Thank you for reading my editorials. In these quick missiles, you might have noticed my obsession with economics, the onshoring of our manufacturing, and the origins of the energy used to power Australia’s industries. I reference many independent media outlets, such as The Conversation, Project Syndicate, ASPI and Reuters, as well as organisations like the Australia Institute and the Superpower Institute and other trusted sources, such as CSIRO and AEMO.
The latest draft of the CSIRO’s GenCost report has assessed Australia’s future electricity generation costs and once again found that renewables have the lowest cost range of any new-build electricity-generating technology. The report focuses on cost estimates for new-build electricity generation, storage, and hydrogen technologies. It provides business leaders and decision-makers with updated capital costs and data comparisons for planning and financing studies.
Professor Ross Garnaut has long advocated for Australia to harness its natural advantages—such as abundant sunshine, wind, and land—to lead the world in renewable energy production, export, and innovation. He has also offered investment guidance to the Future Fund.
The New Energy Trade report intimates that Australia investing in Japan, South Korea, China, India, and Germany has a higher chance of reaping future funds than not. The report provides a world-first analysis of likely international trade in clean energy and finds that Australia could contribute up to 10% of the world’s emission reductions while generating six to eight times larger revenues than those typical from our fossil fuel exports. As the years pass, exporting gas and coal will lose value as our buying clients shift to renewable projects. Finighan focuses on Australia’s international trade role in helping the world reach net zero emissions at minimum cost to our economy. He says Australia should be the low-cost producer of renewable energy, exporting most of it to the world and earning a good living. We have more than enough abundant open spaces, without sacrificing food-growing pastures or populated areas, to generate solar or wind energy at a genuinely massive rate. Finighan finds we can produce “essentially limitless low-cost green electricity”. The required solar and wind farms would occupy about 0.6% of our land mass.
Transporting that electricity overseas is prohibitively expensive, but using some of it to produce energy-intensive products like iron, steel, aluminium, and urea before exporting them could be a valid solution. Australia could become that foundry and quarry along the way and profit from expanding our manufacturing industries. The future world trade in clean energy will involve energy embedded in ‘green’ products. This will mean Australian-manufactured iron products will become part of our export market and our new comparative advantage. It does surprise me that some mainstream media ignore many of these studies.
Talking of Murdoch and the second US Presidency, whatever the Trump Administration chooses to do in the first half of 2025 will strongly influence how manufacturing in Australia continues or reinvents itself. The worst-case scenario for Australia would be picking sides in a future trade war. Treasurer Jim Chalmers notes that we have more at stake here than most. Probably more than anyone else, given our economic and strategic relationship with the US and, meanwhile, our deep economic relationship with China.
Paul Hellard
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