Australia will need to double the pace of its renewable energy uptake to meet the 2030 emissions target set by the Albanese government, even without any increase in demand, according to Bruce Mountain, head of the Victoria Energy Policy Centre.
Labor’s main energy policy, Rewiring the Nation, includes the creation of a special corporation to funnel $20bn into new transmission links to accelerate the uptake of more clean energy. The plan is part of Labor’s pledge to cut Australia’s 2005-level greenhouse gas emissions 43% by 2030, projecting renewables reach an 82% share of renewables in the National Electricity Market by then.
Excluding hydro power, renewable energy has increased its share of the market 3% annually in the past five years, Mountain says.
“Deducting 10% from hydro, the target is 72%,” he says of Labor’s goal. “This requires variable renewable energy growth of 6.1% of operating demand per year, so a bit over twice the rate from 2016-21.”
But that assumes no increase in demand. The electrification of transport and other sectors will boost demand without big improvements in energy efficiency.
“I just do not feel that this realisation [of the scale of the task] is anywhere near real in the corridors of power,” says Mountain, who recently launched a report on the need for much greater storage to support renewables.
Energy ministers will meet on Wednesday to discuss soaring energy prices, with the second big cold front of the winter sweeping across south-eastern Australia, potentially straining energy markets again.
The climate and energy minister, Chris Bowen, says the energy price crunch makes it “more important than ever to implement Labor’s plan”.
“After nine wasted years, Labor will not only supply renewable energy through policies like Rewiring the Nation, but we’ll make sure that Australia develops a sovereign manufacturing capacity, including in renewable energy as well as greater value-adding to critical minerals like lithium.”
Bowen last week said the Clean Energy Finance Corporation, sometimes described as the government’s green bank, and the Australian Energy Market Operator would be asked to implement the rewiring plan.
Simon Corbell, the chief executive of the Clean Energy Investor Group and architect of the ACT’s shift to 100% renewable power, says Labor’s plan will accelerate the “step change” scenario outlined by the Aemo in 2020.
“It’s certainly achievable from a renewable energy development perspective,” Corbell says. “The key issue will be delivery of the transmission infrastructure in a timely way.”
It would require “a very high level of coordination between the states and the commonwealth” to ensure federal action complements state-based renewable energy zones, he said.
The policy will need more than 10,000km of new transmission lines.
“It’s something we haven’t seen before in Australia,” Corbell says.
The development gap remains wide. A survey of Corbell’s group last year found there was less than one gigawatt of new capacity committed, as confidence shrivelled under the Morrison government. Aemo’s 2020 step-change goal would require 20GW in new generation capacity alone by 2032.
Chris McGrath, chief executive of the solar farm builder 5B, exemplifies both the progress and potholes facing the sector. Last week, 5B completed part of a $30m capital raising, which it hopes will allow it to accelerate its world-leading pace of new solar panel deployment.
In May, a team of 10 in Chile’s Atacama Desert built a solar farm using prefabricated panels at the pace of 1.1 megawatts of capacity per day. With the use of robots, 5B expects that can be increased 10-fold.
“If we continue to kind of tiptoe around and think, ‘oh, that’s too big’… then we’ve kind of given up before we’ve even started,” said McGrath, who considers himself “a terrified optimist”.
“The government’s got a huge challenge and opportunity in front of it to address its renewable energy target by 2030,” he says. Given the sales and construction cycles, the goal is more like five or six years away.
Indeed, supply constraints have been tightening lately, forcing 5B to cut a quarter of its staff, or about 50 positions. Shipping times from China have increased by as much as four times as it battles to curb the Covid pandemic.
Solar module prices have risen as their availability drops, McGrath says. The world will need between 40 and 80 terawatts of new solar by 2050 to meet net zero emissions.
Tim Buckley, director of consultancy Climate Energy Finance, says the target of 82% by 2030 is “exceptionally ambitious” but possible, “if the ALP can get the Rewiring the Nation strategy up and running quickly”.
“This challenge has definitely been more political than financial or technological, for sure,” Buckley says. “The cost of not striving for electrification of everything, an aggressive electric vehicle rollout and a 82% renewables target will be sustained fossil fuel price inflation impacting industry, transport and consumers.”
