As Australian energy provider AGL officially pulls the plug on its proposed Victoria coast LNG import terminal, a new report predicts a surge in renewables could leave natural gas delivering as little as 1% of the country’s power mix by 2030.

“Around 7 GW of new wind and solar will be commissioned in Australia’s main grid within the next two years, with a pipeline of more than 60 GW of new projects out to 2040,” reports Renew Economy, citing research by analyst firm Reputex. 

While this “tsunami” of renewables will swamp both coal and natural gas, the latter stands to be swept away particularly rapidly as its much-touted (if long-doubted) value as a transition fuel is undercut by declining costs in large-scale battery storage. 

“Although the timing is uncertain, gas generators have little competitive advantage in the spot market, where batteries are emerging as the most economical way to trade, helping to shave peak pricing and reduce ancillary costs such as frequency control,” said Bret Harper, head of carbon and power markets for Reputex.

Currently supplying around 7.5% of the country’s power mix, gas will be further sidelined by more pumped hydro storage coming online, RenewEconomy adds.

Despite such predictions, Australia’s government remains bullish on natural gas as the best option to “firm up” renewables. The Guardian reports that Energy Australia has confirmed it will move ahead with a new 300-MW peaker plant in New South Wales that will be equipped to handle a blend of natural gas and green hydrogen. 

The confirmation of the project “follows a threat from the Morrison government to intervene in the market to ensure there are not shortfalls once the aging coal-fired power plant at Liddell in the Hunter Valley closes in 2023,” The Guardian writes. The announcement also comes just days after the chair of Australia’s Energy Security Board stated that such an endeavour “made very little commercial sense given the abundance of cheaper alternatives flooding the market.”

AGL’s abandonment of the Victoria terminal arrives just over a month after the state’s Labor government rejected the project over concerns the terminal “would damage internationally recognized wetlands,” notes Reuters. 

The target location—near the coastal village of Crib Point—is a UNESCO Biosphere Reserve that provides significant habitat for migratory birds. “It’s very clear to me that this project would cause unacceptable impacts on the Western Port environment and the Ramsar wetlands,” said State Planning Minister Richard Wynne in a statement. “It’s important that these areas are protected.”

In an earlier report on the proposed terminal, Reuters noted that AGL’s ambitions were thwarted pretty much from the get-go “after opponents pressed for an extended environmental review, saying chlorinated, chilled seawater discharged by the floating storage and regasification unit could harm sea life and hurt tourism.”

Celebrating AGL’s retreat, Environment Victoria’s Nicholas Aberle marvelled at the outcome, “It’s almost unprecedented for environmental effects statements to stop environmentally damaging projects,” he told Reuters. 

The battle to protect Australia’s coastal waters is not over, however—the opposing forces have simply changed. Reuters notes that Australia’s richest man, Andrew Forrest, is now “in pole position to be the first to start importing LNG into Australia, with a terminal at Port Kembla in New South Wales, racing against four other LNG import proposals.”

But New South Wales is prepared to put up its own hard fight. As reported by The Guardian in November, the state has cobbled together virtually unanimous and notably bipartisan support for legislation ensuring that 12 GW of clean energy—“roughly equivalent to the country’s entire existing large-scale renewable capacity”—and 2 GW of energy storage are built over the next 10 years.

Back in Victoria, news of surging renewables and the win against LNG arrives just as the state government pledges to halve the territory’s greenhouse gas emissions by 2030. In a May 2 report, The Guardian writes that Victoria’s plan will see renewables “power all government-owned enterprises, including schools and hospitals,” by 2025. 

“The plan also includes A$20 million to reduce emissions in the agricultural sector, another $15.3 million for a carbon farming program, and a $3,000 payment for Victorians who buy zero-emission vehicles.”

While Victoria’s announcement is being welcomed by industry as “ambitious but sober,” The Guardian notes that conservation groups have panned it for not going far enough to allow the state to play any meaningful role in meeting science-based emissions targets. 

Australia’s Energy Security Board, meanwhile, is saying the entire country “is on track for a renewable energy penetration about 90% by 2040,” writes RenewEconomy. And Reputex agrees, calculating that the growth in low-cost wind and solar generation “will help to suppress electricity prices, with wholesale prices expected to stabilize around $40 to $50 per megawatt-hour.”

Now, said Bret Harper, state investment in new network infrastructure—in particular, the creation of dedicated renewable energy zones—must be accelerated to match the pace of renewables.

“Although utility-scale solar and wind projects are being built at an impressive rate in the NEM [the country’s wholesale electricity market], the final step of delivering electricity into the grid is still experiencing major delays due to inadequate grid infrastructure,” he told RenewEconomy.

With states now moving to redress this situation, he added, this policy shift “is now likely to release the long-term handbrake on renewable energy investment, resulting in a significant change to the speed of the transition from coal to renewables under our forecast scenarios.”