Report says Australia can shift to renewables without price hikes

Australia could move to 70 per cent renewables across the National Electricity Market with little risk to reliability or affordability, according to a new report.

Apr 12, 2021, updated Apr 12, 2021
Leading scientist Dr Alan Finkel said Australia could straddle the old and new economies in the global shift from "petrostates" to "electrostates". (Supplied)

Leading scientist Dr Alan Finkel said Australia could straddle the old and new economies in the global shift from "petrostates" to "electrostates". (Supplied)

Achieving 90 per cent renewables would be slightly more expensive, but would slash emissions at a relatively low cost, according to the unaligned Grattan Institute.

A report from Grattan’s Tony Wood and James Ha said that moving to a system with 70 per cent renewable energy – and closing about two-thirds of today’s coal-fired power plants – would not materially increase the cost of power but would dramatically reduce emissions.

The report said most of Australia’s coal-fired power stations were scheduled to be retired by 2040 and governments should not use taxpayers’ money to extend the life of existing coal-fired generators, or to subsidise the entry of new coal-fired generators.

Both sides of politics have a net zero policy but the Federal Government won’t put a timeframe on when it should be achieved despite pressure to join major countries with a 2050 goal.

Queensland has a target of 50 per cent renewables by 2030 and has a leading uptake of rootop solar.

Minister for energy and renewables Mick De Brenni told Parliament last week there were more than 660,000 rooftop solar systems installed on Queensland households and businesses with a total capacity of about 3350 megawatts. About 50 per cent of energy generated from rooftop PV systems was exported to the grid in 2020.

‘“Australia can achieve a net-zero carbon emissions electricity system without threatening affordability or reliability of supply,’’ the report said.

“It’s a myth that Australia needs to continue to rely on coal-fired power stations to keep electricity bills down.

“But we should not rush to 100 per cent renewable energy, because ensuring reliability would be costly – especially in the depths of winter in the southern states when electricity demand is high, solar supply is low, and persistent wind droughts are possible.’’

Wood and Ha said their economic modelling suggested that moving to a system with 90 per cent renewable energy – and no coal – could also be reliable, but would come at a cost.

That additional cost related to more generation, transmission, and storage that would be necessary to ensure supply when the wind isn’t blowing and the sun isn’t shining.

“Nonetheless, this would be a low-cost way to nearly eliminate emissions in the NEM, and offsetting any remaining emissions each year could well be the cheapest way to reach net zero,’’ the authors said.

“Australia can make the historic transition to a low-emissions electricity system without the lights going out and without power bills skyrocketing.

“But getting to 100 per cent renewable energy over the next two decades would be expensive unless there are major technological advances to backup renewable supply through rare winter wind droughts.

“That’s why Australia should commit only to net zero emissions in the NEM by the 2040s, not absolute zero emissions or 100 per cent renewable energy.

“Gas generation with negative-emissions offsets will be the lowest-cost ‘bridging’ technology until a zero-emissions alternative, such as hydrogen-fired generation, pumped hydro storage, or carbon capture and storage, becomes an economically competitive backstop.’’

“Gas is likely to play the critical backup role, though not an expanded role. Australia will make a gas-supported transition to a net-zero emissions electricity system – but not a ‘gas-led recovery’ from the COVID recession.


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