Picture 2035, a decade hence: 31 million Australians are taking pride in the progress made to tackle climate change. Our homes and offices have become hyper-efficient and cozy, with many generating and storing the energy they need. Sleek electric vehicles occupy our garages, charging wirelessly before humming us to our destinations in near silence.
Outside the cities, regions thrive thanks to abundant renewable resources, from sunshine and wind to fertile soils, fueling and feeding populations near and far. Nature is on the rebound, with native forests no longer logged at a loss, their carbon sinks intact. Ships queue up outside ports, waiting to be loaded with lucrative metals instead of the raw rocks that currently depart our shores. Our resource export revenues from critical minerals, including rare earths, now rival the returns from fossil fuel shipments.
Australia’s Path to Economic Diversification
Australia’s economic diversification didn’t just happen. The nation identified hubs where coal-fired power plants were edging—sometimes fitfully—to the end of their operational lives, and fossil fuel exporting sites that had their own use-by dates. Coordinated policies at all levels of government helped workers retool and companies pivot, catching the shifting tides of technology and commerce towards a clean energy and green manufacturing future.
Of course, the transformation wasn’t solely for economic reasons. Communities and companies heeded the ill-tidings of climate change. “Business as usual” didn’t work when “climate as usual” was relegated to our history books. We are in the process of writing some of that history right now.
Setting Ambitious Climate Targets
This week, Prime Minister Anthony Albanese revealed Australia’s 2035 emissions target of 62-70 percent, after receiving advice from the Climate Change Authority (CCA). The range recommended is achievable, in the national interest, aligned with science, and among the most ambitious globally, particularly on a per-capita basis.
The targets are important for setting a course. Whether we achieve them or not will depend on the policies the government implements and coordinates with states and territories. Local and international investors will act on those cues.
Whether Australia realizes the promise and potential outlined depends heavily on determination to stay the course—and insist our politicians do likewise. Certainly, the technologies required to achieve our target are already here or on the way.
Technological Advancements and Energy Transition
In energy, global research and development is overwhelmingly directed at devices such as electric vehicles or solar panels, rather than finding new ways to extract coal or methane gas. The International Energy Agency noted that almost 90 percent of upstream oil and gas investment since 1990 has been to offset production declines as fields deplete. However, the agency also forecasts global renewable energy rollouts over the six years to 2030 to be 2.6 times higher than in the previous six years. Almost 80 percent of that growth will be solar panels in plants and on rooftops, with capacity more than tripling.
Famously, the roofs of more than a third of Australian homes are adorned with solar panels. When the industry started taking off about 15 years ago, the average system was about two kilowatts in size. This year, average units will be nudging 10kW.
The Role of Energy Storage
The exciting new development is storage. The government’s small-scale battery program has rocketed at a rate that would have surprised even the most bullish forecasters. Last year’s total addition of 75,000 household batteries could be exceeded this quarter alone.
Industry analysts Green Energy Markets (GEM) say historical averages of 10-14kW-hours per unit are heading north of 20kWh in this demand spike.
GEM wasn’t expecting the present rate of battery installations until 2035. The daily addition of almost 15 megawatt-hours far exceeds the 11.8MWh pace they’d penciled in for a decade’s time. The government will eventually turn off the subsidy tap, although there is not yet a public cap. History tells us costs have fallen steadily with each doubling of solar panel—and now battery—production, and we can expect more to come.
Implications for Australia’s Energy Future
These remarkable advances have helped inform key elements of our emissions advice. Saul Griffith, the Wollongong-based advocate behind the “electrify everything” mantra, is right. Whether we achieve the 2030 target of cutting 2005-level emissions by 43 percent—and our new 2035 target—will likely be determined by how fast we decarbonize electricity generation.
Over the coming decade and beyond, electricity won’t need to serve only existing customers. Rather, we will be adding load as we replace gas appliances with more efficient electric equivalents, as industry upgrades to minimize gas usage, and as EVs become the vehicle of choice for the majority of new car buyers. Industry, transport, and agriculture will all have to contribute more to emissions reductions.
The leap in solar and batteries will help spread that extra load during periods of peak demand. The storage will also curb exports of excessive solar power to the grid from households. In turn, the “spills” from solar and wind farms when they generate more than the grid needs will be less common—helping to improve their finances.
The distribution of supply would help take some of the strain off the rollout requirements for new large-scale renewables and extra transmission lines to link them. Those questioning the ambition of the 2035 targets should consider that Australia has energized just 1000 kilometers or so of new transmission since 2022. We will require five times that length under the Australian Energy Market Operator’s “most-likely” Step Change scenario by 2035—and that’s just for the main east Australian grid, the National Electricity Market (NEM).
The same projection requires a quadrupling of wind capacity to 56GW, a tripling of solar farm capacity to 26GW, and a doubling of small-scale solar to 48GW.
The sixfold expansion of utility storage to 22GW in the NEM over the next decade is the largest proportional increase in absolute terms but may be the easiest to achieve given price trends, relative ease of approval, and quick construction times for batteries.
Economic and Environmental Benefits
Importantly, this translates to savings for every Australian home. The Australian Energy Market Commission forecasts average household energy costs will fall by about 20 percent, or $1000 a year, over the next decade under a coordinated renewables rollout. Fully electric households deploying solar and storage could slash costs by as much as 70 percent.
Energy efficiency should not be left out of any calculus. Australians haven’t excelled in this space—despite the prominence of energy debates and stellar returns on investment. The Energy Efficiency Council has recently argued that a fifth of our emissions reductions to 2035 could be achieved by cutting energy wastage.
If energy supplies will increasingly be weather-dependent, a warming world will have its impact on demand too. Unseasonably warm summers in parts of the northern hemisphere have recently sent power demand soaring.
Addressing Climate Risks
Some sections of the media have sought to downplay the National Climate Risk Assessment and National Adaptation Plan as “exaggerated” or even “doomsday”. That approach is unwise, and it would be a pity if it deterred public debate over the following realities.
Rising humidity across northern Australia will make life even harder, particularly for remote First Nations communities. Risks to ecosystems are already rated as “very high”—as seen from South Australia’s algal blooms. By 2050, at about 2 degrees of warming, as much as 70 percent of our native plant species will struggle to survive.
Water security, already deemed at “high” risk, will be further undermined by decreased water flow, reduced groundwater recharge, and water-quality issues. Insurance costs will soar yet higher as weather becomes wilder, straining the ability for many to secure loans for homes or businesses.
That’s before we get to the governance risks identified in the assessment report’s final chapter. Maintaining social cohesion and coping with “resource shortfall” are just two of the challenges that will test the talents of those hired or elected to serve the public.
When it comes to climate action, we must be bold, be hopeful, and be demanding. That way, the future can be more glowing and less grim. I know how I want history to record this moment—and what we achieve next.
