Updated: Aug 31, 2020
Presently the Australian energy system is geared to complete the world’s most rapid transition to renewable energy to date. Recent projections and planning estimates from The Australian Energy Market Operator (Australia’s peak energy body, AEMO) suggest that Australia is currently in the middle of a pivot to an almost completely renewable economy by 2040, even if no further government policies are enacted which might increase the efficiency of this transition. Put simply, the outlook is very positive.
Australia is installing renewable energy 4-5 times faster per capita than the EU, Japan, China and the USA
According to forecasts, the above-mentioned transition is now inevitable, however, Australia is in a position now in which if we move quickly, we will become a renewable energy and economic ‘superpower’. Luckily for us, our collective capacity to do so is great. In 2019, Australia had one of the highest performing capital reserves in the world in our collective superannuation funds, which is the world’s fourth largest. Despite policy complacency at a federal level, state governments are beginning to adopt more ambitious renewable energy and emissions policies, with most states at least targeting net zero emissions by 2050. Renewable energy production recently overtook fossil fuel in terms of the economic feasibility of new projects and battery storage capacity for clean energy is rapidly increasing.
Domestic renewable energy investment peaked in 2018 before dipping slightly in 2019. The current expectation is that investment will slow in the near-term while energy grid infrastructure is improved in order to accommodate more renewables generation, before continuing the upwards trend as many coal plants reach the end of their planned life-span towards the end of this decade. Plans for this grid expansion and adaptation to increased renewables supply have been announced recently by the AEMO. Furthermore, access to finance for renewable projects continues to increase as The Clean Energy Finance Corporation facilitates greater funding and more ambitious agreements are being formulated to guarantee future revenue for investors through the likes of power purchase agreements (PPA).
It is true that in response to closing coal plants, greater public spending in fossil fuel projects such as liquified natural gas infrastructure has been ear-marked by the federal government’s National COVID-19 Commission, however a recent Technology Roadmap discussion paper has acknowledged the impending shift to renewable energy, predicted to make up 50% of Australia’s domestic consumption by 2030. In spite of some having placed early emphasis on a gas-driven economic recovery from the current recession, calls for a recovery centred around clean energy investment are still loud and clear. For example, The Clean Energy Council’s ‘Clean Recovery’ proposal outlines an ambitious plan for a $50-billion investment into the economy, the generation of 50,000 new jobs and to triple the amount of large-scale renewable installations in Australia.
National Employment Generation with BAU (34% renewable electricity in 2030) versus 5ORE (50% renewable electricity in 2030)
All this is to say, that in the worst case scenario, Australia will soon transition from being heavily dependent on fossil-fuel consumption for domestic energy use to producing a sufficient renewable energy supply. What is yet to be determined, is how quickly and efficiently we can capitalise on this transition to position ourselves as a global leader in renewable energy production, export and knowledge.