Electrification and renewables could save Australians $60bn a year in energy costs

The electrification of Australia’s, and world’s, energy systems has the potential to create massive new opportunities for households and businesses to cut their energy costs and emissions footprint and create massive new investment opportunities for industry.

Electrification advocate Saul Griffith, the founder and chief scientist at Otherlab, Saul Griffith told the Smart Energy Conference on Thursday that the electrification of Australia’s energy is vital to cut emissions and to drive significant cuts to household energy expenditure.

Griffith said the scale of savings available to households by switching appliances and vehicles could run into the tens of billions of dollars.

“A small number of billion dollars over the next few years to buy down the costs of hardware and ride the cost curves as they come down, figuring out how to manage all the voltages and phase on the grid with sufficient batteries and sufficient smarts, then the entire country starts to save billions of dollars,” Griffith said.

“By the end of this decade, we’d be seeing $40 to $60 billion a year net savings in the Australian economy by a wholesale commitment to residential electrification alone.”

Griffin said that focusing on how households and businesses use energy, and switching that energy use onto sources that can be easily supplied by renewables, has the potential to drive significant reductions in emissions.

“The household is really where I think the action can be this decade for Australia,” Griffith said.

“Forty-two per cent of the domestic emissions in Australia come from decisions made around the kitchen table. That is what fuel is in our cars, what heat is in the home, where electricity comes from, and how fuels are made.

“If you also believe that small businesses and the commercial sector largely makes its decisions around the kitchen table, it’s actually about 65 per cent of our domestic emissions. So it’s meaningful, and it is also meaningful economically,” Griffith added.

One key benefit to the electrification of Australian energy use, as highlighted by Griffith, is the significant efficiency improvements that can be achieved by avoiding the need to try and convert thermal heat from fossil fuels into useable electricity.

“Our fossil fleet in Australia runs at a net efficiency of about 30 to 35 per cent because it’s mostly coal and natural gas,” Griffith said.

“We’ve been making that slowly more efficient mostly by doing more gas and a little bit less coal. But when we go to wind and solar, we actually eliminate the two-thirds of energy that’s wasted.

“Today we uproot 22,000 petajoules of energy, a huge amount of that goes to export and 6,500 petajoules to the domestic economy.

“If we do the electrification of the domestic economy, with the recipe that includes electric vehicles and electrification of our heat for buildings and we supply that with wind and solar, it reduces by over half our total energy need to 3,200 petajoules,” Griffith added.

BloombergNEF’s head of Australia research, Leonard Quong, added that a worldwide transition to cleaner energy sources significantly magnifies the available investment opportunities, with commitments to net zero emissions targets now covering the vast majority of global emissions.

“In January 2010, about 34 per cent of global carbon emissions were covered under a net zero policy on a national level, sometimes in legislation, but often informal policies under discussion,” Quong said.

“But by the end of this year, that had grown to an incredible 89 per cent of global carbon emissions, now covered by net zero targets, often by around the 2050 point in the middle of this century.”

“Increasingly, net zero is becoming the new normal. The yardstick that companies and markets are being measured against and with,” Quong added.