Welcome to our news round-up. Previous issues including 30 August here.

19 September 2024

WA SUPERPOWERING-UP TO UNLOCK PILBARA’S RENEWABLE FUTURE

In a landmark for accelerating electrification and decarbonisation of the Pilbara, Australia’s resources engine room, the WA Government has announced the development of common user electricity infrastructure corridors as part of the Pilbara Energy Transition Plan. 

CEF applauds this fantastic step-up of ambition from WA, which recognises the incredible value-added opportunity of common user infrastructure (CUI). This includes enabling significant deployment of renewable energy, boosting energy security and reliability, unlocking the state’s $3bn allocation from Rewiring the Nation, and underpinning collaboration with Traditional Owners to ensure benefit-sharing, while reducing environmental impacts by minimising infrastructure duplication.

The PET Plan has identified four priority corridors for the accelerated and coordinated development of high-voltage CUI electricity transmission in the region. This will connect existing energy-intensive industries in the Pilbara, currently powered by fossil fuels, to strategic renewable energy resources hubs and land mass that can open up future-facing industries, driving investment and enabling us to embed decarbonisation in our exports by processing, refining and manufacturing onshore using firmed renewables. 

We were delighted to see that the Plan reflects CEF’s recommendations to the WA government in our report, ‘Superpowering-Up: Accelerating the Electrification and Decarbonisation of the Pilbara’, in which we called for the priority development of a comprehensive single CUI grid infrastructure plan in the Pilbara. As Matt Pollard and Tim Buckley wrote, powering the Pilbara with renewables is the linchpin of Australia’s future leadership in green metals refining, critical minerals processing, and cleantech manufacturing under the Net Zero Transformation and Economic Security & Resilience Streams of a Future Made in Australia. 

The WA Government and the PET Roundtable members mirror CEF’s view on the momentous opportunities of accelerated electrification in the Pilbara – the key to Australia’s future prosperity as a zero-emissions trade and investment power as the world rapidly decarbonises – and are acting on this vision.

>>> CEF’s extended analysis on WA PET Plan.
>>> CEF’s Pilbara Electrification & Decarbonisation Report and our submission to the Federal Government on Australia’s Green Metals Opportunity.

NSW CONSUMER ENERGY PLAN TO ELECTRIFY A MILLION HOMES

We applaud the NSW Consumer Energy Strategy announced by Energy Minister Penny Sharpe this week, which targets access to rooftop solar and a battery system for 1 million households and small businesses by 2035 (1.5m by 2050), and 3,400MW of VPP capacity by 2035 (10,000MW by 2050).

Funding (some previously flagged), includes $30m for apartment residents to install solar, $175m for social housing energy upgrades, $200m for EV charging stations and a $240m Home Energy Saver program with financial support for eligible households. We again encourage a materially faster speed of implementation, as this will permanently reduce the cost of living and climate crisis pressures we collectively face.

CEF has long argued that low-cost distributed CER is a critical component of the energy transition, alongside utility-scale infrastructure and grid modernisation and orchestration, with advantages including rapid deployment. Greater focus is now needed on rolling out distributed firmed renewables in the commercial and industrial (C&I) sector.

With coal power station closures looming we need to see accelerated investment across all these fronts. It is past time for NSW to definitively decouple from expensive, polluting methane gas and end-of-life coal generation. Not a single cent more should go on propping up the latter after the government pledged to hand Origin $450m in public subsidies to keep giant coal wheezer Eraring chugging until 2027.

The solution to the cost of living, energy and climate crises is a rapid, orderly transition to firmed renewables, driving permanent reductions in the power bills smashing the people of NSW. In the last week of August, Australia saw massive drops in wholesale power prices as the share of coal in electricity supply fell to <50% for the first time, as we wrote in our op ed in the AFR. More firmed renewables => cheaper power.

This week’s announcement is a major step in the right direction, and complements our call last week as part of the Renew Australia for All alliance for nationwide investment in rooftop solar, batteries and electrification (see item below).

We were pleased to see the confirmation last week that there will be no further public money incinerated in the furnaces of big coal in NSW post FY2027, as Origin makes material progress on the Eraring big battery, as reported by The Guardian’s Peter Hannam.

RELATED NEWS: Hills of Gold to rain clean energy riches on people of Nundle and beyond

This month, we finally saw state approval for the Engie-owned Hills of Gold wind farm near Nundle, 50 km southeast of Tamworth in NSW, with up to 64 turbines with a generating capacity of around 390MW, a 100MW BESS, a 330 kilovolt transmission line and associated infrastructure. 

Excellent reporting as always in Renew Economy, by Sophie Vorrath.

