Climate and energy ministers have acknowledged the need to obtain social licence when implementing new electricity generation infrastructure, but say the market has already charted its future.

And that’s renewable, says Australia’s climate change and energy minister Chris Bowen, who spoke at the Future Energy conference at the Tonsley Innovation precinct in Adelaide on Wednesday.

“Renewable energy is the cheapest form of energy available today, even including the storage and transmission costs. It’s actually the cheapest form of energy that’s ever been available to humankind,” Bowen said.

That view was echoed by Tom Koutsantonis, South Australia’s mining and energy minister, who spoke at length on his state’s efforts to decarbonise. About 70% of SA’s energy is renewably sourced.  

“Whatever your views are on climate change, there’s one thing that’s clear, the market has decided… international monetary markets have decided climate change is real, carbon abatement is part of their core business,” Koutsantonis said.

South Australia’s mining minister earlier remarked on the state’s 15-year transition to renewable power, now delivering more than half its energy needs, although he noted there are challenges with load management.

The federal government wants 82% of Australia’s energy generated from renewables, and greenhouse gas emissions cut by 45% below 2005 levels by decade’s end.

Bowen lamented the reliability imperative of the transition being often, in his view, “twisted,” but acknowledged its importance for consumer confidence.

“A properly constructed renewable grid is a reliable grid… is one that we can count on in difficult times,” Bowen said. Delays in constructing new transmission infrastructure have been cited in recent months as the chief barrier to achieving the 82% renewables target.

Credit: Brook Mitchell AAP, Getty Images

Resilient grid construction is an imperative for the government, with Bowen and Koutsantonis both acknowledging the criticism South Australia received in 2016 after massive storms downed the state’s grid. Many observers erroneously blamed SA’s investment in renewables as the cause of the outage.

In response, the world’s then-largest storage battery was constructed by a state partnership with Tesla, helping to build both parties’ renewable credentials.

“Our grid is about to go under more pressure in the next few months [and] we are about to face a long and hot summer,” Bowen said, and in direct reference to the impact of past and current fossil fuel pollution as a primary climate driver, “one of the reasons why we’re doing all of this is to try and reduce long and hot summers into the future”.

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In August, the market operator forecast grid reliability gaps as private operators retire existing coal generation facilities – which, due to outages only operated about three-quarters of the time last year – over the next decade.

Bowen acknowledged the importance of social licence in all parts of Australia’s energy transition as well. Some coastal communities are currently debating the proposal to construct offshore wind zones on their horizons. Areas in Bass Strait near east Gippsland and off New South Wales’ coastline in the Hunter Valley and Illawarra regions are among seven sites for development.

The Hunter region has been the subject of protests in recent weeks over the plans. Bowen agreed there are legitimate concerns among the communities that should be heard, but criticised some opponents for instances of “climate denial masquerading as newfound environmental concerns”.

“Communities have very high expectations and quite right, and some of those concerns are very valid and genuine,” he said.

“The zones I eventually declared was, in Gippsland’s case, half the size of the area I originally consulted on, and in Hunter [reduced] by about a third.

“Because people raised legitimate issues. Whether it is whale migration, bird life, amenity… it’s important we show this is a genuine consultation.”

Earlier, Koutsantonis was bullish about his state’s prospects as a hydrogen producer.

South Australia has gone all-in on what it sees as a good economic bet with the construction of a 250MW electrolyser – potentially the world’s largest – at Whyalla in the state’s north. Operations are slated to commence at the end of 2025.

Koutsantonis hopes to see SA’s decarbonisation efforts flow through to industry quickly.

Whyalla is SA’s steelmaking hub. Koutsantonis hopes the decision to co-locate hydrogen and renewable technology near the steelmaking industry and the similarly close magnetite reserves will also advance the renewable transition in South Australian steel.

It’s expected that SA will try achieving a dual outcome of both using hydrogen to decarbonise steelmaking and beneficiate iron ore for export.

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