18
Aug
2018

Transforming Australia’s energy system should not be beyond us

by Tony Wood


Published in the Sydney Morning Herald, Saturday 18 August

Over the past 100 years, Australia has built a secure, reliable and affordable energy system, based on large, centralised, fossil-fuelled power stations close to the major cities. Over the next 30 years, this system must be transformed to one based almost entirely on widely-distributed, low-emissions energy sources such as solar and wind with complementary storage. This is an unprecedented economic, political, social and technical challenge.

It shouldn’t be beyond us. Australia has abundant primary energy resources and we are a nation of early adopters of technology. Rapid reductions in the cost of solar power and battery storage suggest that technology will not be a constraint in what will be an electric century.

Even on the political front, and despite more than a decade of climate wars, there are grounds for optimism. There is a shared vision across political parties that we need to “decarbonise” our economy by mid-century, with bipartisan commitment to the Paris Agreement on cutting emissions. There is a good prospect that within a year we will have a national policy that integrates energy and climate change on a pathway to lower emissions by 2030. The first step was always going to be the hardest.

And despite the current rancour, such a policy would almost certainly quickly gain the support of the states and territories, such that our federal structure could finally become an instrument of unification rather than division.

To secure support from industry and consumers, it will be critical for our political leaders to create a compelling narrative that makes the case for this long-term vision. The necessary elements of such a narrative are there to be brought together: market design, economic policy, technological innovation and systems engineering.

No one need be left behind. Success will be obvious: we will have a market and system that delivers investment as well as reliable and affordable energy to Australians.

If we get this right, our proximity to the extant and emerging economic giants of Asia will be a unique blessing. Awaiting are the prospects of manufacturing based on low-cost, large-scale, solar energy and/or superpower-scale energy exports. The latter could be either as hydrogen/ammonia from solar energy (carbon-free fuels) or as electricity via undersea transmission lines from solar farms in northern Australia to South-East Asia.

Which political leader of conviction will embrace this historic opportunity?