We need to urgently scale-up clean technologies to keep Australia on its’ Net-zero by 2050 targets
Australia's CO2 emissions reductions from fuel combustion by measures implemented, Net Zero Scenario versus no-transition scenario. Source: BloombergNEF. #
BloombergNEF’s *New Energy Outlook for Australia report (just released 19th August 2024) details how we could still meet our decarbonisation targets and net-zero commitment by 2050.
The report stresses that Australia needs to quickly reduce emissions from its power sector by increasing renewable energy sources.
The Net Zero Scenario (NZS)** (consistent with a 67% chance of holding global warming to 1.75 degree C) shows there is no room for any further carbon emissions growth in any sector, if we are to reach net zero by 2050.
However, under the Economic Transition Scenario (ETS)** (ie assuming no new policies are implemented) – we would be breaching the Paris Agreement with a global warming result of 2.6 degree C.
Currently on target
The BNEF analysis indicates that Australia’s current 2030 emissions reduction target is in line with the NZS energy-related emissions reductions.
Our Goals
By 2030, Australia aims to have over 126 gigawatts *** of renewable energy capacity.
How do we get there?
Decarbonisation Goals
To get there requires a swift decarbonization of our power sector and, a significant increase in renewable energy capacity.Investment requirements
Achieving the NZS will need $2.4 trillion in investment from 2024 to 2050 - this amount is only 12% more than what is needed for a less ambitious baseline (ETS) **Renewable Energy Growth
We are planning to install 290 gigawatts of wind and solar power by 2050, with our power demand expected to grow by 2.5 times.Emissions Reduction
To stay in line with the Paris Agreement, we must cut emissions from energy-related sectors by at least 71% by 2035, compared to 2005 levels. Lack of Nuclear Infrastructure: Australia does not currently have a nuclear power industry, regulatory framework, or waste management capabilities. Establishing these would require significant time and investment.
Technology Shift
To do this, means phasing out coal and gas power plants by 2035 and using more renewable energy sources, along with technologies like batteries, renewables and pumped hydro.
Key Technologies for the transition
The report highlights the need for new technologies such as hydrogen and carbon capture to help reduce remaining emissions. By 2050, hydrogen use in Australia is expected to increase 14- fold.
Overall, nine key technologies must be scaled to achieve net zero by 2050, including renewable power, electric vehicles, battery storage, nuclear energy, carbon capture, hydrogen, sustainable fuels, heat pumps, and power networks.
NB: Lack of Nuclear Infrastructure: However Australia does not currently have a nuclear power industry, regulatory framework, or waste management capabilities. Establishing these would require significant time and investment.
BNEF outlook
The findings show that Australia needs to act quickly to transition to cleaner energy and to combat climate change effectively.
Next steps:
If you have questions about sustainability and energy investments in your super or portfolio, call us for a quick chat or drop us a line.
References:
Small Caps: Colin Hay, Renew Economy,
thefifthestate.com.au
BloombergNEF – https://about.bnef.com/new-energy-outlook/
*BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy.
The New Energy Outlook (NEO) is BloombergNEF’s long-term scenario analysis on the future of the energy economy covering electricity, industry, buildings and transport and the key drivers shaping these sectors until 2050.
** ETS and NZS: BNEF created two updated climate scenarios – the Net Zero Scenario (NZS) and a base-case Economic Transition Scenario (ETS) – when assessing where Australia stands in its development of low-carbon transition strategies.
*** Gigawatt: A gigawatt is typical average power for an industrial city of one million habitants and also the output of a large power station. (Wikipedia)
NB all figures are in $US
#Note: The 'no-transition' scenario is a hypothetical counterfactual that models no further improvement in decarbonization and energy efficiency. In power and transport, it assumes the future fuel mix does not evolve from 2023 (2027 in shipping). For all other sectors, the counterfactual to the Net Zero Scenario (NZS) is the Economic Transition Scenario (ETS). 'Clean power' includes renewables and nuclear, and excludes CCS, hydrogen and bioenergy, which are allocated to their respective categories. 'Energy efficiency' includes demand-side efficiency gains and more recycling in industry.
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