MIL-Evening Report: Victoria faces a grave climate and energy crisis. The new government’s policies must be far bolder
- Nov 28, 2022 8:12 pm GMT
Source: The Conversation (Au and NZ) – By
The Andrews Labor government has been returned in
Victorians are still reeling from rare major flooding in which the state’s largest dam, Dartmouth, spilled over. Meanwhile, electricity prices in
The Andrews government has signalled a major shakeup of Victoria’s energy sector. Its pre-election commitments – a 95% renewable electricity target by 2035 and net-zero emissions by 2045 – are definite moves in the right direction.
And plans to reinstate the
These are significant pledges and daunting tasks to accomplish. But the Victorian government must go further to secure the energy sector and take stronger climate action.
Reducing energy costs
Today’s high energy costs are driven primarily by fossil fuel supply constraints. The reduction in gas supply due to sanctions on
For more than a decade, specialists have known the long-term solution to reduce electricity prices and cost volatility: a large-scale shift to renewable sources of energy.
This would shield us from short-term supply and demand shocks because the cost of renewables-produced wholesale energy is fixed at construction, with no variable costs such as fuel.
Shifting to renewables would also make electricity cheaper than coal and gas in countries with major wind and sun advantages, such as
But realistically, in the next two years or so the Victorian and Australian governments can only manage energy prices by curbing the worst excesses of an unfettered free market operation in natural gas and retail electricity.
We are still working with precisely the same market frameworks as when deregulation started in 1998.
For example, in the decade to
We must go back to the drawing board to determine what the energy market should look like. In the meantime, Australian states and territories must consider reimposing price caps on energy retailers.
An immediate relief measure would be to delink Australia’s natural gas market from global markets for a limited period.
The only sure way to do this is by implementing a domestic gas reservation policy, which entails reserving a portion of Australian gas for domestic use, rather than exporting it. This must be nationally coordinated, as we have a strongly interconnected national gas market.
Since winning the election, Victorian Premier
Steps to reduce emissions
Our energy futures are intrinsically intertwined with addressing climate change.
The world has only eight years left for global warming to be limited to 1.5℃. This means accelerating the switch to renewable energy without any further delays.
Our first step must be to make all electricity renewable by 2035 in
Second, we need a transition to electric vehicles across all transport systems as fast as possible and well before 2040. The Andrews government is investing
Third, hard-to-abate sectors – such as certain manufacturing operations, shipping and aviation – need ongoing technological development.
They require significant government support to progress clean fuels, likely based on the renewable hydrogen to ammonia pathway.
Ultimately, the incoming Victorian government’s promises address the first issue well, while making some headway on the second and third.
The Victorian government must be brave
We can’t rely on the rest of the world for innovation. Governments in
Tackling all these challenges isn’t really a job for a single state, particularly given
The Victorian government cannot achieve any significant changes without working closely with other states and the federal government. In this, state governments must be brave and go against the past three decades of hands-off government approaches to essential energy infrastructure.
This isn’t a time for leaving things to the market to resolve. The Victorian government must take immediate and giant leaps to ensure a stable and climate-friendly energy sector.
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