Australia’s super nest-egg could deliver 100% renewables by 2030

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New report says that using just a tiny fraction of Australia’s superannuation nest egg could fund a transition to 100% renewable energy by 2030.

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100% renewable

A new report has revealed the potentially game-changing role Australia’s trillion-dollar pool of retirement savings could play in fast-tracking the shift to renewables.

The research, conducted by UTS Institute of Sustainable Futures (ISF) and Future Super, suggests that an investment of just 7.7 per cent of the nation’s collective superannuation nest-egg, could underwrite the transition to a 100 per cent renewable electricity grid by 2030.

An investment of 12.4 per cent a year, meanwhile, would fund the full decarbonisation of the entire energy system by 2050 – including transport and industry.

The report, which was commissioned by Future Super and 360.org, builds on the work of the ISF 2016 renewables study, which outlined an advanced scenario for Australia.

It says that a transition to 100 per cent by 2050 was both technically and financially viable, not to mention “vital for a safe climate future.” Similar views have been made by network operator Transgrid, and by in depth reports by the CSIRO and the networks lobby.

This new report puts the cost of shifting Australia to 100 per cent renewables by 2050 at around $788 billion – $2bn less than in 2016, but still no small amount.

That is, until you compare it to the volume of funds projected to be under management in super funds by 2050, which is somewhere around $6.5 trillion, up from $2.6 trillion today.

As for the benefits to super fund members, the report assumes a return on investment of 7 per cent to effectively fund the deployment of renewable energy infrastructure and fuels needed to replace fossil fuel energy sources in Australia’s electricity, transport, industrial and primary energy sectors.

But it also notes that this assumption on ROI is conservative, considering renewable energy assets are “routinely delivering” returns of around 10 per cent.

“Australia’s superannuation funds could play a key role in underpinning future growth in clean energy technologies and capture the value in renewable energy infrastructure growth for their members,” the report says.

But Simon Sheikh, who co-founded Future Super as part of the fossil fuel divestment movement, warns that window for Australian super funds to invest in the booming Australian renewable energy market will not stay open indefinitely.

“Superannuation is such a long-term investment, it’s important to capture the first mover advantage,” he told RenewEconomy.

“And as Al Gore said overnight, sustainable investing is the ‘single largest investment opportunity in history’,” Sheikh said.

“It’s an important investment, and the rationale behind the report is to show super funds that they really have to change their approach.

“Government settings have a role to play, too, and as they stabilise we’ll see more capital tipped into renewables.

“The question for Australia,” he added, “is where will that capital come from? Will it come from Australian investors, or will it come from offshore?”

For his part, Sheikh is hoping to get the ball rolling with the launch of a new, renewable energy focussed option via Future Super.

The Future Super Growth (Renewables Plus) product, which will launch on May 8, will give an industry-leading 20 per cent target allocation to renewable energy, on top of its zero investment in fossil fuels.

“By excluding fossil fuels and increasing the allocation to renewable energy and climate solutions, our new investment product empowers everyday Australians to bypass political inertia and invest more of their super in sustainable, future-focussed businesses,” he said.

“The vast majority of Australians want a renewable energy powered society.

“Now, thanks to UTS research, we know how achievable this is – just a small portion of Australia’s collective super savings could completely fund our country’s transition to 100% renewable energy.”

Sheikh says he thinks there will be plenty of demand for a fund that not only excludes fossil fuels, but supports the roll-out of renewable energy – and not just among the environmentally minded.

“When we started Future Super, we started it as part of the divestment movement,” he told RE. “But over the years it has become clear that the same audience had interest in building the clean energy economy.”

The fund is also aiming to appeal to the increasing number of people working in the clean energy sector in Australia.

“We’re very hopeful that there’ll be a lot of demand for this particular product from the industry itself,” he said.

As for the make-up of the fund, Sheikh says it will target 20 per cent of renewable energy across multiple asset classes, gradually building Future Super’s exposure to debt opportunities and listed equity opportunities.

“On the unlisted equity side, it will be heavily skewed to solar,” he said, noting that there will also be particular markets they can target, such as those states in Australia yet to have a lot of investment in renewables (like New South Wales).”

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71 Comments
  1. Dee Vee 5 months ago

    I’m sure super funds would be happy to invest in renewables if the business case stacked up. Unfortunately it doesn’t. Renewables are not competitive, and require huge subsidies from the taxpayer. Its why Australia has the most expensive electricity on the planet!

    • juxx0r 5 months ago

      This is what happens when there is too much mercury and lead emissions from coal powered power stations, people get retarded. Stay safe people, choose renewables.

