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Staying ahead of the curve: Understanding the latest projections for Australia’s grid emissions

Developing emissions forecasts and net zero roadmaps is core business for us, so it is essential that our modelling accurately accounts for anticipated future changes in emissions from grid-sourced electricity. An appreciation of how the projections are calculated is useful for understanding why there are frequent significant revisions made to the projections, and what the implications are for organisations wanting to manage their emissions.

New projections for Australia’s grid emissions

The latest release of Australia’s Emissions Projections (December 2022) is out now, with some interesting updates to Australia’s future grid emissions intensity figures. At 100% Renewables, our work is predominately forward-looking. Developing emissions forecasts and net zero roadmaps are core business for us, so it is essential that our modelling accurately accounts for anticipated future changes in emissions from grid-sourced electricity.

Our future-year emissions calculations are always carried out using the latest official projections data from the Australian Government, and we have been busy updating our forecasting tools to reflect the most recent updates.

How are the projections made?

The electricity sector emissions projections are modelled using PLEXOS forecasting software for the National Electricity Market (NEM). PLEXOS estimates the mix of energy sources needed to meet expected demand at the lowest cost, and then simulates operation of the specific power stations that would be needed to meet that mix.

The main inputs into the modelling include the anticipated closure of several coal generators over the period to 2035, the Clean Energy Regulator’s (CER’s) pipeline of large-scale renewable projects, CER’s modelling of rooftop solar trends, AEMO’s forecasts for energy efficiency, and expected consumption of electricity from electric vehicles (EVs).

The emissions projections also account for the latest economic and activity data, updated forecasts of domestic and international demand for Australian energy and resources and agricultural products, and the latest information on technology costs, uptake, and deployment. The New South Wales Electricity Infrastructure Roadmap has been included in these emissions projections, along with state renewable energy targets.

Significant changes to grid emission projections

It is worth noting that this year’s release includes some significant revisions to expectations of future grid emissions intensity. Taken together, the revisions indicate Australia’s grid emissions intensity has fallen less than expected in the early part of the decade but will fall more than expected in the later part of the decade.

Scope 2 projections for Australia in 2023 have been revised up from 0.54 to 0.63 CO2-e per MWh, while Scope 2 projections for 2030 have been revised down from 0.31 to 0.26 CO2-e per MWh. The upward revision for short-term grid intensity suggests it is possible that anticipated reductions in grid emissions intensity may sometimes fail to materialise and instead stay higher for longer.

The frequent year-to-year revisions made to grid emissions projections further add to the case for being proactive in managing your own emissions reduction journey, as relying too much on grid decarbonisation represents a very long and uncertain path to net zero. Investing in energy efficiency and renewable energy can help bring down your Scope 2 emissions much faster than the current rate of grid decarbonisation, while delivering net profits to your organisation.

 

100% Renewables are experts in helping organisations develop their net zero strategies and plans, and supporting the implementation and achievement of ambitious targets. If you need help to create your net zero transition strategy, please contact  Barbara or Patrick.

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