Here we go again – the latest salvo from the climate luddites of the National Party designed to disrupt and delay Australia’s accelerating clean energy revolution.
This time, it is couched in the tactically crafty but cynical and flawed proposition that distributed renewables – minus utility-scale projects – are the solution to decarbonisation.
Off the back of the Nationals’ call for a moratorium on the large-scale wind and solar and transmission – even as Rio Tinto inks landmark power purchasing agreements in Queensland that will drive the nation’s biggest wind and solar developments – party leader David Littleproud is now spruiking for a massive rooftop solar subsidy scheme.
Littleproud suggests this as the panacea for energy transition, firmed up with the fantastical vapourware combination of “nuclear and carbon capture and storage (CCS) on coal and gas.” A small modular reactor (SMR) in every backyard! And all without a price on carbon emissions!
24 hours later the call had the enthusiastic backing of chief SMR proponent, federal Liberal shadow energy minister Ted O’Brien. To solarise rooftops they want public capital investment diverted away from big wind, solar and transmission. And there’s the rub.
Accelerating utility-scale firmed renewables and transmission while unlocking cleantech industry development and scaling demand-side stimulus – for example, support to households to solarise and electrify – are mutually complementary.
Both are essential to underpin our whole-of-economy energy transition at speed and scale, leverage Australia’s decarbonisation potential, and maximise the climate, economic and social outcomes, including cheaper energy for all.
CEF totally endorses distributed consumer energy resources – critically, they are fast to deploy, scalable and cost-competitive – and we call for strong policies to incentivise accelerated deployments of commercial and industrial (C&I) rooftop solar.
And the federal government must address the challenges of community consultation and social licence on big renewables projects, as it is doing by accepting the recommendations of the Energy Infrastructure Commissioner’s review into community engagement.
But to focus investment on one aspect at the expense of the other would be a costly strategic misstep that Australia can ill afford as we stand on the brink of unprecedented opportunity, not only to transition the consumer, commercial and industrial energy ecosystem to solar, batteries, heat pumps, EVs, demand response management and so on, but to ensure grid stability by leveraging geographic and technology diversity of supply to power our future as a zero-emissions trade and investment leader.
This requires that we continue and accelerate our large-scale rollout of wind, solar, big batteries and transmission.
The false dichotomy of distributed versus utility-scale, coupled with the SMR and CCS furphies is just the latest chapter in the LNP’s attempt to repoliticise the energy transition – and we know in Australia from bitter experience how that story plays out. Delay, disinformation and deception are the standard operating procedures of the political brethren of the global fossil fuel cartel.
The Coalition’s bad faith has been evident in its aggressive campaigning to derail the renewables rollout, as it ignites Climate Wars 2.0 by spreading disinformation to whip up community dissent. Anything they say must be considered in this context.
Meanwhile, countries the world over are moving to prioritise energy security and independence with monumental investments in domestic utility-scale firmed renewables and transmission, and at the same time looking to build distributed, decentralised energy and secure their critical minerals and energy transition materials supply chains.
For example, China, which dominates the world on every decarbonisation front, put on an absolutely world leading 293GW of utility solar and wind in calendar 2023 (up 99% year-on-year), as it looks to pivot its economy for the rapidly approaching zero-emissions future. And zero-emissions industry investment drove 40% of China’s 5.2% GDP growth in 2023.
The $US1tn Inflation Reduction Act is the largest subsidy program in world history and has catapulted the US back into the global energy transition race. On the industry side it has pulled onshore an unprecedented boom in public and private investment into mining, refining, and manufacturing, but also into massive deployments of large-scale firmed wind and solar. Every week there have been yet more transformational investments into new US manufacturing facilities.
In parallel, the US has scaled demand-side cleantech stimulus including low cost financing and multiple incentives programs for electrification of homes, appliances, transport and businesses. The US Department of Energy Loan Program Office is deploying a massive US$400bn of patient strategic capital at speed and scale to crowd-in private investments, both domestic and foreign.
It is a model of the immense benefits of landmark public sector investment in economy-wide decarbonisation, reindustrialisation and cleantech supply chain, as we outlined last August in our summary of its impacts, one year since its introduction. We now call on a considered and strategic Australian response to the US IRA in Treasurer Chalmers’ 2024 Budget.
Australia has some of the world’s largest reserves of critical minerals including lithium, metals and energy transition materials that underpin the global green revolution, as well as superabundant renewable resources. This gives us an extraordinary opportunity to value-add and export “embodied decarbonisation” by using zero-emissions power to process these materials onshore pre-export. For this, we need both utility-scale and distributed renewables and batteries in a decarbonised grid.
This week, CEF released its analysis of the game-changing Queensland government policy and public investment program – underpinned by the $62bn Energy and Jobs Plan – that is catalysing enormous new private investment into the state, led today by Rio Tinto and Windlabs. This is transforming the state’s economy from its current overdependence on methane gas and coal export towards zero emissions industries of the future, powered by firmed renewables and a smart, fit for purpose transmission grid, working for the people and industries of Queensland.
We recently analysed the significant lift in ambition and investment in NSW of recent months, as the pipeline of firmed utility-scale renewables dramatically ramps up after years of ridiculously long approval times and inertia.
We also note the importance of government derisking the energy transition landscape to mobilise capital at scale, such as our massive $3.6 trillion Australian pension pool. Federal Energy Minister Chris Bowen’s fourfold expansion of the Capacity Investment Scheme is an excellent tool, fit-for-purpose, driving massive new investment whilst creating significantly increased firmed renewable supply to permanently drive down electricity costs for all, even as it enables industrial decarbonisation at the scale required to position Australia in the zero-emissions global trade landscape.
Fortunately the states and the federal government are getting on with the job after a devastating decade of energy policy failure under the incorrigible denialists – those now selling us rooftop solar + SMRs + CCS.
As a nation, let’s hope we know better than to buy a bridge from those guys.
Tim Buckley is director of Climate Energy Finance. AM Jonson is chief of staff, CEF