      • Dee Vee 5 months ago

        you reply proves what happens when our education system produces morons with “gold stars” instead of brains, with useless degrees up their wazoo, that don’t even qualify them for a job flipping burgers at Macdonalds.

        • juxx0r 5 months ago

          It’s not too much trouble, apart from the respirator and hazchem suit, for me to come round and give your house an extra spritz of mercury, some cadmium, maybe some arsenic and a bit of radioactive strontium. All totally free of charge, it comes with your dirty coal power, so i’m happy to spritz you for no extra.

          • Hettie 5 months ago

            Now, now, jux, play nicely.

          • juxx0r 5 months ago

            Well the choice is clean power or dirty power. If the toxic chemicals were delivered by men in hazchem suits spraying toxic stuff throughout your home, then pretty quickly we’d switch to clean.

            So i just thought i’d offer it as a bonus to all those people who like toxic stuff in their home. Perhaps they can slip me a tenner to not turn up, i’m cool with that too.

          • Hettie 5 months ago

            Too true, and I admire your entrepreneurial spirit.
            You might start with the offices of IPA, MCA, the big coal companies, and move on to Tony Abbott, Joshie, Mattie, Cory, Georgie, Kelly, Greg and the rest of the RWNJs, finishing with saturation bombing chez Waffles.

        • As it should be 5 months ago

          Considering your spelling and grammar, i’d suggest the opposite is true.

    • Barri Mundee 5 months ago

      Renewables are becoming competitive and will eventually no longer need subsidies- which are justified to kick-start and foster a cleaner future.

      Please also be aware of the hidden price subsidy that has long been in place which unfairly advantages fossil fuels- the cost to the environment and the health of the population. If these are included in the cost of FF’s they would not be competitive with renewables.

      You want a level playing field? Fine, then support a cap on carbon emissions, either by a price on carbon or by direct means such as imposing a statutory cap which progressively reduces the allowable emissions. (I favour the latter as its can’t easily be gamed).

      Then we will see if FF incumbents are willing to invest in the clean technology they sometimes advocate such as CCS (where is that by the way?) so that they can continue to run coal/gas generators or get with the program and make the inevitable transition to renewables.

      Resistance is futile.

      • Joe 5 months ago

        Barri, the Dee Dee is a Trolli, just ignore the dude.

      • firey_octane 5 months ago

        We are the Borg. Your biological and technological distinctiveness will be added to our own. Resistance is futile.

        • Hettie 5 months ago

          You do realise that you sound as if you are smoking some seriously heavy duty weed? Or have already permanently fried your brain with it?

      • Catprog 5 months ago

        The reason why Australia’s retail prices are so high is because we are paying a lot for the network and not the generation.

        • Hettie 5 months ago

          Every country has to pay for its network.
          Australia pays so much because of the relative lack of competition, the sheer size of the network for a small population, and the byzantine market rules. Especially the 30 minute settlement periods.
          Once the coalers are closed and multiple small PHES facilities smooth the intermittency of wind and solar, while batteries large and small, behind and in front of the meter, end the peak demand crises, we won’t have to pay nearly so much.
          If the market rules, designed for generation that was almost completely from fossil fuels, are recognised as no longer fit for purpose and replace by new rules, written *without reference to the existing rules* but for a predominantly renewable supply, prices should return to a sane level.
          I think.

        • Calamity_Jean 5 months ago

          Yes. Part of the cost of the network is because Australia has a lower population density than Germany, so there’s more wire per customer. The two systems aren’t strictly comparable.

      • Joe 5 months ago

        Cat, the Dee Dee is a Trolli. He pops up after a break hoping people had forgotten all about him. Ignore him in future.

        • Catprog 5 months ago

          I post for other people who read not for the poster in question.

    • Joe 5 months ago

      You back again !

    • Alexander Hromas 5 months ago

      Fossil fuels especially coal receive huge subsidies not in direct gov handouts but from the environment like degradation of farming land, damage to aquifers, damage to local health and cost free release of CO2. These do not appear in any government reports but we all have to pay for them. Typical of large corporations, privatize the profits and publicize the costs. Dee Vee pleas open your peepers

    • Hettie 5 months ago

      Get lost troll

    • Carl Raymond S 5 months ago

      Two years ago you may have had a case. Today, renewables are cheaper. The lines have crossed. The best news is that prices for solar and wind continue to decline. So wrong, and more wrong by the day.

    • Diego Fuentes 5 months ago

      Dee Vee name a coal fired power station that wasn’t 100% subsidised by the tax payer. Name a fossil fuel venture that isn’t subsidised via preferential tax treatment etc (eg deductions for exploration).

