Australia has unmatched renewable energy resources but will meet its climate targets only by intervening to accelerate the retirement of coal-fired power plants, according to Michael Liebreich, founder of global advisory service, Bloomberg New Energy Finance.
Mr Liebreich said the Turnbull government should avoid setting renewable energy targets and instead focus on devising market-based methods to phase out coal.
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| Anita Ho-Baillie, senior research fellow at UNSW, with a record-breaking solar cell. Photo: UNSW |
The comments come as debate raged among conservative Coalition MPs about the government's plan to review its climate policies in 2017. Causing angst was the plan to examine an emissions intensity scheme for the electricity sector that could generate a carbon price - which prompted a rapid retreat by environment and energy minister Josh Frydenberg.
Mr Liebreich told a Sydney audience advances in renewable energy technologies were rapid, with solar photovoltaic prices falling by almost a quarter for each doubling of production. For wind, costs sank 19 per cent with each doubling of turbine output. (See chart below.)
Breakthroughs come regularly, with the University of NSW last week revealing it had achieved record efficiency rates for its perovskite solar cells, with prospects of more to come.
The cost of installed capacity for new solar and wind energy had dropped below $US30 per megawatt (or 3¢ per watt) in recent auctions in Chile, Morocco and elsewhere. In Australia, though, the price remains about double that.
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| Joggers along Shanghai's famous Bund: China's pollution is on the rise. Photo: Andy Wong |
Still, Australia's abundant renewable energy meant the country had
potentially the lowest cost for both wind and solar energy. (See chart
below.)
Both large-scale wind and solar projects were now cheaper than
fossil-fuel energy sources in much of the world, including Australia.However, their falling costs alone won't see them drop below the existing cost of operating coal plants without some price to reflect the damage of carbon dioxide and other greenhouse gases, Bloomberg said. (See chart below.)
Yet, on the government's own projects, emissions are going to increase – not fall – on current policies, although Bloomberg predicts some levelling off.
Any effort to go beyond the 2015 commitments - now set for a 26-28 per cent cut on 2005 levels by 2030 - would have to be much deeper if a 2-degree warming limit agreed at Paris is to be met, Bloomberg said. (See chart below.)
Mr Liebreich said his greatest concern about the election of Donald Trump to be the next US president was not that he would reverse America's long-term slide in carbon emissions.
Rather, the risk was he would stop the use of "US heft" - deployed by Barack Obama - to discourage the building of more coal-fired power plants in Asia.
On current projections, coal use in power stations is expected to keep rising for decades to come, led by India, China and Japan, exceeding any reductions in the rest of the world, Bloomberg predicts. (See chart below.)
Warming since the industrial revolution began is about 1 degree, scientists say.
According to Bloomberg, India's plans to boost domestic coal supplies should see the need for imports evaporate by about 2023. (See chart below.)
While Adani may yet line up local buyers of coal it could export from its planned Queensland mine and displace local Indian suppliers, that would not necessary be the most economic outcome for India.
"Lots of things that are not economically optimal still happen," Mr Leibreich said.
For Australia to provide funding to underwrite the rail line to Adani and other Galilee Basin mines, though, would also be a distortion from a climate change point of view, he said.
"Given what we know of the science…it seems a perverse use of public money."
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