Australia’s transition to net zero: successes and challenges

In Australia, renewable energy sources are rapidly increasing their share of total electricity generation, a positive development in our transition to net zero greenhouse gas emissions. But future challenges remain, and we should stay open to a range of options, a leading energy expert, Andrew Murdoch, Managing Director of Arche Energy, has told Adept Economics Director Gene Tunny in the latest episode of his Economics Explored podcast

In the conversation with Gene, Andrew shared his positive outlook and realistic insights into the challenges of integrating renewable energy into the electricity grid. He advocates for being open to a range of options, including small modular nuclear reactors and carbon capture and storage (CCS) of coal-fired generators–i.e. not completely moving away from coal-fired power plants over the next decade and a half as currently planned. 

Across Australia, renewable energy now accounts for around one-third of total electricity generated, while in Queensland it accounts for around one-quarter. Since 2017, renewable energy generation has doubled in Australia, according to the Clean Energy Council (see Renewable energy growth must double to meet Australia’s emission goals, Clean Energy Council says). These are impressive results, but it remains to be seen whether the upward trajectory can continue and states can achieve various renewable energy targets, such as Queensland’s 50 percent by 2030 and 70 percent by 2032. Nationally, there are doubts about the federal government’s 82 percent by 2030 commitment, given delays to Snowy 2.0, among other uncertainties (e.g. see PoliticsNow: $62b black hole in Labor energy plan). 

Sufficient renewable energy capacity must be built to make up for the eventual closure of large power generators such as the Eraring coal-fired power station in NSW. At the same time, as renewable energy penetration increases, more transmission infrastructure and storage (e.g. pumped hydro or batteries) are needed to maintain system reliability. The Australian newspaper has reported that the Australian Energy Market Operator is concerned about future risks to reliability, including next Summer (see AEMO to sound the alarm on electricity with fears over green transition). Because of challenges in the rollout of renewable energy sources, it may be that coal-fired power plants need to remain online longer than previously expected, and there has been speculation Eraring may remain open beyond 2025 when it was expected to shut down (see Eraring power plant’s 2025 closure ‘very unlikely’ amid delays to renewable projects, experts say).

Given these challenges, it makes sense for energy market experts such as Arche Energy’s Andrew Murdoch to advocate for Australia remaining open to a range of options, so we have the best chance of transitioning to net zero while keeping the lights on.  

Published on 24 August 2023. This article was prepared by Adept Economics Director Gene Tunny. For further information please get in touch with us via or by calling us on 1300 169 870.

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