Panel says there are three ‘credible’ ways to hit target but ‘significant government policy action’ needed

This article is more than 3 years old

This article is more than 3 years old

Queensland has three “credible” options to achieve a 50% renewable energy target by 2030, a panel of experts said.

A draft report by the state’s independent renewable energy expert panel said “significant government policy action” would be needed for Australia’s biggest carbon polluting state to reach the target.

But it said the impact on electricity prices would be “broadly cost neutral”.

Earlier this month the federal environment minister, Josh Frydenberg, criticised Queensland and other states for pursuing “ridiculously high and unrealistic” renewables targets.

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The report, handed down on Wednesday by the panel’s chair, the investment banker Colin Mugglestone, charted three scenarios for Queensland to achieve its target, which would require between 4000MW and 5500MW of new large-scale renewable generation capacity between 2020 and 2030.

Until 2020 the state government could use existing federal funding under the national renewable energy target to attract projects to Queensland, the report said.

Queensland’s power sector – its single largest source of carbon emissions – would cut emissions from 2016 by 31% if stronger national climate policy was enacted, including through carbon pricing. This would see the closure of about 1500MW of coal-fired generation in Queensland but limit state subsidies to renewable producers to $50m.



“The stronger national action pathway is not within the direct control of the Queensland government, but represents a credible scenario in the context of national climate change policy,” it said.

A national emissions intensity scheme would drive Queensland to reach 41% renewable energy generation, leaving state government action to deliver 1900MW to hit the 50% target.

The other scenarios, a steady increase in renewable generation or a ramp-up closer to 2030 to take advantage of cheaper technology, would both cut emissions by 25%. The steady increase would cost significantly more via renewable subsidies at $900m versus $500m under the “ramp pathway” but the cumulative cuts would be greater.

Under both the steady and ramp scenarios, “no closure of existing fossil-fuel generators [is] expected prior to 2030” but their operating cash flows would take a hit of between $600m and $1.1bn.

This would affect mostly the state, which owns two-thirds of generation capacity.

The panel recommended the renewables policy action be funded through “electricity market mechanisms”, with the forecast “cost-neutral outcome” being a result of “modelled suppression” of wholesale power prices offsetting renewables subsidies.

But this pricing outcome was “not guaranteed and could differ, for example, if existing generation capacity is withdrawn from the market, especially coal-fired generation”, the report says.

The Queensland energy minister, Mark Bailey, said the release of the report was a “groundbreaking development” in the government’s pursuit of its renewables goal.

It showed “Queensland can meet a 50 per cent renewable energy target while maintaining electricity security and reliability over the next 14 years”.

It also showed the “huge benefits” to the state economy through $6.7bn in new investment, especially in regional areas, and a net average increase in jobs, both direct and indirect, of between 6,400 and 6,700 a year, he said.

After South Australia’s recent power blackout, Frydenberg told Sky News that state governments had an “illusion at the moment about the impact that renewables are having on the system”.

He warned of the “lack of consistency in quantity of generation” from heavy reliance on renewables.

“We’ve got the states pursuing these ridiculously high and unrealistic state-based renewable energy targets,” Frydenberg said.

“In Queensland, they have a 50% renewable energy target by 2030 when they only have about 4.5% of renewable generation currently … We really need to get the states and the commonwealth on the same page when it comes to their state-based targets and the federal target which, for us, is 23.5% by 2020.”

Tim Seelig, of the Queensland Conservation Council, said the panel’s draft report showed recent commentary about renewables targets being unrealistic was “wrong, and that in fact there are several options for achieving the targets”.

“Queensland is the highest emitter of carbon pollution of all the Australian states, and electricity generation is the largest single source of those emissions,” he said.

“It is therefore imperative that renewable electricity generation is made a high priority in Queensland.”