Step 2

PRODUCING CLEANER ELECTRICITY

Since we’ll still need electricity, this next step is to change the way we produce that electricity. We’ll move away from burning fossil fuels that produce loads of greenhouse gas emissions, to using cleaner, low emissions alternatives such as wind and solar (also known as low carbon electricity).

The Pathways Report modelled several options for low carbon electricity. Each of these could be achieved at similar costs, though the report did flag that some technology options face the challenge of social acceptance:

100% renewable energy
Renewables plus carbon capture and storage (CCS)
Renewables plus nuclear

All three scenarios lead to similar emissions intensities by 2050, with the 100% renewables grid resulting in the lowest emissions by 2050. The nuclear scenario could achieve similar emissions levels if constraints were applied to the share of gas generation allowed in the mix (not done in this modelling exercise).

MODELLING FOR THESE THREE SCENARIOS PRODUCED SOME IMPORTANT FINDINGS:

• All scenarios include a dominant share of renewables, driven by the decrease in cost of renewable technologies such as solar and wind over recent years with a minimum penetration of 48% by 2030 and 71% by 2050. They are expected to be the lowest cost technologies to achieve decarbonisation until their penetration requires significant additional costs for the management of variability.
• The major difference between scenarios is how the variability of wind and solar is managed. In the CCS and nuclear scenarios, back-up for variability is met by these technologies combined with peaking gas. In the 100% renewables grid scenario it is met by combining storage with renewables and use of non-variable renewable technologies such as geothermal.
• Solar becomes the dominant technology by 2050. The high share of solar power (either photovoltaic or solar thermal) in the electricity generation mix is a reflection of both their cost advantages and also that a third of electricity consumption occurs in Western Australia, due to increases in mining activity and electrification of mining processes, where conditions for solar power are particularly favourable. Taking into account the need to invest in back-up capacity to cover variable supply, solar becomes more profitable than wind power towards 2050.
• The 100% renewable grid scenario achieved the lowest emissions.
• Analysis of retail electricity prices under the 100% renewable grid scenario showed households using only electricity today could expect the percentage of household income spent on electricity to halve by 2050.

GOING BEYOND THE REPORT

The results of this step could be further enhanced if demand for electricity was reduced - doing this in the mining sector alone would significantly impact total electricity generation in 2050.

On the supply side, additional technologies could be considered such as biomass with CCS, generating electricity with net negative emissions, or the use of biogas to power remaining gas turbines without CCS. Both of these options would need additional biomass feedstocks.

Accelerated reduction in the cost of low carbon energy technologies and storage could also speed up this step.

Further information on low carbon electricity can be found in Chapter One of the Pathways to Deep Decarbonisation: Technical Report.