A modern electricity grid powered by diverse renewable energy and storage can provide secure, clean and affordable power for Australians.
The Powering a 21st Century Economy report find that the inevitable closure of ageing, inefficient, polluting coal plants provides a critical opportunity to move to a modern 21st century electricity system.
In doing so, Australia will tackle multiple policy objectives: affordable electricity for consumers; a secure and reliable electricity system; safeguarding our electricity system from worsening extreme weather; and tackling climate change by reducing Australia’s pollution.
1. The inevitable closure of Australia’s inefficient, ageing coal plants provides a critical opportunity to move to a modern, 21st century electricity system.
- Within a decade, over two thirds of coal plants in Australia’s National Electricity Market will be 50 years or older, technically obsolete, unreliable and costly to maintain. Australia must prepare for a major energy transition, which is already underway.
- Ageing coal and gas electricity infrastructure is vulnerable to increasingly severe weather events influenced by climate change.
- Wholesale energy prices are rising due to rising gas prices and on-going national policy uncertainty undermining future energy investments.
- Renewable energy is now the cheapest form of new power.
2. There are five key requirements in building a robust energy system that will meet Australia’s needs into the future. All five must be met for Australia to effectively meet its energy needs into the future.
- Clean: Tackling climate change requires a rapid transition away from polluting sources of energy to clean sources.
- Reliable: Balancing demand for electricity (from households, business and industry) with supply from power stations, energy storage and demand flexibility (via demand management).
- Secure: Meeting technical requirements for grid stability (described by terms such as “frequency control” and “inertia”), ensuring the power grid can overcome disturbances.
- Resilient: Delivering reliable power in the face of increasingly severe weather events influenced by climate change.
- Affordable: Lowering electricity costs for households and businesses.
3. A modern grid powered by diverse renewable energy and storage can provide secure, reliable, clean and affordable power for Australians.
- Major authorities, CSIRO, AEMO and the Finkel Review are highly consistent in their findings that there are no technical barriers to Australia achieving secure, reliable power from a very high proportion of renewable electricity.
- Combining low cost wind and solar PV with other renewable energy technologies such as solar thermal, hydro and biomass plants can provide round-the-clock, or on-demand power as well as meeting technical requirements for grid stability.
- Adding energy storage in the form of grid scale batteries, pumped hydro and heat storage (as part of a solar thermal plant) and greater interconnection between states by transmission lines will enhance the security and reliability of power supply and increase competition in the electricity market.
- Major economies like California, Germany, and Spain are already actively transitioning to more flexible, modern grids powered by renewable energy. California is on track to reach 50% renewable power by 2030.
4. A key risk for Australian grids and power stations is worsening extreme weather, particularly extreme, prolonged heat and storms. A distributed, flexible grid using multiple forms of technology will be critical to building a resilient energy system.
- A distributed and diverse electricity system incorporating a wider variety of supplies - wind, solar, biomass, hydro, and energy storage, spread out geographically and less concentrated - is far more resilient to disruption from increasing extreme weather events such as heatwaves, storms and bushfires fuelled by climate change.