Most Australians support the transition to a sustainable renewable energy future. Understandably, we want it to be as smooth as possible, with the lowest possible impact on the cost of energy, our lifestyles, and the economy.
Ideally, the transition would happen at a somewhat accelerated pace, while creating more jobs and a stronger economy, and delivering cheaper, more reliable energy with negligible environmental impact.
Within our borders, the picture of our progress toward those goals is often clouded by those with vested interests, those with primarily political agendas, and those whose ideology is so strong that they refuse to consider anything that might challenge those beliefs.
Fortunately, there’s a global body that regularly provides an impartial, external assessment.
Do you know about the International Energy Agency?
The International Energy Agency (IEA) is a Paris-based autonomous intergovernmental organisation, established in 1974, that provides policy recommendations, analysis, and data on the entire global energy sector.
The 31 member countries and 11 association countries of the IEA represent 75% of global energy demand. Australia became a member of the IEA in 1979 when it signed the Agreement on an International Energy Program (IEP Treaty).
When it was established, the IEA’s primary purpose was to help coordinate a collective response to major disruptions in the supply of oil.
Of course, the world has changed significantly since 1974, therefore the mission of the IEA has also evolved and expanded. It now takes an all-fuels, all-technology approach, recommending policies that enhance the reliability, affordability, and sustainability of energy.
It examines the full spectrum of issues including renewables, oil, gas and coal supply and demand, energy efficiency, clean energy technologies, electricity systems and markets, access to energy, demand-side management, and much more.
The Australia 2023 Energy Policy Review
THE IEA produces individual member country Energy Policy Reviews at five-yearly intervals.
A team of seven experts from six IEA-member countries visited Australia between 27 June to 4 July 2022, gathering data through in-person visits to 82 organisations.
A couple of months ago, the IEA released the findings from that exercise, the Australia 2023 Energy Policy Review. While this was largely positive, it also flagged the reality that there is still a lot of work that needs to be done.
In the five years since the IEA’s 2018 review, Australia has experienced a further spike in rooftop solar installation, the closure of a significant number of coal-fired power stations, as well as a domestic natural gas supply crisis.
At the same time, policymakers have set increasingly ambitious targets to switch from fossil fuels to renewable sources of energy and industrial materials.
“Since the last review, Australia has continued to achieve remarkable growth in solar PV and now aims for clean electricity sources to account for over 80% of its power mix by 2030,” IEA Executive Director Dr Fatih Birol noted in his foreword to the report.
The things we need to be conscious of
The report commends the Federal Government for raising its climate ambitions, doubling the target for emissions reductions by 2030 and setting the goal of reaching net zero emissions by 2050.
The IEA has assessed that “hitting the target would mean Australia could decrease its energy consumption while GDP continues to increase”.
However, there are several key challenges that the report makes clear.
Perhaps most urgently, it suggests that Australia’s power system needs to quickly enhance its flexibility through interconnections, storage, and a diverse renewables portfolio.
The report warns that:
– “One of Australia’s security challenges is its exposure to frequent and extreme weather events. The energy sector – from production and generation to transport and distribution – will need to be more resilient to better cope with ever more disruptive storms, flooding, wildfires, and heat waves.”
– “Power sector decarbonisation efforts need to be stepped up considerably, as Australia aims to increase the share of low-carbon power generation by 2030 – with 82% to come from renewable energy, up from 27% today. This will require an accelerated implementation of renewable energy zones, faster permitting of grid-related projects, and additional coal retirements.”
– “Considerable uncertainty remains on the pace of clean energy investment at the right time and in the right place.”
– “The net zero commitment requires a faster trajectory and increased efforts in energy efficiency and renewable energy.”
The more positive commentary should be welcomed
While remaining conscious of the challenges, we shouldn’t gloss over the fact that the report had a lot of good things to say.
“Australia is an important player in global energy markets that is helping to meet today’s needs while advancing the transition to clean energy,” Dr Birol noted.
“I welcome Australia’s efforts to drive progress on low-emissions hydrogen and supplies of critical minerals – and its leadership on working with partners, including through the IEA, to strengthen the diversity and resilience of clean energy supply chains,” he added.
As the report outlines, Australia also has the potential to play a key role in providing critical minerals and new technologies for clean energy transitions globally. It produces cobalt, rare-earth elements, and lithium, of which it is the single largest producer.
In 2022, Australia’s Hydrogen Energy Supply Chain (HESC) project produced and transported liquified hydrogen to Japan, the world’s first such shipment.
Australia has a broad range of demonstration projects for low-emission hydrogen and carbon capture and storage development, which are also critical for the decarbonisation of industrial sectors where emissions are hardest to reduce.
Everyone knows what to focus on
Because the IEA five-yearly review comes from that outsider’s perspective, rather than being influenced one way or another by those involved in the energy sector here in Australia, it should help bring more of the key players onto the same page.
The report notes that “The Covid-19 pandemic, supply chain disruptions, and Russia’s invasion of Ukraine created a new set of energy security challenges for all IEA members, including Australia”.
As a result, it says that, based on lessons learned from recent energy crises, investment in clean energy infrastructure, grids, energy system flexibility, and fuel availability should be key priorities for Australia’s orderly transition.
We expect that the 2028 review will find that we’ve made significant progress in those areas.