Experts back Mike Cannon-Brookes: Australia can be clean energy superpower
Energy experts have backed billionaire Mike Cannon-Brookes’ claim that Australia can become a clean energy superpower by combining wind, solar and pumped hydro to deliver some of the world’s cheapest electricity as coal power is forced out of the energy system.
Atlassian co-founder Mr Cannon-Brookes whipped up a Twitter storm this week as he called on Australia to become an exporter of clean energy and sought to reclaim Prime Minister Scott Morrison’s “fair dinkum power” slogan for clean, green energy.
His case was boosted on Thursday when Snowy Hydro revealed that it had received such cheap bids for its 888 megawatt wind and solar tender that it could “firm” the power with hydro, gas and diesel and still sell it to customers for less than $70 a megawatt hour – well below current grid prices.
But the experts said Mr Cannon-Brookes’ vision of exporting renewable energy either via undersea transmission lines to Asia or as hydrogen or ammonia – a new technology that CSIRO and other groups are working on – would entail additional costs and be a much bigger challenge.
Atlassian co-founder Mike Cannon-Brookes is trademarking a logo as part of his campaign to reclaim the slogan ‘Fair Dinkum Power’ from Prime Minister Scott Morrison for clean energy.
Instead they said the first step should be for Australia to take advantage of its abundant wind and sun to become the natural home for energy-intensive mineral processing and manufacturing, because most trading partners don’t have these resources.
“I think it’s a pretty exciting time for both wind and solar,” said Adam Pegg, Australian head of Lightsource BP, global oil giant BP’s renewable energy arm and one of the winning bidders in Snowy’s tender.
‘More efficient than fossil fuels’
“The outlook for them is proving to be much more efficient than the fossil fuels. I think we are approaching that unsubsidised world where wind and solar energy will be able to stand on their own two feet.”
Tony Wood, energy program director at The Grattan Institute, sounded a note of caution, saying Australia would need to replace its coal and gas exports as they dwindled over the coming decades but the economics of exporting energy were untested and past plans to build big manufacturing off the back of cheap gas and coal power had not been realised.
Snowy Hydro increased a wind and solar tender because it got such cheap prices that it could offer the power – ‘firmed’ by its hydro, gas and diesel resources – to customers at less than $70 a megawatt hour. Bloomberg
Mr Wood said the fundamental hypothesis that Australia would be one of a handful of countries with excellent solar resources, plenty of land and proximity to large economies without such resources such as Japan and Korea is “real” and could support a revival in “white metals” – aluminium, zinc and magnesium.
But Australia would have to compete with other solar or wind-rich regions such as North Africa and China’s Gobi Desert, and developing large-scale manufacturing in Australia’s north looked “problematic”.
“Each of these three alternatives has at least one big question mark and they come down to economics,” Mr Wood said. “I don’t think anyone has got their head around it.”
But Kobad Bhavnagri, head of Bloomberg New Energy Finance in Australia, said: “Snowy Hydro’s plan is a demonstration of the new energy reality – wind and solar give you cheap and clean; hydro, batteries and gas give you reliable.
New wind and solar plant delivers cheaper power than coal plant life extensions. Bloomberg New Energy Finance
“Base-cost renewables are what will underpin a cheap, clean and reliable power system. We can see that in AGL Energy’s plans, and now Snowy’s.” AGL plans to replace its Liddell coal power station with a mix of renewables, gas, batteries and pumped hydro energy.
‘Natural home for energy intensive industry’
Ross Garnaut, economics professor at the University of Melbourne and president of SIMEC ZEN Energy, which is building firm renewable power plants for British billionaire Sanjeev Gupta’s Whyalla steel works, said: “Unless we muck it up with policy uncertainty and astonishingly bad policy and regulation we are naturally the lowest cost energy producer in the emerging low carbon world economy, and that will make us the natural home for energy intensive industries.”
Professor Garnaut, who first made the clean energy superpower case in 2015, said it could eventually be economic to export power as well.
Ross Garnaut, economics professor at the University of Melbourne and president of SIMEC Zen Energy, first made the case that Australia could be a clean energy superpower in 2015. Eamon Gallagher
“Some of our Asian neighbours will have great difficulty producing adequate supplies of their own low carbon energy and it will eventually be economic to supply Asia with power by cable,” he told AFR Weekend.
“But the first major export use of Australia’s exceptional renewable energy resources would be for processing at home and export of processed minerals. We used to do with our coal strengths, which made us the world’s largest aluminium exporter. We are now in a position to do it on a much larger scale in the post-coal economy.”
But Bruce Mountain, director of the Victorian Energy Policy Centre, said the economics of exporting clean energy to Asia either via transmission lines or as hydrogen or ammonia would be “a big ask” and he guessed they would be studied for many years “before it becomes a reality”.
“If you are using it in an existing industry that has a demand for it, no doubt – I think that is a much more realistic proposition,” Professor Mountain said. “And indeed we are seeing the investment by Mr Gupta and others is showing without a doubt that that’s where the market is.”
Mr Cannon-Brookes argued that Australia should become “200 per cent renewables powered” and export the surplus. But Professor Garnaut said that if Australia instead used the energy at home for energy-intensive manufacturing, “it will show up as 100 per cent of a much larger energy output” rather than 200 per cent.
The software billionaire was accused of “grandstanding” by Snowy Hydro chief executive Paul Broad.
But BNEF’s Mr Bhavnagri said: “This isn’t grandstanding, this is vision. Future economic competitiveness will be underpinned by the strength of a country’s renewable resources. Australia can be a new energy superpower, we just need some clarity and focus to get there.
“In a low-carbon world Australia has been dealt two aces – but we are squandering our hand by obsessing over outdated technology, instead of planning for the future.”
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