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Australia's great big energy challenge

The biggest weakness of the draft energy white paper released this morning by the federal government is not immediately obvious – it’s found on page 269 of the 291-page report. It reveals that the data used by the Department of Resources and Energy for its energy modelling is already out of date.

In a world that is preparing for a dramatic shift in energy sources, a transformation to renewables, smart grids and electric cars – scenarios not invented by green-spinning NGOs, but by the International Energy Agency and the world’s leading industrial groups – Australia’s energy bodies cling grimly to the belief that not much will change, that fossil fuel and its attendees (carbon capture and storage) will continue to dominate.

The white paper acknowledges the existence of the IEA and other international reports, but relies on modeling provided by the likes of Treasury, the Australian Energy Market Operator and its own Bureau of Resource and Energy Economics, which predicts that Australia will have between 20.5 per cent and 22.2 per cent of renewables by the year 2030, barely more than its 20 per cent target in 2020.

How does it get this so wrong? By relying on modeling that predicts technologies such as solar PV will fall to a cost of around $220/MWh by 2035. Little wonder, then, that it thinks that solar will account for just 1.3 per cent of generation by 2030. The IEA, however, notes that the cost of solar PV has already fallen to between $160-$230/MWh, and will fall to $50-$100 by 2035, when it expects solar to be producing one fifth of the world’s energy. China thinks solar PV will be as cheap as coal by 2021 and its growth will boom. Australia’s white paper predicts small-scale solar PV will cease to grow after 2030.

To read more about Australia's great big energy challenge, read Climate Spectator's full story.

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