Australia’s main scientific research organisation, along with academics, economists, policy analysis and business people such as National Australia Bank chair Ken Henry, say that the shift to 100 per cent renewables in Australia’s grid is inevitable, and likely by 2050.

A new landmark report by the CSIRO – titled Australian National Outlook – provides a comprehensive vision for what a prosperous Australia can look like throughout the 21st century, and has found that governments need to be proactive in working towards that vision, otherwise Australia risks undergoing a ‘slow decline’.

Key to Australia’s future prosperity is for governments to embrace technological change and plan for the transition to a 100 per cent renewable energy grid, along with working cooperatively with other countries to tackle climate change.

NAB’s Ken Henry, the former Treasury Secretary, said that customers and shareholders were putting pressures on companies to adopt a positive vision for the Australian economy that included investments in renewables, which meant Australia was on a pathway towards 100% renewables irrespective of the policy environment.

“Australia’s energy transition is going to happen anyway, almost no matter what the policy framework is. Decisions taken by business leaders today will ensure that by about mid-century, Australia’s electricity sector will be 100% renewables. That’s almost irrespective of what decisions are taken at a policy level.” Henry said in an interview with ABC’s The Business.

“And that’s because, leaders of businesses in the energy sector are having to take investment decisions on behalf of their shareholders right now. Shareholders obviously don’t want to see stranded assets.”

NAB worked with CSIRO to produce the report.

CSIRO’s projections of Australia’s future electricity system show what the future energy mix will look like and how Australia will shift to an electricity market that is almost completely powered by renewable energy, as renewables replace coal and gas, and fossil fuels are pushed out of the market.

With proactive policies in place, Australia can each 100 per cent renewables by around 2050, while also lowering electricity prices for Australian consumers.

The CSIRO predicts that under an ambitious policy scenario, Australians would spend between 58 per cent and 64 per cent less on electricity as a proportion of their income than they are today. This is due to both falling energy costs driven by renewables uptake, as well as increased wages through improved prosperity.

In fact, the worst thing Australia could do in terms of bringing down electricity prices is to continue to foster uncertainty about Australia’s future energy and climate change policies.

Australia’s greenhouse gas emissions could also be reduced to net-zero emissions by 2050, in a plan that both provides a sustainable transition away from fossil fuels, while providing lower energy prices and a strong economy.

If Australia fails to embrace a future energy system powered predominantly by renewable energy, the CSIRO has predicted that it will fall behind in an increasingly competitive global economy, leading to slower economic growth and a drop in living standards for Australians.

CSIRO forecasts that energy prices will be highest under scenarios where there are no established policies to secure investment in renewable energy and guide the transition away from fossil fuels.

“Without stable policy and the investment that flows from it, investors would require higher rates of return, resulting in a cost of wholesale energy that is higher than all other scenarios in the medium term, alongside a slower reduction in emissions” the report said.

Under the more prosperous scenario, Australia’s overall energy use will be lower, driven by substantial improvements in energy productivity and efficiency, but electricity consumption will grow, as industries undertake a shift towards electrification of their energy use, allowing greater utilisation of renewable energy sources.

This includes a dramatic shift towards electric vehicles, with the CSIRO predicting that electric vehicles will be the cheapest form of transport as early as 2025, with around half of all vehicles to be all-electric by 2040.

Greater use of renewable electricity will also help Australian consumers reduce their reliance on natural gas, which the CSIRO expects to continue its dramatic price increases, with prices expected to surge past $40 per GJ by 2040.

Previous research published by the CSIRO has found that renewable hydrogen could be cost competitive with natural gas as early as 2025.

“We hope the Australian National Outlook 2019 serves as a clarion call for Australia,” CSIRO Futures Director James Deverell said.

“We believe the positive outcomes in this report are all achievable, but they will require bold, concerted action and long-term thinking.”

“Emerging technologies will play a key role and Australian companies need to be aware of both the opportunities and challenges they will create.”

The report injects a degree of sensibility into the discussion about Australia’s future energy system. Many on both sides of government have long asserted that coal and gas will continue to play a large roll in Australia’s generation sector.

But, as the CSIRO report has highlighted, the looming closure of almost all of Australia’s coal generation fleet over the next two decades, and the increasingly cost-effective alternatives in wind and solar, mean that Australia’s future energy system will be powered predominantly by renewables, and backed up with storage.

The benefits of global cooperation in shifting the global economy away from fossil fuels also flies in the face of coal advocates who have celebrate the approvals for Adani’s Carmichael coal mine. It remains clear that Australia’s future economy, and the job prospects of many Australians, will be improved in a shift away from coal and gas, as underpinned by the CSIRO research.