New year, new opportunities for Victoria’s climate transition

2021 was the year the global economy locked in the goal of net-zero emissions by 2050. The Glasgow climate conference underlined the need for rapid change to hold global warming to 1.5 degrees.

In particular, the changed stance of many major financial institutions has consequences for governments. The global politics of climate are shifting from school strikes to investor strikes. This new phase carries both risks of inaction and opportunities to accelerate the climate transition.

The global politics of climate are shifting from school strikes to investor strikes.Credit:Photo: Dominic Lorrimer

The Australian Energy Market Operator’s recently released draft plan indicates the scale and speed of the changes needed in Australia to achieve net-zero. Under AEMO’s central “step change” scenario, renewables grow to 79 per cent of electricity generation by 2030 and 97 per cent by 2050, from just 28 per cent currently.

The flipside to renewable growth is coal phaseout. “Step change” suggests almost three times more coal capacity will be decommissioned by 2030 than has been publicly announced. Coal-fired generation’s financial viability, notes AEMO, is “increasingly uncertain”. Coal’s pending demise necessitates massive investment in storage capacity, such as batteries and hydro, to ensure round-the-clock power dispatch.

In Victoria, where brown coal accounted for more than 66 per cent of electricity generation in financial year 2020-21, this “step change” would amount to an energy revolution. But it would not be our first.

One hundred years ago, work began on what must then have seemed like an equally distant goal: a self-sufficient Victorian electricity system fuelled by the Latrobe Valley’s brown coal. The war hero Sir John Monash, appointed chairman of the new State Electricity Commission, threw himself into the work of planning, communicating the vision and bringing communities along.

A 1922 report in the Morwell Advertiser relates a visit of the “Victorian provincial press” to Yallourn, by “special train” courtesy of the state government, so that “they might judge for themselves of the merits of the case for and against the electricity scheme”.

The article, which does not record whether hard-hats and high-vis were worn, notes that “General Monash explained from three large maps what it is proposed to do at Yallourn”. Monash, “pointing out that the conditions at Yallourn were almost unique for the establishment of cheap power”, talked the scribes through the auspicious physical properties of the site.

Then as now, not everyone was comfortable with change. The Morwell Advertiser records that “a lot of nonsense had been talked about the danger of electricity breaking loose and devastating the countryside”. But the project went ahead, laying the foundations for the electricity system that has powered Victoria ever since.

One century later, an “electricity scheme” is again key to our future: Electricity produced from zero-emission sources and firmed by storage to power a rapidly expanding share of the economy, from buildings to transport to industry. Storage is vital because renewables are intermittent.

The Victorian Big Battery.

In 2022, opportunities for progress on clean energy storage will be immense. This is confirmed in a new report from the United Nations body that I chair, the Technology Executive Committee. We found both promising technology innovation and major improvements in the cost-competitiveness of clean energy solutions.

Our report stresses the need for policy to drive the transition to net-zero, support innovation and foster market development. Within national frameworks, state governments can play an important role.

There is strong public demand for this. In a recent RedBridge poll, climate change was identified as the “most important” issue for the 2022 state election by the second-highest number of respondents, behind only cost of living. When it comes to climate change and clean energy, Victorian voters want to see a contest of aspiration and ambition.

The Andrews Labor government’s strategy includes renewable energy zones, the Victorian Big Battery and investment in technology innovation, including hydrogen.

For its part, the Victorian Coalition will need to demonstrate its commitment to the transition with ambitious and credible policies. It can learn from the achievements of the NSW government and from liberal governments overseas that are leading on the climate transition, such as Emmanuel Macron in France.

One tip for managing the politics: ignore the shrinking, marginal constituency for delay and denial and focus on building for the future.

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