Research released by the Clean Energy Investor Group (CEIG) has highlighted that investment of $421 billion was needed for Australia to align with growing global investor ambitions for limiting climate change to 1.5 degrees Celsius.
New modelling by consulting firm Baringa in the ‘Decarbonising Australia: Accelerating our energy transition with a credible 1.5 degrees Celsius scenario’ report showed a credible path and the coordinated efforts needed across the National Electricity Market (NEM) to limit global temperature increases to 1.5 degrees Celsius.
The modelling showed that at present, Australia’s current scenario planning for the NEM is not consistent with global commitments for 1.5 degrees Celsius.
The report outlined the additional steps that Australian government, the electricity sector, market bodies and the investment community need to take if they are to deliver emissions reductions in line with a 1.5 degrees Celsius objective.
Decarbonisation of the electricity sector creates the biggest opportunity to drive economy-wide decarbonisation, most importantly across the transport and industrial sectors.
Simon Corbell, CEO of CEIG, said: “Decisive policy action by the federal, state and territory governments, has set Australia up to be within striking range of a 1.5 degrees Celsius aligned future.
“Accelerating emission reductions in the National Electricity Market is the next step we need to take, but the scenario planning must be commercially credible with the investment community.
“Through a continued and coordinated effort across government, industry and private markets, we can unlock $421 billion in total investment, ensuring Australia is aligned with a growing global investor effort to make 1.5°C the benchmark for action.”
Peter Sherry, Partner – Energy and Resources at Baringa, said: “Our modelling outlines a practical and commercially credible scenario for decarbonising the NEM in line with staying below 1.5 degrees Celsius and this has been validated by investors.
“While there are certainly near-term challenges, there is huge opportunity to attract major global investment and paint a bright future for Australia, powered by renewables.”
This ambitious, yet credible transition plan is projected to deliver long term lower wholesale energy prices in the medium to long term.
To deliver on this credible plan, CEIG has identified six priority actions:
- The Electricity sector needs a carbon budget – this will help governments and market bodies accelerate transition in line with targets.
- Transition requires national coordination – governments, industry and communities must work together to accelerate coal closures and renewables roll out.
- Investment in long duration storage – this strengthens reliability and security during infrequent renewable energy droughts.
- Support for offshore wind development – offshore wind offers significant volumes but is unlikely to be cost-competitive in Australia until the 2040s without policy support.
- Accelerating network infrastructure build – transmission buildout must be accelerated.
- Skills, supply chains and communities – delivery of infrastructure projects will be challenging with international competition for resources; communities must be supported and empowered through the transition.
You can download a copy of ‘Decarbonising Australia: Accelerating our energy transition with a credible 1.5 degrees Celsius scenario’ here.
