Research shows large investment needed into climate change

The Clean Energy Investor Group (CEIG) has released research highlighting that a $421 billion investment is needed for Australia to align with global investor ambitions for limiting climate change to 1.5°C.

In Baringa’s ‘Decarbonising Australia: Accelerating our energy transition with a credible 1.5°C scenario’ report, new modelling highlights the path and efforts needed across the National Electricity Market (NEM) to limit global temperature increases to 1.5°C. The modelling shows that at present, Australia’s current scenario planning for the NEM is not consistent with global commitments for 1.5°C.

The report outlines additional steps needed by the Australian Government, the electricity sector, market bodies and the investment community to deliver emissions reductions in line with the objective. Decarbonisation of the electricity sector creates the biggest opportunity to drive economy-wide decarbonisation, most importantly across the transport and industrial sectors.

Simon Corbell, CEIG CEO, said the next step is accelerating emission reductions in the NEM.

“Through a continued and coordinated effort across government, industry and private markets, we can unlock $421 billion in total investment, ensuring Australia is aligned with a growing global investor effort to make 1.5°C the benchmark for action.”

Peter Sherry, Partner – Energy and Resources, Baringa said, “Our modelling outlines a practical and commercially credible scenario for decarbonising the NEM in line with staying below 1.5°C and this has been validated by investors. While there are certainly near-term challenges, there is huge opportunity to attract major global investment and paint a bright future for Australia, powered by renewables.”

This transition plan is projected to deliver long-term lower wholesale energy prices in the medium to long term. To deliver on this plan, CEIG has identified six priority actions:

• The Electricity sector needs a carbon budget — This will help governments and market bodies accelerate transition in line with targets.
• Transition requires national coordination — Governments, industry and communities must work together to accelerate coal closures and renewables rollout.
• Investment in long duration storage — This strengthens reliability and security during infrequent renewable energy droughts.
• Support for offshore wind development — Offshore wind offers significant volumes but is unlikely to be cost-competitive in Australia until the 2040s without policy support.
• Accelerating network infrastructure build — Transmission buildout must be accelerated.
• Skills, supply chains and communities — Delivery of infrastructure projects will be challenging with international competition for resources. Communities must be supported and empowered through the transition.
   

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