and, through

a heat exchanger (usually a waste heat recovery boiler), used to drive a turbine and produce electrical or mechanical energy 20

The topping and bottoming-cycle cogeneration processes are explained matically in Figure2.1

diagram-20CEC, Cogeneration Handbook, at 3 See also T Hagler, ‘Utility Purchases of Decentralized Power: The PURPA

16 ENERGY LAW AND THE ENVIRONMENT

The effect of cogeneration is to dramatically increase the overall energy ciency of typical industrial plant The efficiency of industrial plant employingcogeneration technology is between 80% and 90% In contrast, industrial plantwhich produces steam and purchases electricity is usually only 50% to 70%efficient.21

effi-2.2 Renewable energy resources22

2.2.1 Solar energy23

Australia receives abundant quantities of direct insolation from the sun Most

of the country receives over 1600kWh per square metre per year of solar tion, while in an area near the Western Australia–Northern Territory border over2500kWh per square metre per year of solar radiation is received.24This is only10% less than the amount of solar radiation received in the Sahara Desert, wherethe greatest incidence of solar insolation occurs.25The amount of solar radiationreceived by the earth is far in excess of the present and foreseeable needs of thehuman race On a worldwide basis, it has been calculated that enough sunlightreaches earth every day to satisfy mankind’s energy requirements for 15 years.26

radia-It also helps to put the projected shortage and depletion of non-renewable energyresources into context when it is realised that the earth’s surface receives everyyear approximately 1000 times the amount of energy contained in the total knownreserves of petroleum.27

The problem with solar energy is not the supply, but the means of harnessingthe supply As stated by Ewers:28

Since the sun’s rays are diffuse, utilizing solar energy [is] like trying to harness 100 million fleas and then teaching them all to jump in the same direction at the same time.

21C Flavin, Electricity’s Future: The Shift to Efficiency and Small-Scale Power, Worldwatch Institute, Washington,

DC, at 30.

22 For a general discussion of renewable energy resources and their role in modern society, see Richard

Ottinger and Rebecca Williams, ‘Renewable Energy Sources for Development’ (2002) 32 Environmental

Law 331, available at <www.law.pace.edu/energy/documents.html> (accessed 26 January 2005); R Haas,

W Eichhammer et al, ‘How to Promote Renewable Energy Systems Successfully and Effectively’ (2004) 32

Energy Policy 833.

23For a general discussion of solar energy technology, see the material available at <www.worldenergy org/wec-geis/publications/reports/ser/solar/solar.asp> (accessed 18 January 2005); UNDP et al, World

Energy Assessment, at 235ff; World Energy Council, Energy for Tomorrow’s World, ch 2.

24National Energy Advisory Committee, Renewable Energy Resources in Australia, AGPS, Canberra, 1981,

at 7.

25Australian Academy of Science, Report of the Committee on Solar Energy Research in Australia, Report

No 17, Canberra, 1973, 25.

26Solar Energy Research Institute of Western Australia, The Solar Prospect, Perth, 1981, at 1; Business Week,

9 October 1978, 92; W Lawrence and J Minan, ‘The Competitive Aspects of Utility Participation in Solar

Development’ (1979) 54 Indiana LJ 229 at 230.

27T West, ‘Photovoltaics: A Quiet Revolution’ (1982) 3 (No 14) Energy Detente 1 at 1 See also D Halacy, The Coming Age of Solar Energy, Harper & Row, New York, 1973, at 24; H Lof, ‘Solar Energy: An Infinite Source of Clean Energy’ (1973) 410 Annals 52.

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