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Decarbonising Australia: will the country’s $18bn investment cut it?

By Scarlett Evans 11 Dec 2020 (Last Updated December 11th, 2020 11:00)

Australian Energy Minister Angus Taylor has announced A$18bn in public investment over the next decade for carbon-reducing technologies. But there’s already discord over the plans, with Labor describing them as “the road to nowhere” and former Liberal Prime Minister Malcolm Turnbull calling them “bonkers”. So is Australia any closer to forming a united front on its energy and climate goals? We report.

Decarbonising Australia: will the country’s $18bn investment cut it?
Cementing emissions targets and a consistent clean energy plan has been something of a challenge for Australia. Source: Simon Steinberger on Pixabay

While Australia may be predominantly associated with its prolific mining exports, it is in fact a country making significant progress in the global push for decarbonisation, with the National Greenhouse Gas Inventory finding renewables are now providing as much electricity to Australia’s National Electricity Market as gas and brown coal combined. 

The states of Tasmania and South Australia are already on 100% and 60% renewable energy respectively, and while these are smaller states blessed with greater ease of transmission and widespread connectivity than others, rapid advances in solar and wind power mean that optimism is high for the rest of the country following suit.

The success of solar and wind have in a way made the government’s latest announcement divisive, as the proposed technologies for investment are expensive and their success relatively unknown by comparison. Is there a case to be made for developing these underexplored technologies to aid Australia in its decarbonising mission? Or would efforts be more significantly felt elsewhere?

A renewable push

As the leading coal and gas exporter in the world, cementing emissions targets and a consistent clean energy plan has been something of a challenge for Australia. However, despite this obstacle, the country announced it was halfway to meeting its Paris targets by the end of 2019 – a plan that is aiming for an emissions reduction from 28% to 26% by 2030, and an overall cost reduction for technologies such as battery storage and carbon capture.

The latest plan reflects these goals, with carbon capture and storage being one of the main areas highlighted for investment, and hydrogen picked for its promise of carbon reductions. The general lack of examples of these technologies working is, however, a point of concern for other industry members – pitching it as something of a risky move with potentially little pay-off. 

Geoff James, research principal at the University of Technology Sydney’s Institute for Sustainable Futures says there is a valid argument to kick-start the hydrogen industry with the (imperfect) existing methods, to enable a transition to a greener energy source. 

“Brown hydrogen is not clean. But it’s cheap enough to get the industry started, and then we’ll transition,” says James. 

“So once you’ve started the hydrogen industry, then you’re set up to transition that to a cleaner form, either through sequestration, which makes it blue, or through using renewable electricity, which makes it green.”

James warns that there is a risk with pursuing brown hydrogen as it can distract investment from the real target of clean hydrogen – offering fossil fuel companies a means of prolonging the road to transitioning to the greener alternative. Even green hydrogen is a point of contention, as it is not clear how rapidly its currently high costs can be anticipated to come down. 

“We don’t have many working projects,” James says. “The only carbon sequestration project that we have at scale in Australia is actually used in order to push up oil. It’s a great project, but it’s not a carbon saving project. I’m not familiar with the economics of it, but my understanding is that in terms of electricity generation, the worst element is that if you add this process to any fossil fuel generation project, be it coal or gas, it’ll make it totally uneconomical.”

In addition, James says a boom in hydrogen would require a simultaneous build-up of infrastructure.

“We need to ask what are the long term carbon storage sites that will support the growth of the hydrogen industry?” he says. “If you’re going to build your clean hydrogen industry on this technology, where are you going to scale up your CCS to account for the growth of it? And is it really sustainable?”

While the finer details of the plan are not yet clear, the question remains: if investment is not channelled into the government suggested routes, where should it go? 

The drive for integration 

According to James, the big challenge lies in integration, with the majority of current renewable energy production sites remaining in relatively remote areas. 

“Investment is needed to lay the transmission network to connect up these areas where renewable energy is available,” he says. “Solving the same problem using carbon capture just seems unnecessary, because by the time you do that – by the time it becomes cheap enough – the other technologies will also be cheap enough, and we’ll know how to use them better.”

Similarly, speaking with Professor Andrew Blakers, director of the Australian National University Centre for Sustainable Energy Systems, he says investment should be channelled into improving transmission and connection of the grid. Blakerse adds that the country’s already phenomenal wind and solar use is placing it in a prime position to reach its Paris targets regardless. It is this sector that he believes efforts should be made to accelerate. 

“We are installing solar and wind four times faster per capita than Japan, the US, China, or Europe, and 10 times faster than the global average per capita,” he says. “We are far ahead of any other country and are therefore facing and solving on the fly the problems of incorporating solar and wind before other countries and we are finding that it’s not very hard. There are certainly growing pains, lots of them. But they are growing pains not showstoppers.”

Indeed, according to the Clean Energy Regulator, new solar photovoltaics and wind energy in 2020 will have a total delivered capacity of around 6.3GW. Yet this can only go so far without the infrastructure to support it. 

“It’s mainly a matter of overhauling the rules around transmission extension to make them happen fast enough to keep up with the solar and wind deployment,” he says. “And if that’s all they do, then two things will happen. First, the solar wind industry will continue to fly. Secondly, Australia will go far beyond its Paris targets, because the private sector will keep installing wind and solar because it’s cheaper than coal or gas, and will continue to get even cheaper.”

While the industry may be somewhat divided when it comes to just how a greener future can be reached, Australia is already well on its way to achieving its Paris targets and more – evidencing the fact that political disagreements need not stand in the way of environmental progress.