Kean hails solar, battery revolution as EY says consumers could save billions with stronger emissions target

The chair of the Climate Change Authority, Matt Kean, has hailed the “revolution” in solar and battery storage being played out in Australia and across much of the world, as one of the country’s leading consulting groups declared Australian consumers could save billions with a strong emissions target and an accelerated switch to green energy.

The comments by Kean and the new report from EY come just weeks before the CCA is expected to deliver its recommendations for Australia’s 2035 climate target, which must be delivered to the UN by September.

The CCA has said it is looking at a target cut of 65 to 75 per cent below 2005 emissions by 2035, although environmental groups suggest that the bare minimum target should be a 75 per cent cut.

They argue that the falling cost of renewable and other technologies means that the savings for consumers are potentially significant. And, of course, the costs of not doing enough to avoid the worst impacts of climate change are even greater.

That puts Kean’s latest comments – to an energy conference at UNSW in Sydney on Wednesday- in an interesting light, given the focus on the rapidly falling costs of technologies such as solar and battery storage, and the huge opportunities for those technologies both at large scale and at the consumer level.

“As those in this room know better than most, an awesome solar and battery revolution is upon us,” Kean said.

“Now, speed is a priority when it comes to cutting greenhouse gas emissions. But so is price. On both scores, it’s increasingly a case of ‘shine, baby, shine’, and ‘store, baby, store’.”

Kean pointed to the cost of solar electricity, which he said has fallen from around $160 a megawatt hour (MWh) in 2016 in Australia to around $40/MWh now. The Australian Renewable Energy Agency plans to cut that further to just $20/MWh by the end of the decade.

Battery storage costs sank by one third in 2024 alone, and Kean noted that the result of recent auctions in China noted by Renew Economy suggest the CSIRO and AEMO may have to revise down their cost estimates in the next release of their annual GenCost report, which is also due in coming weeks.

Kean suggested that regulators in Australia should also be adjusting their forecasts of the take-up of batteries, both big and small, and joined others – including AEMO – in wondering whether some of the previous assumptions on transmission rollout may have to revised.

“Will we need to build as much transmission, for instance, if developers add more – and larger – batteries to the grid?” Kean said. “Will more solar and wind farms get the financial tick from investors if more of their generation charges batteries rather than gets curtailed?”

But Kean noted that the immediate revolution was likely to take place at the consumer end, predicting a household “stampede” into the Albanese government’s battery program.

Solar systems are getting bigger, and so are big batteries – with households choosing battery systems of around 16 kWh on average, when previous forecasts had suggested 10 kWh would be the norm in 2028.

“These technological shifts will be tectonic, particularly when more people buy electric vehicles capable of discharging to the grid,” Kean said.

“That flurry of household activity will deliver important capacity and flexibility at a time when large-scale generation projects are in a bit of a lull before the government’s Capacity Investment Scheme revives growth.”

As Kean spoke, EY released a report which pointed out that Australia could cut its emissions by 65-75 per cent by 2035 and save households and businesses billions of dollars in the process.

• It said the shifts in technology costs mean Australian governments and businesses don’t need to choose between addressing climate change and managing cost-of-living pressures.

“In fact, the four most easy-to-reach keys can often begin to reduce costs for consumers and businesses today, while unlocking new value for industries and the broader economy and delivering the lion’s share of emissions reductions required by 2035,” EY said.

“The economic case for ambitious action is now strong than ever.”

The EY report says that existing technology can deliver significant cost savings in buildings and transport, and achieve 80 per cent of the abatement required to 2035.

“The world is now halfway to 3°C of warming. Australia’s existing infrastructure and settlements were designed and built for historical climate conditions. As temperature and rainfall patterns shift, our capacity to cope, and indeed prosper, will come under increasing pressure,” it wrote.

It underlined the important role of business. Sadly, Australia’s biggest business lobby – the Australian Chamber of Commerce and Industry is still looking the other way, and is arguing that Australia should adopt a much weaker target than those suggested by the CCA.

That is clearly a case of ideology trumping technology, just as it is with the federal Coalition, and state-based LNP governments such as Queensland and the CLP in Northern Territory, which are turning their backs on ambitious climate targets and and walking away from renewable commitments.