The Clean Energy Investor Group, which includes membership from a number of Australia’s biggest renewable players, has commissioned modelling for a “credible” decarbonisation pathway consistent with 1.5°C targets.
The group said Australia’s current market scenarios for decarbonising the national electricity market “either fall short of government commitments or rely on assumptions that are not credible with mainstream investors.”
The models “falling short” include AEMO’s Integrated System Plans based on CSIRO and ClimateWorks assumptions, the Australian government emissions projections from 2021, and Australian Labor’s modelling done by Reputex.
“Although some existing market projections map a path to 1.5°C, they rely on implausible assumptions like extreme uptake of hydrogen and electrification, a highly truncated coal exit, or unrealistic renewable buildout rates to reach generation targets,” the Clean Energy Investor Group (CEIG) said.
This inadequacy led the group to commission modelling from consulting firm Baringa, which forecasts Australia will need $421 billion of investment to successfully decarbonise the NEM. This is $116 billion higher than AEMO’s Step Change scenario.
“Making this work requires the coordinated closure of coal with a focus on shutting the most-polluting plants first, average renewable buildout of 5.5 GW per year between 2024 and 2034, and credible hydrogen uptake starting in the early-mid 2030s.”
The group identified six priority actions necessary for realising this pathway:
- Making a carbon budget for the electricity sector
- Nationally coordinating the transition between governments, industry and communities
- Investing in long duration storage
- Supporting offshore wind development
- Accelerating transmission networks buildout
- Focusing on developing skills and supply chains
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