Governments must lead on energy transition

Australia needs governments, federal and state, to make the hard decisions on energy – that means taking the political unpopularity on the chin for the sake of the country. That’s the job.

Legislation is a piece of paper. It is not an energy transition, it is not emission reduction – it is an aspiration. Optimistically it is an accountability mechanism. Legislation is not leadership. Nor are words.

This month we have had a stark reminder that legislative words are not written in stone. The UK Prime Minister Rishi Sunak has sadly rolled back commitments to timetables for phasing out petrol cars and carbon-based home heating. There is said to be “backlash” from British car makers and energy suppliers suggesting the decision will create uncertainty and deter investment – and that is in an environment where transition has some momentum and urgency. In Australia we have no urgency, no certainty, and that means no investment.

While we are running out of time, we are not out of time yet. We need governments, federal and state, to make the hard decisions – that means taking the political unpopularity on the chin for the sake of the country. That’s the job.

What do we need?

The end of coal-fired power

We need to set in stone the shutdown of coal-fired power.

Secure and reliable electricity is fundamental to households and business alike. So insurance is sensible and responsible. However, we can continue to have a debate about keeping coal power stations open but the reality is they are ageing (some are well past their expiry date) and unreliable. Shutting them down on time is best option.

Origin Energy’s Eraring power station.

The sudden shut down at Hazelwood is a great example of why we need to pull the band aid off fast. We left it too late and we were not prepared. So what happened? Soaring electricity prices.

The next coal-fired power station closure is Eraring in NSW (August 2025). The question needs to be what it will take to close it on time. NSW has clear alternatives to extending Eraring.

Being smarter is not keeping the unreliable ageing coal open, its about acting with urgency and pulling all levers to build the replacement generation in time.

Transmission

We need to build the transmission to connect the renewable energy generation and batteries to the grid.

The 10,000km of transmission build that will be required to fully connect the new large-scale decentralised generation is the equivalent of 25 per cent of today’s entire grid.

Although key transmission projects have been identified, across the country we are a long way behind on development. The five regulated Primary Transmission Network Service Providers (PTNSPs) have yet to demonstrate they have sufficient capabilities, resources or scale to mobilise the resources necessary for the transmission build out.

Lack of engagement with communities in early-stage processes of these projects has evoked severe resistance which has become a practical and political dead weight to progress. As such, development of transmission has been identified as a potential blocker to new renewable generation.

The energy industry knows that without immediate action on transmission build, the renewable generation can’t be built, and that is going to deeply embed the cost-of-living crisis we are now living through. Recent research backs this up.

There is an answer to this staring us in the face, and it is not going to cost the taxpayer, and it may even save consumers money – potentially as much as $13.bn. Open up our market. Let the experienced transmission network players do what they have already proved they can do, have the supply chains to do, and the skills and people. And they are already here.

Regulated monopolies have proven to be an expensive bottleneck (look at the debate about the cost to customers as a result of protecting Qantas’ market share via locking out Qatar Airways), and they do not move fast enough.

We need to get Australia on the global stage to ensure we protect our industries, manufacturing, businesses and be in the line for the critical supplies needed to build this important infrastructure.

Certainty

We need to give developers and investors in large-scale renewable energy and battery projects certainty.

The scale of renewable power generation that will need to be built is unprecedented. The Australian Energy Market Operator indicates we will we will need an extra 28GW of wind and solar generation by 2030 and a further 97GW by 2050 to replace the retiring coal power stations. Government leadership can enable this process.

British Prime Minister Rishi Sunak. Picture: Getty Images

This is what the UK Prime Minister has just taken away – let’s seize the day and make Australia the “certain alternative”.

During the Covid-19 crisis, when we badly needed vaccines, we managed to speed up the bureaucratic processes without compromising on research and development. That is what we are calling for here.

Empowerment

We need to empower families and businesses to be part of the solution with Distributed Energy Resources.

Australians have demonstrated an appetite for household investment in rooftop solar in order to take control of their electricity bills. As a result, we are a global leader in rooftop solar and we can leverage our unique position to accelerate our clean energy transition.

Government programs and reforms should prioritise the installation of rooftop solar. This includes policies to address accessibility for Australians with shared rooftops, such as those in social housing and apartments, those that don’t own their rooftop because they rent, and those who have low incomes.

Governments have to recognise that the energy transition is the race for vaccines all over again. The issues facing our transition are exacerbated by a global race to decarbonisation. New programs in the US, EU and Asia are accelerating the clean energy transition by providing clear incentives (such as the Inflation Reduction Act in the US, and Green Deal Industrial Plan in the EU).

If governments don’t step up now and act with urgency, we will be out of the running. If governments don’t step up we will not meet legislated targets. If governments don’t step up now, Australians will miss out.

Energy expert Stephanie Bashir is CEO and principal at Nexa Advisory.