Shared infrastructure for clean industry clusters can save money; create jobs

• Report finds shared energy infrastructure for clean energy clusters saves money, materials, time
• Clusters where multiple sites act together reduces emissions faster than individual efforts
• Gov’t funding should prioritise SGM sites that coordinate in clean industry hubs/clusters

As the 215 sites covered by the Safeguard Mechanism consider ways to reduce their emissions, economic modelling by Acil Allen and commissioned by independent think tank Beyond Zero Emissions (BZE), found government would save money and create jobs by building shared transmission lines and green hydrogen pipelines to clusters of businesses which wish to shift to using clean energy. The report is released just days before the EU’s Carbon Border Adjustment Mechanism begins, applying tariffs to imports from countries lagging on emissions reduction, sharpening the focus of Australian businesses on emissions reduction.

The report found:

• Replacing five transmission lines of 100 MW capacity with one 500 MW capacity line can reduce cost by almost three-quarters ($798 Million AUD) for a distance of 100 km and two-thirds ($1.996 Million AUD) for a distance of 250 kms.
• Replacing five green hydrogen pipelines of 50TJ/day capacity with one 250TJ/day capacity pipeline can reduce capital costs by 48-62 per cent over 100-250 km distances. The price of these pipelines differs in different regions:

In Gladstone, the saving can be $610M for 100km of pipeline or $1.2B for 250km. 

In Kwinana, the saving can be $1.2B for 100 kilometres of pipeline and $2.25B for 250 kilometres of pipeline.

In GLADSTONE in Central Queensland, building shared energy infrastructure can create an extra 200 jobs per year, an extra $2.4 billion in real economic output by 2050 and create an extra $600 million in government revenue by 2050, which could be invested into local hospitals, schools and more.

 In KWINANA in Western Australia, such an approach can create an extra 460 jobs per year, an extra $5 billion in real economic output by 2050, and an extra $850 million in government revenue, which could be invested into local schools, hospitals and more.

 BZE CEO Heidi Lee said BZE has long advocated for government investment in 14 clean industry hubs around existing high-emitting industrial regions as an efficient investment of taxpayer money.

“Coordinated investment into shared infrastructure can incentivise industry to coordinate their energy demand and emission reduction plans efficiently. Government investment in shared energy infrastructure empowers businesses to reduce their own emissions.

“Industry in just four of the proposed clean energy hubs – Gladstone, Kwinana, Hunter and Bell Bay - create nearly a quarter of the total emissions covered by the Safeguard Mechanism.

“The modelling showed that by funding clusters of facilities in Gladstone and Kwinana alone could deliver an additional 50 Mt reduction in emissions. 

“Government can coordinate investment into transmission, green hydrogen pipelines and other shared infrastructure in these regions, which will help high emitting facilities switch to clean energy supply sooner. Hundreds of regional jobs, billions in economic output and hundreds of millions in government revenue can be created.”

BZE’s report recommends:

• Key funding programs including the Safeguard Transformation Scheme, Rewiring the Nation and National Reconstruction Fund prioritise funding to facilities who coordinate their energy demand. Funding should lean towards backbone infrastructure that serves multiple facilities where possible.
• Accelerate investment in key renewable energy infrastructure to existing industrial regions to incentivise regional decarbonisation.
• Establish a national clean industry hub program: to coordinate and prioritise infrastructure planning, approvals and investment to ensure government funding provides the best bang for buck, accelerates decarbonisation pathways and provides investors with market confidence.