Energy pumped hydro is among several major renewable energy projects planned that are due to come on-line in the next decade.

Energy pumped hydro is among several major renewable energy projects planned that are due to come on-line in the next decade.

Can Australia be a renewable energy superpower?

Can Australia be a renewable energy superpower?

Energy
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For all the uncertainty surrounding Australia's emerging energy landscape, there are a few things that are already crystal clear.

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For starters, the energy grid as we have known it for the best part of a century is undergoing the most significant transformation since Eddison invented the light globe.

Of equal significance, consumers, rather than utilities are taking control of the grid; by 2050 CSIRO estimates millions of customer-owned generators will supply 30-45 per cent of Australia's electricity needs.

Some may describe it as a green energy pipedream, but economist Ross Garnaut thinks it is more than achievable. In his book Superpower: Australia's low carbon opportunity Garnaut argues that Australia has an unparalleled wealth of renewable energy resources that, combined with a strong skills base, have the potential to make Australia a renewable energy superpower of the 21st century.

But while the sector has already surpassed expectations its future growth will be determined by how government and industry negotiate a web of technical, economic and policy challenges that lie ahead.

For Clean Energy Council Chief Executive Kane Thornton the most immediate need is certainty for industries considering investing billions of dollars into the renewable sector.

"The industry doesn't need a new subsidy, we just need certainty - renewable energy can continue to create opportunities for regional parts of the country for many decades with the right policies in place," he said.

"We've always said that if you set us a [renewable energy] target, we will beat it. We've hit the bullseye with a year to go, and it's time to start asking ourselves what comes next."

A large portion of the rapid growth that has occurred to date has come from the rooftop solar, which has a national penetration rate of 21 per cent. In Brisbane, Perth and Adelaide the rate is up to 30 per cent.

In addition, corporations and institutions are increasingly committing to the purchase of green power. The City of Newcastle and Sydney made history late last year when they became the first councils in Australia to commit to the purchase of 100 per cent renewable energy.

Likewise billions of dollars of private investment are being poured into large-scale projects that will have profound implications not only for the generation of electricity but how it is sold both domestically and internationally.

One of Australia's gas-fired power stations.

One of Australia's gas-fired power stations.

In the NSW Hunter Valley, an economy traditionally been underpinned by coal mining, several major renewable energy projects are being planned. Among the large-scale projects due to come on-line in the next decade are a 250 megawatt wind farm at Bowman's Creek, a 250 megawatt pumped hydro scheme at Bells Mountain and a 250 megawatt gas-fired power station at Tomago.

AGL's executive general manager group operations Doug Jackson said the company was focused on the development of flexible supply from new technology sources to support the transition to a low emissions energy future.

"We are already well on our way to this future having committed to a $1.9 billion development pipeline which includes, wind, solar, hydro, gas, battery storage, and improvements to the efficiency of our existing thermal generation. We also have a further $2 billion worth of projects in the pipeline across the National Electricity Market," he said.

"This has been demonstrated with our proposal for the Newcastle Gas Power Station and the feasibility study for the Bell's Mountain Pumped Hydro. Both these projects will be critical in helping transition to a low carbon economy and ensuring more investment in renewables."

Elsewhere Australian software billionaire Mike Cannon-Brookes and iron ore billionaire Andrew Forrest are planning to supply a fifth of Singapore's electricity needs via a 3750 kilometre underwater cable from the Northern Territory.

Read more: It's time to get serious on zero emissions

The proposed solar farm, near Tennant Creek, would be the world's biggest by a comfortable margin.

The evolution of the smart grids, mostly powered by rooftop solar, are having a similar transformative effect at a neighbourhood level.

The Australian Energy Market Operator anticipates rooftop solar capacity could triple to provide about a quarter of Australia's energy generation by 2040.

But AEMO also warns there will need to be billions of dollars spent on new transmission infrastructure to make the diverse mix of emerging energy networks work together effectively.

"Distributed Energy Resources such as rooftop solar and residential batteries are expected to play an increasingly important role in the evolving energy system, and when intelligently coordinated can complement the evolving generation mix in the National Electricity Market," AGL's Doug Jackson said.

"An example is AGL's Virtual Power Plant that rewards customers for including their solar and batteries in an aggregated fleet of more than 1,000 homes (more than 5MW) that can be rapidly dispatched to support the local distribution network at times of high demand and can also participate in frequency control markets and respond to high wholesale energy prices."

It's this interaction of small and large-scale projects that Garnaut, who advised former Labor governments on how to create a low-carbon future, argues will make Australia a natural leader in renewable technology.

His vision is based on three areas of opportunity that he believes will allow Australia to prosper in the post-carbon world.

The first is by supplying electricity directly to south-east Asia, the second is by using electricity from wind and solar plants to convert water into hydrogen and supplying this to energy-resource-poor countries in Asia and thirdly by using both electricity and hydrogen from renewable energy to process ores into metals (or batteries) for export.

While declines in the cost of wind and solar along with reductions in battery and hydrogen processing costs bring Garnaut's vision within reach at a technical level, the underlying question remains will Australia's climate policies assist?

In a promising development, the Commonwealth and NSW governments announced in late January a $2 billion energy agreement to support increased investment in clean energy in the state.

The deal will include funding for transmission projects 'Humelink' in southern NSW and the Queensland-NSW interconnector, and for the nation's first dedicated renewable energy zone in NSW's Central West.

"The agreement is a positive step forward for the continued growth of the NSW renewable energy sector. We're looking forward to working with both governments on the practical details included in the agreement," Mr Thornton said.

It's the type of initiative that Australia's corporate sector wants to see more of.

A survey of more than 50 business leaders in late 2019 found decisive action on climate change and energy policy combined with the need for certainty about the supply of affordable and reliable energy were at the top of the list.

"The current favourable economics of renewable energy should counter the lack of a federal policy,"Jordan Berryman, senior director at property and investment company JLL Australia said.

"However, considering Australia is faced with the looming issue of an ageing fleet of coal-powered plants, more urgent action, led by policy certainty, is required for renewables to take on the mantle for distributed capacity."

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