Australia’s states have been forced to go it alone on renewable energy, but it’s a risky strategy



Shutterstock

Dylan McConnell, University of Melbourne

Several Australian states are going it alone on the the energy transition. The policies adopted by New South Wales, Victoria, Queensland and others represent major departures from the existing national approach, and run counter to the neoliberal principles underpinning the current system.

Most notably, the NSW Coalition government announced its electricity infrastructure roadmap. The government says by 2030, the policy will enable A$32 billion in private sector investment, and bring 12 gigawatts of new renewable energy capacity online. This is roughly equivalent to the amount of large-scale wind and solar installed in the National Electricity Market to date.

The states were forced to act on renewables after the federal government effectively vacated the policy space. The NSW law has been widely hailed as a victory for the clean energy transition, but also represents a return to the centrally planned system of decades past. In fact, it may well signal the breakup of the National Electricity Market as we know it today.

This presents risks and challenges which, if not managed carefully, may result in white elephants and higher electricity bills for consumers.

Power lines
NSW’s policy is shaking up the national electricity market.
Shutterstock

A very brief history of the National Electricity Market

Before the 1990s, electricity supply was fundamentally understood as a state responsibility. State-owned companies were tasked with generating, distributing and supplying electricity.

But in the 1990s, things changed, for several reasons. First, the cost of electricity supply was rising at a concerning rate. Second, neoliberalism began to dominate economic reform in Australia and internationally. Governments saw their jobs less as providing services (such as electricity), and more as promoting markets and competition to make systems, such as electricity supply, more efficient.

Also in the 1990s, two key inquiries – the Productivity Commission’s report into energy generation and distribution, and the Hilmer inquiry into national competition policy – identified issues in the electricity industry. These included wasteful overinvestment, largely driven by the political imperatives of keeping the lights on at all costs, and creating jobs in specific locations and electorates.




Read more:
The National Electricity Market has served its purpose – it’s time to move on


A new, reformed system, the National Electricity Market, began operating in 1998. It included all states and territories except Western Australia and the Northern Territory. In this new system, market logic – rather than central planners and bureaucrats – would decide the the location, timing and type of new energy generation investment. Private firms would supply electricity to consumers using price signals and contract markets to guide decisions.

Key to this new system was a set of highly prescriptive rules, and a process to develop them. This culminated in the Australian Energy Market Agreement and the establishment of three national energy market institutions we have today:

  • Australian Energy Market Commission (AEMC), which develops the rules
  • Australian Energy Regulator (AER), which enforces the rules
  • Australian Energy Market Operator (AEMO), which operates the market and is supposed to follow the rules.

This market structure, and strict separation of powers and functions, was partly to isolate policy and investments from the political whims of the day.

A coal fires power station
The new system was designed to give certainty to private-sector energy investors.
Shutterstock

Market breakdown

The NSW government legislation is the latest, and perhaps most significant, in a string of policies to reject the old national market approach. Grattan Institute energy director Tony Wood described it as “the most extreme intervention we have seen to date, and moves even more closely to a centrally planned energy system and away from a market approach, than anything else I have seen to date”.

NSW is not alone here. In Victoria, the Andrews government is building the Southern Hemisphere’s biggest battery at Geelong, under a new law that sits outside the national framework. And government this month also announced a A$550 million budget plan to create six renewable energy hubs, and also bring another 600 megawatts of renewable energy generation online.

In recent years Queensland introduced a third state-owned electricity generator, CleanCo, and South Australia built its battery and peaking generators outside the national market framework.

Such interventions are not limited to the states. The federal government is building the Snowy 2.0 pumped hydro scheme. It has threatened to build a 1,000MW gas generator, and has established a scheme to underwrite energy investments. And the Energy Security Board has the power to make rules outside the regular process, which it used most recently to tighten the standards around energy reliability.




Read more:
NSW has joined China, South Korea and Japan as climate leaders. Now it’s time for the rest of Australia to follow


The breakdown can largely be sheeted home to one factor: a lack of climate policy at a national level. This has left the states with little option than to manage the energy transition, and climate action, on their own.

The NSW policy will undoubtedly affect projects already in the pipeline. Following the announcement, both AGL and Energy Australia put the brakes on battery and gas projects in the state.

And the Australian Energy Council, which represents major electricity retailers, expressed “concern about its impact on the functioning of an increasingly interconnected National Electricity Market and the complexity it will certainly add to investment decisions”.

Angus Taylor
Angus Taylor says the NSW plan may drive up energy prices.
Shutterstock

Energy market 2.0?

It’s hard to argue against a democratically elected state government pursuing what is within its constitutional remit – particularly given the federal failure on climate policy. But existing institutions and frameworks are not equipped to govern that kind of system.

So if the states do continue to go it alone, we need a new national accord which clarifies the roles and responsibilities of each government. That would ensure we don’t repeat mistakes of the past, and in particular excessive over investment for which consumers foot the bill.




Read more:
Explainer: what is the electricity transmission system, and why does it need fixing?


The Conversation


Dylan McConnell, Research Fellow at the Australian German Climate and Energy College, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Not just hot air: turning Sydney’s wastewater into green gas could be a climate boon



Shutterstock

Bernadette McCabe, University of Southern Queensland

Biomethane technology is no longer on the backburner in Australia after an announcement this week that gas from Sydney’s Malabar wastewater plant will be used to power up to 24,000 homes.

Biomethane, also known as renewable natural gas, is produced when bacteria break down organic material such as human waste.

The demonstration project is the first of its kind in Australia. But many may soon follow: New South Wales’ gas pipelines are reportedly close to more than 30,000 terajoules (TJs) of potential biogas, enough to supply 1.4 million homes.

Critics say the project will do little to dent Australia’s greenhouse emissions. But if deployed at scale, gas captured from wastewater can help decarbonise our gas grid and bolster energy supplies. The trial represents the chance to demonstrate an internationally proven technology on Australian soil.

pipeline at beach
The project would turn Sydney’s sewage into a renewable gas.
Shutterstock

What’s the project all about?

Biomethane is a clean form of biogas. Biogas is about 60% methane and 40% carbon dioxide (CO₂) and other contaminants. Turning biogas into biomethane requires technology that scrubs out the contaminants – a process called upgrading.

The resulting biomethane is 98% methane. While methane produces CO₂ when burned at the point of use, biomethane is considered “zero emissions” – it does not add to greenhouse gas emissions. This is because:

  • it captures methane produced from anaerobic digestion, in which microorganisms break down organic material. This methane would otherwise have been released to the atmosphere

  • it is used in place of fossil fuels, displacing those CO₂ emissions.

