Will Australia lead the charge toward renewables?
Australia has been named a prime candidate to lead the charge toward renewable energy technologies, more specifically, new hydrogen production facilities, according to a recent report from the International Energy Agency. Will Australia lead the charge to renewables with an ISO 14001-inspired approach?
A recent report handed down from the International Energy Agency says that Australia is in a prime position to capitalise on investments in hydrogen production; the question remains if industry leaders will embrace the transition or not. The report also says that in a resource-rich country like Australia, hydrogen facilities would ideally be positioned adjacent to solar and wind farms to supply the nation with power, and kick-start Australia’s presence as an exporter of hydrogen to power fuel cells in vehicles and the wider energy production industry.
“[Australia] could provide nearly 100-million tonnes of oil equivalent hydrogen, equivalent to 3% of global gas consumption today.” The IEA report states.
Statistics taken from the International Energy Agency’s recent Australia Report.
That same report however paints a rather depressing portrait when it comes to coal production, predicting that Australia will overtake the United States by the late-2020s, but remains “an uncertain market and policy environment” as the government tries to pivot away from traditional energy production to meet the obligations of the Paris Climate Agreement.
Executive director of the Paris-based International Energy Agency, Fatih Birol told The Guardian: “We have no room to build anything that emits CO2 emissions.”
“We are eating up 95% of the carbon budget” - the amount that can be emitted without causing dangerous levels of global warming - “even if we don’t do anything else. Which of course is impossible- not building any more trucks or power plants.”
Birol also explained that there is “a growing disconnect between the new international climate research and what is happening in the energy market.”
The report wasn’t all bad news, with predictions from the IEA stating outright that power provided by renewables like wind farms are expected to grow from the current rate of 4% of global electricity generation to 12% by 2040. The same applies to solar, which his forecasted to grow from today’s level of 2% of global supply, to 10% in the coming decades. Hydro-electric power generation is expected to remain the largest source of non carbon-intensive energy production, estimated to provide 15% of the globe’s energy needs by 2040.
Graphic taken from Allied Market Research
The benefits, as Fatih Birol explains are that solar and wind farms are able to outshine their fossil-fuel eating brethren on costs “almost everywhere” in the world. Once up and running, a renewable source is much less capital intensive in contrast to the maintenance needs of a coal-burning facility. The problem remains, according to Birol that “The oil markets - I believe - are entering a renewed period of uncertainty and volatility. One of the things that worries me is the links between energy and geopolitics are getting tighter and more complex.”
On that theme, it seems reasonable to argue that private commercial enterprise have an equally-important role as a federal government to inspire environmentally-conscious change. In recent months, we’ve seen Australia’s largest bank – Commonwealth Bank -make a pledge "To be use renewable energy directly from the supplier for 65 per cent of our Australian electricity needs is a significant step towards transitioning to 100 per cent renewable electricity use", according to CBA general manager Kylie Macfarlane.
A recent study from Allied Market Research illustrates the monetary incentive to invest in renewables, which valued the global renewable energy market at $1,405,646-million ($1.4-billion) in 2016, forecasting growth to $2,152,903-million ($2.1-billion) in the next seven years alone. However, as the report explains “[the] high cost of investment for the infrastructural setup restrains the market growth…[but] increased government funding and development in the technologies present new opportunities for future growth.”
There remain small signs that the drive will come from both the commercial, but also government sector. More specifically, in the context of Australian state Victoria, the opposition Labor party has pledged to raise the VRET – Victorian Renewable Energy Target- to 50% by 2030, if they’re elected into State politics. Labor has previously mandated a 25% target by 2020, and 40% by 2025. Reporting from Energy Matters illustrates that Energy Minister Angus Taylor is focussed on capped-price energy, rather than reducing emissions.
Graphic - Victorian Labor Party.
“Expanding the VRET would deliver about $9-billion in investment to the renewables industry… [and] would create over 11,000 jobs” according to Energy Matters.
Kane Thornton, Chief Executive at the Clean Energy Council says the move represents the most fiscal and achievable means of modernising the state’s energy industry.
“The industry is not calling for [a] new subsidy, but we do need investment certainty.”
“Building new low-cost clean energy such as solar and wind before our ageing coal-fired plants retire is the most effective way to drive down power prices for Victorian energy customers.” Mr Thornton concluded.
It remains to be seen whether the private or government sector will lead the charge toward large-scale investments in renewable technologies in Australia, but the fact remains that the land down under is in a prime position to capitalise on the move from old-school means of energy production, to the next stage of energy production with renewables.