    • Alastair Leith 5 months ago

      You do realise Renewables projects are often on-sold by developers to super funds right? The largest wind farm in WA (205 MW) at Collgar is half owed by a super fund and a different fund just bought into Synergy’s recently announced new wind development. I’m sure there’s many more examples in Australia very secure investments with good yield.

  2. Max Bourke 5 months ago

    We must do this those of use with accumulated super funds owe it to our chioldren and grandchildren as it is only a very small payback for the global environmental damage of the last few generations!

  3. Electric Boogaloo 5 months ago

    They’d do even better by investing in contemporary or next-generation fission plant.

    • Rod 5 months ago

      Westinghouse you mean?
      “February 18, 2017 02:00 JST
      “TOKYO — Toshiba will buy IHI’s
      3% stake in Westinghouse Electric at the request of the Japanese heavy
      industry group, which seeks to avoid exposure to the U.S. nuclear
      company whose corporate value has been severely diminished due to
      a massive write-down.”

      • Electric Boogaloo 5 months ago

        South Korea’s KEPCO has been kicking butt at designing, building and operating fission plants.

        The OPR1000 and now APR1400 are designs largely evolved from Combustion Engineering’s System 80, as found at Palo Verde in Arizona, USA.

        Funnily enough, Combustion Engineering eventually ended up becoming an acquisition of Westinghouse Electric.

        • Hettie 5 months ago

          Poor Westinghouse. Nuclear plants are being closed down, unable to compete with renewables , which are so much cheaper, and in a few years electric vehicles will be displacing ICE.
          Seems Westinghouse are pretty good at picking losers.

          • Electric Boogaloo 5 months ago

            There are numerous new fission plants under construction around the world.

            Electric vehicles displacing internal combustion engined vehicles will lead to more demand for electricity, which nuclear fission excels at producing for a very low cost, as demonstrated by its track record around the world.

          • Alastair Leith 5 months ago

            Please name a nation where nuclear power hasn’t been heavily subsidised by taxpayers/state. Here you go for USA: https://uploads.disquscdn.com/images/9a04d1052fcb5dd9d2b82febd4fec724c093ac81666d14dcb12f4e954a005e42.jpg These numbers omit all the in kind support like underwriting of risk (US insurance scheme for NPPs caps at ~$100m which is not even 5% of what Fukushima and Chernobyl damages were)

          • Electric Boogaloo 5 months ago

            Why should I believe some random chart citing no data sources?

            I bet if you chart subsidy per Joule it would look similar to flipping the labels on the vertical axis.

          • Alastair Leith 5 months ago

            I’m happy to provide a link for the data source if you don’t know how to use google images.

            https://cen.acs.org/articles/89/i51/Long-History-US-Energy-Subsidies.html

          • Alastair Leith 5 months ago

            I think current and future LCOE per dollar of subsidy would be more relevant than the historical usage in MWh of energy per source.

          • Electric Boogaloo 5 months ago

            Why? Joules per dollar is what counts.

            Going by your chart and considering the sheer amount of the USAs energy that is sourced from fossil fuels and nuclear, it looks like those subsidies are delivering by far the greatest value.

            From reading the magazine article you sourced the image from, it sounds as if the paper the article is about isn’t exactly precise or consistent in how it classifies and quantifies subsidies.

          • Calamity_Jean 5 months ago

            Here’s a link to a PDF of the original paper: http://i.bnet.com/blogs/dbl_energy_subsidies_paper.pdf .

            The “sheer amount” of US energy coming from the older sources is primarily a reflection of the head start the older sources had. (I suspect this is also true in Australia.) The equipment already exists, the money has been spent and isn’t coming back, so the reactors, boilers, buildings, railroads might as well be used as long as they can be used safely and without too much expense for fuel and maintenance. When all that stuff finally breaks down or wears out and can no longer be maintained, replacing it in kind will be unbearably expensive.

            The subsidies needed to replace coal or nuclear power plants that are no longer functional will be astronomical. The subsidies to renewables that can replace them are much more reasonable.

          • Hettie 5 months ago

            Why are you so determined to display your ignorance?

          • Electric Boogaloo 5 months ago

            Ignorance is okay if one has an open and inquiring mind so as to be able to replace ignorance with knowledge.

            I welcome the opportunity to become knowledgable on things I am ignorant of, but I’m not gullible.

          • Pixilico 5 months ago

            Please, Hettie! Don’t waste your precious time!

