supporting economic development, particularly in regional areas. The following sections set out the Institute’s specific responses to the current options assessment. Victoria stands to benefit considerably from CCS infrastructure The coal deposits in Victoria’s La Trobe valley represent a key resource for the region in terms of hydrogen production. This would bring long term, sustainable development in the region following the potential closure of existing brown coal power stations and the associated loss of business activity. Japan in particular is exploring a possible transition to a hydrogen economy given its particular resource endowments and the need to meet emission reduction targets. Victorian brown coal has been identified as a possible source for this transition, with CO2 created in the hydrogen production process addressed via CCS. Private companies such as Toyota and Kawasaki Heavy Industries are two of several international parties interested in this opportunity. To the extent any of Victoria’s coal power stations continue to operate in the coming decades, investment in CCS infrastructure for hydrogen production could be sized to accommodate CO2 emissions from these existing power stations, allowing them to contribute an important controllable source of low emission electricity. CCS is most suitable in situations where a storage site is located in close proximity to CO2 emission sources. Where multiple emission sources are co-located, an opportunity exists to exploit economies of scale and the sharing of commercial risks associated with transport and storage infrastructure investment. Many of Victoria’s largest existing and likely future emission sources are located in the state’s south east, in proximity to a large offshore storage resource in the Gippsland Basin. The role of the CarbonNet project In this context, the Institute is concerned that Infrastructure Victoria may have overlooked the potential for a CO2 transport network in Victoria, in particular the model currently being assessed by the CarbonNet project. Further information on this project is available through the Victorian Department of Energy and Earth Resources and the Institute has multiple publications on this project available on its website. Infrastructure and public investment bodies similar to Infrastructure Victoria, such as the UK’s Crown Estate, are well aware of the value of such shared CCS infrastructure and the important role it may play in the longer term, as governments move to completely decarbonise their economies. Further refinement of the options presented
supporting economic development, particularly in regional areas. The following sections set out the Institute’s specific responses to the current options assessment. Victoria stands to benefit considerably from CCS infrastructure The coal deposits in Victoria’s La Trobe valley represent a key resource for the region in terms of hydrogen production. This would bring long term, sustainable development in the region following the potential closure of existing brown coal power stations and the associated loss of business activity. Japan in particular is exploring a possible transition to a hydrogen economy given its particular resource endowments and the need to meet emission reduction targets. Victorian brown coal has been identified as a possible source for this transition, with CO2 created in the hydrogen production process addressed via CCS. Private companies such as Toyota and Kawasaki Heavy Industries are two of several international parties interested in this opportunity. To the extent any of Victoria’s coal power stations continue to operate in the coming decades, investment in CCS infrastructure for hydrogen production could be sized to accommodate CO2 emissions from these existing power stations, allowing them to contribute an important controllable source of low emission electricity. CCS is most suitable in situations where a storage site is located in close proximity to CO2 emission sources. Where multiple emission sources are co-located, an opportunity exists to exploit economies of scale and the sharing of commercial risks associated with transport and storage infrastructure investment. Many of Victoria’s largest existing and likely future emission sources are located in the state’s south east, in proximity to a large offshore storage resource in the Gippsland Basin. The role of the CarbonNet project In this context, the Institute is concerned that Infrastructure Victoria may have overlooked the potential for a CO2 transport network in Victoria, in particular the model currently being assessed by the CarbonNet project. Further information on this project is available through the Victorian Department of Energy and Earth Resources and the Institute has multiple publications on this project available on its website. Infrastructure and public investment bodies similar to Infrastructure Victoria, such as the UK’s Crown Estate, are well aware of the value of such shared CCS infrastructure and the important role it may play in the longer term, as governments move to completely decarbonise their economies. Further refinement of the options presented
Infrastructure_VIC_submission_17_June_2016.docx