‘Devilishly hard’: Shell Australia chair’s energy project warning
Shell Australia has warned the nation's unprecedented renewable energy rollout faces massive hurdles, with regulatory complexity threatening crucial climate goals.
Energy giant Shell declared it will be “devilishly hard” to deliver an unprecedented wave of renewable energy projects on time in Australia given regulatory constraints and construction hurdles, threatening the chance of hitting the nation’s 82 per cent by 2030 clean energy target.
Shell Australia chair Cecile Wake told The Australian’s Energy Nation forum that she applauded the ambition of setting targets, including both the renewable and 2035 emissions reduction goals, but said delivering a mass of projects on schedule was challenging.
“I think the track record of major infrastructure projects in Australia, whether they’re gas, renewables or storage, is that it’s devilishly hard to deliver them on time, given the regulatory complexity that we face,” Ms Wake told the conference.
“We need more energy and cleaner energy, but we also need projects that are successful, that are delivered on time and that continue to attract multiple waves of private capital. It doesn’t really matter what target we set, or indeed what domestic supply reservations we make, we really need to incentivise that.”
Shell, one of Australia’s largest foreign investors, has previously urged the federal government to remove duplication and inconsistency across state and national energy regimes to create a “single front door” across all energy projects in Australia.
The global operator is one of the dominant players in Australia’s energy sector, operating the QCLNG export plant in Queensland, the Prelude floating LNG project off northern Australia along with stakes in Western Australia’s North West Shelf and Gorgon LNG ventures and gas business Arrow.
As operator of one of Queensland’s three LNG export ventures, the energy producer developed a large swathe of coal seam gas fields in the state over a decade ago amid pushback from some local communities and environmental groups over its drilling campaigns.
Lessons over its experience in Queensland gas could equally be applied to the massive electricity transmission projects being developed in NSW, Victoria and South Australia.
“The lessons that the gas industry in Queensland learnt over a decade or so ago were painful but there is really broad community support for those projects now,” Ms Wake said.
“It begins with a genuine commitment to co existence, which is more than just we can kind of get by with each other there. It’s about working to find those opportunities where there are benefits that endure for the community as well as for the energy project.”
A Net Zero Australia study this week estimated Australia must increase the installed capacity of onshore wind and solar by around 7 times and batteries by more than 25 times while also building new gas-fired generation to support system reliability while doubling transmission capacity.
Climate Change and Energy Minister Chris Bowen has left the door open to increasing government spending to hit Labor’s 62-70 per cent 2035 emissions reduction target while conceding Labor’s 82 per cent renewables target would be a “very big factor” in whether Australia successfully cuts emissions by 43 per cent of 2005 levels by 2030.
Net Zero Australia said its modelling would see coal power retired early with minimal use of only black coal beyond 2035 based on a net zero scenario. Back up for renewables will be provided by batteries and gas with no growth in pumped hydro beyond the delayed Snowy 2.0 scheme.
Carbon capture and storage will also play a big role in reaching net zero by 2050, the authors said, with storage capacity needing to be boosted at least 15 times including increase carbon sequestration through reafforestation while reducing methane emissions from fossil fuel production and beef and sheep grazing.
Shell said in September it was evaluating a sale of its stake in Australia’s North West Shelf venture, potentially giving Woodside room to further consolidate control of the country’s longest-running liquefied natural gas export project.
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