Power Generation and Greenhouse Gas Abatement: The Effects of Generation Efficiency, Fuel Type and Renewables

Abstract Power generation in Australia is responsible for about 25% of the country's greenhouse gas emissions. Due to the abundance of coal, most power stations use this fuel as the primary source of energy. The high carbon content of coal combined with the relatively poor power generation efficiency of these facilities, explain the contributions which power generation make to Australia's greenhouse gas emissions. In this paper, the effects of these two parameters, ie, fuel type and generation efficiency, on greenhouse gas abatement is studied. It is shown that by controlling these two factors, there is a significant potential to reduce greenhouse gas emissions in Australia. An analysis of the electricity market showed that renewable energy projects and natural gas fired power stations cannot compete on price with coal fired power stations. Carbon taxes and green energy programs are seen as the most likely ways to make renewable energy and natural gas competitive with coal, and thus reduce greenhouse gas emissions caused by power generation.