Page 12 - AsiaElec Week 05 2021

AsiaElec RENEWABLES AsiaElec

Australia needs more

ambitious green targets

P AUSTRALIA needs an ambitious long-term Australia is at a pivotal juncture today, and
Renewable Energy Target (RET) policy to investment decisions in the next few years will
unlock future investments, said Wood Macken- play a key role in shaping the role of dispatchable
zie in a note. generation, which will be the need of the hour as
The consultancy said that investment in grid coal retirement snowballs.
flexibility, as the current grid is now at capacity, Shrestha said: “Coal retirements will be chal-
and a co-ordinated policy framework from the lenging due to its important role in providing
federal government would be most effective in low-cost baseload power. Over 40%, or around
enabling renewable’s share of generating capacity 10 GW, of [the] existing coal fleet in the National
to reach 41% by 2030. Electricity Market (NEM) is expected to retire
The RET seeks 20% of power generation to over the next two decades. But realistically we
come from large-scale renewables from 2020 up think significant retirement of coal capacity will
until 2030, and is designed to ensure that at least only start from the early 2030s.”
33,000 GWh of Australia’s electricity comes from In the NEM power generation mix, coal
renewable sources by 2020. This annual target accounted for 55% and gas accounted for 12%
will remain until the scheme ends in 2030. in 2020. By the end of the decade, Wood Mac-
The share of renewables in the country’s kenzie projects coal power to comprise 47% of
National Electricity Market (NEM) power gen- the generation mix, while gas makes up 10%. In
eration mix is expected to double to 41% by 2030, contrast, AEMO expects gas to play a much sub-
from its current share of 21%, a figure which has dued role with just a 1% share of the 2030 power
surpassed the RET. generation mix.
Wood Mackenzie senior analyst Rishab Shrestha said: “There are risks that AEMO’s
Shrestha said: “Australia does not have a federal recently released integrated system plan which
long-term national power mix target like many targets 1% gas by 2030 would remove critical bal-
other countries. The RET scheme, alongside ancing capacity from the grid system and make
government funding, has led to the renewables renewables integration more challenging.”
boom over the last few years. Hardware cost While renewables (onshore wind and util-
declines have continued to be a precursor for ity scale solar) are already competitive against
growth. But the grid has been pushed to its limit, coal and gas, the competitiveness will widen as
making future renewable cash flows difficult to renewables come at a discount of close to 50%
ascertain and stifling growth. by 2030. However, grid and profitability issues
“There is definitely room to achieve more limit renewables development. Gas provides grid
renewables penetration with a more ambitious flexibility but is increasingly being threatened by
target for the RET scheme, but the potential other storage technologies.
needs to be unlocked through grid flexibility Shrestha explained: “While storage is effec-
investments. A co-ordinated federal push would tive for managing intermittency on the scale of a
be effective.” few hours, it is still far from being able to provide
At the same time, Australia could provide the multi-day or even multi-month backup that
$40bn of power generation investment oppor- gas units provide. In the event of a large plant
tunities this decade. Close to two thirds of capex or transmission line outage, a system relying
is expected to flow into new-build renewables by heavily on renewables and storage looks fragile.
2030, with equal amounts going into wind and More storage is needed, but it will not solve all
solar. The remaining $14bn will be invested in the problems which are causing a slow-down in
fossil fuels, with gas accounting for over 90% of wind and solar investment in Australia.”™
projects.

P12 www. NEWSBASE .com Week 05 03•February•2021