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Australia: The New Global Renewable Energy Giant?

by Alex Leeds Oceania Dec 16th 20205 mins
Australia: The New Global Renewable Energy Giant?

Australia relies heavily on fossil fuels, particularly coal and gas, for the country’s energy requirements. A secure supply of reliable energy at an affordable price is paramount for Australia’s economic growth and prosperity. Historically, this has come from their rich sources of fossil fuels which accounts for 20% of the country’s total export value. More recently however, renewable energy has been on the rise within the energy mix of Australia, with 21% being made up of hydro, solar and wind generated energy in 2020. 

With their reliance on fossil fuels, Australia has consistently been in the headlines for their apparent “denialist” government. Australia’s coal exports have increased in the last five years alongside a stable increase of greenhouse gases, with emissions increasing approximately 0.8% per year. They have disputed such statistics, stating they are on track to meet UN climate targets, hiding behind the ageing Kyoto Protocols’ credit system, whereby emissions that previously fell under the regulatory cap are now being emitted as credits. Alongside other highly-polluting nations such as China, Australia is falling short of targets set out by the UN Climate Action Summit, as a result of not meeting the call for increased commitments to climate action, leaving the brunt work to smaller countries. 

In September 2019, Prime Minister Scott Morrison failed to attend the UN Climate Action Summit in New York, despite being in the US at the time. Mirroring the Prime Minister’s actions, reported projections suggested Australia was not on target to meet the 2030 Paris Climate target and therefore also likely to be falling further behind the most recent call by UN Secretary-General António Guterres for zero emissions by 2050. 

Despite the government’s denialist attitude, surprising headlines have recently arisen, crowning Australia as the new global renewable energy superpower. The private sector has dragged the pollutant giant kicking and screaming into the age of renewable energy. An unlikely duo in Australian software billionaire Mike Cannon Brookes and iron ore tycoon Andrew Forrest have proposed an ambitious project to create the world’s biggest solar panel farm in Australia’s Northern Territory. 15 000 hectares of photovoltaic panels are to be constructed near the small town of Tennants Creek halfway between Darwin and Alice Springs in 2023. However, what is more remarkable about this project is that the energy generated is to be stored during the day within a giant 30 gigawatt battery and exported during the night across a 3 750km underwater power line to Singapore, aiming to provide 20% of the city’s energy needs. 

You might also like: World Continues to Fund Fossil Fuels Despite Climate Crisis- UN

There are questions surrounding the export of renewable energy and not committing it to Australia’s domestic needs in order to meet the UN targets. But as a result of this project, other private corporations such as Tesla have begun similar ambitious endeavours to tap into Australia’s renewable energy supply. This has boosted the country’s potential for providing cheap renewable energy to the global market. As a result, 6.3 gigawatts of renewable solar and wind energy will be installed this year, five times more renewable energy than what was installed in 2016. Labour, the opposition party, leader Anthony Albanese stated in a press conference in September that the nation’s long term future lies in renewable energy but the Morrison Government seems to be blind to such opportunities. 

In addition, Australia’s switch will help drive the country’s economic recovery from COVID-19, with the coal industry becoming increasingly unstable. This instability is the direct result of Asian power companies switching to oil and Chinese government policies preventing imports of Australian sea-borne coal. Tensions began to arise between the trading nations when the Australian Government launched an investigation into the origins of COVID-19, accusing China of mishandling the virus outbreak. China began imposing tariffs on Australian beef and barley earlier this year and these tariffs then extended to coal and other minerals. An investigation by China’s Commerce Ministry however, suggested that Australian trading practices were detrimental to China’s domestic industries as a result of “dumping” whereby products are sold or “dumped” at a lower price overseas than it is in the country where it is produced. The resulting difficulty for domestic companies within China to compete with the lower prices and maintain their market share were said to be the main cause of the tariffs.

Prior to the trade dispute, $7.3bn of coal exports went to China in the first six months of 2020. This sudden halt to trade is likely to have severe knock on effects for both Australia’s energy and China’s steel industry. The current economic climate however, may provide the platform for renewable energy in Australia to grow. The government may no longer be able to deny the benefits to be had from investing in renewables, demonstrated throughout the private sector. 

But can the country rely on private firms to complete what the government is so doubtful about doing?  The potential is there. The rapid increase in investment by the private sector made Australia the global leader in renewable energy development per capita at the beginning of 2020. 

Reports from the Australian Reserve Bank economists showed however, that renewable investment has been rapidly falling over the last eight months. This is a direct result of the difficulty in getting 91 new large-scale renewable energy farms connected to the national grid in 2020, caused by a lack of similar levels of investment occurring in the electricity transmission network, resulting in delays in connection. According to the Clean Energy Council Chief Executive Kane Thornton, this has been a result of investors having an unclear view of what the government’s long term approach to clean energy is. Secondly, the Australian government’s National Renewable Energy Target has effectively halted its incentives targeted at private sector companies to invest in generating renewable energy. The target required private sector energy retailers to sell 23% of electricity generation across the grid from renewable sources by 2020

The target was reached in 2019 without the scheme being renewed, therefore halting incentives for new projects. The previous government led by Tony Abbott also legislated to abolish the National Renewable Energy Target back in 2015, but ultimately decided to only reduce its target by one fifth. To put this decision into perspective, according to the non profit organisation ClimateWorks, Australia would need to run on 79% green energy by 2030 in order to be on track for the UN Paris Agreement goals. 

The priorities of the government clearly do not lie in promoting renewable energy. This has ultimately resulted in an unstable platform for the private energy sector and in turn has created Australia’s improvised approach towards renewables. So is Australia the world’s new renewable superpower? The answer is simply: not yet. 

Featured image by: Flickr

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