BloombergNEF (BNEF) says the window for achieving net zero by 2050 is closing fast, but Australia can still make the deadline with a $2.4 trillion investment and urgent scale-up of clean technologies.
In its New Energy Outlook: Australia report, BloombergNEF says Australia must rapidly increase renewable energy capacity by 135% before 2030, to more than 126 gigawatts.
The report calls for all unabated coal and almost all unabated gas generation to exit the power system by 2035 and be replaced with a lower-cost mix of renewables paired with flexible technologies like batteries, pumped hydro, and gas.
To reach net zero by 2050, wind and solar installations need to reach a combined 290 gigawatts by mid-century, while storage — in the form of pumped hydro and batteries — must increase from around 3 gigawatts today to over 59 gigawatts.
Leonard Quong, head of BNEF in Australia, says rapidly moving to a clean power system based on wind, solar and storage will be essential to cost-effectively reduce carbon emissions in line with existing decarbonisation targets.
“But the heavy lifting must be done this decade,” he notes.
“Australia’s window to stay on a well-below-two-degree pathway is closing, fast.
“A low-carbon power sector will also serve as a bedrock for future emissions reduction efforts in other areas of the economy in the years to come.”
The New Energy Outlook: Australia report outlines two updated climate scenarios – the Net Zero Scenario (NZS) and a base-case Economic Transition Scenario (ETS).
The NZS requires a 12% higher investment of $2.4 trillion over 2024-50, compared to the ETS.
The NZS is consistent with a 67% chance of holding global warming to 1.75 degrees Celsius and shows there is no room for any further carbon emissions growth in any sector if Australia is to reach net zero by mid-century.
This requires the country’s emissions from power, transport, industry and buildings sectors to have already peaked, and now be rapidly declining.
Meanwhile, the ETS, which assumes no new policies are implemented, breaches the Paris Agreement with a global warming result of 2.6 degrees Celsius, but BNEF says it demonstrates how far the energy transition can go based on economical and commercially ready technologies.
The report notes that Australia’s current 2030 emissions reduction target is in line with BNEF’s NZS energy-related emissions reductions.
For Australia to remain aligned with the Paris Agreement goal, it needs to target at least 71% emissions reduction from energy related sectors by 2035 relative to its 2005 baseline for the next round of Nationally Determined Contributions (NDCs).
These NDCs are due for submission to the United Nations Framework Convention on Climate Change by November 2025.
BNEF Australia associate Tushna Antia says Australia’s abundance of world-leading wind and solar resources gives the country an advantage in decarbonisation, and combined represent a $213 billion investment opportunity by 2050.
“But getting there won’t be easy and we will need flexible demand from smart electric vehicle charging and hydrogen electrolysers, along with battery storage, flexible generators, and investment in the power network,” she says.
Emerging technologies such as hydrogen, biofuels and carbon capture systems will also be essential for Australia to reach net zero.
BNEF says the solutions needed to abate the remaining quarter of emissions are among the most challenging to scale. These include biofuels in shipping and aviation, hydrogen in industry and transport, and carbon capture and storage in industry and power.
To get to net zero by 2050, under the NZS, Australia’s hydrogen consumption needs to increase 14 times and carbon capture must reach 30 million tonnes annually.
Sahaj Sood, BNEF Australia senior associate, says while questions still remain about their reliability, acceptability, and scalability – if they are not able to be used, emissions reductions will have to come from somewhere else in the economy, and likely from more expensive solutions.
Write to Angela East at Mining.com.au
Images: BloombergNEF and Unsplash
