New modelling indicates Australia requires more than $400 billion in new energy investment to keep pace with advanced economies and hit climate targets to limit global warming to 1.5°C above pre-industrial levels.
Independent advocacy organisation Clean Energy Investor Group says Australia will fall short of its climate targets unless $421 billion is injected into onshore and offshore wind, solar and battery technology.
The modelling by consulting firm Baringa – which is outlined in its report, “Decarbonising Australia: Accelerating Our Energy Transition With a Credible 1.5°C Scenario” – highlights that Australia’s current scenario planning for the National Electricity Market (NEM) is not consistent with global commitments for 1.5°C.
The report outlines additional steps the Federal Government, electricity sector, market bodies and Australia’s investment community need to take to deliver emissions reductions in line with a 1.5°C objective.
The Clean Energy Investor Group is urging the Federal Government to invest further in big batteries as back up to a renewable grid, and accelerated construction of transmission infrastructure.
“Decisive policy action by the federal, state and territory governments has set up Australia to be within striking range of a 1.5°C aligned future,” says Clean Energy Investor Group CEO Simon Corbell.
“Accelerating emission reductions in the NEM is the next step we need to take, but scenario planning must be commercially credible with the investment community.
“Through a continued and coordinated effort across government, industry and private markets, we can unlock $421 billion in total investment, ensuring Australia is aligned with a growing global investor effort to make 1.5°C the benchmark for action.”
The Clean Energy Investor Group has identified six priority actions to stay on track to meet climate goals:
- Electricity sector needs a carbon budget to help governments and market bodies accelerate transition in line with targets.
- Transition requires national coordination between governments, industry and communities to accelerate coal closures and rollout of renewable energy.
- Investment in long-duration storage, which strengthens reliability and security during infrequent renewable energy droughts.
- Support for offshore wind development, which is unlikely to be cost-competitive in Australia until the 2040s without policy support.
- Accelerating the building of transmission network infrastructure.
- Supporting and empowering communities through the energy transition.