The dome of the nuclear reactor of Sizewell plant in eastern England. Credit:AP "In the end it all boils down to, 'What's the objective, and how much do you want to pay?' " the CSIRO's Alex Wonhas says. "I don't think I'd be able to predict what the energy mix will look like. But what's coming through very clearly is that it will be a much more diverse energy mix, with a much greater share of low-emissions technology – mostly renewables, but with some fossil fuel back-up." Dr Wonhas heads the CSIRO's Energy Transformed Flagship – the division responsible for researching new developments and advising the government on future energy. It recently published a new online tool called "efuture", allowing people to experiment with different costs and power technologies. Underpinning the CSIRO's modelling is the assumption that Australia will adhere to present government policy on emissions cuts – an 80 per cent reduction in total greenhouse gas emissions by the year 2050. That target keeps the nation in line with most other industrialised countries, and requires that Australia decides some of its coal and gas is "unburnable carbon" – a resource that could be profitably extracted but must be left in the ground if we are to avoid dangerous climate change. Some people think this scenario is not even remotely realistic. The coal industry, for example, believes potentially catastrophic global temperature rises this century are all but inevitable unless "clean coal" technology is widely deployed.

"At the moment, our energy consumption has us on track for four degrees – some would say six degrees – of temperature rise," deputy chief executive of the Australian Coal Association Greg Sullivan says. "All of the experts we've spoken to say we're not going to achieve [the target]. It's simply not going to happen. We're not even going to get close to it." Nor is the concept of "unburnable carbon" something coal companies are factoring into their planning. "It's a very good question, and it depends if you're going to strive for the two-degree temperature limit," says Sullivan, who was chief regulator of the NSW Environment Protection Authority before he joined the coal lobby group in 2011. An Indonesian worker gathering sulphur deposits at the crater of Ijen Volcano, in East Java, is enveloped by sulphur steam. Credit:AFP The association points to forecasts by the International Energy Agency, and emissions scenarios published last year by the World Bank, which show massive growth in energy demand and heavy dependence on coal and gas for decades to come.

"You can have low emissions or you can have low costs – you can't have both," Sullivan says. "When you're talking about a carbon budget, you need to stop talking about ideology. It's fanciful, really, to think that we're going to achieve a shift to 100 per cent renewables. It just isn't going to happen. It's never going to happen, because the maths does not add up. The only way to do it is to decarbonise all fossil fuels. We're going to have to find a way, because we're going to be using them. You're going to need technology like CCS [carbon capture and storage]." Carbon capture and storage technology – sometimes called "clean coal" – is the great hope of the coal industry worldwide. It involves capturing carbon dioxide emissions and pumping them back underground. Yet it is still at least a decade from being deployed on a large scale, would be extremely expensive, and not suited to every location where coal-fired power stations are built. On present projections, including modelling prepared by Treasury and the CSIRO's own data, coal-fired power plants with CCS would cost as much as the most costly forms of renewable energy. Gas is often seen as a possible alternative to continued dependence on coal, or an intermediate "bridge" between coal-fired power and renewable energy. While uncertainties over the longer-term lifecycle emissions of coal seam gas are yet to be resolved, in general it is a fuel with lower emissions than coal. But the concept of gas as a "bridging fuel" does not find favour with the coal seam gas industry body, the Australian Petroleum Production and Exploration Association.

"The gas industry does not see natural gas as a transition fuel – it is a destination fuel," an APPEA spokesman said in a statement. "This is also recognised around the world, with reports by the International Energy Agency pointing very clearly to the long-term role for natural gas in the global energy mix." The group says that, based on current known reserves, Australia has 819 trillion cubic feet of gas, and it "will be developed as long as it is commercially viable to do so". The usual industry rule of thumb is that 1 trillion cubic feet of gas can supply a city of 1 million people for 20 years. "The industry does not support any proposal to leave accessible gas resources in the ground in view of the benefits of gas as a cleaner, low-emission energy source." The US has seen its greenhouse gas emissions dip in the past five years, in part due to a boom in the controversial practice of fracking, or hydraulic fracturing, which has enabled large-scale extraction of gas that was previously inaccessible. "I think the situation in Australia is going to play out somewhat differently," Wonhas says. "In the US, they had relatively high gas prices for a long time, then the price came down with the unconventional gas boom there. The story in Australia is almost the reverse: we had very, very cheap gas for a long time. The new resources being developed are likely to be linked to international LNG prices, which are significantly higher."

