Through its Clean Energy Future Plan, the Australian Government is implementing key reforms to drive a long-term transformation to a clean energy economy. The central elements most relevant to energy policy are a carbon price, renewable energy and energy efficiency. The government has committed up to $17 billion over the next decade to support more innovation and deployment of clean energy and energy efficiency, including for technology research and development, demonstration and commercialisation.
By 2035, clean energy sources could potentially supply about 40% of Australia’s electricity needs, or around four times as much as today. Around $200 billion in investment may be required by 2050 to assist in meeting Australia’s national greenhouse gas reduction goals.
Accelerating the rate of innovation, early proving of commercial potential and in-country adaptation of key technologies will help markets move to a clean energy future more quickly, and at potentially lower cost. Ultimately, the lowest-cost and most reliable technologies, as determined by the market, will succeed.
Realising the potential of new technologies will require collaborative approaches that can make the best use of Australia’s strengths and capabilities.
Growing global markets for clean energy technologies are already helping to drive down clean energy costs. Australia should be flexible and ready to apply overseas experiences and put the necessary enablers in place to adopt new, cost-effective technologies quickly.
Maintaining flexibility in our energy options will reduce the risk and cost of meeting short- and long-term climate change and energy goals.
The transformation to a clean energy economy is a critical long-term policy reform for the Australian economy and our environment. It has already begun: clean energy is now firmly embedded in our energy generation mix, our markets and our policy frameworks. The transformation will create new business opportunities and jobs in many parts of Australia. Our world-class science and research base also position us well to create wealth through new knowledge and clean energy innovation.
Achieving success at an affordable cost requires the efficient pricing of carbon and the development of efficient energy markets that provide both sufficient certainty for investors and the necessary flexibility to respond to developments.
Many of the technologies likely to be needed to meet our clean energy goals, particularly in the long term, are not yet commercially available or mature. Key challenges for governments over the coming years will be overcoming existing technical, financial and regulatory barriers, properly targeting resources to help develop commercially viable technologies, and ensuring that new technologies can integrate effectively into energy markets. It is also important that the costs and risks of the transformation be manageable for the economy and consumers and that we maintain our energy security.
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