Serious setback for renewable energy goals as budget backs away from transition support
The Australian federal budget was handed down last week, and among all the cost-of-living reliefs, fuel concessions, benefits to home buyers, and so on, there was notable silence on one significant aspect – the transition to renewable energy.
Although we have a net-zero-by-2050 target, Australia is definitely dragging its feet towards that goal.
The minor investments in microgrids mentioned during Treasurer Josh Frydenberg’s budget speech is unlikely to provide major support to put us on the right path.
This is quite ironic, considering we’re the world leaders in per-capita rooftop solar power generation, and have one of the highest penetrations of wind and solar energy of any continental-scale grid in the world.
This is largely due to the strong policies from the late 2000s through to 2013, when the Gillard government’s carbon price was repealed.
But so far we’ve seen no significant governmental support for the climate-emergency-driven massive energy transition that’s underway around the world, and that’s urgently needed in Australia.
If we hope to accelerate towards net zero by 2050, we need to be well on track to a 50% reduction of greenhouse gas emissions by 2035 or earlier. The most important action the government can take right now is to ensure investment in electricity grid transformation and its market policy support.
The most powerful step the government can take is a mix of funding and de-risking of the $30-$40 billion of new transmission infrastructure over the next 10-15 years to set us up for the 2050 net zero goal, as modelled by AEMO’s (Australian Energy Market Operator) 2022 step change scenario.
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To support this investment, what we also need is rapid and significant reform of the National Electricity Market (NEM) governance frameworks, and investment and urgent world-leading research to help manage a near 100% renewable grid. If we can lead the world on silicon PV technology, why not grid technology as well?
We’re already feeling the impacts of this lack of adequate support.
The AEMO in 2021 said we do not have the tools to operate the NEM securely by 2025, as grids have never been operated with so much low-cost renewable generation anywhere else across the globe.
Hence, unfortunately for Australia, we can’t “buy” solutions to these problems or look to other countries for support, because the world has yet to encounter such conundrums.
With the CSIRO and the nation’s universities leading the charge, we need to develop homegrown solutions for our unique energy transition issues.
It’s astounding that though the clock’s running out, there’s no nationally agreed policymaking framework in any real sense.
At the same time, we have a once-in-a-century technological transition precipitated by the climate emergency.
The only clear solution for policy coordination is the creation of a national energy regulator with policymaking powers to replace and improve on the effectively defunct COAG Ministerial Energy Council.
The first task of this body would be to harmonise policy across the nation that includes effective and unambiguous powers for the key energy market bodies such as the AEMO, Australian Energy Market Commission and the Australian Energy Regulator.
The above grid transformation will need to quickly dovetail into a radical transformation of our transport sector (which produces more than 20% of national greenhouse gas emissions) by investment in transport electrification to move fully away from fossil fuels by 2035 at the latest.
This will help reduce emissions over the 1.5°C trajectory, and increase energy security. This is particularly significant considering recent challenges regarding oil and gas prices and supply, caused this time by the Russia-Ukraine conflict.
The time is right for making significant strides towards our 1.5°C goals. Australia’s lack of concern has already been noticed by the world – It’s best we don’t get told off twice.
