By Nick Toscano
Energy giant AGL says the Albanese government’s target for renewables to supply 82 per cent of the grid’s electricity by the end of the decade must not be abandoned if the Coalition wins the election.
With less than eight months until Australia must head to the polls, Opposition Leader Peter Dutton is campaigning against the government over energy, vowing to scrap its commitment to double the share of renewables in the grid by 2030, and claiming its target for a 43 per cent emissions cut is unachievable.
Opposition Leader Peter Dutton and Prime Minister Anthony Albanese are at odds over the country’s energy future.Credit: Rhett Wyman, Getty, Alex Ellinghausen
Instead, it is promising to build up to seven nuclear power generators nationwide to achieve Australia’s longer-term ambition of net zero emissions by 2050.
AGL, the nation’s largest power generator and a leading private investor in renewables, said on Monday the scale and speed of the government’s clean energy build-out would be “challenging” to achieve but that Australia must stick with it.
“These are absolutely ambitious targets,” AGL chief executive Damien Nicks told the Financial Review’s Climate and Energy Summit. “But having ambitious targets is no reason for us not to go after them.”
AGL chief Damien Nicks.Credit: Dion Georgopoulos
AGL remains eastern Australia’s biggest coal-fired electricity supplier, but the 180-year-old utility is working to replace its coal plants with cleaner sources. It is spending billions of dollars building 12 gigawatts of wind and solar, backed by batteries, hydropower and quick-response gas plants in time for the closure of its final coal generator – Loy Yang A – by 2035.
On Monday, Nicks said it was well on track to deliver on its targets, but developers making long-life investment decisions in the energy transition needed confidence in “policy certainty”.
“We need to make those decisions, not on the electoral cycles – we need to be making those decisions for 15 to 20 years out so that we can meet the needs of our customers,” he said.
The share of power generated from sun, wind and water is expanding each year in Australia – now making up roughly 40 per cent of the mix – as billions of dollars pour into household and grid-scale renewable energy and batteries, and the coal-fired generators bring forward closure dates.
But the transition is running behind the pace experts deem necessary to keep the 82 per cent renewable energy target within reach, as projects face rising costs, lengthy approval timelines, community pushback and a lack of new power lines to connect far-flung wind and solar regions to cities.
Energy Minister Chris Bowen voiced confidence on Monday that the target could be hit due to the impact of a new federally funded underwriting program, the Capacity Investment Scheme, which aims to turbocharge the private sector’s rollout of renewable energy and storage assets, including batteries and pumped hydro.
“I expected it to work well, and it’s working better than I thought it would,” he told the AFR summit, adding that the government planned to expand the scheme’s next auction to 10 gigawatts of new capacity.
Bowen said the opposition’s plan to add nuclear to the grid would “chill” investment in new renewables and leave no choice but to delay closures of ageing and failure-prone coal-fired generators, at least half of which are scheduled to shut on the eastern seaboard in the next decade
Citing the Coalition’s lack of a 2030 climate target, Bowen added: “They are not serious people, frankly, when it comes to emissions reduction”.
Opposition energy spokesman Ted O’Bren said Labor was on track to fall short on all its 2030 targets for emissions, renewables, electric vehicle uptake and power price cuts.
“Labor can’t be trusted to deliver,” he said.
“The Coalition’s position has always been that we will set our targets based on the status of the economy and emissions trajectory, along with our own climate and energy policies.”
Nuclear has the benefit of being an emissions-free source of continuous power, which does not fluctuate with wind and sun. But many industry leaders and energy officials have cautioned nuclear is a “comparatively expensive” power source that would take too long to deploy, rendering it an impractical solution to the grid’s most pressing needs.
Research from the CSIRO and the Australian Energy Market Operator this year concluded that the country’s first nuclear plant would cost up to $16 billion and would not likely be operational until at least 2040.
Westpac Institutional Bank’s head of energy, David Scrivener, said on Monday that interim climate targets served as important “anchor points”, providing certainty around the direction and speed of the energy transition.
Stephanie Bashir, of energy consultancy Nexa Advisory, said Australia’s future “must not be held hostage to the political cat fights of election campaigns”.
“We do not have the luxury of time to put our progress towards an inevitable transition on hold for the next six months.”