Australia’s renewable energy superpower fantasy

One of Prime Minister Albanese’s favorite three-word slogans is “renewable energy superpower.” It is from Ross Garnaut’s 2019 political propaganda book Superpower: Australia’s low-carbon opportunity.

Using the miracle ingredient of cheap, renewable electricity, Garnaut skillfully mixed a cocktail of plausible-sounding new orientations on well-established Australian themes. The miracle ingredient is reinventing our traditional competitive advantage in cheap coal-fired electricity in a net-zero world. Then add the familiar modifier of using cheap electricity to upgrade Australia’s natural resources. Round out the cocktail with “green hydrogen”, “green steel” and other “green” industries to replace our fossil fuel exports. Drink this seductive cocktail (which I will christen ‘the Garnaut’) and hey prestoAustralia remains the lucky country in a net-zero world even as we toast the loss of our number two and number three exports, coal and gas, which also provide three quarters of our electricity.

Garnaut, once economic adviser to Bob Hawke, designed Labor’s carbon pricing systems in the Rudd Gillard years. So it’s no surprise that Albanese Labor enthusiastically welcomed the Garnaut:

My government is committed to ensuring Australia becomes a renewable energy superpower and harnessing our natural advantages to become energy independent and a major exporter of clean energy.I

But the publication of the Australian energy market operator Integrated system plan 2022 in June provides sobering relief as the Hydrogen Superpower scenario explores the renewable energy needed to support a hydrogen-based export industry. Despite Albanese’s Garnaut-soaked refrain about the “renewable energy superpower,” it’s easy to see why AEMO, operator of our energy market, doesn’t think this is likely.

In Hydrogen Superpower, the scale of development can only be described as monumental. For Australia to become a renewable energy superpower, as assumed in this scenario, the national electricity market would need about 269 GW of wind and about 278 GW of solar – 34 times its current variable renewable energy capacity. This would increase the total generating capacity of the national electricity market by more than eight times (instead of over two times for the more likely step change and progressive change scenarios).ii

The 269 GW of wind would be almost 90,000 3MW wind turbines, or the equivalent of about 900 larger new wind farms with a capacity of 300MW. The cost could be over $500 billion based on recent projects at around $2 billion per GW. The cost of the 278 GW of solar power could be another $280 billion based on recent projects of around $1 billion per GW.

Fortunately, another ingredient in the Garnaut cocktail is a new era of near-zero interest rates, so the billions of dollars won’t cost anything. What could go wrong?

But there is more. New South Wales Treasurer (previously Secretary of Energy) Matt Kean drank the Garnaut cocktail and subtitled his roadmap for NSW’s power infrastructure ‘Building an Energy Superpower’.

To reassure workers and regions hard hit by coal shutdowns, it says: “A green steel industry in just one NSW region has the potential to be expected to sustain 10,000 jobs.”iii That’s according to the Grattan Institute report Start with steelthe region is the hunter, and it includes 135 GW of renewable power generation to support a major “green steel” export industry.IV This would be in addition to the “monumental” 574 GW involved in AEMO’s Hydrogen Superpower scenario.

With Hydrogen Superpower revealed to be some kind of fantasy, AEMO’s plan focuses on the step-change scenario he believes is the most likely. It is “closely aligned” with Labor’s target of reducing Australia’s emissions by 43 per cent from 2005 levels by 2030, and is consistent with 83 per cent of electricity coming from renewable sources by then. It predicts that electricity demand will double by 2050 as households, vehicles and industrial applications switch to electricity from existing energy sources and the population grows. It also envisages some domestic hydrogen production for transport and as a blended pipeline gas with some industrial uses after 2040. It’s not the full Garnaut, more of a Garnaut-lite.

In the most likely step-change scenario, the Integrated Systems Plan projects additional variable renewable energy needs of over 125 GW by 2050 to meet demand as coal-fired power generation is scaled back. This means maintaining the current record rate of variable renewable energy development each year for the decade to nearly triple the existing 16GW of variable renewable energy by 2030 – and then doubling that capacity by 2040 and again by 2050.v

Step Change also includes a tripling of non-coal fortification capacity (battery, pumped hydro or gas) and 10,000 km of new transmission to connect geographically diverse generation and storage/fortification with customers. This must be built as urgently as possible. This was announced by the head of the Energy Security Board, Anna Collyer Sydney Morning Herald on June 7 that it was difficult to explain the scale of the transition required for an electricity grid that is currently two-thirds dependent on coal, describing the challenge as “staggering”.vi

The cost of the additional variable renewable energy could be on the order of $200 billion, with much more required for capacity consolidation, transmission, and various power system services. Gas-fired generation will remain critical through 2050 to “supplement battery and pumped hydro generation during periods of peak demand, particularly during long periods of ‘dark and still’ weather.”vii It seems unlikely that renewable energy-only fanatics will take much notice until they are sobered by a full-scale blackout.

AEMO’s plan shows that Step Change requires a massive increase in the density of wind and solar farms in designated renewable energy zones by 2050, encompassing the Darling Downs, New England, NSW-central west, western and southwestern Victoria and the Southeast to be remodeled South Australia.viii

Labour, the Greens and the Teal Independents do not hold a single seat in these areas. Their vociferous calls from city voters for more climate action and faster renewable energy are unlikely to contribute positively to the critical role played by securing “community support” and “social licensing,” which according to AEMO “need to be urgently and continually focused.” .ix

It’s a dynamic that could tear Australia apart as urban Australia imposes a ninefold increase in renewable energy capacity and 10,000km of new transmission lines on regional Australia. Becoming a renewable energy superpower would be a monumental imposition if our political, political, and business elites continue to drink the Garnauts.

dr Michael Green holds a PhD in systems engineering

I The AustralianJuly 15, 2022, “Workers are demonizing nuclear power, says Nationals.”

ii AEMOIntegrated system plan 2022, p. 39.

iii Department of Planning, Industry and Environment of NSW, NSW Electricity Infrastructure Roadmap: Building an Energy SuperpowerOverview, November 2020, p. 40.

iv Grattan Institute, “Start with Steel: A Practical plan to support carbon workers and cut emissions”, May 2020, pp. 30-31.

v AEMOIntegrated system plan 2022, p. 39.

vi Sydney Morning Herald“Overwhelming Challenge Requires Deep Energy Reforms: Chief Energy Advisor,” June 7, 2022

vii AEMOIntegrated system plan 2022, p. 11.

viii AEMOIntegrated system plan 2022, p. 44.

ix AEMOIntegrated system plan 2022, p. 27.

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