The Critical Role of Gas in Australia's Energy Transition

The gas-fired power generation industry is at a critical juncture in Australia, serving as a temporary bridge between the fossil fuel era and the country's clean energy future. However, new modelling by Nexa Advisory reveals that delays in developing renewable energy, transmission, and storage infrastructure could lead to an over-reliance on expensive gas-fired generation, resulting in additional costs of $115.7 billion by 2050. The key takeaway is that gas has a limited role in the transition, and its continued use could have significant emissions implications.

Key Takeaways:

• Delays in developing renewable energy, transmission, and storage infrastructure could lead to an over-reliance on expensive gas-fired generation, resulting in additional costs of $115.7 billion by 2050.
• Gas-fired generation is a short-term solution and should not be relied upon as a primary energy source, given its high costs and emissions.
• Australia's reliance on gas is already challenged by global demand, with supply chains stretching beyond five years and the country not in the queue for new gas turbines.
• Failing to transition to renewable energy and storage will unnecessarily increase consumer bills, with an estimated 22% average increase by 2050.
• Renowned US wind turbine company Vestas warns of a global energy transition demand impeding Australia's chance for a smooth transition.
• Governments must provide clear signals to attract developers, investors, and operators to deliver necessary renewable energy and transmission infrastructure.
• Governments should focus on enabling market-led solutions, streamlining planning and approvals, and building social licence for renewable and transmission projects.
• Accelerating renewable energy and storage development is crucial, with 4.3-8 GW of new capacity required annually through 2030 to avoid additional gas-fired generation.

Statistics:

• Delays in transitioning to renewable energy and storage will unnecessarily cost Australian families, businesses, and economy $115.7 billion by 2050 (Nexa Advisory).
• The estimated average increase in consumer bills by 2050 due to over-reliance on gas-fired generation is 22% (Nexa Advisory).
• 4.3-8 GW of new renewable generation capacity is required annually through 2030 to avoid additional gas-fired generation (Nexa Advisory).
• 1.8-2.8 GW of gas-fired generation will be needed if transmission and renewable generation projects continue to be delayed (Nexa Advisory).
• Global demand for gas turbines is soaring, with supply chains stretching beyond five years (Source: Global Data Point).

Sources:

• Nexa Advisory (research showing the unnecessary cost of delays in renewable energy and storage infrastructure development)
• Global Data Point (reporting on global gas turbine demand and supply chain challenges)
• Vestas (reputation as a leading wind turbine company warning of a global energy transition demand impeding Australia's chance for a smooth transition)