Apr 15, 2016 - 12:01am
Unless we tackle the obstacles to clean energy growth and put in place a plan for net zero emissions, Australia risks another slump in clean energy investment, and energy users, communities and the power system, will experience severe shocks, warns The Climate Institute’s A Switch in Time report, released today.
“Clean energy is booming globally, but in Australia it’s stuck in bust-boom-bust cycles,” Connor said. “None of us can afford another decade of uncertainty – investors, companies, employees, the community and our climate effort deserve a well-managed transition to an electricity system that is modern, smart and clean.”
Connor said the next twelve to eighteen months were crucial as either party in government will conduct reviews and face the widely recognised need to integrate climate and energy policy for post-2020 and long-term targets.
“Our modelling found a modest carbon price rising to $40 per tonne by 2030 would result in emission reductions similar to the government’s current national 2030 target of 26-28 per cent below 2005 levels,” Connor said.
“This would result in: almost no replacement of existing high-carbon power stations with clean energy; a 60 per cent collapse in projected clean energy growth from 2020, followed by stagnation through most of the 2020s; and 98 per cent of the sector’s 30-year carbon budget used up in the first ten years.”
He said this means that climate action after 2030 would need to be more extreme.
“More than 80 per cent of the coal-fired generation fleet would have to be closed in less than five years, and new clean energy capacity would have to jump four-fold and keep rising. The impacts of such a disruptive shift would be felt across the economy,” he said.
“Our research shows that a policy package that actively supports both clean energy investment and the orderly replacement of our aging coal-fired power stations can better manage a timely transition to a cleaner electricity supply. A baseline and credit or emissions trading scheme alone will not be strong or reliable enough to drive the change we need, when we need it.”
Such a package of policies reduces by half the gap between a modest carbon price and a less than 2°C pathway. It achieves roughly a 45 per cent reduction in electricity emissions by 2030. This is in line with the Climate Change Authority’s recommended minimum national 2030 target, under consideration by the ALP, but uses up 79 per cent of the sector’s carbon budget.
For its research, The Climate Institute commissioned leading electricity market modeler, Jacobs, to test the ability of policy options under discussion to reduce electricity emissions in line with the Paris commitment to limit global warming to 1-5-2°C*. Policies were assessed against a ‘carbon budget’ for the electricity sector - the limited amount of emissions the sector can emit if Australia were to do its bit as part of international efforts to keep warming to less than 2°C.
“Our analysis shows that a modest carbon price does too little, too late. It would require emission reductions after 2030 that would cause severe electricity system disruption and large economic and social costs.
Connor said policies that would de-risk clean energy investment as well as drive an orderly phase-out of all Australia’s aging coal generators by 2035, alongside a focus on energy efficiency and realistic carbon pricing, would smooth the transition to cleaner power and improve the sector’s chance of keeping to its carbon budget.
Click below here to download the A Switch in Time report.
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Brinsley Marlay ● Media Manager ● 0422 140 555