Net zero will cost $120 trillion but it has to happen, says Origin Energy boss
Origin boss Frank Calabria said the world needed to lean into the energy transition, that its forces were unstoppable and the advantages many, but first Australia must increase the output from its coal fired power stations to fix the current energy crisis.
Faster than expected closure of power stations is raising questions about whether, and when, renewables can take up the slack. (file image)
Calabria said there was also a high risk that more energy retailers would collapse.
“The risk is very high that small, exposed retailers will go under as they grapple with the significant increase in wholesale prices this year, just as we saw in the UK,” he said.
“We must continue to lean into the transition, given its potential to improve outcomes across energy security, affordability and achieve emissions reduction over time.
“But we must act with some urgency to stabilise markets today. First and foremost, by getting coal plant back online as quickly as possible to help stabilise the market and deliver some wholesale price relief.
“We must do this while at the same time rapidly accelerating the build of replacement renewable supply and firming.”
He said the scale of the transition for the energy sector represented an enormous opportunity between now and 2050, but it would need $120 trillion to be invested in the energy sector to reach net zero.
“We estimate that with electrification will come a tripling of demand for electricity. Storage will need to grow by a factor of 170, there will be an eight-fold growth in renewables, and significant growth in hydrogen as a clean fuel source,” he said.
“Australia is a likely to be a significant exporter of hydrogen, given our renewable energy potential and geographic proximity to energy hungry, growing Asian markets.”
But he said coal still accounted for 65 per cent of the generation in Australia and the recent outages had been the driver of the current crisis.
“We must act swiftly, with industry and government working in concert, to bring as much coal supply back into the system as soon as possible, in order to put downwards pressure on the wholesale electricity price,” he said.
To do this coal fired power stations must get priority of supply.
He said for the renewables that were needed to connect to the grid another $70 billion would have to be spent on developing transmission and there would have to be greater investment in “firming capacity” with substantially more storage.
