Our future as an electrostate: Alan Finkel on how Australia gets to net zero from here

“It won’t be easy getting to zero, Kathleen.”

We were at a dinner party soon after the May 2022 Australian election, which saw the Labor party, led by Anthony Albanese, form government, with an unprecedented number of seats won by the Greens and by climate-focused independents. Rolling her eyes, Kathleen pressed on in a triumphal tone.

“With the new political will locked in, surely we’ll get there quickly.”

Quickly? Kathleen was not in a position to see what lay ahead.

Our energy system is a behemoth nourished on fossil fuels. Replacing that rich diet with lean wind and solar energy is a task of barely imaginable proportions. Think forests of windfarms carpeting hills and cliffs from sea to sky. Think endless arrays of solar panels disappearing like a mirage into the desert. What we have now has to be scaled up by a factor of 20.

It will take mining on a massive scale to extract the minerals needed for batteries and solar panels. It will take giant factories to build the parts for towering wind turbines. It will take untold miles of high-voltage transmission lines to carry the electricity to power the mines and factories and the 24-hour buzz of civilisation.

It will take engagement with and support for affected communities; financing at unprecedented scale; strategic government policies that convert targets into actions.

The sheer scale of the task, I pointed out to Kathleen, is why we’d barely made a dent in reducing global emissions despite three decades of effort and concern. Between 1990 and 2021 the behemoth known as global civilisation only reduced its fossil-fuel diet from 87% to 83% of total energy consumed worldwide. Let me spell that out. We shaved off 4% in the last 30 years. In the next 30 we need to shave off 83%.

Kathleen’s expression shifted from triumph to despair.

I am an engineer. I’ve been trained to solve problems. And I’ve spent more than a decade thinking about the climate problem. As Australia’s chief scientist I presided over the review of Australia’s electricity market, the development of the national hydrogen strategy and the national low-emissions technology roadmap. Five years before that, I worked at Better Place, a startup ahead of the times, conceiving the recharging infrastructure for electric cars.

The task ahead is immense but there is reason to be optimistic.

We know what to do. We need to replace fossil fuels with zero-emissions electricity. Our ambition must be to usher in the electric age to replace the industrial age.

The journey has begun. Although solar and wind supplied only 5% of total global energy consumption in 2021, they got there off a zero base in 1990 and are now increasing by a factor of four every decade. If that rate of increase can be maintained for the next two decades, we will be approaching full decarbonisation of the energy system.

To keep the engine of change operating at that pace, we will need an efficient global supply chain. The basic elements are there, built up over decades. But they are vulnerable – think Covid, think the Ukraine war.

With US leadership, after the second world war protectionist tariffs and quotas around the world were dropped, resulting in a thriving international economy. But there have been quirks, including excessive concentration of supply. The dependence of Europe on Russian gas was made clear when Russia cut supplies in 2022. That alerted all countries to the risk excessive supply-chain concentration could pose to the clean energy transition. Nearly all the world’s battery materials are refined in China and the vast majority of solar panels are produced there. Most of the world’s cobalt for electric vehicle batteries comes from the Democratic Republic of Congo.

We must massively expand mining for energy transition materials: lithium, cobalt, manganese, nickel and graphite for batteries; silver and silicon for solar panels; rare earth elements for magnets in electric vehicle motors and wind turbine generators; aluminium for lightweight vehicles and copper for their internal wiring; platinum and iridium for hydrogen production.

As mining expands, there is an opportunity to diversify supply across a broader mix of countries. Simultaneously, mining companies must shoulder their responsibilities to preserve biodiversity and rehabilitate the local environment. Their labour policies must without exception avoid child exploitation and forced labour.

Coal-fired plants have no future but shutting them down before the firmed solar and wind generation plants are built would risk extended electricity blackouts. That would not just be a disaster for modern life; it risks rescinding the social licence for moving as fast as we can to net zero.

Getting things right also means being alert to unintended consequences. The road to hell is often paved with good intentions. One example of this is the trend by companies under pressure from shareholders to improve their green credentials by divesting their fossil-fuel assets. But for every seller, there is a buyer. If, as is often the case, the buyer is a private-equity company or a state-owned corporation, they are not accountable to the scrutiny of pesky shareholders and operate their new acquisition with poorer practices. Net result? The planet is worse off.

Another example of perverse outcomes is when rich countries improve their emissions scorecard by offshoring heavy industries to developing nations. Again, the planet is worse off because the developing countries tend to run their factories on higher-emission energy sources.

Instead of divesting or offshoring, industry and governments should invest in renewable technologies to make them ever more competitive and render fossil fuels obsolete. The mantra should be investment, not divestment. By investing in renewables such as hydro, solar and wind electricity, more countries than before will enjoy the geopolitical security of a domestic energy supply. Equally important, they will benefit from the cheapest form of energy, completely decoupled from global price spikes.

Getting things right also means being alert to unintended consequences. The road to hell is often paved with good intentions. One example of this is the trend by companies under pressure from shareholders to improve their green credentials by divesting their fossil-fuel assets. But for every seller, there is a buyer. If, as is often the case, the buyer is a private-equity company or a state-owned corporation, they are not accountable to the scrutiny of pesky shareholders and operate their new acquisition with poorer practices. Net result? The planet is worse off.

Another example of perverse outcomes is when rich countries improve their emissions scorecard by offshoring heavy industries to developing nations. Again, the planet is worse off because the developing countries tend to run their factories on higher-emission energy sources.

Instead of divesting or offshoring, industry and governments should invest in renewable technologies to make them ever more competitive and render fossil fuels obsolete. The mantra should be investment, not divestment. By investing in renewables such as hydro, solar and wind electricity, more countries than before will enjoy the geopolitical security of a domestic energy supply. Equally important, they will benefit from the cheapest form of energy, completely decoupled from global price spikes.

In Australia’s case, with our abundant minerals and renewable energy, we have the opportunity to become an electrostate of the future, supplying the world with the energy transition materials it needs and with decarbonised products. Technology can deliver the clean alternatives that will enable us to continue to enjoy the benefits of our existing and evolving modern civilisation.

The task is not easy. But if we optimise the supply chain, ensure integrity in financing, invest in constant technological improvement and keep open minds, we will get there. The US architect Buckminster Fuller said: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”

 

 

 

 

 

cover photo:Think forests of windfarms carpeting hills and cliffs from sea to sky,’ Alan Finkel says. Photograph: David Trood/Getty Images