WELCOME John Grimes, Chief Executive Smart Energy Council
Now is the time to launch a national ‘cut the
intensive embedded products (think refined
across the nation should be urgently investing
zinc) to the world.
in heat pumps for hot water and space heating
Much of it will be really hard. We will
their gas connections for good.
quickly hit skilled worker constraints. New
money over the long-term. Environmentally
recedes we will fully appreciate the scale of the energy transition before us which is truly monumental.
Doing this does not happen by chance.
and cooling, induction cooktops and cutting Economically it would save tons of
ONCE THE EUPHORIA of the election result
renewable gases, chemicals and energy
gas’ campaign. Households and businesses
it extinguishes the carbon bomb going off
transmission takes a long time to plan and build, even if you want rapid improvement. But what a great problem to have. This
in every gas-connected house and business
is where we need to bring a whole-of-
across the country. And sending everyone
government approach. To harness both
broke.
the commonwealth and the states on a
This is all happening while we need to
whole-of-government transition plan. To use
transition all petrol and diesel fuel transport
the brightest minds in the country to project-
Australia’s transition fuel is now fully apparent.
to renewable electricity. While we bring the
manage the transition.
Gas prices are pushing electricity prices up to
percentage of renewable energy up over
new highs. A gas fuelled recovery anyone? A
85 per cent by 2030. While we establish a
gas led insolvency more like…
renewable energy export industry, producing
As I write this, the lunacy of making gas
IN MY VIEW THE WORLD IS CURRENTLY experiencing an energy price and supply shock. Coal, oil and gas prices around the world have reached record high levels. The impact of high international gas and coal prices is feeding through to Australia’s National Electricity Market which is now seeing extremely high wholesale electricity prices. They’ve risen 141 per cent since Q1 last year. These high prices are filtering through to customers’ bills with the Australian Energy Regulator increasing default market offers by up to 20 per cent nominally. High energy prices will also filter through to the cost of goods and services. There is going to be pain in the short term. Businesses and households will suffer bill shock. As long as Australia relies on coal and gas we will be exposed to international price fluctuations in these commodities. 2 WINTER 2022
I have long said the smart energy transition will be as big as the industrial revolution. It will just happen ten times quicker.
Johanna Bowyer is Lead Research Analyst – Australian Electricity, IEEFA
To reduce exposure to volatile fossil fuel prices Australia must decarbonise its energy system. The Federal Government’s Powering Australia plan targets 82 per cent renewables by 2030, up from 31 per cent renewables in 2021. This appears to be in line with the Market Operator’s Step Change Scenario in its Draft 2022 Integrated System Plan (ISP). A key part of the Powering Australia plan is $20 billion for the Rewiring the Nation Corporation to upgrade the grid. The newly established Corporation is expected to focus on transmission to enable the buildout of the Integrated System Plan. This investment will help unlock the full potential of the renewables sector. The Powering Australia plan also aims to remove taxes from low emissions vehicles, develop a National Electric Vehicle Strategy, and install 400 community batteries and 85 solar banks.
The plan needs to be detailed further, but nonetheless marks a turning point for Australia’s energy decarbonisation journey. Australia now has two major factors driving decarbonisation efforts forward: the huge need to reduce dependence on currently extremely expensive fossil fuels, and a Federal government supportive of renewables, storage and transmission. By 2050 the NEM needs to grow large-scale renewables capacity by nine times, distributed PV capacity by five times, storage capacity by twenty times and manage an orderly exit of all coal-fired generators – according to the ISP Step Change Scenario. The hard work begins now.
