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Australian infrastructure in need of expensive overhaul
- 13 years ago (2010-12-16)
- Junior Isles
Australia needs to spend up to $130 billion on new power generation and upgrades to its grid to comply with new climate change policies.
World Future Energy Summit (WFES) 2025
The Australian Energy Market Operator (AEMO), which produced the new modelling, has found that between $35 billion and $120 billion in new electricity generation assets will be needed over the next 20 years, as demand for electricity is forecast to rise between 30 and 70 per cent on today's levels as the economy and population grow.
On top of this, between $4 billion and $9billion is needed for transmission to connect up the new sources of power.
The AEMO is proposing a new $8.3 billion link from Queensland through NSW and Victoria to South Australia and Tasmania to allow greater electricity trading and a bid to create a truly national power grid.
Energy Minister Martin Ferguson also says that the government's target of 20 per cent of electricity generation from renewable sources, such as wind, by 2020 is doomed to fail unless a price is put on carbon.
The research is set to reignite the debate over a carbon price, with the Gillard government placing renewed political pressure on Tony Abbott to support the policy after the climate negotiations in Cancun, Mexico.
AEMO chief executive Matt Zema said investors in the electricity industry were "hedging their bets" in the absence of clarity over a carbon price. Gillard has warned that without a price on carbon, Australians will face more blackouts and soaring electricity prices as the power industry is gripped by investment uncertainty.
AGL Energy chief executive Michael Fraser concurred, saying it was crucial to put a price on carbon before energy companies would build baseload generators, which are the power stations that meet Australia's day-to-day electricity needs.
The modelling finds that a higher carbon price would require a greater investment in more costly renewables, such as wind, or in coal-power stations that use carbon capture and storage technologies. But the operating cost of power plants using renewables is usually cheaper.