Biomethane can also produce negative emissions if the CO₂ produced from upgrading it is used in other processes, such as industry and manufacturing.

Biomethane is indistinguishable from natural gas, so can be used in existing gas infrastructure.




Read more:
Biogas: smells like a solution to our energy and waste problems


The Malabar project, in southeast Sydney, is a joint venture between gas infrastructure giant Jemena and utility company Sydney Water. The A$13.8 million trial is partly funded by the federal government’s Australian Renewable Energy Agency (ARENA).

Sydney Water, which runs the Malabar wastewater plant, will install gas-purifying equipment at the site. Biogas produced from sewage sludge will be cleaned and upgraded – removing contaminants such as CO₂ – then injected into Jemena’s gas pipelines.

Sydney Water will initially supply 95TJ of biomethane a year from early 2022, equivalent to the gas demand of about 13,300 homes. Production is expected to scale up to 200TJ a year.

Two women look over the Malabar plant
The project involves cleaning and upgrading biogas from the Malabar Wastewater Treatment Plant.
Sydney Water

Biomethane: the benefits and challenges for Australia

A report by the International Energy Agency earlier this year said biogas and biomethane could cover 20% of global natural gas demand while reducing greenhouse emissions.

As well as creating zero-emissions energy from wastewater, biomethane can be produced from waste created by agriculture and food production, and from methane released at landfill sites.

The industry is a potential economic opportunity for regional areas, and would generate skilled jobs in planning, engineering, operating and maintenance of biogas and biomethane plants.

Methane emitted from organic waste at facilities such as Malabar is 28 times more potent than CO₂. So using it to replace fossil-fuel natural gas is a win for the environment.




Read more:
Emissions of methane – a greenhouse gas far more potent than carbon dioxide – are rising dangerously


It’s also a win for Jemena, and all energy users. Many of Jemena’s gas customers, such as the City of Sydney, want to decarbonise their existing energy supplies. Some say they will stop using gas if renewable alternatives are not found. Jemena calculates losing these customers would lose it A$2.1 million each year by 2050, and ultimately, lead to higher costs for remaining customers.

The challenge for Australia will be the large scale roll out of biomethane. Historically, this phase has been a costly exercise for renewable technologies entering the market.

A woman cooking with gas
Biomethane will be injected into the existing gas network and delivered to homes.
Shutterstock

The global picture

Worldwide, the top biomethane-producers include Germany, the United Kingdom, Sweden, France and the United States.

The international market for biomethane is growing. Global clean energy policies, such as the European Green Deal, will help create extra demand for biomethane. The largest opportunities lie in the Asia-Pacific region, where natural gas consumption and imports have grown rapidly in recent years.

Australia is lagging behind the rest of the world on biomethane use. But more broadly, it does have a biogas sector, comprising than 240 plants associated with landfill gas power units and wastewater treatment.

In Australia, biogas is already used to produce electricity and heat. The step to grid injection is sensible, given the logistics of injecting biomethane into existing gas infrastructure works well overseas. But the industry needs government support.

Last year, a landmark report into biogas opportunities for Australia put potential production at 103 terawatt hours. This is equivalent to almost 9% of Australia’s total energy consumption, and comparable to current biogas production in Germany.

The distribution of reported operational biogas upgrading units in the IEA Bioenergy Task 37-member countries.

Current use of biogas in Australia.

A clean way to a gas-led recovery

While the scale of the Malabar project will only reduce emissions in a small way initially, the trial will bring renewable gas into the Australia’s renewable energy family. Industry group Bioenergy Australia is now working to ensure gas standards and specifications are understood, to safeguard its smooth and safe introduction into the energy mix.

The Morrison government has been spruiking a gas-led recovery from the COVID-19 recession, which it says would make energy more affordable for families and businesses and support jobs. Using greenhouse gases produced by wastewater in Australia’s biggest city is an important – and green – first step.




Read more:
‘A dose of reality’: Morrison government’s new $1.9 billion techno-fix for climate change is a small step


The Conversation


Bernadette McCabe, Professor and Principal Scientist, University of Southern Queensland

This article is republished from The Conversation under a Creative Commons license. Read the original article.

San Francisco just banned gas in all new buildings. Could it ever happen in Australia?



Shutterstock

Madeline Taylor, University of Sydney and Susan M Park, University of Sydney

Last week San Francisco became the latest city to ban natural gas in new buildings. The legislation will see all new construction, other than restaurants, use electric power only from June 2021, to cut greenhouse gas emissions.

San Francisco has now joined other US cities in banning natural gas in new homes. The move is in stark contrast to the direction of energy policy in Australia, where the Morrison government seems stuck in reverse: spruiking a gas-led economic recovery from the COVID-19 pandemic.

Natural gas provides about 26% of energy consumed in Australia — but it’s clearly on the way out. It’s time for a serious rethink on the way many of us cook and heat our homes.

Cutting out gas

San Francisco is rapidly increasing renewable-powered electricity to meet its target of 100% clean energy by 2030. Currently, renewables power 70% of the city’s electricity.

The ban on gas came shortly after San Francisco’s mayor London Breed announced all commercial buildings over 50,000 square feet must run on 100% renewable electricity by 2022.

Buildings are particularly in focus because 44% of San Franciscos’ citywide emissions come from the building sector alone.




Read more:
4 reasons why a gas-led economic recovery is a terrible, naïve idea


Following this, the San Francisco Board of Supervisors unanimously passed the ban on gas in buildings. They cited the potency of methane as a greenhouse gas, and recognised that natural gas is a major source of indoor air pollution, leading to improved public health outcomes.

From January 1, 2021, no new building permits will be issued unless constructing an “All-Electric Building”. This means installation of natural gas piping systems, fixtures and/or infrastructure will be banned, unless it is a commercial food service establishment.

Switching to all-electric homes

In the shift to zero-emissions economies, transitioning our power grids to renewable energy has been the subject of much focus. But buildings produce 25% of Australia’s emissions, and the sector must also do some heavy lifting.

A report by the Grattan Institute this week recommended a moratorium on new household gas connections, similar to what’s been imposed in San Francisco.

The report said natural gas will inevitably decline as an energy source for industry and homes in Australia. This is partly due to economics — as most low-cost gas on Australia’s east coast has been burnt.




