Analysis of bioenergy contribution to Australian economy 2050

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General Description

An analysis of the predicted bioenergy contribution to the Australian economy in 2050.

Predictions of the likely bioenergy contribution to the Australian economy by 2050 have been made by the Clean Energy Council, the Australian Business Roundtable on Climate Change, CSIRO, Clean Energy Futures Group and the Australian Treasury.

Some of these predictions are based on current production levels and historical levels of efficiency improvement. They maintain the 'status quo'.

They do not take into account the impact of disruptive technology or the impact of changes to the international regulatory and economic environment in response to climate change.

These predictions also do not consider potential economic benefit to the Australian economy resulting from such changes, for instance new export markets for bioenergy.

Australia could choose an alternative to the status quo i.e. working towards comparative advantage by changing its energy commodity trading as well as achieving industrial competitiveness due to lowest cost production.

There are three critical success factors here: technological innovation and its commercialization; changes in government policy to incentivise research and development and engineering particularly in the area of bioenergy and the third requirement is the involvement of stakeholders and potential stakeholders in the business and financial sectors and in existing government industry forums.

Decision Situation

What is the likely contribution of bioenergy to the Australian economy in the interval between now and 2050?

Outcomes of the Study

Figure 1 illustrates the model used to illustrate the two alternatives for the Australian bioenergy industry - maintain status quo or work towards a position of global comparative and competitive advantage.

Key to Figure 1

Point 1a: (CEC) Bioenergy Roadmap estimates 2008 biofuel contribution to the Australian economy as PJ.

Point 1b: (CEC) Bioenergy Roadmap predicts 2050 biofuel contribution in 2020 in Australia to be 40PJ.

Point 1c: (CEC) Bioenergy Roadmap predicts biofuel contribution in 2050 in Australia to be 260PJ.

Point 2: The Clean Energy Future Council predicts bioenergy contribution in 2040 in Australia to be 245PJ

Point 3a: The Australian Business Roundtable on Climate Change, based on early action, predicts bioenergy contribution in 2050 in Australia to be 289PJ

Point 3b: The Australian Business Roundtable on Climate Change, based on delayed action, predicts bioenergy contribution in 2050 in Australia to be 194PJ.

Point 4a: CSIRO predicts predicts bioenergy contribution to transportation fuels in 2050 in Australia to be 220PJ

Point 4b: CSIRO predicts predicts bioenergy contribution to total stationary power and transportation fuels in 2050 in Australia to be 590PJ.

Point 5: Estimate of potential bioenergy contribution to the Australian economy

The predictions of the Clean Energy Council (CEC) Bioenergy Roadmap for stationary power illustrate the status quo scenario.

The CEC prediction for 2020 of 40PJ would mean the revenue for the biofuel industry segment of AUD0.8bn, compared with a projected trade revenue for coal of AUD75bn, one hundred times greater.

Using Decision and Risk parlance, the CEC prediction of biofuel contribution to the Australian economy of 260PJ in 2050 could be construed to be 'the 90% probability case'.

This is in line with the Clean Energy for Future for Australia report that anticipates bioenergy contribution to electricity generation in 2040 to be 245PJ.

The CSIRO prediction for biofuel contribution in 2050 in Australia might be seen as the "50% probability case" for 2050.

The figure of 600 PJ is proposed as a ‘first cut’ estimate of the potential for penetration of bioenergy and bioproducts into domestic stationary power and transportation markets and export markets for transportation fuels. Based on Figure 1, it might be thought of as an estimate of the 50% probability case of penetration by 2030.

Assumptions

The project has made some basic assumptions used to set boundaries to the analysis.

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Based on that assumption:

'220 PJ/yr'

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'598 PJ/yr'

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Model

The model that was used to create this graph can be downloaded here. This model was written in Calc, the spreadsheet editor developed with Open Office. You can get the latest version of Open Office for free from [this web site].

References

1. ↑ Assumption of biofuel contribution to Australian economy 2050
2. ↑ Fuel for thought The future of transport fuels: challenges and opportunities pg 36
3. ↑ Australia's Low Pollution Future - The Economics Of Climate Change Mitigation Chart 3.34

'220 PJ/yr'

'598 PJ/yr'

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