The Australian Electricity Industry and Climate Change: What role for geosequestration? Electricity Restructuring Group, UNSW, Sydney. Draft Discussion Paper 0503, Available at www.ergo.ee.unsw.edu.au

Climate change has become a key driver for technology innovation in the electricity industry. A 50% global reduction in greenhouse emissions over this century appears necessary to avoid dangerous global warming. This will require a far-reaching transformation of our current, primarily fossil-fuel based, energy sector. Present technology options for electricity-related emissions abatement include energy efficiency, low-emission fossil-fuel generation and renewables. There is, however, a clear need for further technical progress in these options given the scale of change required. There is now growing worldwide, and certainly Australian government, interest in the potential for novel coal-fired electricity generation and geosequestration technologies to reduce greenhouse emissions. This raises the question of how government policy can be used to drive innovation in promising yet unproven abatement technologies. A particular challenge for policy makers is balancing the risks in trying to ‘pick winners ’ against the need to focus publicly funded efforts on the more prospective technology options. Technology assessments are required despite the many challenges, uncertainties and hence risks in attempting to model innovation. In this paper we outline a simple framework for making such technology assessments. Its evaluation criteria are technical feasibility, delivered energy services (benefits), present and possible futur