Investing in more fossil fuels and curbing the deployment of wind and solar farms could cut 5 percent from Australia’s electricity costs by 2050, the CSIRO says, but that strategy would require the nation to abandon all climate commitments and allow for increased air pollution.
The trade, modeled for the first time in the agency’s latest national electricity generation cost scorecard to be released on Wednesday, is set to fuel Australia’s decades-long climate battle.
According to the CSIRO, new coal-fired power plants and more gas use could generate electricity for $124 per megawatt hour by 2050, measured in today’s dollars. In contrast, electricity would cost $131 per megawatt-hour under the current plan for a zero-coupling grid powered mostly by renewable energy and supported by batteries, transmission lines and gas.
The price gap has been highlighted as conservative political parties clash over renewables and emissions targets with the Albanian government, which has set a legal target to reach net zero by 2050 and an ambitious target for electrified railways to reach 82 per cent of the national grid by 2030 and more than 90 per cent by 2050.
Experts including the Grattan Institute and analyst Rystad they have said renewable printing will decrease significantly to reach its 2030 target.
One Nation leader Pauline Hanson has declared global warming a “lie”, and her party label the notice climate action “the vehicle for creating a socialist Australia” and government action to exert totalitarian control over society.
One Nation MP Barnaby Joyce on Tuesday doubled down on his party’s strong opposition to the new measures, which he declared “an environmental disaster and a stain on our environment … and then you’ve got the means to distribute it, a cobweb of dirt”.
The federal coalition abandoned its pledge to reach zero in November, with Opposition Leader Angus Taylor pledging in May to keep coal plants running “as long and as hard as possible to keep electricity prices down”.
Opposition energy spokesman Dan Tehan said on Tuesday that the government must answer the question “Why aren’t we doing more to develop our coal and gas resources here, instead of selling them overseas?”
However, energy experts warned against any moves to trade Australia’s climate commitments and international status for a 5 per cent cost saving.
The Grattan Institute’s energy director Tony Wood said the CSIRO’s “GenCost” report was a useful estimate of energy development costs, but its long-range modeling 25 years into the future could not be entirely accurate.
Even if it was correct, a 5 percent cost increase from a grid with new coal and gas, or one dominated by renewables, represented good value, he said.
“Five percent is within design accuracy,” Wood said. “But if it was my money and I had to match spending an extra 5 percent to save the planet, I think that’s a good investment.”
The Albanian government has pointed out earlier versions of the GenCost report that found resourcing to net zero was the easiest way to expand the national grid to accommodate future industry and population growth.
However, the government will refer to CSIRO’s instructions in GenCost in advance of the release of another major energy report, the Integrated System Plan from the Australian Energy Market Operator.
“The (GenCost) results are designed to be accurate but, by design, they are significantly lower than the high-quality multi-model system set out in the Integrated System Plan,” CSIRO said.
Coal plants are typically closed by owners when they are 44 years old. More than two-thirds of existing coal plants are 39 years old and due to go off the grid by 2035. Investors are unlikely to fire up new coal plants, as banks and insurers have withdrawn loans for fossil fuels, and shareholders in publicly traded electric utilities have been pushing for further reductions in emissions.
Energy demand is expected to double by 2050, and Industry and Science Minister Tim Ayres has claimed that renewables will be needed to generate much extra electricity and attacked conservative parties opposed to clean energy.
“We know that new coal-fired power stations will struggle to find funding and no new projects are currently proposed – which is why GenCost also questions the assumed fossil fuel prices in its models, noting that the world will continue to embrace cheap, reliable renewables,” said an Ayres spokesperson.
Emissions from the electricity grid are equivalent to one-third of the nation’s greenhouse gas output. Renewables are considered a cheap way to reduce emissions in the economy.
“Solar, wind and batteries remain low-cost technologies with the potential to support Australia’s zero net goals,” the CSIRO said.
Independent analyst Climate Action Tracker has found government policies are inconsistent with the Paris Agreement’s goal of holding global warming to as close to 1.5 degrees as possible.
Increasing emissions from coal power would significantly increase Australia’s contribution to global warming, and it said that if all countries mirrored Australia’s actions, warming would exceed 2 degrees and potentially reach 3 degrees.
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Mike Foley is the climate and energy columnist for The Age and The Sydney Morning Herald.Connect through email address.
Nick Toscano is a business reporter for The Age and the Sydney Morning Herald.Connect through X or email address.
