New discussion papers outline decarbonisation challenges and opportunities

The Australian Energy Council (AEC) released its Net Zero by 2050 policy in June 2020. Since that time net zero by 2050 has been adopted as policy in Australia and the focus has turned to interim targets to set the economy on a realistic pathway to meet the overall ambition.

An interim target should be aspirational yet achievable, and consistent with the overall goal of net zero by 2050. An economy-wide target is more flexible and efficient than purely sectoral targets. With these factors in mind, the AEC has proposed an interim economy-wide target of 55% reduction from 2005 levels by 2035.

2035 is midway to 2050 and provides an opportunity for early decarbonisation to be shared beyond electricity into stationary energy and transport, sectors where large decarbonisation opportunities exist now through electrification. Even at the current technologies and electricity grid emissions intensity, many of these opportunities already have lower lifetime costs and result in lower emissions than burning liquid or gaseous fuels. The progressive decarbonisation of the electricity sector will only further reduce emissions in these sectors. The prospect of indirect electrification via green hydrogen is also a potential route to decarbonisation, although this technology is less well-developed and expected after 2035.

Electrification will increase electricity demand and the implications for the generation mix and networks require consideration. Additionally, coal plant is closing. As these plants are concentrated in a few regions of Australia, the consequences for those regions and their communities requires careful consideration.

The AEC is now developing a series of discussion papers examining the challenges and opportunities with decarbonisation. Today we are releasing the first two papers - setting out the background to the challenges and opportunities [Introductory paper] and the other looking at decarbonisation opportunities in the transport sector [Decarbonising transport]. Further papers will be released over coming weeks and will consider:

• Electrification of buildings/industrial heat
• Zero emissions dispatchability
• Hydrogen - industry development and integration of hydrogen with electricity
• Regional transitions (where coal plants are closing)
• Implications for transmission investment
• Implications for distribution investment.