The inauguration of President Trump this Saturday (Australian time) marks a radical change in the world as we know it. It ushers in the beginning of four years where progressive issues as far reaching as race equality, women’s health, nuclear and foreign policy, and of course climate change will be under sustained attack.
Less than a year after the world agreed a historic climate pact in Paris, the US – the world’s second-largest greenhouse gas polluter – elected a man who wants to revive the glory days of coal, oil and gas.
To less fanfare here at home, the Turnbull government is pursuing a similar trajectory. Ploughing through the headwinds is our resources minister, Matt Canavan, who is seeking a $100bn investment in coal and is the biggest campaigner for a new mega-coalmine in Queensland’s Galilee basin run by the Indian company Adani.
The truth is that try as they might, neither Trump nor the Australian government can turn the tide on renewable energy, nor resuscitate an ailing coal industry with a clear expiration date. This is not a moral or political case, but a purely economical one.
This is why I remain quietly optimistic about the continued global transition away from fossil fuels despite the hostile political climate.
Renewable energy is rapidly becoming the cheapest and easiest way of producing energy in countries around the world. Investors everywhere are watching these changes and the market is responding rapidly.
China has recently announced that it will invest US$361bn into renewable energy over the next four years, creating 13m jobs in the process. This is as much as the entire globe spent on renewables over the past four years. This makes good financial sense as well, since the cost of building large-scale solar has decreased by about 40% since 2010, making it cheaper than coal.
Meanwhile, fossil fuels have become a leading cause of death globally, just behind tobacco. Indeed, air pollution from coal caused 770,000 premature deaths last year in China and India alone. Tell that to Matt Canavan next time he waxes poetic about the virtues of coal in developing economies.
Together these factors add up to what a University of Queensland economist, John Quiggin, says is a continuing trend away from coal that will only pick up speed.
“Until relatively recently, coal-fired electricity generation has been commercially successful,” he says. “That’s changing fast around the world due to the combination of carbon prices, competition from renewables and restrictions on particulate emissions. Taken together, these factors make it uneconomic to build a new coal-fired power station anywhere in the world.”
Bypassing government, many investors and businesses in Australia and around the world are now asking just how quickly this transition will happen. Over the past few decades it has been almost commonplace for new technologies in a range of sectors to erode the competitive advantages of incumbents incredibly quickly.
A great example that could provide an interesting case study for the potential of renewable energy is LED lighting. In 2010 LED lights had only 1% of the US market. With clever government incentives and regulation encouraging the transition, almost overnight the market shifted. Within five years, LED lights had moved into almost 60% of the market, making it one of the fastest technology shifts in human history. The trajectory was remarkably similar to what we are seeing with renewable energy now.
While the Turnbull government’s bungling of federal energy policy is stifling some of the potential for clean energy developments, many Australian business leaders are steaming ahead regardless.
Australia is the best country on the planet for solar energy and the former BHP executive Phil Galloway is looking to capitalise on that.
He has plans to roll out 220,000 solar panels across the empty space on an almond farm in regional Victoria, generating enough electricity to power about 30,000 homes. Inspired by the model adopted in the US by companies such as Google and Apple, Galloway would look to negotiate power-supply agreements directly with large local companies rather than energy retailers.
This is just the sort of project that is not only becoming more viable but, with a bit of clever government incentivisation, could transform Australia’s energy future and create a clean energy transformation that would create countless new, sustainable jobs across the country.
A similar project is under way in the sleepy Victorian town of Yackandandah. Residents there have come together under the banner of 100% renewable energy and energy sovereignty to pursue a transformation of their own.
Working with AusNet, which runs the Victorian grid, the town will trial new storage technology along with setting up a renewable energy farm to power it, with profits from the energy generated being ploughed back into their community. This is one of dozens of community renewable energy projects that are quietly driving Australia away from polluting energy.
Likewise, in the northern rivers region of New South Wales, a community-owned energy company is seeking to offer a clean alternative to the dirty energy produced by Australia’s big three energy retailers: AGL, Origin Energy and EnergyAustralia.
Enova Energy is making inroads not only to kickstart renewable energy but also to empower energy consumers. Headed by former executive heavyweights disillusioned by the government’s inaction on renewables, including Alison Crook, a former Monash University deputy chancellor and Qantas businesswoman of the year, Enova’s mission is to offer the country’s highest feed-in tariffs and lowest GreenPower price while working with social welfare groups to tackle energy poverty in the region.
Our governments may now be held hostage by visionless representatives more determined on prosecuting their narrow ideological agenda than helping Australia find solutions to its most pressing issues but, elsewhere, leaders in other fields are transforming the way we generate, share and manage our energy needs and addressing climate change.
Bellicose political rhetoric can’t hide the economic fact: renewable energy is the future. My advice for Donald Trump and Malcolm Turnbull is this: find an economic reason to justify being part of the clean energy revolution to the deniers around you or watch as investors, businesses and communities steamroll right over you.
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