Under a radical new plan outlined by the Australian Energy Market Operator (AEMO) greenhouse gas emissions from the electricity sector would be reduced at twice the rate proposed by Australia’s conservative Liberal-National government.
The “fast change” model puts the public operator on a collision course with policymakers after AEMO outlined a potential cut of 52 per cent to all electricity emissions by 2030, double the rate required to meet Australia’s Paris Agreement climate change commitments.
Fairfax Media reports the consultation paper comes as the government-created Energy Security Board, of which AEMO’s renewable energy-focused chief executive Audrey Zibelman is a member, is preparing to release modelling next month for the government’s National Energy Guarantee aimed at shoring up reliability while curbing carbon emissions.
AEMO is majority-owned by the federal and state governments and is tasked with ensuring energy security as the country transitions to the National Energy Guarantee (NEG), a policy priority of the government of Prime Minister Malcolm Turnbull
Labor state governments, in particular, hold reservations about the NEG, including whether it will extend the life of coal-fired power plants while freezing large-scale renewable energy at 2020-levels for a decade.
Fairfax Media reports the operator forecast the ambitious 52 per cent reduction target could be reached despite strong economic and population growth through a growing uptake in electric vehicles and rapid cost reductions in wind and grid storage.
The viability of an AEMO “fast change” option over what it described as the “business as usual” policy of the LNP government is likely to encourage state premiers to demand more ambition from Mr Turnbull and Environment Minister Josh Frydenberg.
The operator said it was proposing to apply an emissions reduction trajectory consistent with the government’s commitment to the United Nations sponsored Paris Agreement but the “fast change” scenario could occur through “accelerated investment” and eventually lead to an emissions reduction of as much as 90 per cent by 2050.
Any such move to double emissions reduction targets would put the energy operator squarely at odds with the government’s review of climate policy, which emphasised that emissions baselines should be increased when businesses require it.
The AEMO paper also proposes establishing seven new “renewable energy zones” including two in National Party heartlands of New England and Northern Queensland, where it is likely to meet fierce resistance from MPs who voted against giving any subsidies to renewable energy at their national conference last year.
The paper, quietly released the week before Christmas, said “large clusters” of renewable energy zones should be established to promote economies of scale in high-resource areas and capture geographic and technological diversity.
The operator argued investment in the zones was needed to maintain the guarantee because 70 per cent of coal generating plants would reach the end of their intended operating life by 2040.
Australian Greens Party climate change spokesman Adam Bandt said the AEMO report was effectively sidestepping the government’s policies.
“It’s clear that AEMO has so little regard for this government that it’s leaving it by the wayside, which is what anyone who cares about tackling climate change should do as well,” he said.
“The people running our energy system know what needs to be done and thank goodness they’ve decided to bypass the reckless Turnbull government.”
Fairfax Media reports Environment and Energy Minister Josh Frydenberg would not comment on the “fast change” proposal or the renewable energy zones but said AEMO was acting on the recommendations of the review by Australia’s Chief Scientist Dr Alan Finkel into the future of the national electricity market.
