The electrical industry’s role in a sustainable future
A new report has detailed ways for Australia to rebuild its economy after the COVID-19 pandemic while also progressing towards a renewable energy-based future. Sean Carroll writes.
The COVID-19 pandemic is an unprecedented disaster that has forced many people in Australia and the rest of the world to completely change the way they act and go about their day-to-day lives.
Many are being asked to work from home, take involuntary leave or let go from their jobs altogether and the world is entering a recession that it had no time to prepare for. As a result, governing bodies are creating stimuli, relief packages and other economic measures to keep money in people’s pockets and the economy ticking over.
Global professional services firm Ernest and Young (EY) released a report, commissioned by the World Wide Fund for Nature-Australia (WWF-Australia), which outlines opportunities for Australia to plan and build a more resilient future economy through the use of sustainable stimuli measures, dubbed the Australian renewable export COVID-19 recovery package.
“We think that given there’s a need for that kind of government stimulus, we should be looking for what additional benefits or co-benefits can be delivered,” WWF-Australia energy transition manager Nicky Ison says.
“Particularly around the third crisis that hasn’t gone away: the climate crisis. We should look at opportunities for a renewable recovery that provide good jobs and economic support right now while also putting us on a pathway to being a renewable export nation.”
The report details near and long-term benefits of investing in renewable stimuli including creating over 100,000 jobs by accelerating Australia’s wind and solar project pipeline and fast-tracking new transmission projects to revitalise the network among others.
The report states that every dollar of stimulus spent on clean projects generates nearly three-times as many jobs per dollar than investment in fossil fuels.
One of the long-term benefits is harnessing the opportunity to become a global leader in renewable exports including the manufacture of green steel, battery technology and hydrogen.
Three recommendations in the report that are of particular interest to the electrical industry are restarting local clean energy manufacturing, incentivising renewable electrical generation, transmission and storage and rethinking public transport and fleet vehicles. Let’s go through each in detail:
Restarting local clean energy manufacturing
Tindo Solar is Australia’s only solar panel manufacturer and is currently expanding its Adelaide factory after the pandemic has disrupted global supply chains and forced customers to consider locally-sourced options.
The company reported that it has increased its production since March 2020, largely attributing it to people looking inwards for solar manufacturing.
WWF’s Nicky says that Tindo Solar being the only Australian manufacturer is a cautionary tale: “In the 1980s, Australia led the world in solar research. Now, around a quarter of all solar panels installed around the world are based on technology that has come from the UNSW.
“Unfortunately, a lack of policy support meant that none of that technology was commercialised onshore. It went overseas to places like Germany and China in order to get the kind of support it needed, to scale up manufacturing.”
It wasn’t until the late 2000s that Australia came to the party and started growing a substantial solar industry. Nearly 20 years later.
But where to from here?
The report wants to stop history repeating itself. While we may have missed the innovation boat per se with solar, Australia is in prime position to get ahead on new and emerging technologies and resources.
“With emerging technologies like renewable hydrogen, heat pumps, electric buses, fleet vehicles and batteries, we need to make sure that we keep the supply chain on shore as much as possible,” Nicky explains.
“What can be done from a stimulus and legislative level is prioritise renewable and clean energy solutions when designing stimulus packages. That could include support for transmission lines, extending asset write-offs for these renewable options or scaling up successful programs or applying them to different jurisdictions like the South Australian Home Battery Scheme.”
The SA Home Battery Scheme gives all grid-connected South Australians access to state government rebates and low-interest loans, provided by the Clean Energy Finance Corporation, to help pay for a home battery system and new solar if required.
Available to all South Australians, it’s calculated on the kilowatt hour capacity of the battery purchased.
EY energy transition lead partner Matthew Rennie says that there are two challenges in Australia reaching its full potential as a renewable energy nation. The first is letting new and emerging technologies play a role in firming up and guaranteeing supply in case of a rainy day (ironic).
“The second is to encourage the development of a transmission system that will connect all of these new renewable energy facilities to the grid and ensure that congestion is minimised in getting power to households,” he says.
“Both of these speak to the need for a clear blueprint for the future system to be developed and communicated by the Energy Security Board, and endorsed by government. Once this is done, both the Australian Energy Market Operator (AEMO) and the Australian Energy Regulator (AER) can get on with the job of crafting the many changes to the law and rules required to create the markets needed to incentivise investment in the sector.”
He adds that renewable energy is already a viable choice from a cost perspective for base load power in the National Electricity Market (NEM).
However, the National COVID-19 Coordination Commission (NCCC), a federal advisory body that aims to anticipate and mitigate the economic and social impacts of the pandemic, recommended that the Australian government make sweeping changes for a gas-led recovery and build fossil fuel infrastructure that would operate for decades according to a leaked report from The Guardian in May 2020.
The ACTU released a policy paper in late July 2020 outlining its methods for economic recovery which included an increased investment in domestic infrastructure and manufacturing.
It also calls for a $1 billion fund to invest in manufacturing-tied renewable energy projects, new industrial uses of renewable energy and carbon-neutral manufacturing projects.
