Australia’s energy system: Need for ‘gas-fired’ recovery questioned

Rebecca Gredley
(Australian Associated Press)

 

Gas will not have a bigger role in Australia’s energy system going forward, according to modelling by a major think-tank.

The Grattan Institute report looks at multiple scenarios for the future of Australia’s electricity system, based on the role of coal.

It found moving to 70 per cent renewable energy and closing two-thirds of coal-fired power plants would not increase the price of power but would dramatically reduce emissions.

Energy supply would still be reliable if there was 90 per cent renewable energy with no coal, the think-tank found.

But Grattan says aiming for 100 per cent renewable energy over the next two decades would involve major technological change and still require backup power sources.

The report raises questions over the Morrison government’s planned ‘gas-fired’ economic recovery from coronavirus, saying a bigger role is not needed for the fossil fuel

“Gas is likely to play the critical backup role, though not an expanded role,” the report says.

“Australia will make a gas-supported transition to a net-zero emissions electricity system – but not a ‘gas-led recovery’ from the COVID recession.”

A spokesman for Energy Minister Angus Taylor says balance will be crucial in the system going forward.

“The government is focused on getting the fundamentals of market design right to encourage investment in the right mix of generation to ensure electricity is available when and where it is needed, at affordable prices,” he said.

The Grattan report comes as Mr Taylor denies his office pressured the Australian Energy Market Operator into being more supportive of gas.

The ABC’s Four Corners program says Mr Taylor tried to pressure AEMO’s former chief Audrey Zibelman into changing its Integrated System Plan.

A spokesman for Mr Taylor denied the claim, saying the federal government, as a member of AEMO, was invited to provide feedback on the ISP.

“We reject the premise there was undue pressure being exerted on AEMO,” he said.

“The Commonwealth government sought to understand and raised the clear discrepancy between the ISP gas assumption and the significant reductions in gas prices over the last 18 months and the forward gas price.

“The AEMO ISP modelled a future gas price that was around double the forward price being set by the market.

The spokesman said the minister met with and spoke regularly to Ms Zibelman and they enjoyed a positive and constructive working relationship.

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