The Australian and Singaporean prime ministers inked a landmark agreement in October to transition our respective economies to net zero.
Its implications extend well beyond prime ministerial glad-handing.
The deal, and others like it, could herald a new era of Australian prosperity and a rare opportunity to shape the norms and values of our region.
The power of peripheries
History is written from the peripheries. Rome was once an agrarian outpost, far from Eastern Mediterranean power. The Chinese scorned the Mongols as cultureless barbarians. Developments in England were barely considered by the great powers of Europe.
The renewables revolution will also be determined by those on the margins. But their competitive advantage will not be the capacity for conquest. Green economy winners will instead be blessed with land adjacent to large population centres. Think the Maghreb to Europe. Canada to the United States. Russia to China.
Australia is best placed of all. Our continent sits at the heel of the world’s most populous region. Southeast Asia, population 680 million, is two hours from our northern shore. East Asia (1.7 billion), and South Asia (2 billion) lie further afield. Around 55 percent of humanity lives on our geographic doorstep. And this population is increasingly wealthy. Asia’s middle class could almost reach 3.5 billion by 2030.
We are uniquely positioned to support the decarbonisation of Asia for three reasons: land, renewables and minerals.
An abundance of land
As the sixth largest country by landmass, Australia is a territorial superpower. We have the lowest population density of any country over 10 million, with 3.3 people per square kilometre. In our north, closest to Asia, density is lower still. The Northern Territory has just 0.2 people per square kilometre; Western Australia a mere 1.09 per square kilometre.
Australia is currently the world’s largest exporter of LNG and second largest of thermal coal, mainly to Asia. Just 2 percent of Australian land is needed for solar and wind farms to export the same amount of energy in green electricity and hydrogen, and to process iron ore, bauxite and alumina into green steel and aluminium for high-value export.
Even a traditional liability, our scarcity of arable land, will become a strength. The best place to build solar arrays is on arid land, which means Australian policy-makers will not have to choose between energy and food production. Solar farms built on Indigenous land will also provide reliable annuity streams to support the economic empowerment of communities.
An abundance of renewables
Australia is already a renewables superpower. Around 29 percent of Australia’s total electricity generation came from renewable energy sources in 2021. South Australia has the highest penetration of combined solar and wind power in the world. Tasmania runs on 100 percent renewable energy.
One third of freestanding households are fitted with a solar PV system. At nearly 1 kilowatt of solar capacity per person, Australia easily leads the world. We also have a wealth of wind resources, thanks to a powerful westerly called the Roaring 40s. The Star of the South offshore windfarm will soon supply up to 20 percent of Victorian electricity.
Our science and technology sector, fuelled by world-class university research and a reliable stream of skilled migration, is another “renewable” advantage. Examples of domestic innovation include HB11 Energy, which is developing laser Hydrogen Boron-11 fusion to produce unlimited clean electricity, and Sun Cable, which is building the world’s largest solar infrastructure network with plans to power 15 percent of Singapore.
An abundance of minerals
An endowment of minerals and resources is the final piece of our renewables trifecta.
Australia ranks first in reserves of iron ore, nickel, uranium and zinc, and second for bauxite, cobalt and lithium. With visionary government policies and an acceleration of the green entrepreneurialism pioneered by Andrew Forrest and others, we have an opportunity to move up the value chain and build domestic manufacturing capacity for green steel, ammonia and aluminium, as well as lithium-ion and flow batteries.
Public-private collaboration at scale has already begun. The Asian Renewable Energy Hub (AREH) could soon generate 90 terawatt hours annually; equivalent to a third of all electricity produced in Australia in 2020. Decarbonisation might even revive the car industry. Roev, which stands for renewable optimised electric vehicles, plans to launch a branded ute around 2026.
Looking ahead, Australia could grow revenues from green exports to $333 billion by 2050, almost triple the value of existing fossil fuel exports. Indeed, selling the renewables revolution to Asia should deliver even greater nation-building prosperity than gold, wheat and wool delivered in the 19th Century.
Millions of jobs, even new cities, will materialise. Our creaking education and health sectors can be properly funded. Australian soft power will grow as we become an indispensable partner in shoring up Asian energy supply, gifting us a greater capacity to shape the norms and values of our increasingly contested region.