Read more:
A third of our waste comes from buildings. This one’s designed for reuse and cuts emissions by 88%


There’s also an environmental imperative, because Australia must slash its fossil fuel emissions to address climate change.

While acknowledging natural gas is widely used in Australian homes, the report said “this must change in coming years”. It went on:

This will be confronting for many people, because changing the cooktops on which many of us make dinner is more personal than switching from fossil fuel to renewable electricity.

The report said space heating is by far the largest use of gas by Australian households, at about 60%. In the cold climates of Victoria and the ACT, many homes have central gas heaters. Homes in these jurisdictions use much more gas than other states.

By contrast, all-electric homes with efficient appliances produce fewer emissions than homes with gas, the report said.

A yellow triangle sign that says 'no coal or coal seam gas' on a wooden fence.
Natural gas produces methane, a greenhouse gas that’s far more potent than carbon dioxide.
Shutterstock

Zero-carbon buildings

Australia’s states and territories have much work to do if they hope to decarbonise our building sector, including reducing the use of gas in homes.

In 2019, Australia’s federal and state energy ministers committed to a national plan towards zero-carbon buildings for Australia. The measures included “energy smart” buildings with on-site renewable energy generation and storage and, eventually, green hydrogen to replace gas.

The plan also involved better disclosure of a building’s energy performance. To date, Australia’s states and territories have largely focused on voluntary green energy rating tools, such as the National Australian Built Environment Rating System. This measures factors such as energy efficiency, water usage and waste management in existing buildings.

But in 2020, just 2% of buildings in Australia achieved the highest six-star rating. Clearly, the voluntary system has done little to encourage the switch to clean energy.

The National Construction Code requires mandatory compliance with energy efficiency standards for new buildings. However, the code takes a technology neutral approach and does not require buildings to install zero-carbon energy “in the absence of an explicit energy policy commitment by governments regarding the future use of gas”.

An economically sensible move

An estimated 200,000 new homes are built in Australia each year. This represents an opportunity for states and territories to create mandatory clean energy requirements while reaching their respective net-zero emissions climate targets.

Under a gas ban, the use of zero-carbon energy sources in buildings would increase, similar to San Francisco. This has been recognised by Environment Victoria, which notes

A simple first step […] to start reducing Victoria’s dependence on gas is banning gas connections for new homes.

Creating incentives for alternatives to gas may be another approach, such as offering rebates for homes that switch to electrical appliances. The ACT is actively encouraging consumers to transition from gas.




Read more:
Australia has plenty of gas, but our bills are ridiculous. The market is broken


Banning gas in buildings could be an economically sensible move. As the Grattan Report found, “households that move into a new all-electric house with efficient appliances will save money compared to an equivalent dual-fuel house”.

Meanwhile, ARENA confirmed electricity from solar and wind provide the lowest levelised cost of electricity, due to the increasing cost of east coast gas in Australia.

Future-proofing new buildings will require extensive work, let alone replacing exiting gas inputs and fixtures in existing buildings. Yet efficient electric appliances can save the average NSW homeowner around A$400 a year.

Learning to live sustainability, and becoming resilient in the face of climate change, is well worth the cost and effort.

Should we be cooking with gas?

Recently, a suite of our major gas importers — China, South Korea and Japan — all pledged to reach net-zero emissions by either 2050 or 2060. This will leave our export-focused gas industry possibly turning to the domestic market for new gas hookups.

But continuing Australia’s gas production will increase greenhouse gas emissions, and few Australians support an economic recovery pinned on gas.

The window to address dangerous climate change is fast closing. We must urgently seek alternatives to burning fossil fuels, and there’s no better place to start that change than in our own homes.




Read more:
No, Prime Minister, gas doesn’t ‘work for all Australians’ and your scare tactics ignore modern energy problems


The Conversation


Madeline Taylor, Lecturer, University of Sydney and Susan M Park, Professor of Global Governance, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Pumped hydro isn’t our energy future, it’s our past


Bruce Mountain, Victoria University and Steven Percy, Victoria University

It’s now beyond dispute that — for new electricity generation — solar, wind and other forms of renewable energy are cheaper than anything else: cheaper than new coal fired power stations, cheaper than new gas-fired stations and cheaper than new nuclear power plants.

The International Energy Association says so. Its latest World Energy Outlook describes solar as the cheapest electricity in history.

Solar costs 20% to 50% less than it thought it would two years ago.

Attention has turned instead to the ways to best meet demand when renewable resources are not available.

The government is a big supporter of gas, and as importantly, pumped hydro.

It has backed the $6 billion-plus Snowy Hydro 2.0 pumped hydro project (the world’s biggest) and Tasmania’s proposed $7 billion “battery of the nation”.

Pumped hydro is an old technology, as old as the electricity industry itself.

Pumped hydro is old technology

It became fashionable from the 1960s to 1980s as a complement to inflexible coal and nuclear generators.

When their output wasn’t needed (mainly at night) it was used to pump water to higher ground so that it could be released and used to run hydro generators when demand was high.

Australia’s three pumped hydro plants are old, built at least 40 years ago, and they operate infrequently, and sometimes not at all for years.




Read more:
Snowy 2.0 is a wolf in sheep’s clothing – it will push carbon emissions up, not down


Gas fired electricity generation, whether by turbines (essentially a bigger version of those found on aeroplanes) or by conventional reciprocating engines, has several advantages over pumped hydro including much smaller local environmental impacts and in many cases smaller greenhouse gas impacts.

They can be built quickly and, most importantly, if there is a gas supply they can be built close to electrical loads. There are 17 gas-fired peaking generators in the National Electricity Market, but none have been built over the past decade.

Batteries are cheaper

Batteries have advantages over both.

In 2017, Australia built the world’s biggest battery, but it since been overtaken by a Californian battery more than twice its size and may soon be overtaken by one 150 times the size as part of the Sun Cable project in the Northern Territory which will send solar and stored electricity to Singapore.

Part of Tasmania’s proposed Battery of the Nation project.

In a study commissioned by the Bob Brown Foundation, we have compared the pumped hydro “battery of the nation” project to actual batteries and to gas turbines.

The battery of the nation (BoTN) is a proposal instigated by the Australian and Tasmanian governments to add more pumped hydro to Tasmania’s hydro power system and used enhanced interconnectors to provide electricity on demand to Victoria.

We sought to determine what could most cost-effectively provide Victoria with 1,500 megawatts — the BoTN, gas turbines or batteries.

