Philip Hopkins
THE state government’s policy that the transition to renewable energy will create 59,000 jobs by 2035 is based on more than $55 billion in investment, according to a report by consultants pwc.
More than half this investment amount – $29.34 billion – will come from offshore wind, with the bulk of the jobs, about 53,000, coming from the construction phase. Ongoing jobs in the operational phase by 2035 will total about 6000.
These are key figures from the report, ‘Victorian electricity sector renewable energy transition’, prepared by pwc for DELWP (Department of Environment, Land, Water and Planning).
Consultants pwc were hired by DELWP to assess the economic impact of the government’s new renewable plans – a renewable energy target of 65 per cent by 2030 and 95 per cent by 2035.
The analysis found that 95 per cent renewable supply by 2035 would boost gross social product by $9.5 billion and generate an additional 59,214 jobs over that horizon. The GSP increase is based on $7.1 billion from construction, while $2.3b relates to the impact of ongoing jobs. The GSP impact by 2030 is $5.32b – $4.4b in construction and $911 million in ongoing operations. The analysis uses energy modelling by Jacobs Australia and DELWP.
With energy accounting for 70 per cent of Victoria’s total greenhouse gas emissions in 2019, “the transition to 95 per cent renewable energy is essential in order for Victoria to achieve its legislated target of net zero emissions by 2050”, pwc said. It claims the transition will maintain supply reliability and affordable energy.
The transition is based on renewable energy investment, firm capacity and emerging dispatchable technologies such as hydrogen-based generation. Greater transmission, interstate interconnections, household solar, batteries and electric vehicles will complement this new build.
It assumes the closure of all Latrobe Valley brown coal plants by mid-2035, the upgrade of the Kerang Link interconnector in mid-2031, completion of the Marinus Link interconnector to Tasmania in mid-2033 (stage 1) and mid-2035 (stage 2) and Victorian offshore wind targets of four gigawatts (4000 megawatts) by 2035 and 9GW (9000MW) by 2040.
The report found that the total undiscounted capital cost of this technology investment from 2023 to 2040 would be $55.5 billion.
The total is dominated by offshore wind ($29.344b) followed by onshore wind ($8.7b), rooftop solar ($4.9b), household batteries ($4.48b), utility batteries ($2.1b), PVNSG solar – more than 100 kilowatts and less than 30MW ($1.98b), pumped hydro ($1.85b), solar ($1.46b) and hydrogen ($614 million).
The estimated 53,019 two-year construction jobs by 2035 includes 28,549 direct jobs, 13,873 indirect and 10,597 induced jobs. The 6195 operational jobs includes 961 direct, 3254 indirect and 1980 induced jobs.
By 2030, two-year jobs created total 27,869 – 25,996 in construction and 1872 in the operational phase.
The estimated economic impact of the investment accelerates after 2032. The report includes tables showing the estimated investment in renewables and energy storage annually until 2040, showing the contribution of the various energy types.
Other tables show the undiscounted operating costs of the various technologies until 2040, with offshore wind well ahead at $8.1b, and also the economic impacts of the various technologies.
The pwc analysis does not include fuel costs within the modelling. As agreed with DELWP, pwc assumed that pumped hydro systems have eight to 48 hours’ storage capacity.
Following DELWP’s instruction, battery storage systems are based on two-hour and four-hour storage capacity.
