Utilities’ role in progressing carbon emissions reduction in Australia

Topic
James Turner5 April 2019

Utilities have begun to play an important role in the carbon emissions reduction in Australia – helping to lead the country towards a lower-emissions future through the closure of power plants and investment in renewable energy sources. Integral to this transition is the rehabilitation of communities at the centre of this shift.

The shifting energy landscape

Ten coal-fired plants have closed since 2012, taking with them more than 5,000 megawatts (MW) of capacity.1 Further, the slow retirement of an additional 15,000 MW anticipated over the next 15–20 years2 could result in changes beyond short-term fluctuations in electricity prices and an accelerated shift to renewables. If this transition is not well managed, communities that previously hosted power plants face the potential of early retirements, under and unemployment, and work that is lower paid or less skilled.3

According to Repower Australia, a grassroots organisation campaigning to promote Australia’s transition to renewable energy, experts have agreed that shifting the energy landscape to renewables is not only technically feasible, but economically responsible.4 While previously renewables were an expensive but necessary part of the generation system to achieve decarbonisation, they are now the lowest-cost form of new generation in Australia.5 However, Repower Australia also emphasises the importance of ensuring a “just” transition for coal communities in actively phasing out polluting fuels – one that includes community-driven economic renewal plans, retraining for workers, redeployment and fully funded retirement options.6 Examples of community transitions internationally provide useful lessons, for example in Appalachia in the United States, where intergenerational poverty has resulted from the shift away from coal, whereas in the Ruhr in Germany, the regional economy was reshaped with no forced job losses. Findings from work undertaken by the CFMEU in conjunction with UNSW echo Repower Australia’s sentiments and highlight the importance of a national, coordinated response to change.7 Specifically, the CFMEU and UNSW recommended the establishment of a Federal Government authority, along with a comprehensive, long-term and staggered strategy for transition well in advance of closures that involves all stakeholders to help manage any impacts.8

"Wind and solar power could replace coal as the bedrock of Australia’s electricity grid..."

Emissions reduction and rehabilitation targets

So, how are utilities playing a role? AGL, Australia’s largest carbon emitter,9 is working towards a lower-carbon future as detailed in its strategic review and Greenhouse Gas Policy, which highlights a pathway for the gradual decarbonisation of its generating portfolio by 2050.10 Of note is the closure of AGL’s Liddell Power Plant scheduled to occur in 2022. Together with the co-located Bayswater power plant, the plants comprise two of Australia’s major electricity generators.11 Utilising highly skilled people, land, water, transport and energy infrastructure, the utility says it is committed to working with the plant’s local business, industry and government to rehabilitate the site and identify new opportunities for economic diversification and employment for the region impacted by the closure.12 According to AGL, it plans to not only close all existing coal-fired plants by 2050, but to continue investing in new renewable and near-zero-emission technologies while also serving as an advocate for effective, long-term government policy that could help reduce the country’s emissions.13 More information about the utility’s understanding of the challenges associated with repowering, repurposing and rehabilitating large generation sites can be found in its report – Rehabilitation: AGL’s approach to rehabilitation of power generation infrastructure.

At the same time, Origin Energy has formally committed to halving its emissions by 2032. Progress toward this emissions reduction goal includes a commitment to having renewable energy make up 25% of its generation mix by 2020.14 To this end, the utility has contracted 1.1 gigawatts (GW) of newly sourced renewable power, with investments in large-scale solar and wind projects.15 Origin Energy has also committed to purchase energy produced by Lakeland Solar & Storage to further its understanding of battery storage16 – which, as discussed previously, could play an important role in managing Australia’s energy mix in future.

While utility EnergyAustralia produces roughly 20 million tonnes of greenhouse gas emissions each year, the utility claims it is thoughtfully assessing opportunities to support renewable development.17 According to Mark Collette, Executive - Energy, wind and solar power could replace coal as the bedrock of Australia’s electricity grid, driven by its position as the lowest cost form of new generation.18 While coal could still have a role to play during times of peak demand, Collette anticipates an “unstoppable” energy transition that results in an electricity system that is affordable, reliable and which has zero emissions.19

With two solar power plants in Australia, New Energy Solar is conscious of its ability to have a positive social impact in local communities. With calls for a national, coordinated response that can guide communities and consumers alike through the inevitable energy transition, New Energy Solar will continue playing an active role in adding value through providing sustainable energy solutions and by making tangible contributions to the prosperity and economic development of these regions.

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