South Australia signs emissions reduction deal with federal government

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The agreement will help more renewable power enter Australia’s energy system, PM Scott Morrison said. Image: VivoPower.

South Australia has struck a AU$1.08 billion (US$840 million) energy and emissions reduction agreement with Australia’s federal government.

The deal includes AU$400 million in federal funding for “priority areas” such as hydrogen, carbon capture and storage, electric vehicles and “other emissions reduction projects” in South Australia, as well as up to AU$110 million in finance for solar thermal and storage projects.

The two governments will also kick-start work on Project EnergyConnect, an interconnector between South Australia and New South Wales that will receive up to AU$100 million in joint support.

While it is hoped the deal will contribute to South Australia achieving net-100% renewables by 2030, it will also see the two governments “unlock gas supplies to help prevent shortfalls in the market”, according to a press release.

Prime Minister Scott Morrison said the bilateral deal is a key part of government efforts to ensure the country reaches its emissions reductions targets. “Families and businesses need affordable, reliable power. That is what reduces prices and creates jobs. Australians also want to ensure we are doing everything we responsibly can to combat climate change,” he said.

“This means getting more gas into the market to support the increase in renewable solar and wind power coming into the electricity system.”

The deal’s focus on hydrogen comes months after South Australia announced its backing of a green hydrogen facility in Whyalla that will feature a 75MW electrolyser and ammonia plant. The state government said the project is a precursor to a hydrogen export facility that could see the state boost energy ties with customers around the world.

With progress being made in green hydrogen and energy storage facilities across Australia, Fitch Solutions expects the country to accelerate its shift towards cleaner generation sources over the coming decade. The consultancy forecasts non-hydro renewables generation to be 30% of Australia’s power mix by 2030, representing a total capacity of 47.4GW.

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