The government has a plan for Australia’s energy transition

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The government’s plan for Australia’s energy transition is a tad complex.

But a possible path to get there has been spelt out in Australia’s Integrated System Plan (ISP) for the energy transition.

At 104 pages it’s not for the casual reader but is written in clear language. If you are a state or federal public servant, the plan may show a role for decision-makers in the transition.

The ISP is underpinned by least-cost modelling by CSIRO, Climateworks and AEMO. It uses existing and known emerging technologies, and offers three different possible futures, or scenarios for the energy transition.

And it could be one of the government’s most useful tools to guide emissions reductions in the electricity sector in a way that supports our economy and enables the decarbonisation of other sectors.

Taking on the energy transition

The electricity sector is expected to be very important in the energy transition, as it plays a dual role in decarbonising Australia.

Electricity generation is Australia’s largest emissions source, so reducing those emissions by switching to zero carbon generation will be vital. But the electricity sector also enables the decarbonisation (via electrification) of energy use by other sectors of the economy such as industry, buildings and transport.

So, as shown in Climateworks’ decarbonising scenarios for Australia, the decarbonisation of the electricity system performs two roles. Firstly, it produces substantial emissions reductions in its own right. Secondly, it enables the decarbonisation of the rest of the economy.

Switching to a clean energy system allows Australia to reduce emissions and transition Australian industry and exports to respond to the global shift to a net zero economy.

How the plan can help with the transition

The ISP creates the framework to allow planning for and investment in the future energy system that enables Australia’s net-zero economy. It can encourage bold action rather than resorting to dealing with change incrementally.

The plan is based on a ‘backcasting’ approach using scenario modelling that shows alternative pathways to the agreed goals. This backcasting takes into account the future energy demand and supply needs across all sectors and maps possible ways to generate and maintain the system.

In this case, net zero emissions and an economy built on using Australia’s exceptional clean energy resources.

For example, electrifying current high-emission industrial processes need extensive planning. And the ISP can support decision-makers, policy experts and even engineers to understand the direction of our energy transition.

What the scenarios can tell us (and what they can’t)

Australian governments are driving change in the energy system. The Climate Change Act, and the National Energy Transformation Partnership are leading to changes in laws, policies and regulations.

But there is no rule book for this change, and in such a complex system it is hard to determine which policy levers, decisions and technology — and what combination — can lead to a future that works for our economy and our climate. So this type of scenario modelling estimates possible futures based on the least cost options and real costs.

They are not prescriptive but give a vision of where we are going.

Scenarios can show decarbonisation of the energy system that supports the optimal use of energy, reduces systems costs and ensures the electricity system can scale up to the size needed to allow electrification of the economy. It shows the role of gas reduction, and the growth of solar, wind and storage.

What governments and energy agencies are still working on is how to improve planning and investment, given the complexity of fast-changing dynamics in the system.

For instance, how should the market operate as solar panels and batteries become ever more popular in homes? What additional information is needed? As the electricity system becomes ever more variable — in generation and in use — there is increasing value in other forms of energy management, including managing energy demand as well as supply.

Climateworks’ decarbonising scenarios for Australia also show the important role of electrification and fuel switching to zero or near-zero alternatives from fossil-fuel use in buildings, transport and industry. In your home, for example, this means changing from a gas heater to a reverse-cycle air conditioning system.

By applying these scenarios to the energy system, the ISP gives you some idea of the plans that governments have made to decarbonise the energy system.

You may work in another sector outside of the energy sector, and have a role in developing scenarios to navigate the decarbonisation of Australia. There are exciting developments in the circular economy, electric vehicles, and energy efficiency, for example.

The ISP is a clear plan for the energy sector in Australia’s eastern states — and you can expect to see similar plans in other sectors.

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