Gas-Backed up Renewable Energy Is Most Affordable Power Source, AEMO Says

Wind turbines are seen in Albany, Western Australia, on May 26, 2024. (Susan Mortimer/The Epoch Times)

The Australian Energy Market Operator (AEMO) considers renewable energy backed up by gas to be the most affordable way to provide power to homes as the country prepares to meet its net zero goals in line with the Paris Climate Agreement.

In the 2024 Integrated System Plan (ISP) for the National Electricity Market (NEM), AEMO proposed that 82 percent of electricity be supplied by renewable energy sources (pdf).

Minister for Climate Change and Energy Chris Bowen said the AEMO supports the government’s drive towards a reliable renewable energy plan in the country.

“The Albanese government’s reliable renewables plan is the only plan supported by experts to deliver the clean, cheap, reliable, and resilient energy system that Australians deserve,” Mr. Bowen said.

“AEMO tested 1,000 scenarios to identify the lowest-cost plan that would also meet our growing electricity needs and keep the grid reliable between now and 2050.”

He added that having a different energy mix meant Australians would miss out on up to $22 billion in benefits.

The agency also estimated that the total cost of the roll-out for utility-scale generation, storage, firming, and transmission infrastructure has a present value of $122 billion.

The AEMO report also said that Australia needs more than 10,000 kilometres of new transmission lines by 2050 which will cost $16 billion or 13 percent of the total cost mentioned above.

Unreasonable, Unachieveable Target: Think Tank

However, the Sydney-based think tank, Center for Independent Studies (CIS), said that AEMO’s proposal is unreasonable and unattainable.

According to an analysis by the CIS, attaining the 82 percent target requires building more than twice the amount of renewable energy sources in the next five years, which is more than what was realistically achieved in any five-year period.

“No serious analysts, even those who support renewable energy, believe 82 percent by 2030 is going to happen,” said Aidan Morrison, Director of Energy at the CIS.

“Consumers will end up paying more because of this unachievable renewables target.”

The CIS also said that introducing the 82 percent target in 2030 was not even mentioned in previous reports.

“It’s not required to hit our emissions reductions targets. But now this policy dictates almost everything about how our energy system will change,” Mr. Morrison said.

CIS said that the AEMO needs to be practical to ensure a reliable energy security for Australia, without burdening the pockets of its citizens.

“While AEMO has finally acknowledged in fine print that this isn’t a whole-of-system plan, people still assume that it covers the whole-of-system cost. In fact, consumers will be heavily relied on to foot the bill for staggering amounts of rooftop solar and home batteries controlled by private operators,” Mr. Morrison said.

Apart from the CIS, the Coalition said that the renewable energy plan from the Albanese government is expensive.

They proposed a zero-emissions nuclear energy program to help reduce the cost of electricity for Australians within the next decade, following the expected shutdown of coal power plants in the country.

“A zero-emissions nuclear power plant will be a national asset delivering cheaper, cleaner and consistent energy for 80 years. Getting started now on establishing a civil nuclear programme is the right decision for you, your children and your grandchildren,” said the Liberal Party of Australia in a previous statement.

The Coalition also said that full reliance to renewable energy may not be feasible or practical, especially since no country across the globe have solely relied on both solar and wind energy.

However, Mr. Bowen criticised the nuclear proposal, noting it would cost Australians through higher taxes and bills.

“[Opposition leader] Peter Dutton’s anti-renewables obsession hides the cost Australians will pay for his reactors and ignores the fact renewables are the cheapest form of energy, and getting more renewables into the system brings prices down,” said Mr. Bowen.

Keep All Options on the Table

Innes Willox, CEO of the Australian Industry (AI) Group, said the ISP is the “best roadmap“ that Australia needs to meet its energy demands but it will require all hands on deck to make it happen.

“Faster approvals for projects, especially transmission, are essential to control costs and ensure we can keep the lights on. Governments can’t deliver this alone; all of us have a part in restoring Australia as a place that builds,” said Mr. Willox.

“The NEM needs more gas supply, quicker transition of those forms of gas demand that have better solutions, and more capacity to store fuels. That will take tireless pragmatism, not ideology, from governments and stakeholders.”

However, Mr. Willox emphasised that Australia should not close its doors to nuclear power as a potential component of its future energy mix.

“Nuclear energy doesn’t figure in the ISP, most directly because it is currently illegal in Australia. If it was allowed, at current costs it looks unlikely to be economically attractive. However, we should never be closed off to future innovation,” said the CEO.

“Removing the ban on nuclear and being open to the potential for future improvements would make sense. Halting the deployment of the best solutions available today would not make sense.”