The Independent Planning Commission got it right: “The Commission finds that on balance, the likely benefits of the 62 turbine Project warrant the conclusion that an appropriately conditioned approval is in the public interest. The Commission is of the view that this [wind farm] would facilitate social and economic benefits for the wider community and for the State of NSW.”

Great to see progress – but it simply should not have taken this long.

The question remains, for Planning Minister Paul Scully and for Minister Sharpe, why in the midst of a cost of living, energy security and climate crisis did it take 4 years to approve this critical infrastructure? Planning is the bottleneck, and it needs resolution yesterday.

As we reported in our last newsletter, the energy market operator says in its 10 year outlook that it sees no energy supply reliability gap out to 2030 in NSW provided all clean energy and storage infrastructure proposals proceed on time and are delivered in full. The onus is on the NSW government to accelerate this process.

Tim Buckley: "We cannot afford the chronic assessment and approvals delays that have compromised the state’s energy transition, with lack of firmed renewables replacement capacity then tactically leveraged to justify the extension of coal power in the state at the public’s expense."

RENEWABLES SURGE AS LNP DOUBLES DOWN ON NUCLEAR SWIFTY

In our latest AFR op ed, we reflect on the threshold week in August where coal generation slumped to <50% in the NEM for the first time, as renewables' share rose to a record high 48.7% – bringing near record low wholesale prices, averaging $57/MWh versus $91 in August 2023. 

As PM Albanese, Energy Minister Bowen and the states get on with the transition – SA averaged a staggering 89% renewables this past week and targets 100% by 2027 – this week marks three months since Peter Dutton and co launched their nuclear con. They're yet to release detail or costings – reportedly because they “don’t want to overload Australians with too much information”! 

The Coalition's fact-free one-page policy memo proposed to construct 7 nuclear reactors nationwide. Contrary to their frequent claims that everyone else in the world is embracing nuclear, we note that Wood Mackenzie’s assessment of the US$1.4 trillion of investor plans in the North American grid to 2033 sees no material new investment from nuclear post 2024.

Our estimate is that the public cost of deploying the climate denialists’ “plan” would be a minimum of $100bn. The Smart Energy Council estimates up to $600bn in capital costs and a $1000pa impost on energy bills. Nuclear would inevitably be taxpayer-funded because there is zero investor interest without massive government subsidies, risk transfer and guarantees. How ironic: the champions of free markets proposing to nationalise a socialist-style rollout of nuclear power reminiscent of the Soviet Union. Only 50 years too late.

While this alone makes nuclear unviable here – along with its delivery sometime in the 2040s – the clincher is energy prices. The 2024 CSIRO/AEMO GenCost report prices large-scale nuclear energy at $155-$252/MWh, double the cost of fully-firmed renewables at $90-$100, even after factoring in every conceivable grid transmission, curtailment and battery firming cost.

As noted above, now we need to see a further dramatic acceleration in distributed and utility-scale firmed renewables especially as coal power clunkers like Eraring power-down in the near term, very similar to investment trends in both China and North America. Government energy investment should be directed solely to the public interest – low-cost, reliable clean energy for all. 

It’s time Dutton and the LNP sought out some credible energy policy advice. One could almost imagine their nuclear scam is less about viable policy and more about cynical political opportunism – the tragedy being that it is at the expense of the Australian people and the climate.

>>>Our full AFR op ed.

CEF AT ASIA SUMMIT – PARTNERSHIPS KEY, ESPECIALLY WITH CHINA  

Tim Buckley spoke at the AFR/Asia Society Australia Summit in early September, alongside Foreign Minister Penny Wong, Ambassador to the US Kevin Rudd and other leaders in Asian affairs, geopolitics and decarbonisation. 

Minister Wong eloquently advocated that regional nations embrace a united front to manage relations with the US and China, and that we elevate our involvement in ASEAN as part of a collective effort to defuse tensions and avert conflict between the two superpowers. She highlighted the importance of longstanding relationships, including between Australia and Indonesia, the third largest democracy in the world.

CEF agrees the rise of a multipolar world with the ongoing growth of India and ASEAN is key to peaceful solutions and improved global trade.

We advocate for an Asian CBAM price signal to catalyse onshore value-adding of our critical minerals and strategic metals, powered by large-scale firmed renewables, so we export 'embodied decarbonisation' to our regional partners.

China is our #1 trade destination, accounting for 30% of Australian exports. We need to enhance collaboration with cleantech world leaders, and it is China that is increasingly globally dominant across the sector.

The iron ore slump heightens the imperative to act at speed to value-add onshore and to pivot to green iron – our #1 future export opportunity – accelerating decarbonisation in the Asian steel sector including in China.