Partly this depends on how long peak demand for dispatchable power last. BoTN would be able to provide sustained power for 12 hours, but we found that in practice, even when our system becomes much more reliant on renewables, it would be unusual for anything longer than four hours to be needed.

Less than half the cost

We could easily dismiss gas turbines — the Australian Energy Market Operator’s costings have batteries much cheaper than gas turbines to build and operate now and cheaper still by the time the Battery of the Nation would be built.

And batteries are able to respond to instructions in fractions of a second, making them useful in ways gas and pumped hydro aren’t.

They are also able to be placed where they are needed, rather than where there’s a gas connection or an abandoned mine, cliff or hill big enough to be used for pumped hydro.




Read more:
NSW has approved Snowy 2.0. Here are six reasons why that’s a bad move


We found batteries could supply 1,500 megawatts of instantly-available power for less than half of the cost of the enhanced Tasmania to Victoria cable alone, meaning that even if the rest of the BoTN cost little, batteries would still be cheaper.

Pumped hydro projects are being pulled

Origin Energy recently gave up on expanding the Shoalhaven pumped hydro scheme in NSW after finding it would cost more than twice as much to build as first thought.

Similarly, investor-owned Genex has repeatedly deferred its final investment decision on one of the cheapest pumped hydro options in Australia — using depleted gold mine pits in Queensland — despite being offered concessional loans from the Australian Government to cover the entire build cost.




Read more:
Snowy 2.0 threatens to pollute our rivers and wipe out native fish


The final barrier seems to be obtaining subsidies from the Queensland Government to fund the necessary transmission lines.

Snowy 2.0 is proceeding, for now

Snowy 2.0 seems to be proceeding after the Australian Government pumped in $1.4 billion to get it going, and paid a king’s ransom to New South Wales and Victoria for their shares in Snowy Hydro.

Yet even before the main works are to start, credit rating agency S&P has down-graded Snowy Hydro’s stand-alone debt to “junk” and suggested the government will need to pump more money into Snowy Hydro to protect its debt.

Prime Minister Morrison has said recently that batteries can’t compete with gas generators , yet a couple of days later, his government announced support for a 100 megawatt battery in Western Australia, where gas is less than half the price it is on the east coast.




Read more:
Enough ambition (and hydrogen) could get Australia to 200% renewable energy


Our analysis suggests neither gas nor pumped hydro can compete with batteries, and if the prime minister wants more of either, he will have to dip his hands deeply into tax payer’s pockets to get it.The Conversation

Bruce Mountain, Director, Victoria Energy Policy Centre, Victoria University and Steven Percy, Senior Research Fellow, Victoria University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Super-charged: how Australia’s biggest renewables project will change the energy game



Shutterstock

John Mathews, Macquarie University; Elizabeth Thurbon, UNSW; Hao Tan, University of Newcastle, and Sung-Young Kim, Macquarie University

Australia doesn’t yet export renewable energy. But the writing is on the wall: demand for Australia’s fossil fuel exports is likely to dwindle soon, and we must replace it at massive scale.

The proposed Asian Renewable Energy Hub (AREH) will be a huge step forward. It would eventually comprise 26,000 megawatts (MW) of wind and solar energy, generated in Western Australia’s Pilbara region. Once complete, it would be Australia’s biggest renewable energy development, and potentially the largest of its type in the world.

Late last week, the federal government granted AREH “major project” status, meaning it will be fast-tracked through the approvals process. And in another significant step, the WA government this month gave environmental approval for the project’s first stage.

The mega-venture still faces sizeable challenges. But it promises to be a game-changer for Australia’s lucrative energy export business and will reshape the local renewables sector.

Map showing proposed location of the Asian Renewable Energy Hub.
Map showing proposed location of the Asian Renewable Energy Hub.
AREH

Writing on the wall

Australia’s coal and gas exports have been growing for decades, and in 2019-20 reached almost A$110 billion. Much of this energy has fuelled Asia’s rapid growth. However, in recent weeks, two of Australia’s largest Asian energy markets announced big moves away from fossil fuels.

China adopted a target of net-zero greenhouse emissions by 2060. Japan will retire its fleet of old coal-fired generation by 2030, and will introduce legally binding targets to reach net-zero emissions by 2050.

There are signs other Asian nations are also moving. Singapore has weak climate targets, but on Monday inked a deal with Australia to cooperate on low-emissions technologies.

Night scene in Japan
Japan wants to decarbonise its economy by using hydrogen.
Shutterstock

Export evolution

The Asian Renewable Energy Hub (AREH) would be built across 6,500 square kilometres in the East Pilbara. The first stage involves a 10,000MW wind farm plus 5,000MW of solar generation – which the federal government says would make it the world’s largest wind and solar electricity plant.

The first stage would be capable of generating 100 terawatt-hours of renewable electricity each year. That equates to about 40% of Australia’s total electricity generation in 2019. AREH recently expanded its longer term plans to 26,000MW.

The project is backed by a consortium of global renewables developers. Most energy from AREH will be used to produce green hydrogen and ammonia to be used both domestically, and for shipping to export markets. Some energy from AREH will also be exported as electricity, carried by an undersea electrical cable.

Another Australian project is also seeking to export renewable power to Asia. The 10-gigawatt Sun Cable project, backed by tech entrepreneur Mike Cannon-Brookes, involves a solar farm across 15,000 hectares near Tennant Creek, in the Northern Territory. Power generated will supply Darwin and be exported to Singapore via a 3,800km electrical cable along the sea floor.




Read more:
It might sound ‘batshit insane’ but Australia could soon export sunshine to Asia via a 3,800km cable


The export markets for both AREH and Sun Cable are there. For example, both South Korea and Japan have indicated strong interest in Australia’s green hydrogen to decarbonise their economies and secure energy supplies.

But we should not underestimate the obstacles standing in the way of the projects. Both will require massive investment. Sun Cable, for example, will cost an estimated A$20 billion to build. The Asian Renewable Energy Hub will reportedly require as much as A$50 billion.

The projects are also at the cutting edge of technology, in terms of the assembly of the solar array, the wind turbines and batteries. Transport of hydrogen by ship is still at the pilot stage, and commercially unproven. And the projects must navigate complex approvals and regulatory processes, in both Australia and Asia.

But the projects have good strategic leadership, and a clear mission to put Australian green energy exports on the map.

