The following is a summary of a conversation hosted by the Academy of Technological Sciences and Engineering (ATSE), at the UUSC in Sydney on 28 February 2024, focussed on whether renewables are “up to the challenge” of our energy transition.
“We can achieve close to 100% renewables with the technologies of today, that is not the issue. The opportunity lies in doing it better with new technologies and with the appropriate policy and regulatory settings.”
This was the key message from Dr Alex Wonhas FTSE, a Director of NSW EnergyCo, as he set the scene for an event hosted by the Australian Academy of Technological Sciences and Engineering (ATSE) to understand whether renewables are up to the challenge of our energy transition.
From where he sits, we have already progressed about halfway there to the Australian Government’s target of 82% renewables by 2030. However, at current deployment rates, especially of storage and wind, we are currently not on track to reach the target. There are now some strong government policies in place like the expanded Capacity Investment Scheme (CIS) and Long-Term Energy Service Agreements (LTESA). However, there is room for improvement around market design, regulation, and planning processes. For example, the process of building the replacement capacity before the retirement of our ageing coal-fired generators that are less flexible and becoming increasingly less reliable must get better.
Dr Wonhas added, “The tough question is, how do we firm up the last 10-20% of renewables? It will be difficult, and we are probably better off keeping all options open to make the best choices in the future.”
Dr Martin Poole, Head of Development at Ark Energy with a long history of developing solar and wind projects in Australia and consulting to Australian and UK energy businesses, is also concerned with the current momentum. From his view on the ground, there are significant hurdles despite investor interest.
“There is virtually unlimited capital to invest in our system. The money is available,” Dr Poole said.
Luckily, despite the relatively recent policy uncertainty, Australia is still seen to be low risk economically.
However, this may change if our communities are not well-engaged, and social license has emerged as one of the key factors to the success of the energy transition. Dr Poole has also experienced this first hand.
“The level of misinformation I am finding on the ground is extraordinary. One of the most important parts of my job is to try to establish a positive dialogue with communities so we can deliver shared benefit to everyone,” he said.
These benefits could be financial – NSW has committed to providing landowners with $200,000 for each kilometre of transmission network on their land – but they can be broader. Based on his conversations with communities, Dr Poole suggests that the government needs to involve people more actively in workforce development given we need at least another 20,000 skilled workers.
“Although the operational labour costs are likely to be lower in renewable energy developments, there is a massive shortage of grid, power system and electrical engineers. We need to be proactive in recruiting our energy transition workforce at a very early stage,” Dr Poole said.
The issue of workforce is not just one of skills development. It also relates to where those workers need to be. There is a great opportunity to increase employment in many regional centres. There is a well-worn path to bringing workers in and out of a region, but it needs to be done carefully without disrupting communities.
And so, assuming we can overcome these practical hurdles, some questions remain: What technological advancements do we still need? And can we deliver them in time?
Professor Renate Egan FTSE, Executive Director of the Australian Centre for Advanced Photovoltaics (ACAP), is optimistic.
“There is no doubt that we are building the plane as we are flying it, but we are faced with practical engineering challenges that we have the capacity to solve. The real issue is whether we have the resources to solve it in time,” she said.
We have already seen the solar industry doubling every 2-3 years and Prof. Egan expects this trend to continue with the discovery and development of new solar materials. She is on the front line of this development.
“The excellent work that I am seeing coming out of ACAP gives me such hope that we can achieve the ambitious goal of 30% efficient solar cells, costing 30 cents per watt by 2030.”
This 30/30/30 goal is also fully supported by the Australian Renewable Energy Agency (ARENA).
We need this ultra-low cost solar to afford the renewable energy overbuild that will maintain the cost of electricity at $80-100/MWh, drive out the last coal- and gas-fired generators, and power the big hydrogen electrolysers we are hoping will position Australia as a renewable energy exporter.
It could also help reduce the need for storage, which remains a critical piece in the puzzle.
Dr Wonhas is particularly focused on the development of long duration storage. “Solar, wind and 2-4 hour batteries can achieve 80-90% renewables very cost effectively. For the last 10-20% we need long-duration firming,” he said.
There are number of different technologies that could do this, including pumped hydro (like Snowy 2.0), open cycle gas turbines, compressed air systems, small modular nuclear reactors (SMRs), hydrogen and novel battery chemistries including flow batteries. The final four still need significant work to make them technologically or commercially viable, e.g. there are no fully commercially viable SMRs available yet.
The technology development we need in the energy sector requires significant support. There are plenty of ‘valleys of death’ to overcome but, again, there are also plenty of investors on the other side.
In 2019, the International Energy Agency (IEA) reported Australia to be 25th of 27 key country economies when comparing energy research funding. This was supported by further analysis undertaken for the Australian Energy Transition Research Plan under the Australian Council of Learned Academies.
This found Australia’s RD&D spend, as a portion of national GDP, to be 1.68% in 2021 compared to the world average of 2.71%.
If we are to achieve 100% renewables reliably, at a low cost and with strong social license, we need better technology. And, if that technology is to be available by 2030, we need to invest in it today starting with R&D in sectors where Australia has proven expertise.