A new CCIWA report has found Western Australia needs to be competitive, technology agnostic, and share the right messaging to attract the investment to meet net zero by 2050.
CCIWA’s report shows that $8.6 billion per year on average in private and public capital investment is needed to reach net zero by 2050.
The Powering WA’s Future report, based on economic modelling by Deloitte Access Economics and developed specifically for WA, examined five scenarios for meeting WA’s decarbonisation goal while avoiding any loss of industry or reduction in energy reliability.
Four of the five scenarios modelled what would be required for WA to reach net zero by 2050 under a range of economic circumstances, while the fifth modelled delaying net zero until 2070.
CCIWA Chief Economist, Dr Daniel Kiely, said the report highlights the scale of the challenge and opportunity ahead to reach WA’s emissions reduction targets.
“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.”
The five scenarios examined in the model are:
- Net Zero by 2050: what is the least cost path for WA to achieve net zero by 2050.
- Accelerated Carbon Capture, Utilisation and Storage (CCUS): What happens if the cost of CCUS decreases?
- Early Gas Retirement: What if gas is made unavailable and needs to be replaced by other generation technologies?
- Diversified Industries: What if WA’s diversification agenda takes off, in new areas like green metals and data centres, driving up energy demand.
- Delaying net zero until 2070: What if we don’t meet net zero by 2050?
Dr Kiely said reaching net zero is achievable for WA’s economy, if several key conditions are met.
“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.”
The report lays out the unavoidable build costs associated with reaching net zero targets, which was found to be an average of $8.6 billion per year. This includes all business-as-usual replacement capital expenditure for running the economy coupled with the capital expenditure for decarbonisation.
“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,” Dr Kiely said.
Critically, the report highlights the key role gas will play in helping WA achieve net zero.
“This research takes an energy agnostic approach to reaching net zero, which means everything was on the table,” Dr 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.”
“Building industrial-scale solar and wind power generation and the associated transmission infrastructure will require a significant amount of land,” Dr 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.”
