Energy road map shows transition is in sight, the head of Andrew Forrest’s Squadron Energy says

Abandoning the energy transition would waste billions of dollars and risk significant opportunities for regional Australia, Andrew Forrest’s Squadron Energy chief says.

The energy transition is advancing and abandoning the so-called road map would waste billions of dollars and risk “huge” opportunities for regional Australia, the head of Andrew Forrest’s energy company says.

The comments illustrate broad support for the Australian Energy Market Operator’s road map, published on Tuesday, that showed new renewable energy was being created but the delivery was currently too slow to meet 2030 emissions reduction targets – and to adequately compensate for the complete exit of coal-fired generation from the grid by 2038.

Rob Wheals, chief executive of Squadron Energy – one of Australia’s largest renewable energy developers and owned by Andrew Forrest – said the report illustrated the stark challenge but that progress was being made.

“Renewable energy generation already contributes on average 40 per cent of our energy mix and at times we have renewables contributing a peak 72 per cent of our energy needs,” Mr Wheals said.

“Why would we suddenly stop when we are already half way into shifting our energy system on to least-cost renewables to meet our future needs?

“With mounting closures and increasing outages of ageing coal-fired power plants, now is the time to stay the course.

“Building out variable renewable energy generation, backed up by batteries and flexible gas, will deliver the lowest-cost new build energy option.”

While Squadron was the most forceful, AGL said the report aligned with its view and the findings would provide an important signal to the wider market.

“AGL has been consistent in its view that as coal plants reach their end of life they will need be replaced with other forms of generation and firming, and the AEMO’s 2024 Integrated System Plan (ISP) supports this view in reflecting that renewable energy now accounts for a significant portion of National Energy Market energy use and will continue to grow,” an AGL spokesman said.

The head of Squadron, one of Australia’s largest renewable energy developers and owned by Andrew Forrest, says the report illustrates the stark challenge but that progress was being made.

“The ISP serves to provide important signals for the market to make the investments necessary to enable the energy transition and is one of a number of key inputs to AGL modelling.”

While both Squadron and AGL endorsed the report, others declined to publicly comment on the ISP as political debate raged over the future of Australia’s electricity grid.

The federal government seized on the findings as evidence that its plan to place renewables at the heart of the electricity grid, generating 82 per cent of the national power by 2030, was the only viable solution But AEMO said such a plan required broad community support and there was evidence of growing opposition.

The federal Coalition has proposed seven nuclear power stations, but AEMO said nearly all of Australia’s coal-fired power stations will have been retired by the time the first nuclear facility was operational. Even then, electricity demand was likely to substantially outstrip the capacity of a series of nuclear power stations.

There are, however, significant concerns about whether the transition has broad community support, and senior executives privately worry that transmission lines, required to connect the large-scale wind and solar generators to the grid, and recent high electricity bills may be galvanising opposition.

The prospect of nuclear, which the Coalition said would reduce the need for new transmission, also loomed over the prospect of securing support for the 10,000km of infrastructure that AEMO said Australia would need by 2050.

The uncertainty around broad community support is seen as the biggest obstacle to states and territories moving to streamline planning laws, much to the frustration of developers.

Renewable energy developers insist Australia can accelerate the rollout of renewable energy projects but existing planning laws mean small pockets of resistance can delay approvals.

Delays are so long that in NSW – widely seen as the most difficult state in which to develop new renewable energy projects – a wind farm can take more than five years to secure approvals.