Western Australia can reach net zero emissions by 2050 but only if the right policy settings, investment signals and industry collaboration are in place, a new CCIWA report has found.
Launched at a CCIWA event on June 22, the report brings together economic modelling and industry insight to examine how WA can transition while remaining globally competitive.
CCIWA Chief Economist Dr Daniel Kiely said the findings highlighted the scale of the challenge and the opportunity ahead.
“Energy is absolutely critical to everything we do as a society and an economy, but there is clearly a need to decarbonise,” he said.
“We need to balance the energy trifecta of reliability, cost and decarbonisation, and industry has been clear that we must do this while maintaining WA’s international competitiveness.
“This report sets out several clear pathways to achieve this.”
Five pathways to net zero
The report models five scenarios to explore how WA could meet its emissions reduction goals:
- Net zero by 2050: the least-cost pathway to achieving net zero
- Accelerated CCUS: the impact of lower costs for carbon capture, utilisation and storage
- Early gas retirement: replacing gas with alternative energy sources
- Diversified industries: increased energy demand driven by new sectors such as green metals and data centres
Delayed transition: pushing net zero to 2070
Kiely said reaching net zero was achievable but only under the right conditions.
“Firstly, WA’s competitiveness is the key to both growing and decarbonising our economy. The energy transition will largely be funded by the private sector, so it’s vital that the approvals and policy conditions are right to bring capital into the State,” he said.
“Secondly, WA needs to take an agnostic approach to how the energy transition will be achieved. That means being open to every type of energy generation as well as initiatives like carbon abatement and battery storage.
“Finally, messaging matters. It’s crucial that both Federal and State Governments, and industry, are clear on what needs to happen to reach net zero and how that will be achieved.”
Scale of the challenge
Speaking on a panel at the launch, Deloitte Access Economics Partner Josh Martin said the modelling revealed the scale of the task ahead.
“We are talking about installing more than 100GW of renewals over the next 25 years which is an enormous task, but there’s also a really wide range of other technologies that also need to be deployed at scale,” he said.
The report said the $8.6 billion annual investment included both business-as-usual replacement capital and the additional funding required to decarbonise.
“With the right signals and environment, the bulk of that investment will come from the private sector, but there will still be a critical role for Government to play,” Kiely said.
Policy critical to attracting investment
Panellists (L-R): CCIWA’s Dr Daniel Kiely, Deloitte Access Economics’ Josh Martin, WesCEF’s Mussaret Nagree and CCUSNA’s Rosie Johnstone
Panelists agreed that policy settings would be critical in attracting capital and enabling large-scale decarbonisation projects.
WesCEF Chief Energy Transition Officer Mussaret Nagree said industry must balance emissions reduction with global competitiveness.
“Maintaining our competitiveness is really important,” she said.
“We want to decarbonise but we also have to maintain our competitive position and this is where policy is so important because we need policy settings that enable us to do both.”
CCUS Network Australia Chair Rosie Johnstone warned that without policy reform, key technologies could fail to scale.
“We have all the elements in Australia, and certainly in Western Australia, we’re very blessed, but we don’t have the policy yet,” she said.
“So, we face a choice now with governments. Our message to Government really is the status quo will see you not having the big use of multi-user hubs. If you would like those, you’ll have to change your policy settings.”
Kiely said strong coordination between government and industry would be essential to success.
“It [net zero] is very much achievable. Industry wants to deliver on this. What we need is very clear signals from Government and clear collaboration between industry and Government to ensure that this can occur,” he said.
“We don’t have a choice here. We need to deliver on this. We’re in a globally competitive economy. Other nations are decarbonising, and they require us to deliver goods and services that have been delivered in a green manner.
“So, if we want to be competitive in global supply chains, we need to be part of that decarbonisation story.
“So, again, yes, they are big numbers. The modelling has looked at a least-cost pathway, so each of these look at combinations of energy generation and fuel that ensure that we get there in the least-cost manner.”
Gas and land will both play a role
The report also highlighted the continued role of gas during the transition, alongside large-scale renewable energy development.
“This research takes an energy-agnostic approach to reaching net zero, which means everything was on the table,” Kiely said.
“We can see clearly that gas will continue to underpin our economy as an essential fuel for industry but also ensuring that WA can keep the lights on for households while transitioning to lower-emissions technologies.”
Significant land would also be needed to support new infrastructure.
“Building industrial-scale solar and wind power generation and the associated transmission infrastructure will require a significant amount of land,” Kiely said.
“Fortunately, WA is blessed with abundant space, as well as the sun and wind required to achieve this.
“However, it’s important that the community is informed and understands the journey required. This starts with sharing information and having an honest conversation about how WA can remain competitive, while decarbonising.”
Read the report: CCIWA Energy Transition Report
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