Introduction

By exploiting her birthrights of sun, wind, waves geothermal, Australia in the next 30 years can become a "clean energy superpower."

In doing so, Australia can gain higher living standards, an improved economy, a healthier natural environmental and increased global economic and political power. With unrivalled resources of low emission energy, Australia can become a major player in global technology, environmental, energy and geopolitical spheres.

How to achieve this? By following the policy prescription below:

The Seven Tenets of a Smart Energy Future For Australia

1. Institute carbon trading with a minimum 2015 floor price of A$40 per tonne on greenhouse gas emissions. This will firmly anchor expectations about climate change costs. It will create greater certainy for business decision making and investments. The proceeds can be used to ease the retrenchment and dislocation suffered pain in sunset industries.

2. Limit "free" carbon emission permits to peaking power markets only. This provides a degree of adjustment assistance to uncompetitive industries such as coal without distorting baseload power markets. This will help shift Australia toward cleaner renewable energy without risking grid stability.

3. Restrict new coal-fired power capacity to Victoria. The La Trobe Valley has large supplies of brown coal supplies unsellable on international markets. Carbon capture and storage technology should be tried there. If this technology proves safe and cost-effective, it can be rolled out elsewhere. If not, Australia will already have developed ample supplies of renewables. This is not a technology issue. That's because carbon capture and storage doesn't even exist yet. This is a prudent economic risk management issue.

4. Prohibit dismantling of uneconomic coal-fired power plants until 2025. Use public funds if necessary. Progressively idled coal-fired capacity can provide Australia a crucial insurance policy against future demand surprises. With air conditioning and consumer gadgetry proliferating like mad, it's a sure bet electricity demand will rise. As dirty, geriatric coal-fired plants reach their retirement dates, they can be mothballed but kept ready to meet excess demand, should it materialise. This is not a technology issue. This is an economic reform issue.

5. De-emphasise use of natural gas for base load power. Natural gas (and hydro)'s quick start up times are an invaluable attribute in a future energy system dominated by fluctuating supplies of renewable energy. Therefore, future electricity generation capacity additions in natural gas should be directed to meeting high-priced peaking power markets. Doing so doubles the global gains in reducing carbon emissions. That's because Australia reduces its own greenhouse gas emissions by shifting baseload power provision to low emission technologies, while other countries (that would have used coal) can buy marginally freed up Australian gas supplies, lowering their greenhouse gas signature. In doing this, Australia will improve its trade balance through greater exports by concentrating on its natural comparative advantages. As a result, everyone comes out ahead. This is not a technology issue. This is an economic reform issue.

6. Upgrade Australia's electricity transmission infrastructure to provide a level playing field for new energy sources, particularly those located in remote areas. Create common-carrier tariffs on new, high capacity power lines to pay down the costs. Open access will increase competition, lower greenhouse emissions and lower consumer prices for electricity. Eliminating impediments to production are beneficial to any economy, since the market then picks winners. Opening up access to the electricity grid, and building needed infrastructure is not a technology issue. It's an economic reform issue.

7. Allow nuclear power generation in Australia, PROVIDED:
a. It is approved by national referendum in 2017
b. Australia's entire nuclear industry is located in Roxby Downs, South Australia.
c. Uranium is mined, enriched, burned and buried within a small radius of Roxby Downs.
This will "close the nuclear cycle,' eliminate proliferation risk, generate cheap, clean power and provide Australia’s cities a safety buffer against dangerous nuclear accidents.

Renewable energy costs are falling so rapidly that virtually all will be cheaper than coal in 2016, and cheaper than nuclear by 2019

Sources: International Energy Agency, Intergovernmental Panel on Climate Change, Australian Nuclear Science Technology Organisation, ABARE, among others