          • Hettie 5 months ago

            Electric vehicles will more than double the demand for electricity, that’s true. And it will happen so fast that only renewable generation will be able to keep up.
            From decision to commission, nuclear plants can take 20 years.
            Solar, 2 years. Wind, 2 to five years. Small PHES, using old mine sites, not sure, but not long, perhaps 3 years? And once there is a demand, manufacturing of the turbines will quickly ramp up.
            Once the tipping point for EVs is reached and starts to double every two years, reaching 100% in around 12 years, there is no way that nuclear construction could possibly keep up.
            Renewables is the only technology the is fast enough to keep up.
            So dream on, Booga.
            It ain’t gonna happen.

          • Electric Boogaloo 5 months ago

            CAN take 20 years, but that’s a worst-case scenario. South Korea and China are doing it in 5 years or less.

            If we’d pulled out fingers out 12 years ago when the Howard government received the UMPNER report, we’d be very close now to have had all the coal fleet replaced with fission.

            Today, coal still accounts for the vast majority of electricity generation and it is going to continue to do so for years to come.

            With rising electricity demand from EVs, existing fossil fuel plants will run with increased capacity factors, similar to what has happened since the closure of the Port Augusta and Hazelwood power stations.

          • Hettie 5 months ago

            And the overworked, poorly maitained plants will fail more and more often. Already about 3 trips every week. And soon there will be a boiler explosion, with loss of life and terrible burn injuries.

        • Blue Gum 5 months ago

          You won’t get a rational debate about any form of nuclear on this site.

          • Giles 5 months ago

            You mean, we talk about the costs of nuclear? Haven’t heard much about Kepi’s UAE plant recently? Oh, maybe that’s because they forgot to build back-up for it. South Korea also announced its intention to quit nuclear.

          • Hettie 5 months ago

            Don’t get upset Giles. Seems to me that Nuclear enthusiasts are a bit like steam engine enthusiasts. Totally in love with a technology that has been superceded.
            All you can say to them really is “Yes, dear.”
            She said, after having her own little spray. They do drive one nuts.

          • Electric Boogaloo 5 months ago

            Photovoltaics, wind and hydro are much older technologies than nuclear fission.

            I guess there’s solar thermal, but that’s a “superceded” technology as well since it uses steam…

          • Alastair Leith 5 months ago

            PV is much older than nuclear fission? Which planet is that on? When it was first being deployed on the Apollo space missions the embedded energy was greater than the return, not to mention freakishly expensive.

          • Electric Boogaloo 5 months ago

            It’s here on Earth.

            The photovoltaic effect was discovered by Alexandre-Edmond Becquerel in 1839, while nuclear fission was discovered by Otto Hahn almost a century later in 1938.

            The first solar cell was made by Charles Fritts in 1884.

            The more you know.

          • Alastair Leith 5 months ago

            Re-read my comment and get back to me. You are avoiding the point I made completely, how nuke fanboy like of you.

          • Electric Boogaloo 5 months ago

            I re-read it and came to the same conclusion: You questioned my claims, implying I’m off my tree and also that photovoltaics were created during the space race.

            I replied with the facts that back the correctness of my claim that nuclear fission is the most modern power generation technology.

          • Hettie 5 months ago

            Please explain why you are ready to accept that nuclear power technology has advanced over the past 30 years, but refuse to accept that solar pv and wind generation technologies have also advanced.
            I would be very interested in your reasoning.

          • Electric Boogaloo 5 months ago

            I never said that photovoltaic and wind technology hasn’t advanced.

            I said that fission delivers a better bang for your dollar than those technologies.

            I struggle to understand how people who can be so strident in their belief in the nebulous science of climatology and the need to reduce greenhouse gas emissions can be so against the mastered science of nuclear fission and the abundant, clean and economical power it provides. I suspect it’s down to bigotry and prejudice rather than just plain ignorance.

          • Hettie 5 months ago

            If you want to see prejudice and bigotry, Booga, take a look in the mirror.

          • Electric Boogaloo 5 months ago

            No sound rebuttal, just name calling?

          • Pixilico 5 months ago

            Hasn’t your mother taught you not to feed the trolls?

          • Electric Boogaloo 5 months ago

            Yet funnily enough, South Korea has new plants under construction…

          • Giles 5 months ago

            They have been under construction for years. The government now says these will be the last, and tore up plans to have 60% nuclear. instead, it will be gradually phased out and replaced with renewables.

          • Electric Boogaloo 5 months ago

            New fission plants have been commissioned in the last couple of years and others are soon to be completed.

            South Korea gets around 1/3 of its electricity from fission and the phase-out plan announced by their new president last year has a duration of 45-years.

            That’s what is called a token gesture.

