A growing commitment to net zero emissions in Australia

GHG, carbon tax, emissions

By Jeff Allen, EESA national president

There appears to be a greater understanding in the Australian community that climate change is becoming an increasingly more critical issue for the planet and its inhabitants. It also appears that the community understands that a solution to climate change cannot be implemented overnight and that measures to reduce global warming require an immense amount of support from government, businesses, organisations, and individuals both in Australia and around the world.

Australia is one of 195 countries that have committed to keeping global temperature rises to below 2°C under the Paris Agreement. Many of these countries have set a goal of reaching net zero emissions by 2050. Many of the world’s largest companies have already committed to reducing their emissions to net zero by 2050.

There is of course significant debate regarding Australia making a firm commitment to achieve Net Zero by 2050.

Despite the debate, the last few years have seen an increase in federal, state, and local governments as well as businesses and community groups demonstrating support for combatting climate change through energy-efficient incentives and thus these groups are increasingly looking for opportunities to invest in “technology” that will result in emissions reductions. This demand for low emissions goods and services is creating opportunities for businesses with expertise in developing and deploying the technologies needed to achieve the world’s carbon reduction aspirations.

The ongoing transformation of Australia’s energy supply area was reported in the recent release of the report on the assessment of the Health of the national electricity market (NEM) by the Energy Security Board. The report finds that emissions across the NEM at present are approximately 25 percent lower than in 2005. The report indicates that by 2030, those emissions will be between 40 and 60 per cent lower than 2005 and they will be between 70 and 95 percent lower by 2042. This shift is happening because we are using more solar, wind and battery-stored energy, and less from coal and gas generation. This same trend is happening globally.

As global demand for low emissions products and services continues to grow, low emissions technologies are becoming cost competitive. Since 2010, the cost of solar generation has fallen by more than 73 per cent. Electric vehicle battery prices have also fallen by more than 85 per cent since 2010. There is a view that as prices continue to fall, that there will be opportunities to support economic growth, jobs, new globally competitive businesses, and exports.

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Solar panels and wind turbines are now capable of being manufactured and deployed at scale at significantly lower cost than traditional electricity generators. When combined with firming technologies, such as gas, batteries and pumped hydro, renewables are now the cheapest form of new, reliable electricity generation. As an example, there are currently 40 big batteries either completed or planned with a total capacity of 7000 Megawatts across Australia.

There is growing interest by state and local governments in moving to electric vehicles. As a result, their bulk purchasing power will incentivise importers to sell a greater range of electric vehicle models in Australia. This means the electric vehicle market will become increasingly competitive and thus lower the cost of electric vehicles. These vehicles are typically resold to the second-hand market after three to five years, giving drivers more electric vehicle options at a lower cost.

An example of another “new energy” technology is Hydrogen. This can be used as a fuel to generate electricity in gas turbines or to power vehicles and is also a feedstock in industrial processes. It can be produced using electricity and water, and it can be stored and transported. Hydrogen has the potential to transform large sectors of the economy, such as transport and manufacturing, as it can be produced with low or no emissions using solar and wind generation when they are not required for the electricity market.

Many nations are rich in solar and wind resources, but it is generally recognised that in the production and distribution of clean green hydrogen, the leaders are Australia, Saudi Arabia, and the North Sea nations – The Netherlands in particular.

Australia is seen to be a leader in the green hydrogen area due to the size of the proposed projects, political support, our robust financial system with a low weighted average cost of capital, a strong body of entrepreneurs and the asset maximising combination of wind and solar.

Proposals for green hydrogen plants are becoming commonplace in Australia. This is due to the interest of trading partners, particularly Japan and South Korea, but even a nation as far distant as Germany has joined Australia in a feasibility study for a green hydrogen supply chain.

The take-up of low emissions technologies is not limited to big business and industry. Households are increasingly adopting products and services that both reduce the cost of living and protect the environment. Households and small businesses are continuing to instal rooftop solar and are reducing energy consumption and are therefore reducing annual emissions. Motorists are slowly moving to electric or hybrid vehicles, reducing their fuel costs and decreasing annual emissions per car.

Empowering people with meaningful information will promote even greater commitment to low emissions goods and services and will ensure we all benefit from the transition to a net zero emissions economy.