In July this year, the Australian Energy Market Operator (AEMO) released scenarios outlining pathways to decarbonise Australia’s energy system. The release includes a 1.5 degree-aligned ‘hydrogen superpower’ scenario, produced through Climateworks and CSIRO’s AusTIMES model.
The AEMO July release was significant for its ambition. The ‘step change’ scenario originally released in 2019 has returned, compatible with limiting global warming to 1.8 degrees Celsius. The ‘hydrogen superpower’ scenario, new for the 2021 release, takes the modelling further by aligning to 1.5 degrees of warming. The release of a 1.5 degree scenario by the national energy market operator keeps the window open for Australia to meet the Paris Agreement to limit global temperature rise.
The ‘hydrogen superpower’ scenario represents a future with the strongest global decarbonisation targets, resulting in a thriving international hydrogen economy. It would see Australia’s export industry grow through hydrogen and hydrogen-produced green steel.
The scenario was one of four developed using the Climateworks and CSIRO AusTIMES model, an Australian implementation of the Integrated MARKAL-EFOM System (TIMES).
Developed under the International Energy Agency’s (IEA) Energy Technology Systems Analysis Project (ETSAP), the TIMES energy system modelling framework has been used extensively in over 20 countries, with the Australian version developed by CSIRO and Climateworks.
AusTIMES is the foundation for Climateworks’ scenario-based research, and was also used in our seminal report Decarbonisation Futures. The 2020 release of Decarbonisation Futures showcased the capabilities of the AusTIMES model – which have since been extended to include hydrogen pathways as part of this scenario development for AEMO. AusTIMES optimises the mix of possible technologies to achieve minimum overall system cost, according to imposed conditions. The representation of sectors, technologies and commodities in the model is tailored specifically to Australia’s energy system. Conditions that can be imposed include demand forecasts for particular areas of the economy, introduction of emission-reduction technologies, climate policies represented through a shadow carbon price and constraints on system emissions limits.
Climateworks Senior Analyst Jay Gordon, who worked on the scenarios, says: ‘There are a growing number of global Paris-aligned decarbonisation scenarios, but these are often challenging to translate to a national scale. AusTIMES allows us to model pathways that are relevant to an Australian context, unpacking the specific challenges and opportunities across different parts of our economy under the transition towards net zero emissions, including under 1.5 degree futures.’
CSIRO and Climateworks modelled four scenarios for AEMO in the AusTIMES model, each focussing on a key theme. Three of the four were included in the July release.
The first, ‘net zero 2050’, plots a pathway towards a zero emissions economy that is consistent with Australia’s 2030 commitments under the Paris Agreement. This is followed by an increase in the uptake of decarbonisation technologies needed to achieve net zero emissions in 2050 and is broadly consistent with a target of 2.6 degrees of warming.
The second, ‘step change’, looks at more ambitious emissions reductions, limiting warming to well below 2 degrees Celsius in line with the goals of the Paris Agreement. Energy efficiency, electrification and emission reductions across all sectors play a balanced role towards meeting this goal.
The most ambitious scenario, ‘hydrogen superpower’, presents a future where global commitments limit warming to 1.5 degrees Celsius above pre-industrial levels. This leads to strong decarbonisation actions taken across all sectors of the economy and breakthroughs in the cost of hydrogen production, resulting in substantial growth of both domestic and export industries.
The fourth scenario, ‘strong electrification’, is a variation of ‘hydrogen superpower’. It represents a strong global push to limit warming to within 1.5 degrees Celsius where reductions in hydrogen production costs do not eventuate, resulting in a greater reliance on electrification across the economy to maintain our climate commitments.
Since it was utilised for Climateworks’ Decarbonisation Futures work in 2020, the AusTIMES model has enabled scenarios to adapt to: technology outpacing our expectations, shifts in government policy and economic drivers. With the window for 1.5 degrees still open, but narrowing, it is providing Australia with the tools to keep the Paris Agreement within reach.