Our Position on Climate Change
We are targeting Net Zero by 2025.
We are leading Australia to a clean future, today. Our emissions intensity is just 5% of the average of Australia's National Electricity market. But we believe more is possible. We are targeting the full offset of all our Scope One and Scope Two emissions by 2025.
We support the Paris Agreement.
We believe that companies, customers and investors should plan for the long term, managing their businesses in a way that limits global warming to less than 2 degrees Celsius. That's why we support the Paris Agreement and have aligned our business strategy with the achievement of its goals.
We believe that environmental management does not end with carbon emissions.
We are advocates for sustainable development and environmental conservation in all aspects of our operations. We monitor and manage resource efficiency, water usage, effluent and waste, biodiversity and heritage conservation.
Australia's Energy Mix Needs to Change
Despite recent growth, renewables remain a small component of Australia’s primary energy demand, representing just 7.7% of Australia’s total energy consumption, with the remaining 92.3% split between coal, gas and oil. The preponderance of fossil fuels in Australia’s energy mix has resulted in our national per capita emissions tracking at approximately three times the global average.
The Decarbonisation Challenge is Urgent
We are supporters of the Paris Agreement. We reflect this in our regulatory submissions and we have aligned our business plan with the Agreement’s objectives. The Paris Agreement has the objective of limiting global warming to “well-below 2 degrees Celsius (“C”) above pre-industrial levels” and to make additional efforts to limit the temperature increase to 1.5C. The Agreement has been ratified by Australia’s federal government, alongside 185 other nation states representing more than 95% of global emissions.
Despite the widespread ratification of the Paris Agreement, neither the world in general, nor Australia in particular, is on an emissions trajectory that will deliver the Paris target. In addition, with each year of inaction, the carbon abatement requirement for future periods becomes increasingly onerous. In short, the later emissions peak, the harder it becomes to limit warming to 2C or 1.5C. This is illustrated in the analysis of resilience.org, showing that emissions trajectories steepen with ongoing inaction. Urgent action is needed by fossil fuel consumers and producers in order to put us on an achievable trajectory towards the Paris target.
Australia is not on track to meet the Paris Agreement
With the ratification of the Paris Agreement, Australia’s federal government guided to an emissions reduction target of 26-28% for the entire economy. This abatement is against a 2005 benchmark, with delivery required by 2030.
There is substantial evidence suggesting that this 26-28% trajectory is not in fact aligned with the Paris Agreement target of a 2C or below scenario. Consequently, there is a risk that the federal guidance of 26% underestimates the level of decarbonisation required by Australia’s economy.
The projections of the Federal Department of Environment and Energy suggest that in 2030 Australia’s economy wide emissions will be 16% lower than the 2005 benchmark. This substantially underperforms the 26-28% guidance. Moreover, outside of changes in land use (Land Use, Land Use Change and Forestation, LULUCF), no decarbonisation of Australia is projected. Emissions in other sectors remain flat or increase, only offset by projected improvements in the electricity sector.
The Opportunity for Iberdrola Australia
The electricity sector can is uniquely positioned to decarbonise at scale. Electricity decarbonisation has a known cost, using proven technologies on a predictable timeframe, and could be rapidly deployed.
If the electricity sector were called on to provide additional emissions reduction such that the economy as a whole reached the 26% guidance level, it would be required to decarbonise from 180mmtpa today to approximately 70mmtpa by 2030, a 60% reduction.
Recent modelling by AEMO for the Draft 2020 Integrated System Plan suggests that this may require approximately 19,000MW of additional large‑scale renewable energy capacity, for which an appropriate price signal would be required. For reference, 19,000MW is approximately 6000 wind turbines, or approximately 100 new wind farms.
Iberdrola Australia's Strategy and Climate Change
Iberdrola Australia's strategy of combining renewables with fast start firming assets facilitates decarbonisation while minimising customer bills.
The strategy of combining renewables with fast-start assets is corroborated by the experts. For instance, in the AEMO Integrated System Plan, 2018, the market operator argues that “the cheapest way to replace generation capacity will be a portfolio of solar, wind and power storage complemented by flexible gas fired power plants.”
Our strategy is designed to provide customers with clean energy that is reliable and competitively priced. Its the way that we are leading Australia to a clean future, today.