Fossil fuels could cut electricity costs by 5 per cent but would require huge pollution surge, abandoning net zero
CSIRO says investing in more fossil fuels and limiting the rollout of wind and solar power could cut Australia’s electricity costs by 5 per cent by 2050; but the strategy would require the country to abandon all climate commitments and allow a massive increase in atmospheric pollution.
The trade-off, modeled for the first time in the national science agency’s latest power generation cost scorecard to be released on Wednesday, will fuel Australia’s decades-long climate battles.
According to the CSIRO, new coal-fired power plants and greater use of gas could produce electricity at $124 per megawatt hour by 2050, measured in today’s dollars. By contrast, electricity would cost $131 per megawatt hour under the current plan for a net-zero-compliant grid, powered mostly by renewable energy and supplemented by batteries, transmission lines and gas.
The price gap comes as conservative political parties clash over renewable energy and emissions targets with the Albanian government, which has set a legally binding net-zero target by 2050 and an ambitious target for renewables to reach 82 percent of the grid by 2030 and more than 90 percent by 2050.
Experts including the Grattan Institute and analyst Rystad said renewable energy use would fall significantly short of the 2030 target.
One Nation leader Pauline Hanson said global warming was a “hoax” in her party’s statement. manifesto labeling climate action is a “means of creating a socialist Australia” and a government move to impose totalitarian control over society.
One Nation MP Barnaby Joyce doubled down on his party’s fierce opposition to renewable energy on Tuesday, declaring it “an environmental disaster and a blight on our landscape… and then transmission lines, cobwebs of filth”.
The federal Coalition abandoned its commitment to net zero in November, with Opposition Leader Angus Taylor vowing in May to run coal plants “as hard as possible and for as long as possible to bring down electricity prices”.
Opposition energy spokesman Dan Tehan said on Tuesday the government needed to answer the question: “Why aren’t we doing more to develop our coal and gas resources here rather than selling them abroad?”
But energy experts have warned against any moves to change Australia’s climate commitments and international position towards nominal 5 per cent cost savings.
Grattan Institute energy director Tony Wood said CSIRO’s “GenCost” report was a valuable estimate of energy development costs, but long-term modeling 25 years into the future could not be completely accurate.
Even if true, the 5 percent cost increase from a grid with new coal and natural gas or dominated by renewables represents good value, he said.
“Five percent is within the rounding accuracy of the modeling,” Wood said. “But if it were my money and I had to compare it to spending an extra 5 percent to save the planet, I think it’s a pretty good investment.”
The Albanian government cited previous versions of the GenCost report, which found that introducing renewable energy to reach net zero was the cheapest way to expand the grid to meet future industrial and population growth.
But the government will prioritize CSIRO’s guidance on GenCost, prioritizing another key energy report, the Australian Energy Market Operator’s Integrated Systems Plan.
“[GenCost] The results are designed to be reasonably accurate but are, by design, significantly less complex than the multi-model, state-of-the-art framework used in the Integrated Systems Plan,” CSIRO said.
Coal power plants are generally shut down by their owners when they reach the age of 44. More than two-thirds of existing coal power plants are 39 years old and will be off the grid by 2035. Investors are unlikely to green-light new coal plants as banks and insurers pull back on fossil fuel lending and shareholders in publicly traded energy companies insist on further emissions cuts.
Energy demand is expected to double by 2050 and Industry and Science Minister Tim Ayres has argued that renewable energy will be needed to produce much of the extra electricity and attacked conservative parties opposed to clean energy.
“We know that any new coal-fired power plant will struggle to secure financing and no new projects are currently proposed, so GenCost also questions the assumed prices of fossil fuels in its models and notes that the world will likely continue to adopt cheap, reliable renewable energy plants,” a spokesman for Ayres said.
Emissions from the electrical grid account for approximately one-third of the country’s greenhouse gas production. Renewable energy is seen as the cheapest way to reduce emissions across the economy.
“Solar power, wind and batteries remain the lowest-cost technologies that can support Australia’s net zero target,” CSIRO said.
Independent analyst Climate Action Tracker found the government’s policies were inconsistent with the Paris Agreement goal of keeping global warming as close to 1.5 degrees as possible.
Increasing emissions from coal power will significantly increase Australia’s contribution to global warming, and if all countries mirror Australia’s actions, warming will exceed 2 degrees and potentially reach 3 degrees, it said.
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Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email.
Nick Toscano is an economic correspondent for The Age and the Sydney Morning Herald.Connect with: X or email.