Red sand and tussocks of grass
Australia’s Pilbara region would be home to Australia’s biggest renewables development.
Shutterstock

Shifting winds

Together, the AREH and Sun Cable projects do not yet make a trend. But they clearly indicate a shift in mindset on the part of investors.

The projects promise enormous clean development opportunities for Australia’s north, and will create thousands of jobs in Australia – especially in high-tech manufacturing. As we look to rebuild the economy after the COVID-19 pandemic, such stimulus will be key. All up, AREH is expected to support more than 20,000 jobs during a decade of construction, and 3,000 jobs when fully operating.

To make smart policies and investments, the federal government must have a clear view of the future global economy. Patterns of energy consumption in Asia are shifting away from fossil fuels, and Australia’s exports must move with them.




Read more:
China just stunned the world with its step-up on climate action – and the implications for Australia may be huge


The Conversation


John Mathews, Professor Emeritus, Macquarie Business School, Macquarie University; Elizabeth Thurbon, Scientia Associate Professor in International Relations / International Political Economy, UNSW; Hao Tan, Associate professor, University of Newcastle, and Sung-Young Kim, Senior Lecturer in International Relations, Discipline of Politics & International Relations, Macquarie School of Social Sciences, Macquarie University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Explainer: what is the electricity transmission system, and why does it need fixing?



Shutterstock

Tony Wood, Grattan Institute

Shifting Australia to a low-emissions energy system is a big challenge. Much has been said of the need to change the electricity generation mix, from mostly fossil fuels to mostly renewables. Yet our electricity transmission network must also be overhauled.

The transmission network largely consists of high-voltage cables and towers to support them, as well as transformers. This infrastructure moves electricity from where it’s generated, such as a coal plant or wind farm, to an electrical substation. From there, the distribution network – essentially the “poles and wires” – takes the electricity to customers.

On Australia’s east coast, increased renewable energy generation is already stretching the capacity and reach of Australia’s ageing transmission network. New capacity is being built, but is struggling to keep up.

In his budget reply speech last week, Labor leader Anthony Albanese pledged to create a A$20 billion corporation to upgrade Australia’s energy transmission system. So let’s take a look at what work is needed, and what’s standing in the way.

Anthony Albanese, centra, with Labor frontbenchers
Labor leader Anthony Albanese’s budget reply speech included a $20 billion plan to upgrade transmission networks.
Mick Tsikas/AAP

Starting with the basics

The electricity grid covering Australia’s east is part of the National Electricity Market (NEM). It’s one of the largest interconnected electricity networks in the world, and covers every jurisdiction except Western Australia and the Northern Territory.

The NEM comprises:

  • electricity generators (which produce electricity)

  • five state-based transmission networks, linked by interconnectors that enable electricity to flow between states

  • the distribution network (poles and wires)

  • electricity retailers (which sell electricity to the market)

  • customers, such as homes and businesses

  • a financial market in which electricity is traded.

The NEM’s transmission grid currently has a long, thin structure, running from the north of Queensland to the south of Tasmania and the east of South Australia. This reflects the fact that electricity has traditionally been produced by a small number of large, centralised (mostly coal and gas) generators.

Electricity transmission infrastructure
Electricity transmission infrastructure is expensive and complex to upgrade.

Who owns and runs transmission networks?

Australia’s electricity networks were originally built and owned by state governments, mostly during the latter half of the 20th century. Over several decades, interstate transmission interconnectors were built to share resources more efficiently across borders. The NEM was formally created in the late 1990s.

Between 2000 and 2015, several states either partly or fully privatised their transmission networks, leading to the mixed model of today. The transmission companies are monopoly providers, and the prices they charge are set by the Australian Energy Regulator (AER).




Read more:
Sure, no-one likes a blackout. But keeping the lights on is about to get expensive


The Australian Energy Market Operator (AEMO) operates the national market and is responsible for transmission planning. In Victoria, AEMO also decides on transmission investments. In the other jurisdictions, that role rests with the transmission companies.

In the past, electricity companies made some infrastructure investments far beyond what was needed – mostly in distribution networks, but also in transmission. This so-called “gold plating” of networks led to inflated costs for consumers, who ultimately pay for the investments via their power bills.

A $50 note in a power socket
The cost of transmission upgrades is passed onto power consumers.
Julian Smith/AAP

Why do the transmission networks need fixing?

Renewables have increased the total NEM generation capacity from 40 gigawatts to 60 gigawatts since 2007. More than 30 gigawatts of renewable generators and 12 gigawatts of energy storage are expected to come online by 2040.

In mid-2017, a panel led by Australia’s Chief Scientist Alan Finkel recommended a plan be drawn up to create “renewable energy zones”. These would coordinate the development of new renewable projects with new grid infrastructure.

The zones were contained in AEMO’s 2018 “Integrated System Plan (ISP). It identified transmission projects that should start immediately, and possible future projects.

Two initial projects involve expanding the system’s capacity between Queensland, New South Wales and Victoria. Possible future projects include a second interconnector between Victoria and Tasmania.




Read more:
In a world first, Australian university builds own solar farm to offset 100% of its electricity use


But upgrading the transmission grid is easier said than done. The large size and cost of new transmission lines means planning and approval is subject to lengthy, intensive economic assessments.

What’s more, renewable energy generators are often built in regional areas, where solar and wind energy are plentiful. In many cases the electricity grid in those areas, designed in a different era, doesn’t have the capacity to accommodate them.

In September, the Energy Security Board (ESB), created by COAG energy ministers, said the transmission grid must be reconfigured along the lines of the ISP to suit the emerging mix of renewable generation and storage. This means upgrading existing interconnectors, and building new interconnectors and intrastate transmission from regional areas to coastal centres.

Transmission lines
The Energy Security Board has called for transmission infrastructure upgrades.
Shutterstock

Weighing the political promises

Labor leader Anthony Albanese last week released a A$20 billion “Rewiring the Nation” policy to upgrade the grid. It would establish a government-owned body to partner with industry, providing low-cost government finance for the upgrades.

The Morrison government, for its part, is also working on transmission solutions. It’s supporting projects prioritised in the ISP, including up to A$250 million allocated in this month’s federal budget.

Some states have separately accelerated their own high-priority transmission projects. However, none of the above measures effectively solve two big impediments to modernising the transmission network.




Read more:
Energy giants want to thwart reforms that would help renewables and lower power bills


First, the processes to identify, analyse and build transmission projects is too slow. Second, a state’s transmission infrastructure is currently paid for by consumers in that state – a poor fit for the increasingly integrated, and therefore shared, national grid.

