Article: What is the future of energy generation in Australia?

By Wendy Riley, Article Writers Australia

As Australia moves from fossil fuel generation to a decarbonised economy, consultation and collaboration have never been more important.

With no single pathway to net zero 2050, the challenge remains. How do we bring together all the disparate approaches and technologies into a workable whole?

We asked Australian Energy Week 2024 speakers John Ivulich (ATCO CEO/Country Chair) and Ian Brooksbank (Hydro Tasmania CEO) for their views on the best way forward for Australia’s energy generators.

What policy settings would foster growth in renewables?

Both CEOs see the federal government’s Capacity Investment Scheme (CIS) as instrumental in supporting new forms of renewable energy.

“Governments need to ensure a good mix of technologies, as well as directing investment of taxpayer money in the most effective way,” Ivulich says.

“They need to enable discrete, more complex and sought-after technologies like pumped hydro, incentivising or de-risking them in a shared development/delivery approach between private developers and government.”

He says Australia’s policy focus should consider new technologies, such as hydrogen fuel cells. He also points to the importance of not leaving consumers behind.

“The cost of living is increasing across all categories, including energy costs, and this is something for policy makers to be mindful of when pursuing technologies that do cost more and will increase costs for those households that are not fortunate enough to generate their own energy.”

According to Brooksbank, CIS is key to firming up renewable reliability as well as fostering development of new renewable capacity.

“We need to look at everything from how we engage with communities, and deal with environmental approvals, to how long-duration storage such as pumped hydro can be supported and rewarded to firm up the national grid.”

How can developers create solutions that work for all?

When renewable project developments impact communities, solutions have to work for all stakeholders involved – local residents, businesses, investors and buyers of renewable energy.

“The key is getting the local community on-side, engaging with them in a consistent, transparent way. Benefit-sharing frameworks need to be put into place, so all parties are satisfied,” Brooksbank says.

“It’s not just a question of those living right beside the wind or solar farm. Communities further away might have transmission lines running through their backyard, or schools may be impacted during construction.”

Government and industry need to work closely with local communities to find workable solutions, Ivulich says.

“Battery Energy Storage Systems (BESS) will also be important enablers for the renewable energy industry. It’s a solution we’re confident communities will support, because they provide flexibility and stability for renewable projects.”

What underdeveloped energy technologies will have a future impact?

According to Ivulich, CIS will provide the right environment to deliver alternative forms of energy that firm up intermittent wind and solar power in the grid.

As well as incentivising discrete technologies like pumped hydro, the scheme can use existing energy infrastructure that consumers have already invested in. This will help meet decarbonisation goals and complement existing renewable technologies.

“We believe there is an opportunity for the gas network to work with the electricity sector as an energy storage mechanism to support the intermittent nature of renewables – a ‘giant battery’ connected to over 800,000 Western Australian homes and businesses. 

“When excess energy is produced by renewable sources, hydrogen can be produced and stored in the gas distribution network. When those renewable sources are not producing energy, the hydrogen can be used to create electricity.”

Brooksbank says several renewable technologies are under-utilised, including local-use hydrogen generation which doesn’t have to be transported at high cost.

“Pumped hydro storage is currently under-developed. Despite having massive amounts of rooftop solar, grid-scale solar generation also needs development.

“There’s a great opportunity for offshore wind in the Bass Strait, while wave generation is still early stage. On King Island, off Tasmania, a combination of wind, rooftop solar, grid-scale solar and diesel is working well.

“I don’t think nuclear power has a role in Australia’s energy future, due to high cost, long build times, lack of expertise and safety risks. I don’t think we need it either. We have enough proven and potential renewable sources to draw on.”

What is the future of gas and heat energy in Australia?

Brooksbank says gas has a role in Australia’s energy generation over the next 50 years.

“Tasmania is 100% renewable, but we still have a gas-fired plant in the Tamar Valley as a last resort. Biomass and heat energy can be used, but trees are slow growing, and we need to protect native forests.

“Grid-scale wind and solar are best, backed by pumped hydro. But gas, whether natural gas or hydrogen, is a useful way to plug the gaps until the energy transition is complete.”

Ivulich says we should embrace gas as an important fuel source in the nation’s energy future.

“Gas is not just important to our energy transition, but is also in transition itself, with the progress being made in hydrogen and biomethane. Gas supports both the energy transition and the diversification of the industry, which is most important. 

“As such, establishing a renewable gas target would encourage investment in another energy source that supports the transition to net zero.” 

With so many moving parts, a ‘whole of system’ view can help to support electrification, with gas slowly being phased out as a transitional fuel.

As Australia decarbonises, the government is supporting a mix of emerging technologies. What needs to change to secure our future energy generation?

Leaders quoted in this article (plus many more!) will be speaking in the Generation 2.0 Stream of Australian Energy Week 2024.

To access the detailed conference program, download the brochure here.

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