Sydney Council's Gas Gamble


Sydney Council’s Sustainable Sydney 2030 plan targets a 70 per cent reduction of greenhouse gas emission compared to 2006 levels in the city’s local government area.

A large part of this reduction is planned to be achieved by building a network of gas burners throughout the city that will simultaneously provide power, heating and cooling to public and private buildings. This approach is known as trigeneration, or trigen.

The gas burners will use natural gas, ultimately taking the city off the coal fired electricity grid. Sometime prior to 2030 the city hopes the trigen system will begin to use biogas generated from processing of municipal waste and the digestion of crop residues.

In April 2012 Sydney Council signed an agreement with Origin Energy’s wholly owned subsidiary Cogent to begin building the trigen system. The total cost of this project will be $440 million (in 2010 dollars) by 2030.

Destructive climate change from carbon emissions is one of the major threats facing our planet this century. Sydney’s plan for electricity locally generated by burning gas — long considered a low emission fuel — sounds likes a positive step for the council to take.

However, serious questions and concerns have been raised by various environmental groups.

Former US vice president and Nobel Prize winner Al Gore wrote in his recent book that he no longer believes it is wise to first move from coal to gas and then later move from gas to renewable, due to both environmental impacts and cost.

Gore explains that each transition is so expensive it is best to move directly from all polluting fossil fuels to renewables. Moreover, Gore says, "[I]t is increasingly clear that the net effect of shale gas on the environment may ultimately be inconsistent with its use as a bridge fuel."

Experts at Beyond Zero Emissions (BZE) studied the city’s plan over a number of months and modelled several comparable schemes. In their October 2012 submission to Sydney Council entitled "Energy efficiency plus renewables can do it better", they pointed out the problems with Sydney’s plan and gave alternative solutions. BZE calls trigen "Sydney’s white elephant".

The Sydney scheme will promote coal seam gas production (CSG), because the trigen network will result in greater demand for gas in NSW. (We will explore this concern in more detail in a future article, but it is important to recognise that a trigen system run by CSG will reduce or even negate any environmental benefits of Sydney’s trigen system.)

The cost of Sydney’s scheme is almost impossible to predict. Gas prices are rising very quickly in Australia as the east coast becomes connected to export facilities in Queensland and large volumes of gas are contracted for export.

But won’t the trigen system soon be run totally by biogas from our waste and drop residues? BZE’s Executive Director Matthew Wright raises several concerns about this scenario. One is Origin Energy’s Cogent has a 20 year contract with the City of Sydney. How many years would Cogent contract existing conventional fossil gas supplies before moving to biogas? As Wright points out, Origin is one of the biggest names in coal seam gas.

Jonathan Prendergast of Prendergast Projects, who consulted with the City of Sydney on the trigen project, argues that the biogas age will arrive and Sydney’s trigen system will be fine. He uses developments in Denmark to support his position.

However, Wright disagrees. He says that although Denmark has been developing its biogas production for two decades, it has less than 200 biogas plants and these produce a relatively small amount of gas. To supply Sydney’s trigen system four times as much biogas will be needed as is produced in Denmark.

BZE argued in its submission to Sydney Council that the money planned for trigen would be better spent on looking to the latest building energy efficiency, upgraded building chillers and development of renewable energy technology. They hoped that trigen will be put on hold while their energy efficiency and renewables alternative is given consideration.

However, Sydney Council appears determined to continue with its 20 year plan.

One of the authors discussed in length the Sydney trigen plans with an expert who worked for a number of years in a government regulatory agency dealing with the electricity industry. He has studied the Sydney scheme in depth. He asked not to be named due to commercial reasons.

He said the economic life of the trigen project will likely be decades, potentially locking Sydney into this project for a very long time. Many things can change during that period. 

New technologies will be developed that could be cleaner and less expensive.  The cost of natural gas is rising, and it could much more expensive in the future in comparison to renewables.  As renewable energies are developed other cities and states will benefit from them while Sydney is tied to fossil fuel. 

In short, he believes residents and businesses in the Sydney local government area might pay a much larger financial price than currently predicted if trigen is used, posing a major financial risk to the City of Sydney and its ratepayers.

In summary, we believe Sydney Council has moved too fast into this project without heeding the advice of other experts and looking at other options to deliver on their ambitious carbon reduction targets while minimising financial risks and prolonging fossil gas use. We hope that other agencies in Australia look more carefully at these other options.

In an article next week we will look more closely at the impact of the City of Sydney’s trigen plan on promoting CSG development in NSW and the environmental, health and social issues this may cause.

New Matilda

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