Power sector in 2030
In 2020, coal, gas, and renewables (including biomass) made up 54%, 20%, and 25% of Australia’s power generation mix, respectively. The latest government statistics show that coal’s share has fallen, while that of gas and renewables has increased.3 Although the decrease in coal use is positive, illustrative 1.5°C pathways would require this to occur at a faster pace and that coal be phased out of power by 2030. Gas-fired power should also begin to decline and be phased out by 2035. Moreover, fossil fuel phase-out should coincide with a strong uptake of renewables. This is to be accomplished by a projected 82% renewable penetration in Australia’s power sector by 2030. An 82% renewables penetration would be an increase from the current 27% level and the projected ~68% 2030 level under the government’s latest projections.
Towards a fully decarbonised power sector
A 1.5°C compatible full decarbonisation of the power sector by mid-2030s could be driven by the phase-out of coal around 2029 and gas around 2035, and a strong uptake of renewables reaching around 100% of the power mix by 2040.
The Climate Action Tracker assessment of Paris compatible pathway for Australia shows that the power sector could be fully decarbonised by the mid-2030s with a 97% renewable energy share by 2030. Analysed downscaled pathways show a lower uptake of renewables by 2030, around 81-88%.
The range of 1.5°C compatible pathways assessed here see power sector carbon emissions reach 32–60 MtCO₂/yr by 2030, a reduction of 67-82% below 2019 levels.
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47 We have derived the excl. LULUCF target from 2005 emissions level in the government’s Paris Agreement inventory and 2030 LULUCF projections in the Government projections published in 2022 of -33 MtCO₂e. Both these sources use global warming potentials (GWP) from the IPCC’s Fifth Assessment Report (AR5). As the 1.5°C national pathway explorer uses GWPs from the Fourth Assessment Report (AR4), we have converted the government’s emissions data to AR4 using an average conversion factor of 0.98 (AR4=0.98*AR5). For reference, the AR5 GWP weighted 2030 emissions based on for reference, the AR5 GWP numbers based on the most recent inventory the most recent inventory is 388 MtCO₂e/yr excluding LULUCF in 2030.
48 Based on Government LULUCF projections which use AR5 GWP (-16 MtCO₂e/yr in 2030). Here we have applied the government LULUCF projections growth rates to the latest LULUCF historical data in the Paris Agreement Inventory, and estimate a LULUCF sink of -26 MtCO₂e/yr by 2030 using AR4 GWP. Historic LULUCF emissions for 2005 have also been converted to AR4.
49 The 2022 projections including LULUCF for 2030 are for about a 32% reduction, 11% short of the Governments 43% target.
50 For a critique of the effectiveness of this mechanism, see Climate Action Tracker’s analysis of Australia’s current policies. For discussion of the associated Safeguard Mechanism, see Submission on Safeguard Mechanism reform.
51 This is consistent with the Climate Targets Panel in Australia “fair share” reductions for Australia in 2030 of 74% from 2005 emission levels including LULUCF based on earlier Climate Change Authority work. The overall fair share contribution includes domestic emissions reductions and substantial support for emission reductions in developing countries on top of its domestic reductions.
Australiaʼs power mix
terawatt-hour per year
- Negative emissions technologies via BECCS
- Unabated fossil
- Nuclear and/or fossil with CCS
- Renewables incl. biomass
Australiaʼs power sector emissions and carbon intensity
MtCO₂/yr
- Historical emissions
- SSP1 High CDR reliance
- SSP1 Low CDR reliance
- High energy demand - Low CDR reliance
- Low energy demand
- 100%RE
1.5°C compatible power sector benchmarks
Carbon intensity, renewable generation share, and fossil fuel generation share from illustrative 1.5°C pathways for Australia
Indicator | 2019 | 2030 | 2040 | 2050 | Decarbonised power sector by |
|---|---|---|---|---|---|
Carbon intensity of power gCO₂/kWh | 680 | 120 to 130 | −60 to 0 | −80 to 0 | 2039 to 2040 |
Relative to reference year in % | −83 to −80% | −109 to −100% | −112 to −100% |
Indicator | 2019 | 2030 | 2040 | 2050 | Year of phase-out |
|---|---|---|---|---|---|
Share of unabated coal Percent | 59 | 0 to 5 | 0 | 0 | 2029 |
Share of unabated gas Percent | 20 | 6 to 7 | 0 | 0 | 2035 |
Share of renewable energy Percent | 20 | 81 to 88 | 100 | 100 | |
Share of unabated fossil fuel Percent | 80 | 12 to 19 | 0 | 0 |
Investments
Demand shifting towards the power sector
The 1.5°C compatible pathways analysed here tend to show a strong increase in power generation and installed capacities across time. This is because end-use sectors (such as transport, buildings or industry) are increasingly electrified under 1.5°C compatible pathways, shifting energy demand to the power sector. Globally, the “high energy demand” pathway entails a particularly high degree of renewable energy-based electrification across the various sectors, and sees a considerable increase in renewable energy capacities over time. See the power section for capacities deployment under the various models.
Australiaʼs renewable electricity investments
Billion USD / yr
Yearly investment requirements in renewable energy
Across the set of 1.5°C pathways that we have analysed, annual investments in renewable energy excluding BECCS increase in Australia to be on the order of USD 3 to 18 billion by 2030 and 4 to 18 billion by 2040 depending on the scenario considered. The ‘high energy demand, low CDR reliance’ pathway shows a particularly high increase in renewable capacity investments, which could be driven by an increase of electrification of end-use sectors such as industry and transport. Other modelled pathways have relatively lower investments in renewables and rely to varying degrees on other technologies and measures such as energy efficiency and negative emissions technologies, of which the latter can require high up-front investments.