Australia can address the energy trilemma and provide secure affordable energy while reducing greenhouse gas emissions – but not by extending the life of existing coal-fired power stations, according to Climateworks Australia.

Climateworks Australia Head of Implementation, Scott Ferraro said it would be short-sighted to adopt a national energy policy that did not also address Australia’s commitment to reduce emissions as required under the Paris Climate Agreement.

“The Australian Energy Market Operator has highlighted the need for 1,000 MW of strategic energy reserve which can be met through new generation, storage, or voluntary demand management response,” he said. 

“Our research shows this additional energy reserve can be met in a way that meets affordability, reliability and our emissions reduction commitments to limit global warming to well below 2 degrees.

“Australia has the potential to provide 2,000 MW of energy through demand response management at peak times from industry within the National Energy Market.  This is double AEMO’s estimate of the required strategic reserve and in line with levels of demand response available to energy market operators in parts of the United States and Europe. And Western Australia already uses demand response to improve market reliability.”

Mr Ferraro said Australia needed to begin the transition to a clean energy economy and not look at extending the life of existing coal-fired power stations slated for closure.

“The Finkel Review highlighted the importance of resolving all aspects of the energy trilemma – not just affordability and reliability,” he said.

“If the federal government pushes ahead with the idea of extending our ageing coal-fired power plants – such as Liddell in NSW – then Australia is at high risk of failing to meet its commitments under the Paris Agreement.

“Even extending the life of the Liddell coal-fired power station is likely to add around 12 million tonnes of emissions every year at a time when Australia has committed to reduce emissions by 26-28 per cent by 2030.

“Liddell’s annual emissions are currently around 8 per cent of the abatement needed to meet Australia’s emissions reduction target in 2030. 

“A transition to clean energy is crucial.  Not only are the opportunities for emissions reductions lower cost than many alternative options, but low emissions electricity also unlocks emissions reductions elsewhere in the economy like a switch to electric vehicles.”

Mr Ferraro said Climateworks’ recent ‘Power up‘ report shows that Australia’s electricity sector could make substantially greater cuts to emissions than outlined in the Finkel Report and lead the economic transition to a net zero economy.

“Our research shows Australia’s electricity sector could cut emissions by at least 40 per cent by 2030,” he said.  “This is the minimum required to get us on track to Australia doing its fair share of climate action to meet the Paris Agreement.

“If the electricity sector doesn’t achieve emissions reduction of this magnitude then the burden shifts to other sectors of the economy where emissions reductions are more costly and harder to achieve.”