Coal is forecast to almost completely disappear from Australia’s electricity system by 2050 if governments do not attempt to keep plants online with subsidies, according to the latest economic analysis in the BloombergNEF (BNEF) New Energy Outlook 2019.
Coal-fired capacity is predicted to fall from 25 gigawatts in 2018 (generating 63 per cent of the country’s electricity), to 18 gigawatts in 2030, and just six gigawatts in 2040.
Power stations will instead be powered by lower-cost renewables, paired with flexible technologies like batteries, pumped-hydro and gas.
These technologies will ensure the power sector does its part in keeping global temperatures from rising more than two degrees Celsius, at least until 2030.
Renewables are already the cheapest source of new generation in Australia, and their costs will continue to fall, according to BNEF.
“Australia’s existing fleet of ageing coal plants, which have been the backbone of the electricity sector for years, will be the last coal generators in the country,” BNEF head of Australia Leonard Quong said.
“Cheap renewables, firmed with a variety of storage technologies, have set Australia on a path to achieve low-carbon electricity by 2050. The future grid will be underpinned by cheap wind and solar, with batteries and pumped hydro to smooth variability, while gas and long-duration storage will provide additional backup to the market.”
“Our analysis suggests that governments need to do two separate things – one is to ensure their markets are friendly to the expansion of low-cost wind, solar and batteries; and the other is to back research and early deployment of these other technologies so that they can be harnessed at scale from the 2030s onwards,” BNEF’s New Energy Outlook director Seb Henbest added.
Consumers also play a key role in this transformation, according to Quong. Households and businesses buying solar, batteries and increasingly electric vehicles represents “an economic tidal wave” that will reshape the market.
They have installed around 10 gigawatts of solar on their rooftops today, with the figure set to surge to 38 gigawatt by 2030 as the costs of solar continue to fall and new business models make solar even more accessible to consumers, according to the report.
By 2050, rooftop solar capacity will increase to 61 gigawatt, enough to supply nearly one quarter of the country’s electricity demand. At the same time, Australia will invest $US107 billion ($155.6 billion) into renewable energy generation, with coal receiving almost no new capital.
New Energy Outlook 2019 is the result of eight months of analysis and modelling by a 65-strong team at BNEF, based on the announced project pipelines in each country, plus forecast economics of electricity generation and power system dynamics.
It assumes that current subsidies expire and energy policies around the world remain on their current bearing.