As Tim commented at the Summit:

"Australia should embrace the decarbonisation opportunity that would come from a more open stance towards Chinese investment. It’s critical Australia actually double down and enhance [relations] and partner with China because if not, they will go elsewhere. At the moment, I don’t think that message is coming through loud and clear. We don’t know what the rules are, or China doesn’t know what the rules are, for when they do invest here.

The biggest opportunity for Australia in decarbonisation would be to convert the iron ore export industry to green iron."

>>>Read the AFR reporting on the Summit, including Tim’s commentary.

AUSTRALIA-CHINA BUSINESS COUNCIL TALKS COLLABORATION FOR NET ZERO

Tim Buckley and CEF China energy analyst Xuyang Dong participated in an Australia-China Business Council event in Canberra last week, with ACBC National President David Olsson, Foreign Minister Penny Wong, Trade Minister Don Farrell, Opposition Leader Peter Dutton, Senator Simon Birmingham & PRC Chargé d’Affaires, Li Fanjie.

Xuyang (pictured below) joined a panel on accelerating collaboration for a net zero future with Smart Energy Council CEO John Grimes, Head of Energy Transition of ANZ, Tsen Wong, and Executive Director of Pollination, William Acworth. 

She highlighted the need for clear policy frameworks to attract Chinese decarbonisation investment into Australia, including elucidation of Foreign Investment Review Board rules, emphasising the benefits of JVs between private Chinese and Australian investors.

For Chinese investors, partnering with local Australian firms offers a level of familiarity with the local regulatory environment and market conditions. For Australian companies, there are enormous opportunities to collaborate on  value-adding our world leading critical mineral and strategic metals, cleantech supply chain manufacturing and energy infrastructure development, benefitting from China’s globally dominant cleantech leadership, capital firepower and expertise in areas such as automation. 

>>>Watch this space for our forthcoming China report, which maps the extraordinary outflow of Chinese cleantech investment capital into nations on almost every continent around the globe, and across the full gamut of cleantech sectors (solar, wind, New energy vehicles, batteries, BESS, hydro and green hydrogen) – while Chinese investment into Australia in these sectors remains exceptionally week.

We highlight Australia’s as-yet largely untapped opportunity to attract this capital by collaborating with private Chinese cleantech leaders to value-add onshore, accelerate our domestic decarbonisation, and reap the economic dividends.

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Renew Australia for All launches

The Renew Australia for All (RAFA) initiative – a united voice from civil society, community and faith groups, local government, unions, investors and industry calling for a fairer, better and more secure future for all Australians – launched on 11 September with a keynote panel at the Better Futures Forum in Canberra and a Parliament House press conference (pictured below). Meet and greet visits at Parliament House saw reps from 41 member groups, including CEF and our affiliate the Climate Capital Forum, brief 43 MPs, senators and advisers. 

The alliance calls for a $5bn investment in renewable energy systems for electrification of low and middle income households, so they can benefit from the changes we are already seeing in our energy market, enabling an average $1,390pa in annual savings as firmed renewables cut energy bills.

>>> See the TV news stories on Channel 9 and Channel 7 and read more at Renew Economy.

CCF members also attended the Better Futures Forum (BFF), an important opportunity to hear from the wide range of community, social advocacy and industry groups advocating for equitable outcomes from our changing energy system not just in Australia, but in our region and globally. 

Great to hear from Kristy McBain, Minister for Regional Development, Local Government and Territories who reinforced the central role that regions are playing in our changing energy system, and Josh Wilson, Assistant Minister for Climate Change and Energy who emphasised how the Future Made in Australia Act will change Australia’s role in the global economy.

The BFF also featured the launch of a new report from the Smart Energy Council and Clean Energy Council on the benefits to Australia and the region from hosting COP31 in 2026.

A joint letter from BFF supporters urges the Federal government to upgrade the ambition of its national climate target by February 2025. 

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OUR MEDIA |

View our recent media here, including Tim’s regular fortnightly commentary on the Spark Club podcast.

OUR WORK |

See more of our latest work, including presentations on global decarbonisation and capital shifts.

PREVIOUS NEWS UPDATES |

Our previous newsletters covering major energy news can be accessed here. 

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AM for Tim, Matt, Xuyang and Amanda (see more on our team here).

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This newsletter is not intended to provide, and should not be relied on for, tax, legal, investment or accounting advice, nor is it an offer or solicitation of an offer to buy or sell, a recommendation, endorsement, or sponsorship of any security, company, or fund. CEF is not responsible for any investment decision made by you. Unless attributed to others, any opinions expressed are our current opinions only. Certain information presented may have been provided by third parties. CEF believes that such third- party information is reliable, and has checked public records to verify it wherever possible, but does not guarantee its accuracy, timeliness or completeness; and it is subject to change without notice.