            South Koea’s fission fleet can already satisfy almost all of Australia’s electricity demand and paired with “Snowy 2.0” it could probably completely satisfy it.

          • Calamity_Jean 5 months ago

            “the phase-out plan announced by their new president last year has a duration of 45-years.

            That’s what is called a token gesture.”

            No, that’s called “not wasting the money that’s already been spent” and “recognizing that replacing a bunch of equipment will take time.”

          • Electric Boogaloo 5 months ago

            No, it’s a token gesture because according to the plan most of the shortfall from the phaseout of fission will come from a doubling of LNG capacity, not from a complete replacement with renewables.

            This is similar to how Germany has been increasing its use of fossil fuels to replace the fission capacity it is decommissioning.

            Congratulations on completely failing to fulfil your goal to cut greenhouse gas emissions because of anti-fission dogma!

          • Calamity_Jean 5 months ago

            “This is similar to how Germany has been increasing its use of fossil fuels to replace the fission capacity it is decommissioning.”

            Germany hasn’t been increasing its use of fossil fuels. FF use in Germany has going down slowly (not a point in their favor, I’d like to see it go down faster); there was a slight increase in 2016, almost all of which could be accounted for by the fact that ’16 was a leap year.

          • Electric Boogaloo 5 months ago

            Yes, it has been increasing the use of fossil fuels.

            Germany is falling far short of its emissions reduction targets and emissions have been growing for the last few years with that growth expected to accelerate this year.

          • Calamity_Jean 5 months ago

            Source?

          • Electric Boogaloo 4 months ago

            https://www economist com/news/europe/21731171-thanks-panicked-decision-shut-its-nuclear-plants-germany-carbon-laggard-germany
            https://www cleanenergywire org/factsheets/germanys-greenhouse-gas-emissions-and-climate-targets

          • Calamity_Jean 4 months ago

            In the first link you provided I found this:

            “The government’s projections also failed to allow for a stronger economy and lower oil prices, which encouraged the use of oil for heating homes and delighted car-loving Germans with cheap petrol and diesel.”

            and in the second one there was this:

            “…the transport sector only reduced its emissions by 2 percent.”

            These two items combined may point to a way that Germany will increase the rate at which it is transitioning away from fossil fuels. Some German cities are considering bans on diesel cars entering the cities, in order to reduce air pollution. The sales of diesel cars in Germany has fallen considerably in the past year because of the pollution scandal, and the German public is agitating for electric cars to replace them. Electric cars are more efficient, so they emit less CO2 per mile driven, even if they are charged with electricity from coal-burning power plants.

            Also please notice in the chart titled “Not green enough”, there have been several periods of three or four years together in which emissions didn’t fall. Nevertheless, the general trend is downward and there’s no strong reason to believe that trend won’t resume.

          • Electric Boogaloo 4 months ago

            So despite all that, at the end of the day the facts are that Germany’s emissions are rising and it is going to substantially miss its targets. On top of that it has inflicted itself with high electricity prices.

            All of which was perfectly avoidable by not closing down its emissions-free nuclear fission plants.

          • Calamity_Jean 5 months ago

            That’s because there’s no rational reason for building nuclear plants in a nation as generously supplied with renewable potential as Australia.

            It’s raining soup, hold out your bowl.

    • Carl Raymond S 5 months ago

      No thank you. Renewables please. Cheapest. Cleanest. Fastest to deploy.

      • Electric Boogaloo 5 months ago

        How much is it going to cost and how long will it take to deploy enough renewables+storage to match the annual production of a 1GW fission plant? That is, a consistent 1GW output for 8,760 hours.

    • Hettie 5 months ago

      And how long do you think that would take to commission?
      No one State would do that without COAG approval. Say 12 months. The site selection, all the NIMBY protests and traditional owner lawsuits, design, environmental impact studies, I figure about ten years before the first sod is turned, then ten years to build in the face of fierce protests.
      In the meantime, the prices of wind and solar continue to drop, while the prices of all the stuff needed for a nuclear reactor continue to rise.
      Rooftop solar uptake increases exponentially, doubling every two years, and solar farms are being built at a rate that also doubles every two years. As are wind farms. PHES will proliferate to compensate for the intermittency of sun and wind.
      Despite the transition to electric vehicles, which will require a doubling of supply, within those 20 years the electricity generation capacity of Australia will have not only replaced the coalers, the PHES and batteries will have replaced the gas peakers.
      The nuclear plant will be abandoned because the price it must charge is 5 times what the rest of the market charges and no one is interested in buying.
      So nah. No nuke. Too slow, too expensive, to contentious.

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