Political pressure is also taking a toll on coal seam gas, with public campaigns against the industry impeding its ability to access land and earn a "social licence" to drill. However, advanced gas-fired power plants do have a significant role to play in powering the country beyond 2050, according to the energy white paper. Most in the gas industry believe the hurdles of negative public perceptions of large-scale gas drilling will be overcome during the next decade. Public opposition has, so far, meant that nuclear energy remains only an intriguing possibility. Nuclear energy generation – like all the other options on the table – would require a massive injection of capital upfront to build new power plants, but has the potential to all but wipe coal and gas off the map in Australia by about 2040, according to CSIRO modelling. "Australia has a long history of being anti-nuclear, and so something would need to change that," says Barry Brook, an environmental scientist and nuclear energy advocate at Adelaide University. "We won't change that attitude among the majority of the population. As long as you believe we can achieve the same outcome with wind and solar, that won't change."

Professor Brook believes solar, wind and hydro energy alone won't be able to do the job, and that, ultimately, the nation will turn to reactors, as the effects of climate change are increasingly felt in coming decades. "There is a group of people like me who have reached this conclusion," he says. "There is no consensus about who is right. There's a mix of views. There is a group of people dedicated to proving that you can do it all with renewables. Then there are people like me who believe we should retain nuclear as an option." While advocates contend nuclear energy is an extraordinarily safe industry – and statistical studies suggest its use around the world has cut emissions, pollution and saved lives – when it does go wrong, it has the potential to go spectacularly wrong. It means insurance would be unobtainable and, like all other energy sources, would ultimately have to be underwritten by public revenues.

Would Australians become accustomed to the idea of reactors around Sydney or at the entrance to Port Phillip Bay? No one knows. "As soon as you raise that as an option, it kills it off, because nobody wants one next door," Brook says. "We're not going to get through that sort of dialogue." This leaves renewable energy, in the form of wind farms, hydroelectric power from dams, burning biomass such as wood that can be replaced, solar panels, and the larger-scale solar thermal power plants. While the current carbon price of $23 a tonne is shrouded in political uncertainty, and the ripples from Europe's embattled emissions trading scheme are expected to affect Australia, there is bipartisan political support for Australia's mandatory renewable energy target. It states that 20 per cent of the nation's energy generation has to be renewable by 2020. That target has skewed renewable energy towards the cheapest options – mostly wind turbines – and there is not much scope for building more hydroelectric power. "More renewable energy as quickly as possible is the best way to go, in general terms, from our point of view," policy manager of the Clean Energy Council Tim Sonnreich says. "That's not to say the council doesn't think there is some role for fossil fuels in the future. "The energy market we have now is set up to deal with three types of energy: black coal, brown coal and gas. It's not a question of how that market can continue in that form, because it's already changing – it's a question of how we want it to change.

"If we were to go to 100 per cent renewables, we would need a totally different energy market." That option is considered technologically feasible, with the use of solar thermal power plants that store energy for times when the sun isn't shining. But it is also the most expensive form of power known at present – the silver bullet option that would see household power bills rise up to 2 and a half times if widely deployed. The renewables industry as a whole is banking on mass deployment of new technology in Australia and overseas to drive down costs. "If I had to lay a bet, I'd put my money on there being a number of different breakthroughs in battery storage," Sonnreich says. "The reason I'm confident about it is there are so many drivers for change that need that technology – mobile phones, computers, anything that requires power. There will be huge demand and big rewards for commercialising new ways of storing power more efficiently. The potential is huge." That view is widely shared by those whose job it is to work on the problem. If nothing else, there is an expectation that renewable energy generation will ultimately cost less than all other forms of power because its fuel falls free from the sky as sunlight, or blows in the wind. Wonhas shares that impression – though the million-dollar question is precisely when that technological transformation will take place, and if it can happen fast enough to be much use in tackling climate change. "My view is that by 2050, renewables will be just so cheap they will be pushing everything else out of the market."