Much work must be done to address these issues. Perhaps a government-owned national company could be established. It would own the shared transmission system, while AEMO would drive what gets built. Operations could be outsourced to a private company to deliver efficiencies.

Separating planning from owning would minimise the perverse financial incentives that led to past “gold plating”.

To minimise the risk of white elephants being built, strong, up-to-date benefit-cost assessments would be required.

Such alternatives will come with their own challenges. But the transition towards low emissions is too important for radical solutions to be ignored.The Conversation

Tony Wood, Program Director, Energy, Grattan Institute

This article is republished from The Conversation under a Creative Commons license. Read the original article.

People power: everyday Australians are building their own renewables projects, and you can too



Shutterstock

Dominique McCollum Coy, Monash University; Roger Dargaville, Monash University, and Shirin Malekpour, Monash University

In the town of Goulburn in southern New South Wales, an energy revolution is brewing. The community has come together to build its own 4,000-panel solar farm – everyday citizens are invited to buy shares in the venture and reap the rewards.

Goulburn is not alone: community-owned energy is an idea whose time has come. About 100 community energy groups operate across Australia – their projects at various levels of development – up from 25 groups in 2015.

The concept is gaining political attention, too. Independent MP for the federal Victorian seat of Indi, Helen Haines, in August moved a motion in parliament, calling on the Morrison government to support community energy, including establishing a new government agency. The bill is backed by fellow independent Zali Steggall.

At its core, community energy rests on the belief that everyday people should have power over how their energy is generated – including its environmental and social impacts. Big corporations should not control our energy systems, nor should they reap all the profits. So let’s take a look at how community energy works.

A solar farm
Projects such as the ACT’s Mount Majura solar farm allow citizens to take control of their energy needs.
Steve Bittinger/Flickr

What is community energy?

Australia’s first community-owned renewable energy project, Hepburn Wind, started generating power in June 2011. Since then, many more communities across Australia have banded together to manage their own solar, wind, micro-grid and efficiency projects.

The Goulburn project will be built in the Hume electorate of federal energy minister Angus Taylor, about 3km from the town centre. Earlier this year it received a A$2.1 million state grant, under the Regional Community Energy Fund.

Investors can reportedly buy A$400 shares, each covering the cost of a solar panel and the infrastructure needed for grid connection.

Community energy groups take various forms.




Read more:
Earth may temporarily pass dangerous 1.5℃ warming limit by 2024, major new report says


Hepburn Wind and the Goulburn Solar Farm, for example, involve a community investment model in which local groups develop a project, then seek investors from the community to fund it.

This might involve forming a cooperative, or selling shares in the venture. The community organisation may take responsibility for delivering the project – including design, installation, and management – or may outsource this to an external company.

A second model involves raising money through donations, either via crowd-sourcing platforms or traditional means. The money is usually spent on installing a sustainable energy system at a local premises. For example in north-east Victoria, a First Nations-owned renewable energy project will deliver solar power to the office of a state government agency.

The third type of project involves a group of households coming together to find a renewable energy solution, such as bulk-buying solar energy.

Hepburn Wind is Australia’s oldest community energy project.

What are the benefits?

Community-owned renewable energy projects are a great way for everyday people to get involved in the transition to a low-carbon future. The benefits include:

  • local job creation and economic development

  • returns on investment for community shareholders

  • increased energy security, helping communities to avoid blackouts

  • more affordable energy

  • the creation of funds to reinvest in other community projects. For example in Scotland, dividends from renewables developments have been invested in electric public transport and local skills development

  • community building, in which towns develop a stronger identity, participate in communal activities and make collective decisions about their future.

Empowering the community

The energy transformation is not just about moving from fossil fuels to renewables. It’s also about changing who is responsible for, and benefits from, our energy system.

Inevitably, those in power, such as existing energy generators and their political supporters, will resist such change.




Read more:
‘The good, the bad and the ugly’: here’s the lowdown on Australia’s low-emissions roadmap


We’ve seen this play out in Australia, which has triggered more than a decade of climate policy inaction. More recently, the Morrison government has pushed ahead with a plan for a “gas-fired” economic recovery, despite the harm this will cause to our emissions reduction efforts. These developments are clearly at odds with community support for action on climate change.

Traditionally, communities are often shut out of decision making on energy projects, including renewables. Communities often become dependent on both local political representation to voice their views, and the capacity of energy network operators to work with them.

People attend a community meeting
In community energy projects, locals are involved from the ground up.
Flickr

Communities must be empowered to take part in planning, and have ownership of projects. Our research, soon to be published, shows such empowerment involves helping communities develop the capacity and power to meet their own energy goals. This means developing new skills, working together and becoming equal decision makers.

Governments are central to this by helping communities deliver projects. The Victorian government’s Community Power Hubs are a good example. At three “hubs” – in Ballarat, Bendigo and the Latrobe Valley – various types of energy projects were implemented. Each sought to build local knowledge of, and participation in, community energy, and ensured the benefits stayed in the region.

Looking ahead

Australia’s growing community energy movement shows us what’s possible, but it needs more government support, especially at the federal level. Helen Haines’ proposal is a very good start.

The energy transformation will require massive investment, and most projects will be built in regional communities.

Empowering community energy is the ideal way to provide some of that investment, build stronger rural economies and ensure the benefits of the energy transformation are shared by all.The Conversation

Dominique McCollum Coy, Doctoral Researcher, Behaviour Change Graduate Research Industry Partnership (GRIP), Monash Sustainable Development Institute, Monash University; Roger Dargaville, Senior lecturer & Deputy Director Monash Energy Institute, Monash University, and Shirin Malekpour, Senior Lecturer and Research Lead, Monash Sustainable Development Institute, Monash University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Malcolm Turnbull condemns Scott Morrison’s ‘gas, gas, gas’ song as ‘a fantasy’


Michelle Grattan, University of Canberra

Malcolm Turnbull has launched a swingeing attack on Scott Morrison’s gas-led recovery, labelling his threat to build a gas-fired power station “crazy stuff”, and his idea of gas producing a cheap energy boom “a fantasy”.

The former prime minister also claimed Morrison’s refusal to embrace a 2050 net zero emissions target was “absolutely” at odds with the Paris climate agreement. “That was part of the deal,” Turnbull said.

Morrison at the weekend would not commit to a 2050 target – endorsed by business, farming and other groups in Australia and very many countries – although he said it was achievable.

