Australia could be the Saudi Arabia of clean energy

A large part of the change is political. The federal election in May not only put Labor in power, it meant gains for the Green party and a number of independent politicians who campaigned on environmental platforms. Prime Minister Anthony Albanese delivered on his election promises by introducing a climate change bill on July 27 with the goal of reducing emissions by 43% by 2030 compared to 2005 levels.

“Australia is open to business in renewable energy, transmission, storage, to create hundreds of thousands of jobs,” Minister for Climate Change and Energy Chris Bowen told Sky News Australia.

In the media, a handful of our richest people have been grabbing headlines. Mike Cannon-Brookes and mining tycoon Andrew Forrest are raising $30 billion in funding to build a 4,200-kilometre submarine cable to send solar power to Singapore that could start construction in 2024.

“Twiggy” Forrest, founder of the country’s third-largest iron ore exporter, Fortescue Metals, plans to make his entire fleet of trucks and trains in the Pilbara mining region carbon-free by 2040, according to regulatory filings. One of the billionaire’s biggest coups this year was luring Reserve Bank Guy Debelle, who he had set out to become Australia’s next central bank governor, to work for him.

“We don’t have all the time in the world, we have to do something now,” said Debelle, now chief financial officer of Forrest’s clean energy company Fortescue Future Industries, which also plans to start producing 15 million tons a year. year of green hydrogen by 2030.

Billionaires aren’t the only ones in the country going green. Oil company BP has linked up with green hydrogen firm InterContinental Energy and solar provider CWP Global to lead what could become one of the world’s biggest clean energy projects: a 26-gigawatt solar and wind farm in Western Australia. The project would pump 1.6 million tons of hydrogen, or 9 million tons of ammonia, a year.

Charging

Meanwhile, Japan received its first shipment this year of carbon-neutral Australian hydrogen made from lignite in the Suiso Frontier, a purpose-built hydrogen tanker by Kawasaki Heavy Industries.

“We can be the equivalent of Saudi Arabia in clean energy,” said Murray Shearer, chairman and professor of hydrogen and alternative energy at CQ University in Gladstone. “We have all the natural advantages, and we need to grab these things before they go elsewhere.”

Australians have more reason than most to worry about global warming and rising sea levels. While Londoners in the UK sweltered during an unusually hot July, Onslow in Western Australia saw a mercury rise to 50.7 degrees in January, the hottest temperature on record on the continent. Even in Sydney’s western suburbs, summer temperatures regularly melt asphalt. The “black summer” of 2019 and early 2020 had the worst forest fires in memory in the country.

And while the country’s dry, inhospitable interior may be good for mining and solar farms, it means nine out of 10 Australians live near the coast, mostly along the east coast, which was hit by deadly floods this year. .

The continent has “absolutely extraordinary potential that is only just starting to materialize on the renewable side,” Mark Carney, a former Bank of England governor and now head of Brookfield Asset Management’s Global Transition Fund, told a Melbourne conference via an email. video link on July 28. “Taking advantage of that will create more jobs and more opportunities.”

‘Extraordinary potential’

However, for Australia to harness its clean energy potential and create enough jobs to replace those lost due to the disappearance of dirty fuel, the nation needs to develop a much larger green ecosystem than it already has, one that includes research, new companies, skills and above all financing. A Deloitte index of “economic complexity,” which measures diversity in industries and supply chains, ranks Australia 37th, behind China, Russia and India.

One potential advantage is that Australia is also the source of many of the minerals used in green technology industries, such as electric vehicle batteries and energy storage. It supplies more lithium raw materials than any other country, accounting for about three-quarters of Tesla’s needs, and has a host of other key metals, including nickel, cobalt and manganese.

Developing a diverse battery industry that includes more than just mining would add more than $3 billion in value and an additional 16,000 jobs by 2030, Accenture said in a report last year. But efforts to harness that mineral wealth to develop higher-value, related industries have been slow. The first lithium refinery started production in Kwinana, Western Australia, in May and other sites are being built, a first step up the value chain.

‘We can be the equivalent of Saudi Arabia in clean energy. We have all the natural advantages, and we need to grab these things before they go elsewhere.’

Murray Shearer, CQ University

To move towards the goal of making lithium-ion cells and batteries, and potentially even revive car production, Australia could start by focusing on specialized areas such as commercial vehicles and energy storage for wind and solar farms, according to the Accenture study. Tesla built and installed the world’s first large-scale battery for energy storage in Hornsdale, South Australia, in 2017.

