Clean power generation will be key
Between 40% and 50% of our emissions reductions can be achieved by switching to 100% renewable electricity generation. As of last year, only 24% of Australia’s electricity came from renewable sources.
Frank Jotzo, professor of environmental economics and climate change economics at the Australian National University, agrees the energy sector has made significant progress, but still has a long way to go .
“We are now confident that this will continue and, in fact, the transition of the electricity supply sector is likely to accelerate as the economic advantage of renewables increases and coal-fired power plants, in particular especially the older ones, are no longer able to compete in the market,” says Jotzo.
This is an important transition period for the Australian energy market. By 2050, the Australian energy market operator’s integrated system plan foresees a near doubling of grid electricity consumption and a tripling of flexible and dispatchable capacity available on demand.
“The timing and pace of this transition is important if we are to have enough capacity to keep the lights on and prices affordable while meeting our climate goals,” said Australian Energy Regulator chairwoman Clare Savage.
“Too Much Hot Potato”
“We will need substantial new investment not only in wind and solar, but also in technologies such as pumped hydro, batteries and gas-fired power plants (hydrogen-ready) that can be there when the wind is not blowing or the sun is not blowing. brilliant,” Savage says.
The timing depends on politics and politics, and investment decisions have been delayed or postponed entirely in the absence of a clear national strategy.
“No such strategy was put in place, certainly not by the government, because it was too much of a hot potato,” says Jotzo.
Thornton says, “The last decade has been very frustrating when it comes to clean energy policy settings. But what I think is clear is that the public, big business, certainly state governments, have on board and are very clear that the future is renewable.
Thornton and Jotzo are confident the tide will turn after the next federal election.
“There is reason to be optimistic that after the elections the political space on climate and energy will be less politically charged than it has been for many years. This will likely unlock very large investments that will have economic benefits,” says Jotzo.
As a priority, the government should review how it provides incentives for investment in Australia’s electricity grid.
“The grid is, without a doubt, becoming the biggest challenge for renewable energy investments in the country, and that’s because the grid we have was really built for the last century,” says Thornton.
“When you think of things like the NBN, when you think of the power grid when it’s being built or the rail network, those are investments in the future of the nation. For us to become a clean energy superpower, for us to become a modern economy powered by low-cost, zero-emission energy, you need a modern, strong grid to make that happen.
It’s a sentiment shared by Australia’s energy regulator.
“We will not achieve our climate goals without a well-functioning electricity system, and that will require an unprecedented level of new investment and the market parameters to achieve it, including strong long-term signals to reward investments when and where we need it,” says Sauvage.
While the energy sector is fundamental to achieving the nation’s net zero goals, emission reductions in the sector are low-hanging fruit. Attention must also turn to other sectors of the economy where it may be more difficult to reduce emissions.
“You look at agriculture. On-farm transportation and use of diesel is a big form of emissions in the agricultural sector, so how quickly can we transition our fleet of heavy-duty vehicles in the agricultural sector to electric or things like renewable hydrogen? said Thornton.
Another opportunity for Australia lies in its contribution to the global steel industry.
“How do we decarbonize cement? Jotzo said. “How to manufacture steel in a carbon neutral way? The technologies already exist, we know how it can work, but it is a huge task to understand how it can be done at commercial scale and to mobilize the billions of dollars of investment needed to transition the steel industry. world.
Even after net zero is reached, there will be residual emissions from some sectors of transport, industry and agriculture. New services will be needed to compensate, such as carbon sequestration.
“Australia is extremely well placed as a provider of carbon dioxide removal services,” says Jotzo. “The extraction of carbon dioxide from the air, for example, by direct air capture, is a chemical process that requires large amounts of clean energy.
“In the long term, we are talking about the second half of the century. Australia could potentially be a provider of this type of service.
Events on the other side of the world will support net zero, as sanctions against Russia and European energy security concerns are expected to put downward pressure on clean technology costs.
“Energy importing countries will not want to be dependent on imports. And, in most cases, the answer to that will be renewable energy, because renewable energy is local energy, and so it’s the ultimate answer to energy security issues,” says Jotzo.
“The more these technologies are deployed, the less expensive they become. Solar and wind energy, including offshore wind, including storage, will become much cheaper, and the push for greater investment in energy-importing countries will further reduce the cost of these technologies.
Thornton adds: “Suddenly we are now in a position where it makes sense from an economic point of view, from an energy price point of view and from an environmental point of view for us to go further and achieve goals such as 50% by 2030.