In October, senior climatologists warned the nation that Australia was now experiencing the worst drought in its 200-year recorded history, as a probable consequence of global warming. This has caused a flurry of activity by the government.

Plans have recently been announced to build the largest solar power farm in the world in the southern state of Victoria. And large sums of money are being poured into clean-coal technology.

Australia has abundant coal reserves

Australia is the world’s leading coal exporter, with about 300 years worth of estimated coal reserves at current domestic energy demands. With such reserves, the Australian government is looking to clean-coal technologies to cut their emissions.

One such project is the Eraring power station 120 kilometers north of Sydney. The plant, which is one of Australia’s biggest yet most efficient coal fired power plants, emits 920kg of CO2 per megawatt hour.

According to Chris Brucki from Eraring Power, the coal burners run at around 38 percent thermal efficiency -- a rating he says is standard for a conventional coal-fired power plant.

Thermal efficiency rating is the amount of energy produced in the power station that is finally transformed into electrical energy (the rest of the energy is dissipated as heat). This means that by increasing its thermal efficiency rating, a plant can produce more energy per amount of CO2 released into the atmosphere.

Three main "clean coal" technologies

The most widespread of the three leading coal cleaning technologies is known as "Supercritical", which typically delivers thermal efficiency rates of around 45 percent. Globally, there are about 400 plants with this technology in operation around the world.

Secondly, there is "Coal Gasification", which is considered the next step in environmentally-friendly coal-fired power generation. Because this is a relatively new technology, far fewer plants are in operation. By 2010, such power stations are expected to reach a 45 to 50 percent efficiency rating.

And thirdly, another new technology known as Ultra Clean Coal (UCC) claims a thermal efficiency rating of approximately 53 percent. This technology, developed by Australia’s government-funded scientific research body CSIRO, has been patented by UCC Energy based in Sydney.

The process involves chemically cleaning ash coal that has been pulverized into small particles, explains John Langley, UCC Energy’s head.

"The coal goes in, and then it’s chemically cleaned and washed and virtually all the impurities are removed from it, so that it can be blown like a gas. But it’s not coal gasification; it's a jump over the coal gasification technology."

The increased efficiency translates into lower CO2 emissions per kilowatt hour and Langley claims no further pollutants or wastes are produced in the UCC process.

"It is a totally closed loop system -- the water is recycled, the sodium hydroxide is recycled and regenerated, the dilute acid we use is consumable, but there is no waste from that. The only mineral by-products are the ash. We think there will be commercial applications for those by-products in ceramics industry, and certainly in fertilizers and construction materials."

Australian government firmly behind coal

In October 2006, the Australian government announced a $500 million (300 million euros) Low Emission Technology Development Fund, and a further $60 million to support development projects such as a mobile CO2 gas capture unit, also conceived by CSIRO.

UCC Energy has received financial support from this round of funding. The company is now working with a major company in Japan and expects to have fully commercialized the coal-cleaning process in four to five years time.

Environmental groups push for move from coal

Environmentalists believe the government should stop pouring money into cleaner-coal initiatives, and move away from coal altogether. Senator Bob Brown, head of the Australian Green party, says it’s "pathetic" that the government isn’t investing in technologies such as solar power.

Monica Richter is a spokesperson for the Australian Conservation Foundation -- the organization is one of the strongest critics on Australia’s energy policy. She believes coal-cleaning technologies are a "useful development", but sees them as "only a short-term solution."

"We would much prefer to see much more investment and uptake in renewable energy technologies," she says "and certainly much more investment in energy efficiency."

Coal cleaning combined with carbon storage?

Peter Cook, the Chief Executive of the Co-operative Research Center for Greenhouse Gas Technologies, a government and industry body, believes UCC technology could potentially prove to be more cost efficient if used together with geosequestration.

This is a process whereby CO2 emissions are captured in the plant, liquefied and then pumped deep underground into geological reservoirs such as exhausted oil or gas wells, old coal mines, porous rock or saline aquifers.

The more efficiently coal is burnt, the less the total emissions. But the concentration of CO2 in those emissions is higher. Cook says this means it is cheaper to separate CO2 from coal which has been cleaned beforehand.

"So the two processes are compatible," Cook says. "If you can tune up your ultra clean coal sufficiently, and get this high concentrated stream of CO2 then it’s much cheaper to do the rest."

Carbon storage still unproven

However, environmental organizations such as the Australian Conservation Foundation are skeptical that geosequestration and UCC emissions reduction technology are viable in the future.

"Of course there are the dangers associated with geosequestration", says Monica Richter. "The fact that it’s an unproven technology and it has to stay in the ground in perpetuity means it has the potential for a nightmare scenario."

Coal industry representatives are talking about programs to reduce CO2 outputs per kilowatt hour by a further five percent over the next decade, but scientists say that to stop climate change total emissions in the developed world need to be reduced by somewhere between 70-90 percent by 2050.

The big question is how much longer can we afford to keep the coal-fires burning?