Submission to the House of Representatives Standing Committee on Environment and Energy,  May 2021

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Australia can move to high levels of renewable electricity, specifically across the National Electricity Market, with little risk to reliability or affordability.

As the proportion of renewables increases, the value of long-distance transmission grows. Battery storage, alongside gas-fired generation, will also play an important role in ‘balancing’ the system.

The best information today indicates that achieving net-zero emissions will be most efficient if a small and declining quantity of emissions are offset. The alternative – achieving absolute-zero emissions – looks more costly. As the proportion of renewables grows, the physical and economic challenge of balancing the system during rare, sustained periods of high demand, low wind, and cloudy skies becomes too big.

Gas generation with offsets looks to be the lowest-cost ‘backstop’ solution until zero-emissions alternatives – such as hydrogen-fired generation or near-perfect carbon capture and storage – are economically competitive. Gas is likely to play a critical, but not expanded, role: the NEM faces a gas-supported transition, not a ‘gas-led recovery’.

As this Grattan submission to a federal parliamentary committee shows, the bottom line is that Australian policy makers can be confident in planning for net-zero emissions.

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