What will Australia’s energy future look like?

It’s up to us where Australian energy heads, but we need to understand the options. Maxine Sherrin

If things keep going as they are currently Australia’s energy future is pretty clear. By 2030 we will have seen continued energy price rises and we will still be reliant largely on fossil fuels for our electricity generation. Meanwhile the market for our energy exports will have collapsed because many of our trading partners will have switched to their own, often lower emissions, energy sources.

If that doesn’t sound too appealing, here’s another scenario. By 2030 households and industry will enjoy more affordable energy. We will have embraced a diverse mix of new, often cleaner energy technologies. Our electricity system will have become an efficient and highly decentralised machine, and we will export more low emissions fuels, a classification that now even includes former “villains” such as coal.

These two scenarios could be two examples in a whole spectrum of possible energy futures. The challenge for Australia is to choose the future we want and work out the best way to get there. To that end, CSIRO aims to support Australia’s transition to a prosperous, secure and lower emissions energy future. This will mean getting two key things right: unlocking value from Australia’s unmatched energy resources in a way that is responsible and environmentally sustainable, as well as building a cost competitive, lower emissions domestic energy sector.

Last year, Australia earned $60 billion from the export of coal and gas, but recently the Climate Commission concluded that 80% of global fossil fuel resources need to stay in the ground if we are to have a hope of limiting global temperature increase to a relatively safe 2C. Can Australia have its energy cake and eat it too?

We believe it is possible.

Renewable energy will, no doubt, continue to experience spectacular growth for the foreseeable future. But despite this rapid rise, the International Energy Agency (IEA) forecasts 75% of global energy will still be met by fossil fuels like coal and gas by 2035. Our own forecasts for Australia are not too dissimilar.

Fossil fuels and low emissions are not as incompatible as one might think. For instance, carbon capture and storage technologies could significantly reduce greenhouse gas emissions by removing carbon dioxide that would normally be released into the atmosphere during the burning of coal and gas, and storing it underground. We believe that it is not only in Australia’s commercial interest but also our moral obligation to ensure these technologies are cost competitive, readily available and pose a low risk to our environment.

If we are to get our domestic energy mix right we need to take a cold, hard look at how we are operating our electricity system. Over the past five years electricity prices have risen more than 60%. This is due to a combination of factors, but upgrades of electricity networks are the main driver for the increases. At times, we as consumers chose to use this expensive infrastructure in an inefficient way. Network infrastructure worth $11 billion across the National Electricity Market is only used for an estimated 100 hours per year of peak demand.

Australia needs a pricing system for electricity that signals the true network costs to households and businesses. We also need to remove barriers to deploying solutions that can enhance energy productivity and reduce costs.

Many solutions already exist that could make our electricity system more efficient. For example, CSIRO has been working with its industry partner BuildingIQ to develop a control technology for heating, ventilation and air conditioning systems in commercial buildings. The technology requires only a small upfront investment and can be easily retrofitted to existing structures by simply integrating with the existing building management system. It has recently been installed in the Rockefeller Centre in New York and now saves 13% of the building’s energy consumption. The technology can also reduce peak electricity consumption by up to 30%.

And we need to address rising natural gas prices. Community concerns, for example regarding ground water impacts, site access and remediation, can delay or prevent development. Fully understanding the potential environmental, social and economic implications of coal seam and shale gas development and then successfully working with communities and companies to ensure concerns are addressed can enable development and thus ease price pressures.

So while neither a fossil fuel-free future, or a business-as-usual future, are very likely possibilities for our country or the planet, there are clear solutions that are affordable, sustainable and achievable. We should start finding and implementing them now.

To get an idea of the energy options open to us, and the impacts of each option, visit eFuture and explore more than 1,300 different scenarios.