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Dr Alan Finkel, Specialist Adviser to the Australian Government on Low Emissions Technology
Virtual address at the ASEAN Energy Business Forum, sponsored by Partnerships for Infrastructure
14 September 2021
I see this ASEAN Energy Business Forum as a valuable opportunity to take stock of what we are doing, and to highlight that our region is at the forefront of the clean energy revolution.
This is a revolution we in Australia are witnessing first hand – indeed, I have been fortunate enough to do so from a front row seat.
My engagement started back in 2016, when, as Australia’s Chief Scientist, I was asked to lead a review into our national electricity market.
After a series of tornadoes damaged transmission line towers in South Australia, our fifth most populous state suffered a complete blackout.
South Australians were suddenly confronted with an insight into an inescapable reality – without an energy supply, modern civilisation would be back in the Stone Age.
As it happened, South Australia was the Australian state with the fastest adoption of wind and solar electricity, so, no surprise, straight after the blackout, before the storms had passed, the finger pointing began. Was this pioneering adoption of wind and solar electricity to blame? Was the blackout going to damage its future prospects?
Our review found that solar and wind generators were not to blame. Instead, the problem was that our national electricity market rules and regulations were twenty years old, and had not modernised to manage the onslaught of new technology.
We corrected that, and instituted new oversight mechanisms to ensure that the market design would continuously adapt to optimally manage the rapid advance of technology.
Globally, our reliance on energy has come at a cost – we all know that.
Essentially, since the Industrial Revolution, greenhouse gases have poured into the atmosphere as we used more and more fossil fuel energy to drive our economies forward.
As a result, climate change is making itself felt in increasingly frequent and more severe weather events.
So, what can we do?
My second opportunity in a front row seat came with an invitation from the government to lead the development of Australia’s national hydrogen strategy.
Japan had already developed the world’s first national hydrogen strategy and it inspired me through its ambition. With enthusiastic support from all levels of Australian government and industry, I chaired a process that produced a national hydrogen strategy that was unanimously adopted by the state and federal governments.
My third opportunity in a front row seat came when I was asked to chair the panel that advises the Minister for Energy and Emissions Reduction, the Honourable Angus Taylor, on the development of Australia’s Technology Investment Roadmap.
Our roadmap stands out as one of the most strategic national decarbonisation strategies in the world.
It is central to Australia’s strategy to drive down domestic emissions while providing new jobs, and exports that will help the rest of the world lower their emissions.
Our approach is to ensure abundant, low cost, clean, reliable electricity for householders and industry.
This will support the production of zero emissions hydrogen, which, combined with zero emissions electricity, will allow us to decarbonise our mining operations to produce zero emission iron ore, alumina and aluminium.
We aim to make low emissions technologies the economically rational choice, rendering high-emissions alternatives obsolete.
Our ambition is to ensure strong economic growth while simultaneously driving emissions to zero.
We are focusing on solutions, on being adaptive, and on attracting industry co-investment alongside substantial government investment.
We are also holding ourselves to account, with an impact evaluation framework.
The Australian Government’s aims are ambitious, but we are not tackling this alone. State governments, banks, farmers and manufacturers are increasingly on board, driven by the desire to participate successfully in the future economy.
One recent example is Australia’s single biggest electricity user – the Tomago aluminium smelter near Newcastle.
Because a power outage of just two hours would cause catastrophic damage, to date coal fired electricity has been Tomago’s only viable option.
And yet, last month, Tomago’s chief executive officer vowed to switch to 100% solar and wind electricity by 2029.
Why? Two reasons.
The first is price. Today, a constant supply of solar and wind electricity is too expensive for an aluminium smelter. But by the end of the decade, pumped hydro storage, transmission lines and battery plants already in the pipeline will deliver constant clean electricity at the same price as yesterday’s coal fired electricity.
The second reason is customer demand. Given comparable prices, customers will always prefer the green alternative; especially after the ‘Code Red’ alert of the recent IPCC report.
But it is not just an Australian story.
International partnerships – in particular, Australia’s energy engagement in Southeast Asia, will be crucial to our collective success.
Australia has long-standing partnerships with ASEAN countries.
We’ve supported each other during the Asian Financial Crisis, Indian Ocean Tsunami, and now the current COVID-19 pandemic.
We can support each other on this journey too.
Australia is committed to the Paris Agreement, with a focus on practical, scalable and collaborative solutions that will enable us to reach net zero.
We have the world’s largest government owned green bank, which has committed over $9 billion for clean energy projects with a total value over $31 billion.
The Australian Renewable Energy Agency has invested over $1.7 billion in grants to accelerate the shift to renewable energy, supporting projects totalling nearly $7 billion.
And in Australia we have the world’s highest uptake of rooftop solar electricity.
Australia appreciates the strong desire in Southeast Asia to advance the energy transition.
I recently had the honour of welcoming participants from ASEAN countries in an inaugural Australia Awards short course on renewable energy, delivered by the Australian National University.
We are backing the $140 million Australia Climate Finance Partnership being delivered by the Asian Development Bank. This will mobilise private sector investments in low emissions and climate-resilient solutions in Southeast Asia as well as the Pacific.
We are introducing a new $141 million Partnerships for Infrastructure program for Southeast Asia, which supports high-quality infrastructure and includes an emphasis on energy and climate change resilience.
And we are supporting the development of emissions inventories and working with specific countries to roll out a pilot regional crediting scheme.
Energy security is vital.
Predictable access to affordable sources of energy is crucial for the region’s post-pandemic economic recovery, development, and long-term prosperity.
Australia is a reliable, large-scale provider of energy to Southeast Asia and we are committed to ensuring uninterrupted supply chains and a competitive market.
We will continue to bring together our combined clean energy expertise to achieve our shared interests in building a resilient and prosperous Southeast Asia via initiatives to decarbonise and cooperate on clean energy solutions.
My best wishes to you all as you lead your countries and industries into the low emissions future.