Victorian Brown Coal Dale Seymour Deputy Secretary Energy, Resources and Major Projects Department of Primary Industries, Vic

World Brown Coal Source - World Energy Council: 2004 Survey of Energy Resources* *Reserves data

Brown coal mines in the world MineProductionDepthStrip Ratio Loy Yang Mine30 Mtpa220 m (plan 250 m)4 coal: 1 waste New project in Latrobe Valley 40 Mtpa300 m (plan 350 m)3 coal: 1 waste New Project in Latrobe Valley 30 Mtpa350 m +2 coal: 1 waste Hambach (Germany) 40 Mtpa350 m (plan 500 m)1 coal: 6 waste Afsin (Turkey)25 Mtpa250 m1 coal: 2 waste Source: Presentation Traralgon Bypass Inquiry GHD Pty Ltd

Moisture content ranges between 48-70%; Ash content usually <5% (dry basis); Average Net Wet Specific Energy: 8.6 MJ/kg; Average Gross Dry Specific Energy: 26.6 MJ/kg. Moisture 48-70% Hydrogen 5% Sulphur & Nitrogen 1% Ash <5% %weight Typical Characteristics of Latrobe Valley Brown Coal *If JORC Classifications were applied : “Victorian Coal - A 2006 Inventory of Resources” GHD Pty Ltd

Major Coal Players in Victoria Mine/LicenseOwner/OperatorEstimated Resource (Mt) Current Use Status Hazelwood Mine Hazelwood Power Corp 420*Power Generation Loy Yang Mine Loy Yang Power1740*Power Generation Yallourn Mine Yallourn Energy463*Power Generation Flynn/Rosedale Monash Energy6300Coal to Liquids Loy Yang East/Fernbank Loy Yang Power4000Power Generation Drillfield HRL Developments920Power Generation Maddingley Maddingley Brown Coal 100Coal Drying Technologies Anglesea State Agreement Alcoa390Power Station/Smelter *Proven and probable

Victorian Electricity Generation Capacity Total Capacity (2006): 8,913 MW ** Includes embedded hydro generation, landfill and sewerage gas, and solar (minimal). Source: ESAA Electricity Gas Australia, 2007, p

The Future of Brown Coal Victoria’s economy built on low cost power from brown coal We have no comparable source of baseload power CCGT baseload cost estimated at ~A$45 per MWh with gas at A$3 per GJ Victorian gas supplies good but not as plentiful as coal Gas from northern fields has higher pipeline costs and price risk Gas-fired power most viable for peaking and intermediate use Renewables also supported by Victoria (VRET) 10% by 2016 Nuclear energy unlawful in Victoria

What has Victoria done already? Greenhouse Challenge for Energy and other policies have ensured that Victoria is a leader for market “demand-pull” and innovation “supply-push” policies and programs to accelerate technological change Support for a national emissions trading scheme Support for renewable technologies (VRET) Driving energy efficiency (building standards, VEET) Energy Technology Innovation Strategy

Emissions Trading Scheme Australian Government establishing an Emissions Trading Scheme as part of an effective framework for meeting the climate change challenge In place by 2010

Strategic Policy Framework for Near Zero Emissions from Latrobe Valley Brown Coal On-shore CCS legislation delivered in 2008 Position Victoria as a leader in carbon capture and storage Reduce greenhouse gas emissions Support new energy and energy related technologies Carbon Capture and Storage Policy and Legislation

Coal Prep Combustion Gasification Combustion Gasification CCS Aquex: Brown Coal dewatering$0.8 Million over 2 years. HRL: Advanced Flaw Detection $0.45 Million over 3 years. HRL: Boiler Optimisation $0.39 Million over 3 years. HRL: Advanced Materials Assessment $0.525 Million over 3 years. Monash: Advanced Gasification $0.3 Million over 3 years. Monash: Oxy-fuel combustion $1.3 Million over 3 years HRL: Advanced Flaw Detection $0.45 Million over 3 years. HRL: Boiler Optimisation $0.39 Million over 3 years. HRL: Advanced Materials Assessment $0.525 Million over 3 years. Monash: Advanced Gasification $0.3 Million over 3 years. Monash: Oxy-fuel combustion $1.3 Million over 3 years Otway Basin Carbon Storage Trial $4 Million IP: Advanced dried Brown Coal Combustion $30 Million over 4 years Demonstration Deployment Research & Development Pilot Large Scale Applied Strategic CSIRO: Modelling of Dried Brown Coal Combustion $0.55 Million over 3 years Coal Utilisation Steps HRL: IDGCC $50 Million over 4 years Loy Yang Power: Post Combustion Capture $2.5 Million over 2.5 years. CO2CRC: Pre Combustion Capture $2.06 Million over 3 years Loy Yang Power: Post Combustion Capture $2.5 Million over 2.5 years. CO2CRC: Pre Combustion Capture $2.06 Million over 3 years Monash: Lignite for Waste-water Clean-up $0.55 million over 3 years IP: Advanced dried Brown Coal Combustion $30 Million over 4 years ETIS 1 - Brown Coal

ETIS 1 – Large Scale Demonstration Project - International Power Hazelwood 2030 – Coal drying (steam fluidized bed) – retrofit of an existing 200MW boiler to accept dried brown 12% moisture. – PF combustion demonstration applicable to ultra-supercritical plants – Drying technology can be for retrofit or used for new plant – Up to 30% reduction of Greenhouse gases at commercial scale – Operational by 2010 – Cost: $369 million total project cost $30 million from Victorian Government $50 million from Australian Government

ETIS 1 – Large Scale Demonstration Project - HRL - IDGCC HRL Ltd - Integrated Drying Gasification Combined Cycle or "IDGCC”: Already proven at 10 MW scale Uses 30% less brown coal for every megawatt hour than Victoria’s most efficient current plant Uses 50% less water than current best practice Exploration Licence granted to HRL for the development of a new 800 MW power station using the IDGCC process Cost: ‣ $750 million total project cost ‣ $50 million from Victorian Government ‣ $100 million from Australian Government

Otway Basin Pilot Project Australia’s first demonstration of the injection and underground geological storage of CO2 Also involves development and implementation of rigorous monitoring and verification regime Up to 100,000 tonnes of gas will be injected

CO2 Storage Opportunities adjacent to Latrobe Valley