Weld Australia has warned that Australia risks locking in higher energy bills following the Liberal Party’s decision to abandon its commitment to net-zero emissions by 2050.
According to Weld Australia CEO Geoff Crittenden, net zero does not mean emitting nothing. It means emitting as little as technologically possible and then removing whatever emissions remain.
“Right now, Australia emits around 450 million tonnes of greenhouse gases every year,” he said.
“To reach net zero, we must slash those emissions to the lowest feasible level, and then sequester whatever is left. It’s basic maths, and it’s non-negotiable.”
The Liberal Party has ditched net zero and launched a new energy and emissions policy with the focus on energy affordability.
Opposition Leader, Sussan Ley, said the priority is getting energy costs down for households and businesses.
“The Opposition will harness all available energy technologies to bring prices down, keep the grid stable and reduce emissions responsibly,” Ley said.
“This includes maintaining baseload power, supporting all forms of generation where it is required, unlocking new gas supply, and lifting the ban on zero emissions nuclear energy, which is already used or being developed in 19 of the world’s 20 richest countries."
A new briefing note released by the Institute for Energy Economics and Financial Analysis (IEEFA) claims the most effective way to lower energy costs is to focus on renewables, efficiency, electrification and fairer energy markets.
Report author and IEEFA CEO, Amandine Denis-Ryan, said renewables are not driving up electricity costs, it is ageing coal plants, high gas prices and inefficient markets that are to blame.
“There is a lot of room for improvement when it comes to energy affordability – but it is not about choosing a different electricity generation mix. It is about fixing inefficient energy markets and regulation, increasing competition, and acting on the demand side,” she said.
Australia’s coal fleet is rapidly ageing, with most plants set to retire within the next decade. A large portion of network assets are similarly reaching end-of-life. IEEFA’s report finds that replacing these assets is unavoidable – but the choice of replacement technology has a profound impact on affordability.
“The evidence is clear: renewables backed by storage and transmission are the lowest-cost form of new electricity generation,” Denis-Ryan said.
“Their cost is already on par with new coal and will be materially cheaper by 2030. Gas, meanwhile, has become increasingly uncompetitive as prices have surged.”
According to IEEFA, the cheapest way to supply Australian gas consumers is instead to redirect small amounts of uncontracted LNG from exports to the domestic market.
“Making our markets and rules work better should also be a big priority. Market concentration and lack of transparency in gas and electricity markets are also key drivers of high prices, and reforms to improve competition are essential,” Denis-Ryan said.
“Demand-side measures – energy efficiency, electrification, flexible demand, solar and batteries – offer the largest bill-cutting opportunities.”
The report found that replacing inefficient heaters and hot water systems with modern electric alternatives could avoid $3.4 billion in unnecessary household costs every year.
Moreover, shifting to efficient electricity appliances and installing solar and battery systems can reduce net household bills by up to 67%, even after accounting for the upfront cost.