Transition Australia’s exports and domestic energy demand to high-tech, low-cost, low-emission energy sources through a coordinating national strategy.
- Economic benefits
- Liveable cities
- No regrets
Key messages
The global shift from fossil fuels to low-cost, low-emissions renewable energy is rapidly underway and a big opportunity for Australia, which relies on fossil fuels for domestic electricity production and exports. The associated jobs and assets could become stranded as the shift accelerates. To make the energy transition work for, rather than against Australia, there needs to be a clear approach to change and accelerated renewable energy development.
Australia has world-leading renewable resources, such as solar and wind, that can service both the economy and trading partners. It can remain a global energy supplier of choice by pivoting from fossil fuels to low-emissions supply chains.
Australia’s energy export industries must be redefined through national planning and coordination that identifies and nurtures a diversified portfolio of low-emission energy industries across energy commodities, services and value-added products.
The existing national energy policy and planning framework will need to be enhanced to increase investor confidence and ensure Australian homes and businesses benefit from affordable and reliable energy.
Rural and remote communities should have access to low-emission standalone power systems, which will reduce their energy costs and improve power reliability.
What are the impacts?
Transitioning Australia’s energy system to low-cost, low-emissions renewable energy will have significant environmental benefits, particularly by reducing greenhouse gas emissions in line with policy commitments. Lower-cost renewables, alongside required firming capacity, can also increase energy affordability.
Harnessing Australia’s renewable export potential through national planning and investment in new technologies and emerging industries will create economic opportunities such as jobs, particularly in regional areas.
Both the economic outcomes and reduced environmental harm support social benefits and protect quality of life for Australians. Micro-grids and other new technologies can provide better energy access and enhance the quality of services through greater reliability, making remote communities more resilient.
Collaboration, knowledge-sharing and consistent regulation and legislation will enhance the efficiency of infrastructure planning and governance. Coordinated planning will be critical to unlocking these opportunities.
How easy is it to implement?
Some costs will be borne by taxpayers in the short-term, such as the burden of national planning and investments in low-emissions technologies and emerging industries. However, the long-term benefits of low-cost renewables are expected to be significantly larger, both in terms of cost reductions and economic output.
National coordination across governments and jurisdictions and changes to regulations and legislation will be complex.
However, Australia is building world-leading capacity to harness this transformation and can implement this future with the right investments in emerging industries, skills, and systems.
How certain are the outcomes?
Community acceptance of investment in renewable energy is generally high. A number of significant work programs, such as the Integrated System Plan and National Hydrogen Strategy, have highlighted the clear impacts that harnessing this transition could have for Australia, and create confidence that the benefits could be achieved.
However, much of the required investment and collaboration must come from the private sector, which leaves some of the outcomes outside governments’ control.
| Economic |
National energy planning
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| Affordability |
Energy affordability
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| Quality |
Standalone power systems
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| Environmental |
Renewable energy generation share
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Read more about this recommendation in 5.3 Powering a cheaper, cleaner future in the 2021 Australian Infrastructure Plan.
Reform implementation pathway
This recommendation comprises of outcomes and activities, which form the reform's implementation pathway.
The implementation pathway is designed to guide change agents on the supporting activities necessary to achieve the overall reform.
For each outcome and activity, we propose change agents to act as:
- Proposed sponsor: facilitate, coordinate and champion the recommendation
- Proposed lead: deliver specific activities or lead related outcomes
- Support: share ownership, contributions or knowledge to enable the reform process.
Ensure Australia remains an energy export supplier of choice in decarbonised global supply chains by coordinating national development of low emission energy sources (0-5 years).
0-5 years
Enable collaboration opportunities, shared infrastructure and regulatory consistency across jurisdictions by coordinating a national approach to energy planning.
0-5 years
Support the development of clean energy export supply chains by identifying key precincts for new low-emission energy export hubs and developing enabling infrastructure plans.
0-5 years
Grow new export industries and jobs in clean energy commodities and value-added products such as aluminium, green steel, technology and services by developing coordinated clean energy industry strategies.
0-5 years
Increase investor certainty and enable emerging industries by developing clear, outcome-focused legislation and regulation for emerging low-emission energy technology.
0-5 years
Transition Australia to a high-tech, low-cost, low-emission energy system by implementing appropriate regulatory and legislative environments, identifying opportunities to transition assets, and continuing to fund new energy technology development and adoption.
0-5 years
Increase investor certainty by restating commitment to collaboration through the national governance frameworks that support the National Electricity Market.
0-5 years
Make the electricity market framework fit for purpose for a decentralised, renewable system by implementing a future market design that builds on the post-2025 work by the Energy Security Board and market bodies.
0-5 years
Maintain electricity market reliability by developing and implementing a trigger-based electricity market review mechanism that is undertaken at key policy trigger-points such as announcement of accelerated retirement of thermal electricity generators.
0-5 years
Get the most out of existing and shared gas infrastructure by enhancing Integrated System Plan modelling to co-optimise gas and electricity systems. This will include consideration of the potential for existing gas infrastructure to transition to renewable sources, such as hydrogen or biogas.
0-5 years
Ensure new sources of gas and hydrogen help provide reliable and affordable energy to Australian homes and businesses by reviewing the application of a nationally consistent policy on potential reservation or prioritisation of new gas sources and hydrogen for domestic consumption.
0-5 years
Give rural and remote communities access to clean, reliable and affordable energy by implementing an appropriate regulatory and legislative environment and funding that supports standalone power systems and micro-grids.
- State and territory governments should accelerate the amendment of jurisdictional regulation and legislation to enable the implementation of standalone power systems.
- ARENA should maintain funding for low-emissions standalone power systems and micro-grids.
0-5 years