THE GLOBAL MANUFACTURING & INDUSTRIALISATION SUMMIT

KNOWLEDGE HUB

The Australian-German Energy Transition Hub is a bilateral initiative for research on renewable energy transition. Supported by the Australian Department of Foreign Affairs and Trade and the German Federal Ministry for Education and Research, the hub brings together these leading research organisations to identify and harness the opportunities in the transition to a net-zero emissions world economy.

The partnership is a pioneering example of innovative and effective collaboration through fostering closer links between researchers, industry, and government entities.

In a recent report, the Energy Transition Hub said: “Energy transition is happening in response to rapidly-changing technology costs and governments seeking to implement policies in line with the Paris Agreement goals. This transition poses policy and technological challenges but if managed well, it can also deliver great economic opportunities in both Australia and Germany”.

Germany’s energy transition strategy kicked off in 2000 with the introduction of guaranteed feed-in and tariffs for renewable electricity in the Renewable Energy Sources Act. Its success in driving energy transition while rapidly reducing the cost of renewables within years made it an international pioneer.

The Act has since evolved to include market premiums and a competitive auction system and as a result, renewable investments remain high and in 2018, annual net electricity generation from renewables (approximately 40%) exceeded coal power generation for the first time.

Germany’s energy transition strategy has been realigned as a result of this success, and it now focuses on:

  1. a continuous transition to an electricity supply system based on very high renewable shares of mainly fluctuating solar PV and wind power;
  2. deeper direct electrification of zero-carbon electricity in the transport, buildings and industry sectors; and
  3. use of renewable-based synthetic fuels to cover remaining non-electric energy demands and backup (indirect electrification).

At the core of the German vision lies the concept of ‘sector coupling’, which involves closer integration of renewable power supply and newly electrified demand across end-use sectors. For example, power-to-heat, power-to-fuel, and battery-electric vehicles help reduce emissions and increase demand flexibility to support the integration of variable renewable power.

Australia also commenced its energy transition in the early 2000s with legislation of a national Mandatory Renewable Energy Target (MRET Review Panel, 2003). As a result of falling technology costs and changing market conditions, Australia’s national target for 2020 has already been achieved, with renewable energy contributing over 21% of electricity supply across the main east- and west-coast grids in 2018.

According to a report by the hub, with the right policy support Australia could become a global leader “both in climate mitigation and the export of zero-carbon energy” in the form of green hydrogen, green steel and other products such as aluminium produced from green electricity. As such, Australia has the potential to create an export industry around its renewables infrastructure and could achieve 200% export of energy from renewable sources by 2050.

As one of six scenarios devised by the Australian-German partnership, securing 200% energy exports is dependent on extensive electrification, industrial processes and transport demand. It also requires the development of large-scale hydrogen storage and significant investment in renewable export infrastructure. But the researchers state that achieving this would require the world to move to a zero-carbon energy system.

“A fundamental driver is the world essentially deciding to do something about climate change,” said Dylan McConnell, a researcher with the University of Melbourne and one of the report’s authors. “The demand for hydrogen is essentially predicated on deep decarbonisation around the world and in Australia.”

This creation of such a strong renewable energy export market in Australia could also benefit Germany’s renewables industry. Germany is a key manufacturer and engineering innovator of energy transition technologies supporting Australia with its ambition to bolster renewable energy generation.

Indeed, Germany expects to import Green hydrogen as it moves to a net zero economy and is likely to become a supplier of some of the technology required for producing those fuels, such as electrolysers for hydrogen. This is a future ambition, however as green hydrogen is not yet cost-competitive with fossil fuel-intensive hydrogen and will require scaling up for that to change, but Falko Ueckerdt from the Potsdam Institute for Climate Impact Research, another of the report’s authors, said it is in the pipeline. “If countries coordinate and agree that they want green hydrogen and scale it up simultaneously, they can really create an industry around that that’s also competitive,” he said.

As the world continues to grapple with solutions to climate change, inter-governmental coalitions such as the Australian-German Energy Transition Hub could signal a way forward. Collaboration often generates the most productive results, and by working together on driving forward renewable energy resolutions, we may be able to address, if not halt, rapid global warming and its disastrous effects.

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