Three reasons the green energy transition will be non-inflationary
Renewable technologies will get cheaper down the cost curve, price spikes from retiring coal plants will be avoided, and exposure to volatility in fossil fuel markets will be reduced.
Australia stands at a critical juncture, faced with the need to make significant, sustained investments in electricity infrastructure and export industries while balancing its goals of increasing the share of renewables in the grid to 82 per cent and becoming a “green energy superpower”.
Some say the high level of investment needed in renewables is inflationary, but this ignores the fact that there will be high levels of investment needed in electricity infrastructure over the coming decades regardless of whether it is “green” or not.
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Toby Phillips is a program director at the Centre for Policy Development.
Guy Debelle is a non-executive director at Tivan and a former deputy governor of the Reserve Bank of Australia.
