I have been an active commercial investor in the renewable energy sector for many years, including most recently when I was the CEO of the Clean Energy Finance Corporation. Particularly over the past five years, I have been following the rapid decline in costs of wind and solar generation and the improvement in the economics and bankability of such projects. We are at a stage now when these renewable energy technologies no longer require any subsidies to be built. Their generating costs are less than new coal-fired power stations that can still pollute the atmosphere with impunity. As energy storage technologies also get cheaper, we will be able to dispatch low cost renewable energy at any time of the day and we will be able to phase out the aging coal-fired power plants.
Whilst coal will still be part of the energy mix in some parts of the world for some time to come, the reality is that coal is being progressively phased out in favour of new technologies in all advanced economies. Furthermore, Australia’s coal-fired power stations are aging beyond their economic lives and will need to be replaced. A responsible government cannot ignore this inflection point and needs to implement policies to help the economy respond and adapt to a low carbon future. We need a ‘pull through’ of new technologies to build enough energy capacity ahead of closing down the coal-fired power stations.
The transition of our electricity sector to renewable energy, supported by a range of energy storage systems, is vital. This must happen all around the world if we are to have any hope of limiting the warming of our planet to less than 2 degrees. The sustainability of a strong economy requires a healthy environment.
Here in Australia, this transition presents enormous economic opportunities. We have an abundance of diverse solar and wind resources and plenty of space across a large geographic footprint. With such natural assets, we can match demand with generation across different times of the day and optimise storage costs . We also have proximity to Asia, where we can export our renewable energy technologies and energy, including in the form of hydrogen and bio fuels. In addition, the next phase of growth beckons as the conversion of renewable energy to chemicals becomes economic.
Of course, we need to manage this transition very carefully so that people can reskill and take jobs in renewable energy and other new industry sectors that will emerge in a clean energy economy. We also need to protect and promote jobs in current industries that will otherwise be under threat from climate change, such as the tourist industry, our farmers and the people and businesses all the way down our Murray Darling river systems.
With vision and the right policy settings, I see a clean energy future here in Australia where we will have an abundance of very cheap renewable energy, supported by storage that can be reliably dispatched at any time of the day to drive all forms of existing and new industries. As a renewable energy superpower, we will have an enormous competitive advantage, a sustainable future and economic prosperity that will be the envy of the world.