COVID-19 and renewable energy: Australia’s golden opportunity

By Madeline Taylor, Sydney Law School, The University of Sydney

Australian CO2 emissions from electricity generation declined by 8% in the National Energy Market this year.¹ This didn’t result from policy change or the COVID-19 lockdown itself, but from our changed daily habits. The other significant factor in our emissions drop is the increased uptake in renewable energy.

While this emissions drop is welcome news, a much larger and urgent risk looms. Australia is now officially in the first recession in 29 years. Historically, restarting economies after recessions causes emissions to surge. For example, emissions grew rapidly in the rebound from the Global Financial Crisis in 2010 increasing by 5.8%, compared to the previous long-term average of 2.0%. This cancelled out any previous emission reductions experienced in 2008.²

Economic recessions often also come hand in hand with the relaxation and wind-back of environmental regulations to fast-track large fossil fuel projects in an effort to easily kick start economies. This is evident in the recent approval of the 25,0000ha coking coal mine on 6,000ha of koala habitat, 41,000ha of potential agricultural land and 11 wetland zones in Queensland, and the likely imminent approval of the Narrabri coal seam gas project.^3,4 Environmental crimes also occur during economic crises when media and political attention is turned elsewhere. Rio Tinto’s recent destruction of two ancient Aboriginal rock shelter site of the Puutu Kunti Kurrama and Pinikura peoples to make way for iron ore mining has appalled the nation.⁵  This demonstrates worrying signs of an economy focused on increasing economic activity at the expense of our environment and emissions targets.

Despite the gains in renewable energy market penetration, coal remains the dominant energy source in our electricity mix representing 56% of total generation.⁶ A recession may favour easy access to existing fossil fuel energy sources while pulling investments in new renewable energy projects. The COVID-19 pandemic has led to a collapse of funding by more than 50% for new wind and solar project commitments in Australia and a drop of up to 20% in global energy investment (A$601 billion) compared with 2019, according the International Energy Agency.⁷

2019 saw the highest levels of carbon emissions ever on our planet. Australia must make reductions to its emissions consistently year on year at a rapid rate in order to reach the zero-emissions by 2050 target, set by all Australian states and territories. Yet, Australia has not had a consistent federal energy or emissions reduction policy for over thirty years. Indeed, such lack of policy direction was once again confirmed by the federal government which will not follow the example of states and territories in creating a federal zero emissions by 2050 target.⁸ 

We must create, implement and enforce clear and consistent renewable energy policy to ensure our emissions do not surge in our eventual economic rebound. Such a policy could centre on the resources that we have in abundance – solar energy.

The Australian continent receives annual radiation of 58 petajoules or 1600kWh per square metre per year, representing 10,000 times the national energy consumption.⁹ However, overall, the provision of onshore commercial large-scale commercial solar power within Australia is relatively small, at 7022 MW.¹⁰ Large-scale solar energy is not yet broadly deployed as an energy source for large industrial loads in Australia. This is largely due to a lack of battery storage and a lack of consistent policy and regulation encouraging its commercial deployment.

In the wake of calls for a federal energy policy, the Energy Technology Investment Roadmap Discussion Paper was recently released. However, the Roadmap doesn’t represent a policy stance, rather, it surveys an enormously broad framework of 140 differing low emission technologies to bring investment and ‘improve productivity and support a resilient economy’.¹¹ Such investment will take on an uncontrolled market-led basis by ‘incentivising voluntary emissions reductions on a broad scale’ without introducing any taxes or pricing on carbon.¹² There is no indication that large-scale commercial renewable energy projects will be prioritised.

The omission of coal from the Roadmap represents a long-awaited moment for many Australians. However, in its place, gas is touted as playing an important role in ‘balancing renewable energy, ramping up and down to match supply and demand’.¹³ Such a statement is true to the extent that current storage infrastructure is not able to balance intermittent renewable energy generation. Rather than pinning hopes on a ‘gas led’ recovery that could create a graveyard of stranded gas infrastructure within a matter of years, a ‘battery led’ recovery is what the Australian energy sector desperately needs.

Speeding up the creation of battery infrastructure via green funding and deployment, backed up by regulatory and policy certainty, will provide stability and reliability for renewable energy. The call to develop battery technology and facilities is largely being taken up by the solar industry. But as storage technology is an expensive business that waxes and wanes with economic peaks and troughs, a government-backed green fund and regulatory requirement to build large-scale batteries in conjunction with large-scale solar energy farms (over 5 MW) would provide much-needed certainty and resilience to our energy sector.

However, time is not on our side. We cannot leave our energy policy future and the fate of renewable energy uptake to the ‘invisible hand’ of the market any longer. The UN and climate scientists alike have warned we have just ten years to stop irreversible damage from climate change.¹⁴ In order for Australia to play our part, we must fast-track consistent federal energy policy and deploy a green stimulus package. This could include creating renewable energy zones, earmarked and strategically reserved for renewable energy projects and connected via integrated transmission lines within the National Energy Market. The funding and deployment of large-scale batteries to increase efficiency, productivity and stability would also provide much-needed firming capacity to renewable energy.

COVID-19 represents a once in a generation pivotal opportunity to reset our energy system and finally create a sustainable renewable energy policy. Such a policy is in the public interest and will ensure we continue to reduce our emissions to safeguard our planet, currently experiencing the sixth mass extinction event. Renewable energy must also go beyond political cycles and contestation. It is time for Australia to move on from a struggle over large-scale renewable energy to harnessing its golden opportunity as a sustainable, secure and lucrative export opportunity both domestically and when exported internationally. With the right policy and green funding settings, we can finally live up to our ambitions as a renewable energy superpower.

Madeline Taylor specialises in Energy and Natural Resources Law and specifically on the intersection between unconventional gas regulation, energy policy, and landholder rights. In particular, her research advances a novel examination of transitioning energy regulation from a comparative and socio-legal perspective, including the strategic governance of energy and the fragmentation of ownership rights between the state, corporations and landholders.

Header image: via Shutterstock, ID: 1724647588.