A quantitative study of emissions reductions in the Australian electricity sector, and the “full cost” for renewables to provide reliable energy supply, including energy storage technologies.
To meet its current and future emissions targets under the Paris Agreement, Australia will need to begin transforming its economy, with the electricity sector viewed as a critical pillar to achieve large-scale emissions reductions through to 2030, and beyond, as Australia transitions to net-zero emissions by mid-century.
As policymakers and businesses begin to consult on policy design, in this Insights article, we provide a quantitative basis for identifying emissions reductions opportunities in the Australian electricity sector, along with a detailed understanding of the cost of ‘reliable’ energy supply, including storage technologies.
This article introduces our latest market study “The Energy Trilemma: A cost curve for emissions reductions & energy storage in the Australian electricity sector “, which identifies emissions reduction activities in the power sector – such as retrofitting existing coal-fired plants, developing new wind, solar, gas and ‘clean coal’ generation – with analysis mapping the size and cost of abatement through in 2020 and 2030, in the form of a marginal abatement cost (MAC) curve.
Analysis also calculates the ‘full cost’ for renewables to supply reliable power – including the cost of batteries, pumped hydro, or thermal storage. This ensures like-for-like comparison of each technology’s ability to provide flexible energy supply, at least cost, while supporting energy security. We refer to this analysis as the levelised cost of firm energy (LCOFE) supply.
The market study therefore aims to provide policymakers and businesses with an in-depth dataset of emissions reductions and energy storage technology costs to serve as an updated, technology-neutral reference point for the design of a roadmap to meet Australia’s 2030 target, while ensuring low-cost, reliable energy supply – referred to as the energy trilemma.