Turnbull also declared that Energy Minister Angus Taylor – who on Tuesday delivered his technology investment roadmap for low emissions – didn’t believe most of what he was saying on energy.

“Angus has got quite a sophisticated understanding of the energy market, and he is speaking through the political side of his brain rather than the economic side,” Turnbull told the ABC.

The energy/climate war was pivotal in Turnbull’s fall from the prime ministership in 2018, and from the opposition leadership in 2009. While Morrison is totally safe in his job, the battle over energy policy on the conservative side of politics has not been put to rest, although the prime minister is banking on his elevation of gas satisfying his Liberal parliamentarians.

Morrison’s gas policy, which the government spruiks as underpinning a manufacturing revival, is being seen as a walk away from coal.

It includes a threat to build a gas-fired power station in the Hunter region if private enterprise does not fill the gap left by the coming closure of the Liddell coal-fired station.

The debate about gas has produced an unexpected unity ticket between Turnbull and former resources minister, the Nationals Matt Canavan, on one key point – both insist gas prices won’t be as low as the policy assumes.

But Turnbull and Canavan go in opposite directions in their energy prescriptions – Turnbull strongly backs renewables and Canavan is a voice for coal.

While acknowledging gas had a role “as a peaking fuel”, Turnbull dismissed any prospect of a “gas nirvana”.

“There is no cheap gas on the east coast of Australia. It is cheap at the moment because there’s a global recession and pandemic and oil prices are down, but the equilibrium price of gas is too high to make it a cheap form of generating electricity.”

“The cheap electricity opportunities come from wind and solar, backed by storage, batteries and pumped hydro, and then with gas playing a role but it’s essentially a peaking role,” Turnbull said.

Writing in the Australian, Canavan said the Morrison gas plan would “keep the lights on but it is unlikely to lower energy prices to the levels needed to bring manufacturing back to Australia.

“If we were serious about getting [energy] prices down as low as possible, we would focus on the energy sources in which we have a natural advantage, and that is not gas. We face gas shortages in the years ahead.”

Former Nationals leader Barnaby Joyce said about the government’s power station threat, that it would be “peculiar” to build a gas-fired plant “in the middle of a coal field”.

Turnbull said of last week’s announcement, “I’m not going to sing the song but it’s a gas, gas, gas”.

The roadmap was “gas one minute, carbon capture and storage the next”.

“What you need is to set out some basic parameters, which deal with reliability, affordability and emissions reduction, and then let the market get to work. That’s what Liberal governments should do. Unfortunately, it’s just one random intervention after another,” Turnbull said.

He lamented that, for whatever reasons, there was a “body of opinion on the right of Australian politics in the Liberal party and the National party, the Murdoch press, which still clings to this fantasy that coal is best and if we can’t have coal we’ll burn gas – I mean, it’s bonkers. The way to cheaper electricity is renewables plus storage, which is why the big storage plan that we got started, Snowy 2, is so important.”

Turnbull said that unlike his own situation when PM, Morrison was “in a position with no internal opposition”. “Now is the time to deliver an integrated, coherent energy and climate policy which is what the whole energy sector has been crying out for.”

Taylor told the National Press Club the government’s determination to get the gap filled, whether by private investment or a government power station, when the Liddell coal fired station closes in 2023 “is partly about reliability, but it’s primarily about affordability.

“If you take that much capacity out of the market, it’s a huge amount in a short period of time. We saw what happened with Hazelwood. We saw very, very sharp increases in prices. We’re not prepared to accept that.”

Asked whether the government’s resistance to committing to the 2050 target was more about appeasing the right wing of the coalition rather than about the target itself, Taylor said: “Our focus is on our 2030 target in the Paris agreement…and in a few years time we will have to extend that out to 2035 …

“What we’re not going to do is impose a target that’s going to impose costs on the economy, destroy jobs, and stop investment. The Paris commitment, globally, is to net zero in the second half of the century and we would like that to happen as soon as possible.”The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Morrison government lays down five technologies for its clean energy investment


Michelle Grattan, University of Canberra

The Morrison government will tell its refocused clean energy agencies and the clean energy regulator to give priority to investment in five low emissions technologies and report how they are accelerating them.

The technologies are clean hydrogen, energy storage, low carbon steel and aluminium, carbon capture and storage, and soil carbon.

The government last week announced it would legislate to extend the remit of the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC) beyond renewables.

On Tuesday it will indicate the “priority low emissions technologies” they, and the Clean Energy Regulator (CER) – which is responsible for administering the government’s emissions reduction fund – should concentrate on.

Energy Minister Angus Taylor, in a Tuesday speech on low emissions technology, will say the government is putting technologies into four categories. Apart from the priority low emissions technologies, the other categories are emerging and enabling technologies, “watching brief” technologies, and mature technologies.

Priority technologies “are those expected to have transformational impacts here and globally and are not yet mature,” Taylor says in his speech, released ahead of delivery.

“They are priorities where government investments can make a difference in reducing costs and improving technology readiness.

“Technologies where we, as a government, will not only prioritise our investments but where we will streamline regulation and legislation to encourage investment.

“Investors will have confidence that identified priority technologies are of long-term strategic importance for the government.”

Emerging and enabling technologies, such as those for energy efficiency and infrastructure for electric and hydrogen vehicle charging/ refuelling, will also be included in the mandate of the government’s investment agencies.

In the “watching brief” category are those that are for the longer run or are longer odds, such as direct air capture and small nuclear modular reactors. (There is a moratorium on nuclear power in Australia at the moment but the government is watching developments in Europe and the United Kingdom.)

Notably, key renewables and key fossil fuels are in the “mature” category, which includes coal, gas, solar and wind.

The government says it will only invest in them where there is market failure or where such investments secure jobs in key industries.

Last week Scott Morrison threatened to build a gas power station in the Hunter region if private investors left a supply gap for when the Liddell coal-fired station closes, while he also indicated renewables could now stand on their own feet.

Taylor will release an overarching technology roadmap, which he says “arms the government with “four levers to enact change”: an investment lever, a legislative lever, a regulator lever, and international co-operation and collaboration.

“The roadmap will guide the deployment of the $18 billion that will be invested, including through the CEFC, ARENA, the Climate Solutions Fund [which will evolve from the Emissions Reduction Fund] and the CER.

“This will turn that into at least $50 billion through the private sector, state governments, research institutions and other publicly funded bodies. That will drive around 130 000 jobs to 2030,” Taylor says.

The legislative level “is about flexibility and accountability.