“Australia has the minerals, not just lithium, and also the knowledge and many of the skills to seize the opportunity of this new energy era,” Australian Tesla chairman Robyn Denholm said at a conference in Sydney last month.

Rising tension between the US and China could also help Australia, as Western companies seek alternative suppliers to counter China’s dominance in rechargeable batteries.

A pro-environment government can help by providing investment in education and seed capital to drive innovation, and by tightening regulations to encourage investment in technology and infrastructure, but government spending on green projects is only a small amount of what is needed. Arena, Australia’s renewable energy agency, has invested around $1.9 billion over the past decade in more than 600 projects, including 35 hydrogen ventures. By contrast, oil-rich Saudi Arabia pledged last year to spend more than $100 billion ($145 billion) over the next 10 years on renewable energy.

Charging

For Australia to turn its energy supertanker around, it will need massive investment, both at home and abroad. And here you have another advantage: the land. Australia and the US are among the few developed nations with large, relatively sparsely populated areas of land that are ideal for year-round solar power, where projects can be quickly connected to a power grid with a market ready to go. use.

Ironically, many of these investments are in traditional mining and fossil fuel regions because they already have much of the infrastructure and labor needed to operate renewable plants and connect them to the grid.

A key advantage Australia has could be the ability to turn some of its biggest environmental offenders into green havens. Queensland’s Gladstone, currently the world’s fourth-largest coal export terminal, is the site of an investment by Rio Tinto and Japan’s Sumitomo Metal Mining to create sustainable energy and green hydrogen that would help decarbonise the world’s carbon-intensive industries. city, like cement and aluminum.

“Strategically, it works very well to start the energy transition in these industrial hubs,” said CQU’s Shearer. “When you do an analysis of where the cheapest places are in Australia to make clean energy, particularly hydrogen, some of them are in Gladstone and the area around it.”

‘Increasing urgency’

One area where Australia’s change of heart is most visible and most needed is in research.

From a project at the University of New South Wales that uses old tires and coffee grounds to melt steel, to Sydney-based HB11 Energy, which recently received $22 million to develop Australia’s sovereign nuclear fusion program, founding new companies in new industries related to energy and climate change.

One success story is Brisbane-based Tritium DCFC, which has almost 7,000 fast chargers for electric vehicles installed in 41 countries, the fastest of which can add 349 kilometers of range in 10 minutes.

“There is a growing urgency in the industry to go green,” said Andrew Horvath, president of Star Scientific, which is working on ways to replace fossil fuels in power plants with green hydrogen, another example of an effort to take advantage of existing infrastructure. of the nation by using existing steam turbines. “Why would you throw them away? They are already connected to the network,” he said.

Still, there are those who warn against moving too quickly to get rid of fossil fuels, arguing that it could lead to high unemployment in some communities and hurt the economy.

“I think the finance industry for the most part hasn’t quite got around to the idea that financing coal probably isn’t sensible,” Debelle said. She argues that far from hurting the economy, Australia’s potential green resources give it a competitive advantage.

“We have a great ability to really make these opportunities very good,” Debelle said. “It’s good for the economy. You have employment opportunities. It’s great from an energy self-sufficiency point of view, but actually the commercials add up too.”

Meanwhile, traditional carbon- and fossil-fuel-intensive industries are making money thanks to the global energy crisis, fueled by Russia’s war in Ukraine. The price of coal for power plants shipped from Newcastle, Asia’s key port for fuel, hit a record high in June.

But while the Ukraine war is causing a temporary surge in demand (Europe’s largest economy, Germany, has already restarted some coal-fired power plants to reduce reliance on Russian gas), the crisis is also reinforcing the need for energy-importing nations reduce their dependence. in a small number of large exporters of fossil fuels.

Charging

Pressure from the community, unions and companies realizing that dirty fuel’s days are numbered has been building for nearly a decade, said Amanda Tattersall, a researcher involved with transition projects in Australia. Now the political and economic muscle has arrived to back it up.

“The choice is clear and that choice is about moving forward at pace and scale for Australia to become the clean energy superpower,” Deloitte’s Symons said. “There is no playbook that we can follow. We need to map this out ourselves.”