We estimate new CEFC investment commitments in 2019–20 will achieve more than one million tonnes in emissions abatement in their first full year of operation. Across our portfolio, we estimate CEFC investment commitments since inception will contribute to an estimated 220 Mt CO2-e in lifetime abatement.1
In estimating the lifetime carbon abatement for individual investment commitments involving electricity consumption, we incorporate the impact of additional renewable energy generation as well as improvements in energy efficiency in lowering electricity demand.
As in previous years, the CEFC is careful not to claim that this abatement occurs independently of other policy measures, such as government grants or procurement settings, or regulatory settings such as the Renewable Energy Target.
The CEFC references the latest available Australian Government projected electricity emissions intensity factors (EIFs) in considering the abatement impact of our investments.
During 2019–20, we collaborated with the Department of Industry, Science, Energy and Resources in the development of Australia’s Fourth Biennial Report, which summarises Australia’s progress towards meeting its 2020 target under the United Nations Framework Convention on Climate Change. As part of this collaboration, the Department provided the CEFC with its latest projected future EIFs at 2019–20.
Positively, the 2019–20 EIFs forecast accelerated decarbonisation of the electricity grid to 2030 and beyond, compared with the previously available EIF projections. This increased decarbonisation is largely a result of the rapid uptake of renewable energy generation, which has increased the share of low emissions electricity in the energy system. It also considers forecast additional generation in the period to 2030.
During 2019–20, we adopted these latest EIF forecasts and recalculated the lifetime abatement estimates relating to CEFC investment commitments. In our 2018–19 Annual Report we estimated lifetime abatement from CEFC investment commitments to 30 June 2019 at more than 260 Mt CO2-e over their lifetime. Based on the 2019–20 EIF we now estimate these investment commitments will collectively abate 200 Mt CO2-e over their lifetime.
The paradox of Australia’s welcome progress in decarbonising the electricity grid is that it will have the continuing effect of raising the bar for the emissions impact of CEFC investment commitments. This is a welcome and validating outcome, despite the forecast lower level of CEFC abatement. It suggests the CEFC has contributed to emissions reduction in the electricity grid through our investments in new renewable energy, as well as enhanced energy efficiency. Accordingly, we are now comparing the impact of our investment commitments against a less carbon intensive grid than previously forecast.
1 This estimate is subject to future changes in the forecast EIF.