Industrial revolutions across the globe have traditionally heavily relied on coal-fired power generation.
Transitioning to a more renewable solution remains one of the biggest challenges governments face to commit to the decarbonisation plans agreed upon in the 2015 Paris Agreement.
This transition will only be achieved through effective negotiations involving unions, industry associations, historical coal regions, local communities, scientists and environmental NGOs.
What Does This Look Like For Australia?
Australia is one of the wealthiest countries in the world in terms of renewable resources. As a result, experts and politicians believe that Australia has the ability to easily reach its 2030 CO2 emission objectives.
However, reaching this goal rests upon coal-fired power stations being replaced with natural resources at a net-zero cost. As coal fire generators are no longer financially viable or sustainable for the environment, making the transition to renewable generation is essential.
Over the last decade, the cost of new generation renewable energy, particularly solar and wind, has significantly decreased. In most places, power from new renewables is now cheaper than power from new fossil fuels. This trend is observed globally.
Furthermore, new renewables even beat existing coal plants on operating costs, making coal power increasingly uneconomic. This shift in cost-effectiveness is driving the global transition towards renewable energy.
Financial & environmental costs aside, this transition will be challenging for Queensland, New South Wales and Victoria as they remain Australia’s oldest long-standing coal-dependent states.
For there to be long-term success, it will be crucial for the Australian government to establish transition plans that will shape the future security and stability of the grid.
Policy Landscape
The Australian Government has been proactive in implementing policies and regulations to drive the transition to renewables.
In June 2022, the government submitted a revised 2030 Nationally Determined Contribution (NDC), pledging a 43% reduction of greenhouse gas (GHG) emissions by 2030 from 2005 levels. This target was legislated alongside the NDC commitment to achieve net zero emissions by 2050 in the Climate Change Act 2022.
The government is also taking a collaborative approach with states and territories under the new National Energy Transformation Partnership (NETP) with a broad scope of action. In April 2024, the Australian federal government unveiled plans for a Future Made in Australia Act, proposing taxpayer-funded incentives to advance renewable energy industries, manufacturing, and infrastructure.
Renewable Energy Zones
Renewable Energy Zones (REZs) are regional zones in the natural Electricity Market (NEM) where large-scale renewable energy is developed to promote the economics of scale in a high-resolution area.
They are modern-day power stations that convert renewable energy (wind and solar) into batteries and high voltage poles to deliver energy to homes.
Australia is rich in renewable energy resources, but converting the potential into productive renewable energy zones is a big job. A quick glance at a map of the National Electricity Market shows how existing transmission lines connect the historical electricity-generating hotspots with the nation’s large population centres.
The Latrobe Valley and Hunter Valley have plenty of coal, which is great for coal power. But, these areas aren’t ideal for wind and solar power. On the other hand, north-west Victoria gets a lot of sun, making it perfect for solar power. However, the current power lines there are already full, so it’s hard to connect new solar farms to the power grid.
Unlocking the potential of these renewable energy zones is becoming more pressing. To help break through these barriers and lay the groundwork for future renewable energy projects, ARENA engaged consultants Baringa Partners to explore the challenge for renewables in constrained zones, and present solutions to manage them.
These initiatives demonstrate the potential for coal regions to transform into renewable energy hubs, contributing to a sustainable and green future.
Network & Technology Challenges
The transformation of Australia’s traditional coal-fired power regions into renewable super hubs is a complex process, with infrastructure and technical challenges being at the forefront. These include thermal issues and system strength, which are being addressed through various initiatives.
In the Victorian region, new transmission infrastructure is being developed to deliver the energy transition and secure Victoria’s energy future. This includes upgrades to the Victoria-NSW Interconnector (VNI), unlocking more transmission capacity and allowing more energy to be transferred between Victoria and NSW.
Similarly, in NSW, the government has committed to developing five renewable energy zones. These zones are located in the Central West-Orana, New England, Hunter-Central Coast, Illawarra, and South West NSW near Hay. Their locations have been chosen because of their connection to existing transmission infrastructure.
