The key climate change summitGlasgow’s opening ceremony has just begun. Scott Morrison, the Australian Prime Minster, will be bringing his widely-criticized plan for net-zero emissions by 2050Bring it to the negotiation table.
Released last week, the plan promises to deliver deep cuts to Australia’s greenhouse-gas emissions by relying on new technology, while eschewing taxes and mandates. As the Grattan InstituteThis week, it was warned that the government will not implement other market-based policies.
The plan prioritizes clean hydrogen and ultra-low-cost sun, energy storage, carbon capture and storag, and low-emissions steel.
However, the plan is lacking in detail and long-term thinking. It only provides support for technology during the initial stages, and not ongoing support throughout the commercialisation phase.
Many of these technologies depend heavily on progress in renewable electricity generation. This plan relies on 91-97% reductions in emissions occurring in the electricity network by 2050.
Australia must dramatically increase renewable electricity generation in order to reach net zero. However, the sector is constrained by its competition in a system that was originally built for fossil fuels.
2020 only 24% of Australia’s electricity came from renewable sources, despite Australia’s massive potential as a global leader in the sector thanks to our abundance of sunshine, wind and space.
Here are four reasons why the current electricity system favors higher-emitting technologies. These must be overcome to rapidly cut Australia’s emissions and help the world avert catastrophic impacts of climate change.
1. Framing renewables as a ‘problem’
Australia’s fossil-fuel energy system is deeply rooted and resists any attempts to shift. The Australian Energy Market Operator is often used to frame renewables as a problem which needs to be controlled. identifyingThe stability of the electricity grid is threatened by rooftop solar and renewable energy.
Even the government’s net-zero plan emphasises the need for coal and gas for grid stability, despite including goals to boost emissions-free storage technologies, such as batteries and pumped hydro, that could likewise support this stability.
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This is an example of the entrenched system at work – a transition to renewable energy will require the grid to be reimagined. This is technologically feasibleThis should be seen as an opportunity, not a problem.
Indeed, the existing electricity grid is rife with problems that aren’t fully acknowledged in the strategy. For example, coal and natural gas can pollute at no cost, with the consequences falling on society in general rather than those who are paying for coal-fired power.
2. Securing long-term investors
Renewable generation is costly to install upfront but is very affordable to operate once it is built. For investors in renewable generation, being able to plan for long-range sales over the course of the generating plant’s life is crucial.
A researcher from Switzerland is included in a 2020 study interviewed 40 renewable energy investorsThe UK, Germany and Spain. They stated that investment was more risky when they rely on variable investing. spot marketPrices rather than fixed prices agreed to at the time construction began
Baffled by baseload? Dumbfounded by dispatchables?
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Spot market energy prices in Australia are highly volatile and change every thirty minutes. Prices can go as high as A$14,500 per megawatt hour and, when there’s an oversupply of electricity, can go as low as A$1,000 below zero per megawatt hour.
The net-zero plan does not provide any mechanisms to ensure stability for investors in renewables regarding their return on investment. This type of mechanism is however common. worldwideEven locally in Australia.
The Australian Capital Territory, for instance, has a “reverse-auction renewable feed-in tariff”. This promises a fixed price for electricity over a period of 20 years. It is produced through contracted renewable energy investors (around A$80 per megawatt hourRecent wind investments
3. There is no real plan for energy storage
Solar and wind are “non-dispatchable” technologies, meaning they can’t be turned on when needed. This is a problem because the electricity grid depends on a real-time electricity supply and demand balance and has very limited storage capacity.
Without sufficient storage in the grid, renewable generation may need to be curtailed at times when there’s too much supply, adding to the financial riskFor investors in renewable energy and financing difficulties
This issue can be solved by more storage, and the plan correctly names storage as a priority technology. However the plan’s focus on early-stage development can only be the first step. Australia also needs a plan for commercializing and deploying storage technology. However, the plan is lacking details.
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It gives two examples of this: co-investment and the Neoen HornsdaleSouth Australia’s Power Reserve battery storage program, and the Victorian Big Battery.
Nicive project is a new action or commitment. The Neoen project was successfully completed in September 2020, and the Big Battery was committed towards in FebruaryThis year – both well ahead of the release of the plan.
4. Without legislation, there is little to no imperative
The plan states “Australia will not legislate its net-zero by 2050 target”. Without legislation, it will not be necessary to dig deeply to mobilise enough resources (funding time, effort, and funding) to meet the target.
The plan calls for five-yearly reviews of progress towards meeting emissions targets. This plan is very detailed, so it will be important to conduct these reviews well and act on their findings in order to achieve actual progress on emissions reduction.
However, the plan doesn’t specify what these reviews will look like, or what will happen if reviews show progress is falling short. The Australian government promised no consequences if it fails to meet its net-zero goal, even though it has not legislated for it.
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