Australia gets energy wake-up call – but is anybody listening? by Giles Parkinson

The new technology cost forecasts produced by the Bureau of Energy Economics this week provide a marvelllous opportunity for Australia to redefine its debate about its future energy needs. But don’t hold your breath waiting.

The conclusions – most notably that wind and solar provide the lower cost energy options over the medium to long term – should put an end to the nonsense espoused by Conservative politicians across this country about coal remaining the cheapest long-term option. Australia has now joined the world’s largest economies – the US, India and China – in recognising that renewables, particularly wind and solar, will be cheaper than new-build coal and gas within a decade. This should encourage Labor to be more embracing of the Clean Energy Future on which it has staked its future. Sometimes it’s OK to be seen to agree with The Greens. Private polling tells us green energy is a vote winner.

The landscape of inputs into the country’s policy debate has changed markedly since the appalling Draft Energy White Paper (The Old Testament) was unveiled by the government just before Christmas. Martin Ferguson has sat through enough briefings about solar PV, in particular, in the interim to understand that this is a game-changing technology. The BREE report acknowledges this, and the fact that it, along with the recent analyses of expansion in the solar industry and declining demand by the Australian Energy Market Operator, reflects that technology costs and consumption patterns are changing so rapidly that they need to be constantly monitored.

The tendency in the past has been to grossly underestimate the cost of fossil fuels and grossly over estimate the cost of renewables. This has now been at least partly redressed. By recognising that wind and solar present the lowest-cost options over the medium to long term, Australia should now be discussing how to get there more quickly, rather than retarding their growth. It should be talking about a more ambitious renewable energy target, possibly enhanced by the projects that could be brought on by institutions such as ARENA and the CEFC. These hold the key to bringing down the other technologies to the costs that are predicted by the industry and most other international literature.