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http://www.abc.net.au/radionational/programs/backgroundbriefing/mr-clean-coal/5601074

The search for the clean coal holy grail

Sunday 20 July 2014 8:05AM


The Abbott government and a group of investors are pinning their environmental hopes on a clean coal technology that is still in the very early stages of development. Paddy Manning tracks the quest for the clean coal holy grail and investigates the men getting unspeakably rich from the search.

The federal government is pinning its hopes of cleaning up Australia’s electricity sector on a new clean coal technology that is still at the laboratory stage.
Environment Minister Greg Hunt has made clear that a key plank of the government’s plan to tackle climate change is reducing emissions from existing black and brown coal-fired power stations.
It is lower emission than building an equivalent old brown coal station, but who is going to build that? Surely if there's a calculation of the emission abatement it's against modern equivalent alternatives, and alternatives exist at lower cost with no emissions, or much lower emissions, so I don't know in what sense it would qualify as an emission reduction.
Bruce Mountain, energy consultant
As the minister told ABC’s 4 Corners last week: ‘The technology which is emerging now, and which I think will be available over the next three to five years, cleans up very significantly, not perfectly, but very significantly by up to 30 to 50 per cent the emissions from current generation.’
That technology is called DICE—or Direct Injection Carbon Engine, a modified diesel engine running on a mix of coal and water—and it has just received $9 million in funding for stage one trials, including $1 million from the Victorian and Commonwealth governments.  
Ignite Energy Resources, a member of the DICE network, recently recieved a $20 million grant to produce liquid fuel for DICE engines from brown coal, among other things.
‘Minister Greg Hunt and Minister Ian Macfarlane for energy are very interested in DICE, because it offers the opportunity of reducing CO2 emissions for electricity from brown coal by 50 per cent, and it offers the opportunity to reduce CO2 emissions from black coals by around 30 per cent,’ says John White, chairman of the DICE Network and co-founder of Ignite.
This article represents part of a larger Background Briefing investigation. Listen to Paddy Manning's full report on Sunday at 8.05 am or use the podcast links above after broadcast.
CSIRO energy theme leader Dr Jim Smitham says the government is not putting too much faith in DICE and that the technology has ‘high potential’.
‘The opportunity is for coal to be used in a new way and far more efficiently, to reduce emissions, and the diesel engine is a highly developed piece of technology that, provided the injection system can be modified to take a coal water slurry, will burn quite efficiently,’ he says.
Dr Smitham says the development of the DICE engine, while not yet commercially viable ‘is worthwhile.’
‘This option provides coal with a low emissions future that it [currently] doesn’t have.’
At present, however, DICE technology exists only as a prototype single-cylinder diesel 16kw, 3.9-litre engine in a lab at the CSIRO in Newcastle. It’s clear that the technology, which the government hopes will be rolling out in three to five years, is a long way from commercial viability.
Mr White hopes that ultimately the direct injection carbon engines will qualify for a share of the billions that will be made available through the Emissions Reduction Fund.
‘When these DICE engines are commercially available and energy electricity generators decide to install them incrementally into the grid, these projects, using this new technology, will reduce CO2 emissions dramatically and they will be able to make a bid into the Emissions Reduction Fund’s reverse options, and supply carbon credits and obtain some extra revenue,' he says.
According to Mr White, CSIRO modelling shows such funding could amount to hundreds of millions of dollars a year. However, energy consultant Bruce Mountain questions how the direct injection carbon engine technology can be considered as a genuine emissions reduction.
‘It is lower emission than building an equivalent old brown coal station, but who is going to build that? Surely if there's a calculation of the emission abatement it's against modern equivalent alternatives, and alternatives exist at lower cost with no emissions, or much lower emissions, so I don't know in what sense it would qualify as an emission reduction.’
Mr Mountain says rolling out large new coal-fired diesel engines for power makes no sense given there is already a surplus of generating capacity and—based on his analysis of forecast cost figures given to the government—the technology is neither cheap nor clean.
‘It doesn't appear to be cheaper than modern black coal. It may be cheaper than large scale gas if gas prices turn out to be higher but so what? Wind and solar and customer demand shifting is a lot less expensive than that.’