“The policy would address the high cost of energy and challenge how we move to more renewable sources that work for energy-intensive industries, particularly heavy manufacturing,” ACTU president Michelle O’Neil says.
The Australian Energy Market Operator (AEMO) recently released the AEMO 2020 Integrated System Plan which shows a clear pathway for a rapid transition to 90% renewable energy in the 2030s.
“The market operator has made clear that the renewable energy industry, in the world’s sunniest and windiest inhabited continent, can power Australian homes, businesses and heavy industry,” Climate Council senior researcher Tim Baxter says.
“Wind and solar backed by storage are now the cheapest form of new generation in Australia, which means lower prices for everyone.”
It’s cheaper, but it just needs a good kick start, something to get it off the ground and picked up by a larger market.
Another measure state and federal governments can introduce is incentives for the adoption of renewable electricity generation, transmission and storage.
The Australian renewable export COVID-19 recovery package outlines three short-term measures which would help incentivise the pickup of PV including solar grants programs, expanding the Clean Energy Finance Corporation (CEFC) funding program and increasing the awareness and uptake of electric heat pumps.
The report goes in-depth on expanding the CEFC funding which includes upping it to $400 million and releasing low-interest loans for state/local council governments and land-councils to develop solar farms, rooftop PV on assets such as schools, hospitals and other such community batteries.
An ancillary benefit to installing these new power sources is that it will create jobs in the short-term for electricians and installers of these systems and as the solar panels and battery systems need maintenance which results in further jobs, there will be long-term opportunities.
“EY’s analysis shows that there are three-times as many jobs in a renewable recovery than there are in a fossil fuel recovery,” Nicky says.
“The jobs aren’t limited to certain areas as well. Renewables can be deployed at multiple different scales all around the country whether urban or regional, so there’s the potential to lower bills and create jobs country-wide.”
One of the objectives to help incentivise renewable energy is the deployment of renewable energy zones (REZ), something which has already seen progress.
The NSW government recently announced that in stage one of its Net Zero Plan (taking place from 2020-2030), it will fast-track the delivery of the state’s first REZ’s. Located in NSW’s central-west, south-west and New England areas, it plans to unlock approximately 3GWs of renewable energy generation while supporting an expected $23 billion of private sector investment and 2,000 annual construction jobs.
“Households and businesses will be incentivised to make choices that will have positive, sustainable outcomes for their cost of living, for doing business and for the environment,” NSW Environment deputy secretary energy, climate change, sustainability and waste James Hay says.
“There will be options for manufacturers to modernise their plants and increase their productivity and farmers will have access to new markets and technologies.”
“We forecast that by 2024, EVs will reach long-term cost competitiveness with internal combustion engines, and from there, we will see an S-curve adoption and take up of EVs in Australia,” EY’s Matt says.
“By 2040, we expect 30-40% of cars on the road to be EVs. Over the next 20 years, we will see investment of around $15 billion in charging station infrastructure alone to service the demand for these new vehicles.”
The NSW Net Zero Plan aims to increase the number of public charging stations after finding similar results to EY in terms of EV take-up in the future.
“We’re also seeking to change building construction codes so that new buildings will be fitted with appropriate wiring and circuits to accommodate charging stations,” NSW Environment’s James explains.
“With improvements in infrastructure, we’ll see an expansion in the EV market and low-cost options.”
James adds that the planning expects to see similar price drops as the demand increases in technology evolves, similar to what happened with the solar generation market.
Transport is one of the greatest contributors to air pollution in urban areas, contributing around 25% of all global greenhouse gas emissions in urban according to the report. By decarbonising public transport and government fleet vehicles, it can lead the way for the private sector.
The EY report recommends financing higher rebates, tax incentives or subsidies for public transport organisations which would then lead to the mass electrification of buses, trams, trains and others.
Sydney Airport unveiled a fleet of electric buses in 2016 that shuttle between terminals and the long-term car park. The vehicles, dubbed the Blue Emu’s, can carry 70 passengers and luggage and reduced the airport’s carbon emissions by 160 tonnes each year.
On top of that, the buses are cheaper to run which means both the Sydney Airport and customers save money on their trips.
Another benefit to rethinking transport as outlined by the report is the idea of being a leader in innovation, not letting new technologies and products end up offshore. By investing in the EV market, Australia has the opportunity to innovate in relation to EV transport and with that, comes increased local manufacturing of key components.
The report mentions financial incentives for individuals purchasing EVs like having $0 stamp duty and receiving 20% off annual registration.
Where to from here?
“Cost is no longer a valid reason for rejecting a renewable future,” Matt expresses.
“New renewable energy is safe, reliable and cost-effective. As a nation, our attention needs to turn to the creation of markets and the enablement of technologies to provide power at other times of the day, whether hydro, batteries, hydrogen or by incentivising the transmission system to embrace the new functionality it requires to assist.”
While the NCCC has pushed for a gas-lead economic recovery, this report has laid out other options that can be far more beneficial, now it’s a matter of working towards change and looking at the huge role the electrical industry can play in rebuilding the Australian economy during and after the COVID-19 pandemic.
The full Australian renewable export COVID-19 recovery package report by EY and WWF, as well as a range of surrounding resources can be found on the WWF website.