10,000 Kilometres of New Transmission Infrastructure Needed for Net Zero: Green Advisory

Photo showing transmission lines in Melbourne, Victoria, Australia. Mitchell Luo/Unsplash

The Albanese Labor government’s lofty plans to supply 82 percent of the country’s energy grid with renewable sources is unlikely to come to fruition, according to a green energy advisory.

The firm, Nexa, says Australia will struggle to get to 60 percent renewables by the end of the decade, citing the challenges with building new infrastructure.

“Australia needs to build 10,000 kilometres of transmission, in less than 10 years, equal to 25 percent of today’s entire transmission grid,” said Nexa CEO Stephanie Bashir, according to the report published in June.

“It is becoming extremely unlikely that we will meet our 2030 and 2050 targets. Even if we could generate enough renewable energy, we do not have the transmission infrastructure required to convey it to consumers,” she added.

“Lengthy and uncertain approvals process that do nothing to ensure social licence from and compensation of host communities.”

Ms. Bashir also said the scale of construction would likely result in bottlenecks in supply chains.

In its report, Nexa further recommended the government incentivise competition within the transmission sector, citing an entrenched monopoly as the main factor behind delays and cost overruns in the push for net zero.

In fact, modelling within Nexa’s report revealed de-monopolising Australia’s transmission market would save over $13 billion (US$8.5 billion) in electricity costs.

Around $1 billion would be saved by opening the sector to established international competitors, while $2.98 billion could be saved through the industry’s deregulation.

The most significant cost reduction, however, is the potential to avoid a $9.2 billion increase in wholesale energy prices as a result of construction delays in getting the renewable energy grid up and running.

Costs for Net Zero Are Compounding

Compounding these challenges is the increase in insurance premiums with many underwriters expressing reluctance to back renewable energy projects.

Gallagher, a global insurance brokerage firm, has called for renewable energy and transmission markets to be jumpstarted so that it can be competitive enough to sustain brokers, creditors, and borrowers.

“While there’s a big push for renewables in Australia and New Zealand, the supply chains to service the demand are lagging behind which can affect ability to get equipment to site,” the firm said in an update.

“As a result, underwriters may be reluctant to provide cover, reflected in premium costs and the imposition of terms and conditions such as higher deductibles or less coverage,” it continued.

“Having an experienced broker with strong market relationships increases the chances of obtaining economical cover.”

There are those who believe a transition is unworkable no matter the timeline.

“Retooling our entire energy grid, both generation and transmission is transferring hundreds of billions of dollars out of the pockets of everyday Australians into the pockets of the climate carpetbaggers running this scam, using rising electricity prices and higher taxes,” said One Nation Senator Malcolm Roberts told the Senate last week.

The senator said the move was contradictory to Australia’s position as a resource-rich nation with plenty of coal and uranium reserves.

“We are the world’s most energy-rich country, yet we have some of the world’s highest prices for electricity. We export coal and uranium so foreign countries can have cheap, reliable power; yet the energy policies of the Greens, Liberals, Labor, and the Nationals mean we cannot use it here—all in the name of this new religion of green self-flagellation,” Mr. Roberts said.

“What’s really killing this country is investment in solar and wind, which are inherently more expensive because they produce far less and lower-density electricity and so their unit costs of electricity are far higher.”

Australian States Aiming for Net Zero Highs

In 2022, renewables accounted for 35 percent of the National Energy Market’s (NEM) generation, just four percent higher than in 2021.

Analysis conducted by the Clean Energy Regulator (CER) forecasts this figure to reach 40 percent by the end of 2023, due to rapid increases in public investment in solar and wind as well as the recent closures of coal-fired power stations across the nation.

Each state and territory government has set slightly differing targets for transition and emissions reduction, accounting for differences in their respective populations, consumption, as well as the concentration of electricity generation between different power stations.

Victoria is currently aiming for 65 percent of energy to come from renewables by 2030, and 95 percent by 2035.

Queensland has also set a clear target, aiming for 70 percent renewables by 2030, and 80 percent by 2035.

New South Wales is currently on track to cut its emissions by 70 percent on its 2005 figures by 2030, while Western Australia is compelling public agencies to curb emissions by 80 percent within the same timeframe.