What polluters are doing to help
Our biggest carbon emitters are powering ahead to reduce reliance on fossil fuels to generate electricity
Avoiding power price increases with a smooth transition from fossil fuels to renewable energy is the central goal of the nation’s electricity producers and biggest emitters. Energy production accounts for about a third of Australia’s emissions, with the top seven electricity generators responsible for 128.9 million tonnes of greenhouse gases in 2019-20.
The country’s biggest private power generators, AGL, EnergyAustralia and Origin, are investing heavily in renewables and accelerating the retirement of ageing coal-fired power stations where possible in order to reach net-zero emissions by 2050.
However, recalibrating their plans to ensure that global temperatures do not rise more than 1.5C above pre-industrial levels – an adjustment from the initial target of no more than 2C – has presented a significant challenge.
Recent falls in emissions from the energy sector have mostly been due to an increase in renewable power generation, according to a report by research and advisory nonprofit organisation ClimateWorks Australia.
“But they can and must set a faster transition pace,” ClimateWorks said.
While well-known high emitters are committed to speeding up, they say this acceleration must not cause extra blackouts or skyrocketing power bills.
AGL last year conceded that for it to meet a “1.5-degree scenario” it would require the earlier closure of its two Loy Yang stations, which together are the biggest brown coal-fired power generators in Australia.
As Australia’s largest single source of emissions, AGL recognises it “must challenge ourselves to see what more can be done” to improve upon its net-zero emissions commitment, according to chief operating officer Markus Brokhof. “A key step in our emissions reduction will be the closure of the Liddell Power Station, which is due to begin next year and will result in a 23 per cent reduction in emissions by 2024,” he said.
But Mr Brokhof said it wasn’t as simple as shutting down coal-fired power stations.
“It is all too easy to simplify the challenges facing Australia’s energy industry and demand the closure of coal generation – but this ignores the essential role thermal assets play in delivering reliable and affordable energy when renewables aren’t available. This will change but we aren’t there yet,” he said.
Energy Australia is the country’s second-largest emitter, and managing director Mark Collette said it supported “an orderly, respectful and responsible transition to cleaner energy in a way that ensures no customer is left behind”.
The company has committed to bring forward the closure of the nation’s thirdlargest brown coal power station, Yallourn in Victoria, from 2032 to 2028.
That would reduce EnergyAustralia’s direct emissions by 60 per cent, which ClimateWorks has said will make the company “more aligned with Australia’s required decarbonisation trajectory”.
Origin Energy chief executive Frank Calabria said the decarbonisation of the electricity sector was playing out “more quickly” than expected even only a few years ago. “When I think about net zero by 2050, I feel very confident,” he said.
“The most economic new-build form of
generation today is renewables.”
Mr Calabria said the transition was about making sure coal left the market in an “orderly way” to ensure there was always secure and reliable power available with “no spike in prices”.
Origin, the fourth-largest emitter in Australia, is in the process of upgrading its carbon-reduction targets to align with a warming limit of 1.5C instead of closer to 2C. “We would need to be reducing emissions more than we are (to achieve 1.5C),” Mr Calabria said.
The company’s Eraring black coal-fired power plant in NSW is the biggest in Australia, and is due to retire by 2032 – although Origin has not ruled out accelerating this timetable.
With a target of achieving 1500MW of renewable power by 2025, Alinta Energy is one of several companies vying to compete with Australia’s three major electricity providers.
Alinta Energy chief executive Jeff Dimery said he was “very confident” the company would get to net zero by 2050 “or earlier”.
“We’re investing massive amounts in technologies like pumped hydro, solar, wind and batteries … (combined) with the retirement of our older generation over time,” he said. “By far the cheapest new generation to build is renewable, so it’s unlikely that we’ll see many new fossil fuel power stations built from now on.”
Mr Dimery said the sector needed governments to help ensure a smooth transition to net zero to avoid “dramatic price spikes” or “collapses”.
Resource companies have also outlined pathways to net zero, including investing in decarbonising the manufacture of energyintensive products in their value chains, such as steel and aluminium.
Rio Tinto has committed to a 45 per cent reduction in absolute emissions on 2010 levels by 2050, which the company said was consistent with the 1.5C maximum global temperature rise pathway.
The company is building a $98 million new solar plant and lithium-ion battery storage system in the Pilbara, and is working with Caterpillar and Komatsu to fast-track the development of zeroemission haul trucks and other mining haulage equipment.
Rio Tinto has also partnered to research the use of hydrogen in alumina refining.
In September, mining giant BHP released its Climate Transition Plan, outlining how the company will decarbonise to reach net zero by 2050.