“We don’t currently have that. Our agencies are restricted by legislation and regulation to invest in the new technologies of 2010 not the emerging technologies of 2020.”

The regulator lever “is about enablement”.

Taylor says the government’s plan is not based on ideology but “balance and outcomes”.

The government is announcing several “stretch goals” (see table for details). Stretch goals are the point at which new technologies become competitive with existing alternatives. The government announced the hydrogen stretch goal earlier in the year.

“Getting these technologies right will strengthen our economy and create jobs,” Taylor says.

“This will significantly reduce global emissions, across sectors that emit 45 billion tonnes annually.

“Australia alone will avoid 250 million tonnes of emissions by 2040.”

He says “Australia can’t and shouldn’t damage its economy to reduce emissions”.

The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

‘A dose of reality’: Morrison government’s new $1.9 billion techno-fix for climate change is a small step



Dean Lewins/AAP

Frank Jotzo, Australian National University

The Morrison government today announced A$1.9 billion over ten years to develop clean technology in industry, agriculture and transport. In some ways it’s a step in the right direction, but a far cry from what’s needed to drive Australia’s shift to a low emissions economy.

The big change involves what the money is for. The new funding will enable the Australian Renewable Energy Agency (ARENA) to support technologies such as green steel production, industrial processes to reduce energy consumption and somewhat controversially, carbon-capture and storage and soil-carbon sequestration.

This is a big move away from ARENA’s current investment priorities. Importantly it means ARENA will continue to operate, as it is running out of money now.

However technology development alone is not enough to cut Australia’s emissions deeply and quickly – which is what’s needed to address the climate threat. Other policies and more money will be needed.

Interior of steelworks
Cutting emissions from industry will be a focus of the new spending.
Dean Lewins/AAP

New role for ARENA

ARENA will receive the lion’s share of the money: A$1.4 billion over ten years in guaranteed baseline funding. ARENA has spent A$1.6 billion since it was established in 2012. So the new funding is lower on an annual basis. It’s also far less than what’s needed to properly meet the challenge, in a country with a large industrial sector and huge opportunities for zero carbon production.

To date, ARENA’s investments have focused on renewable energy supply. Prime Minister Scott Morrison today said the renewables industry was enjoying a “world-leading boom” and no longer needs government subsidies. Critics may be dismayed to see ARENA steered away from its original purpose. But it is true solar parks and wind farms are now commercially viable, and technologies to integrate large amounts of renewables into the grid are available.

So it makes sense to spend new research and development (R&D) funding on the next generation of low-emissions technologies. But how to choose what to spend the money on?

A few simple principles should inform those choices. The spending should help develop new zero- or low-emissions technologies or make them cheaper. It should also enable the shift to a net-zero emissions future, rather than locking in structures that continue to emit. The investment choices should be made by independent bodies such as ARENA’s board, based on research and expert judgement, rather than politically determined priorities.

For the industrial sector, the case for supporting zero-emissions technologies is clear. A sizeable share of Australia’s total emissions stem from fossil fuel use in industry.




Read more:
Government targets emerging technologies with $1.9 billion, saying renewables can stand on own feet


In some cases, government-supported R&D could help lay the foundation for zero-emissions industries of the future. But in others, what’s needed is a financial incentive for businesses to switch to clean energy or zero-emissions production methods, or regulation to require cleaner processes.

Green steel is a perfect example of the positive change that is possible. Steel can be made using clean hydrogen and renewable electricity, and the long term possibility of a green steel industry in Australia is tantalising.

Steel being made
Steel could be made cleanly using hydrogen instead of coking coal.
Dean Lewins/AAP

A future for fossil fuels?

The government’s support for carbon capture and storage (CCS) will be highly contested, because it’s a way to continue using fossil fuels at reduced – though not zero – emissions. This is achieved by capturing carbon dioxide before it enters the atmosphere and storing it underground, a technically feasible but costly process.

CCS will not perpetuate fossil fuel use in the energy sector, because renewables combined with energy storage are now much cheaper. Rather, CCS can be an option in specific processes that do not have ready alternatives, such as the production of cement, chemicals and fertiliser.

One step further is so-called “carbon capture and use” (CCU), where carbon dioxide is not pumped underground but turned into products, such as building materials. One program announced is for pilot projects of that kind.




Read more:
Yes, carbon emissions fell during COVID-19. But it’s the shift away from coal that really matters


A different proposition is the idea of hydrogen produced from coal or gas, in which some resulting emissions are captured. This method competes with “green” hydrogen produced using renewable electricity. It seems the government for now intends to support fossil fuel-derived hydrogen.

Reducing fossil fuel use, and using CCS/CCU where it makes sense, will not get the world to net-zero emissions. Emissions from other sources must be cut by as much as technically possible, at justifiable cost. Remaining emissions must then be negated by drawing carbon dioxide from the atmosphere. Such “negative emissions” can be achieved through technological means, and also by permanently increasing the amount of carbon stored in plants and soil.

The new funding includes support for increasing the amount of soil carbon. This method may hold promise in principle, but in practice its effectiveness is uncertain, and hard to measure. At the same time, the large emissions from agriculture are not yet addressed.

Gas flaring from an industrial plant
Reducing the burning of fossil fuels is not enough to get to net-zero emissions.
Matt Black Productions

A piecemeal effort

The spending amounts to A$140 million per year for ARENA, plus about A$500 million all up through other programs. A dose of reality is needed about what this money can achieve. It will create better understanding of options, some technological progress across the board and surely the occasional highlight. But a much greater effort is likely needed to achieve fundamental technological breakthroughs. And crucially, new technologies must be widely deployed.

For a sense of scale, consider that the Snowy 2.0 scheme is costed at around A$5 billion, and a single 1 gigawatt gas power plant, as mooted by the government for the Hunter Valley, would cost in the order of A$1.5 billion to build.

As well as additional spending, policies will be needed to drive the uptake of low-emissions technologies. The shift to renewables is now happening in the energy sector without government help, though some hurdles remain. But we cannot expect the same across the economy.

Governments will need to help drive uptake through policy. The most efficient way is usually to ensure producers of emissions pay for the environmental damage caused. In other words, putting a price on carbon.

The funding announced today is merely one piece of a national long-term strategy to deeply cut emissions – and not a particularly big piece.




Read more:
Carbon pricing works: the largest-ever study puts it beyond doubt


The Conversation


Frank Jotzo, Director, Centre for Climate and Energy Policy, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.