Water enters coal-fired power station debate

By Keith Orchison
(Published in The Weekend Australian, 1-2 March 2008)

After more than a decade of manning the battlelines in the debate about greenhouse gas emissions, coal-fired power generators are increasingly under pressure on another environmental front: water use.

According to the International Energy Agency, there are more than 50,000 coal-fired power plants around the world -- and the number is still rising, particularly in Asia -- and they are among the planet's thirstiest industrial activities.

In Australia, while few new coal plants have been built in the past decade, production (and therefore water use as well as greenhouse gas emissions) has risen steadily -- output from black and brown coal generators, which together account for 84 percent of electricity produced nationally, has increased by almost a third in 12 years.

While the concerns about the greenhouse gases emitted by these generators are constantly being expressed, it is only in the past 12-18 months that angst about their water needs has begun to receive similar focus.

Ironically, this is partly because the generators have had production constrained by drought -- the resulting impact on wholesale power prices, leading to government concern and considerable unhappiness among large business users of electricity, has provided a high profile stage for detractors to strut their stuff.

Fingerpointing is coming from two different quarters -- the environmental lobby, which has tended in the past to prefer playing up the emissions angle against the coal generators, and the gas supply industry, which has been quick to spot an opportunity to promote its product.

"A major problem with coal-fired power stations is their insatiable thirst," says Patrice Newell, who sought a seat for the Climate Change Coalition in last year's New South Wales election. "Most people don't realise that every time they turn on a light switch they are also turning on a tap -- that the flow of electricity (in NSW) is dependent on the flow of water, which is not factored in to the true price of coal-generated electricity."

The Australian Petroleum Production & Exploration Association, on behalf of the gas industry, hammered home a similar message to the 2007 Owen Inquiry in to NSW generation needs.  "Gas-fired generation," said APPEA, "uses between a sixth and half of the water required by equivalent coal-fired power generation. Most new gas-fired power plant is air-cooled and a 1,000 MW combined cycle gas turbine system needs just 74 megalitres of water a year compared with 11,000 ML for the same-sized, wet-cooled coal plant."

Origin Energy, one of APPEA's members, plans to build a 630 MW power station fuelled by coal-seam gas on Queensland's Darling Downs and promotes the environmental credentials of the project on the basis that not only will it emit 2.5 million tonnes of greenhouse gases less than an equivalent coal plant, but it will require only 200 megalitres of cooling water a year compared with 8,000 ML for a coal burner.

Queensland Premier Anna Bligh, whose government has been the main builder of coal-burning generators in Australia in the past decade, hopped on the bandwagon, too, when officially opening the country's newest coal plant, the 750 MW Kogan Creek power station near Chinchilla.  Kogan Creek will be air-cooled instead of water cooled and Bligh was quick to tell her drought-plagued State electorate that the generator will use a tenth of the water required by conventional coal-burners and source what it does need from nearby deep wells rather than competing with the community for dam-based fresh water.

Kogan Creek is, in fact, the second coal generator in the country to opt for air-cooling. The first -- also built in south-west Queensland -- is the 840 MW Millmerran power station, commissioned by the private sector in 2002, and its technology cuts water demand by 15 megalitres a day as well as using treated effluent piped from Toowoomba as production water (to create super-heated steam to drive turbines) for its boilers.

Air-cooling technology in power stations operates on much the same basis as using a radiator to cool a car engine. Basically, power stations using it consume water only to generate steam, not to cool the steam for re-use.

Use of the technology comes at a cost, however.  The National Generators Forum, the lobby group for Australia's 22 major power generators who provide 95 percent of the country's electricity, says it is much less efficient than water cooling. "Not only is more fuel required for the same output of energy but the air cooling equipment is more expensive to build an operate, making the electricity produced more expensive," says NGF chief executive John Boshier.

What he doesn't add is that the process also adds to greenhouse gas emissions because operating it requires more energy than water cooling.

Despite the extra capital burden, the NGF expects most or all of new thermal power stations in Australia to be dry-cooled unless they are located close to seawater (and the environmental movement is also strongly opposed to use of seawater by generators because of concerns about the impact on marine fauna and flora).

The NGF is also quick to point out that power generation uses only a tenth of the water consumed each year by Australian householders and vastly less than agriculture, which accounts for 63 percent of total national annual water demand. The electricity industry consumes about 270 billion litres a year versus 12,200 billion litres by agriculture.

Economic consultants ACIL Tasman, who last year undertook a study of water reform and industrial use for the Federal Government, say that the power generation sector has been working to significantly improve water use and re-use, treatment and disposal.

At the centre of the debate is the growth in Australia's future demand for electricity. Power production has risen by 60 percent since 1990 and the Australian Bureau of Agricultural and Resource Economics, the Federal Government's economic research agency, predicts in its late energy review that output will rise by another 61 percent between 2005 and 2030.

This represents 160,000 gigawatt hours of new production per year by 2030 or an average of 6,400 GWh of extra output annually -- worth about $250 million a year in extra income for the generation sector and more than $6 billion annually in 2030, an enormous pot of new revenue for power producers and, in the case of gas and coal suppliers, for the fuel companies, too.

Not surprisingly, the debate about which fuel sources should capture the lion's share of this market can get heated, pitching the gas industry against coal, the renewables industry against fossil fuels and segments of the alternative fuel proponents (for example wind power versus solar and geothermal power) against each other.

First mover status in this arena is critical.  Power plants are long-living assets -- a power station built this year can expect still to be in full production in 2030 and well beyond.  Revenue for larger plants over that time runs to billions, not millions, of dollars.

This explains why some of the strongest submissions to the Owen Inquiry for the NSW Government were from the gas sector, which has high hopes of a rapid increase in gas-fired power capacity between now and 2020 while the conventional coal generation sector is hobbled by high emissions, "clean coal" technology is still not commercially available and renewable sources such as wind power continue to be too expensive.

For the gas sector, conventional coal power's large thirst at a time when the community is increasingly concerned about water supply is a handy extra lever in prising open the growing electricity market

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