In the upcoming Australian election, public opinion will be gauged on whether nuclear energy is a viable solution for Australia’s energy needs and its rising costs.
Rystad said that energy security issues arising from grid instabilities, power shortages and an imminent gas shortage may hinder immediate plans for energy transition.
The Australian electorate will choose between Labor’s goal of a 82% renewable power and the Liberal-National Party (LNP’s) plan of replacing coal with nuclear energy of 13 gigawatts by 2051.
Australian election focus
According to Rystad’s analysis, it will be hard to reach the target of 82% renewable electricity.
The most optimistic estimates under Labor predict a share of renewable energy of about 65%. This is 17% below the goal.
According to Norway’s energy intelligence firm, if the LNP is elected, renewable energy will be less prevalent in the country due to its focus on nuclear energy. The 82% goal would then seem a long way off.
It also brought to light the challenges that Australia faces in its energy transition regardless of who wins.
Rystad’s most recent research highlights the need for gas in Australia as the clean energy sector takes centre stage during the run-up to elections.
By 2028, it is expected that the retirement of coal- and gas-fired plants such as Yallourn West, Eraring and South Australia will cause a capacity shortage in New South Wales.
LNG and Gas in Transition
Rystad stated that gas generators and gas peaking installations will be necessary to offset the loss of this type, particularly during times of high demand.
According to the company, batteries and pumped-hydro are also expected to play an important role in combating grid instabilities in one of world’s most volatile markets for electricity. An estimated 3GW is projected to be powered by the end the year.
The research firm stated that infrastructure bottlenecks may prevent the development of energy storage and renewables in a timely manner, affecting the energy security of Australians.
The decline in production at the legacy Victorian offshore fields has increased their reliance upon Queensland, said Kaushal RAMESH, Rystad Energy Vice President of Gas & LNG Research.
These states have a much smaller buffer than in 2022. This could lead to another surge of prices if there are multiple shocks in supply and demand. LNG imports into Australia seem inevitable, even in the most optimistic of scenarios.
Rystad Energy predicts that, should Labor win the federal elections, Australia will add a record-breaking annual renewable energy and natural gas capacity of 7.2 GW, mostly in Queensland, Victoria, and New South Wales.
It would be the largest annual increase recorded in Australian history.
A LNP win, however, is likely to lead to a reduction in solar and wind energy deployment. However, the exact extent of this decrease remains uncertain.
Rise in adoption
Australia leads the world in battery innovation.
In the press release, Gero Farruggio said that more urgent action was needed in order to avoid a shortage of power in the future.
Blackouts can be prevented by taking immediate action to reduce the level of critical dispatchable capacity.
Faruggio said that the issue goes beyond Australia as more countries rely on gas for their energy transitions.
This global shift has led to a rise in the demand for gas powered generation. The result is longer lead times in the delivery of heavy turbine equipment.
The window to address these issues is quickly closing. Faruggio said that if we don’t act quickly, the soaring prices of gas and electricity could lead to an inflationary boom, which would increase consumer costs.
Increased energy capacity
The peak of renewable energy investment is anticipated in Australia in 2025. This will be largely due to the Kidston Pumped Hydro Project and Kurri Kurri Gas Plant.
Rystad stated that the expected capacity of utility batteries in 2025 will be 2.9 GW.
This number could increase due to rapid battery construction and activation timelines.
According to estimates, these batteries are expected to add between 1.7 and 2.0 terawatt hours (TWh), or annual demand for the grid.
This will stabilize the Australian market, by shifting the peak solar production from the daytime to the evening.
The research firm stated that “there are still issues to address, including the retirement of old coal plants, winter heat demand during low solar output, and extreme weather conditions.”
Prices of gas are determined by both the domestic and global market.
Gas prices will have an impact on the cost structure of facilities that generate gas, but it is anticipated that gas price volatility will decrease.
Backup support could be provided by gas peaking plants. The future will depend on these factors.
Rystad: Gas and LNG are crucial to Australia’s future energy despite the nuclear debate
This site is for entertainment only. Click here to read more
