AEMO roadmap sets uneven path to net zero

The Australian Energy Market Operator says some energy transition scenarios could see the grid almost entirely decarbonise by 2035.

The market operator has grown increasingly vocal about the need to prepare the grid for the rapid uptake of renewables, with new chief Dan Westerman recently outlining its aims to be able to support temporary 100% penetration on the grid as soon as 2025.
It is currently developing its 2022 Integrated System Plan, and today published its 2021 Inputs, Assumptions and Scenarios Report.

It contains five model scenarios ranging from ‘Slow Change’ to ‘Hydrogen Superpower’ — the latter which would see the rapid uptake of new technologies like green hydrogen and green steel and policies to support decarbonisation of the grid.

In that scenario, National Electricity Market emissions would halve by 2026 and Australia would almost entirely decarbonise by 2035.

The Slow Change scenario anticipates a situation where weak economic conditions after the pandemic dulls investment in decarbonisation, with the Steady Progress, Net Zero by 2050 and Step Change scenarios sitting in the middle.

AEMO chief system design officer Alex Wonhas said the scenarios capture the range of plausible futures for the NEM over the next few decades.

“There is no doubt the energy transition is forging ahead. We have tried to capture this through a range of scenarios characterised by the growth of electricity demand and the pace of decarbonisation,” Dr Wonhas said.

“This has led to the introduction of two central scenarios. One is the ‘steady progress’ scenario with decarbonisation led by existing government policy, corporate abatement goals and continued growth in PV uptake.

“The other, ‘net zero’, is driven by accelerating technology-led emission abatement based on extensive research and development, policy and progressive tightening of emission targets to meet an economy-wide net zero target by 2050.

“We have also mapped out a progressive ‘hydrogen superpower’ scenario based on a power system to support the development of a renewable hydrogen export economy.”

The Hydrogen Superpower scenario would achieve net zero by the early 2040s, and is in line with targets to keep warming to 1.5C over pre-industrial levels by 2050.

But other models fall far short of that mark, with the Steady Progress scenario considered to be in line with a 2.6C rise in global temperatures and Slow Change in line with a 4C rise, with both of those scenarios only seeing thermal generator closures earlier than expected closures years if forced by economic conditions.

The final ISP, a roadmap for the future of the NEM, is due in June 2022.

Meanwhile, the Federal Government has moved again to expand the function of the Australian Renewable Energy Agency to fund carbon capture and storage and other “low emissions technologies”.

Changes to its remit were recently knocked back by a loose Senate coalition of Labor and the Greens.

“Getting new, low emissions technologies to economic parity as soon as possible is the only way to reduce emissions without imposing new costs on households, businesses or the economy,” Taylor said.

“This change allows ARENA to support technologies that can reduce emissions across all sectors of the economy.”

“These changes have received wide industry support from over 28 businesses, peak bodies, and climate change groups including the Business Council of Australia, the AiGroup, the National Farmers Federation, ClimateWorks Australia and the Investor Group for Climate Change – and ARENA.”

The changes have been backed by Australia’s gas industry body APPEA, which claims CCS should be on the table to “help reduce emissions”.

“The global oil and gas industry is leading the world in the practical deployment of CCS and hydrogen. In Australia, the oil and gas industry has been at the leading edge of researching and deploying CCS and greenhouse gas storage technologies,” CEO Andrew McConville said.

“Natural gas with CCS is a pathway to a large-scale clean hydrogen industry.”