What’s more, the Australian Renewable Energy Agency (ARENA) has seen an expansion in its mandate under new regulations introduced by the Australian Government. This allows ARENA to support a broader range of sectors and emerging technologies, paving the way for significant commercial and regulatory reforms.
These developments are crucial in allowing the required technological updates and unlocking investment, thereby ramping up Renewable Energy Zone (REZ) projects across the country.
REZ Case Study Potential
In April 2023, AGL Energy completed the shutdown of its coal-fired Liddell power station in New South Wales. AGL plans to convert the Liddell power station site into a renewable energy hub dominated by a 500 MW/2 GWh battery energy storage system. They are also exploring options with potential partners in industries such as solar, wind, and waste-to-energy.
Led by renewables advisory outfit Energy Estate, the Hunter Hydrogen Network (H2N) project will see the creation of Australia’s first hydrogen hub in the Hunter Valley, NSW.
This facility will use new energy storage technology, relying on water reservoirs and rotational solar panels, which is a cost-effective alternative to utilising a battery system.
Dubbed the “Hydrogen Valley”, the project’s second stage involves installing more electrolysers near Liddell and an additional pipeline to Newcastle, developing a clean energy precinct near the port. A potential third stage will involve building an additional pipeline to the central west and the New England REZ.
The operation would be powered by wind and solar farms and backed up by batteries in a nearby REZ, creating further opportunities in the region.
Other Initiatives Around The Country
These projects represent a substantial 27.6 GW of capacity. Among these, 121 new generation projects have been successfully connected. The proposed projects include an impressive 97 GW of generation capacity, encompassing 46 GW of wind, 33 GW of solar, and 10 GW of hydro.
This proposed capacity is double the current capacity in the National Electricity Market (NEM). The renewable energy sector in Australia is demonstrating the nation’s dedication to fostering a sustainable and green future. Here are some successful renewable energy projects in Australia:
1. New England Solar Farm: This project is planned by Philippines-based AC Energy and is expected to have a capacity of 720 MW.
2. Stubbo Solar Farm: Also planned by AC Energy, this solar farm is proposed to have a capacity of 400 MW.
3. Coppabella Wind Farm: Goldwind Australia is developing this wind farm with a capacity of 275 MW.
4. RWE Renewables’ Big Battery: German energy giant RWE Renewables is developing a big battery with a capacity of 50 MW/400 MWh.
5. Marinus Link: As part of the A$20 billion Rewiring the Nation plan, the Australian Government is investing in the Marinus Link to connect Tasmania’s Battery of the Nation pumped hydro and renewables to the East Coast transmission network.
6. Community Batteries for Household Solar Program: The Australian Government has earmarked over A$300 million for community batteries and solar banks. The A$224.3 million Community Batteries for Household Solar Program will deliver up to 400 community batteries to store excess solar energy.
7. Community Solar Banks program: This program will help Australian households access cheap solar-powered energy.
These projects demonstrate the potential for coal regions to transform into renewable energy hubs, contributing to a sustainable and green future.
Key Takeaways
Australia is making significant strides in the adoption of renewable energy technologies.
The International Energy Agency (IEA) forecasts Australia’s renewable energy capacity to expand by 85% to reach 40 gigawatts (GW) by 2027. This growth is driven by ambitious targets and increased clean energy funding at federal and state levels, Power Purchase Agreements (PPAs), and new projects announced in the renewable energy zones (REZ).
The transition is primarily focused on solar and wind energy, with a growing interest in sustainable energy storage, such as lithium-ion batteries.
As Australia continues to adopt renewable energy technologies and implement supportive policies, the transformation of its traditional coal-fired power regions into renewable super hubs is well underway.
About the Author:
Jan is Anávo's VP of Global Talent Acquisition and he aims to continue making the world more aware of climate change & the importance of utilising clean energy for a better tomorrow.
Read more about Jan Rieche.
