Ross Garnaut’s bright idea
The septuagenarian is quietly orchestrating an energy revolution in the private sector. Linda Marsa reports.
Last July, shortly before his 70th birthday, Garnaut took the reins of one of the most ambitious renewable energy initiatives in the world: a A$100 million (about US$75 million) solar energy fund, part of a larger plan to sink A$1 billion into solar infrastructure in Australia by the end of this decade. The year before, the Perth-born economist became chairman of clean tech outfit ZEN Energy, based in Adelaide.
A decade ago, as an adviser to the Australian government, Garnaut authored a ground-breaking report on the economic impact of climate change that catapulted him to national prominence. Now determined to steer his country towards a low-emissions future, the grandfather of seven believes the private sector is the best place to channel his energies.
The stakes could not be higher: Australia has been whipsawed by extreme weather throughout its history, but global warming is amplifying these fluctuations. Witness the increased incidence and intensity of natural disasters including floods, heat waves, and bushfires of unimaginable ferocity. Warming has also worsened coral bleaching on the Great Barrier Reef and threatens unique terrestrial species, from Western Australia’s banded hare wallaby to Queensland’s Lumholtz’s tree kangaroo.
Yet despite the obvious dangers, Australia remains heavily reliant on coal: domestic consumption accounted for more than 61% of electricity generation in 2015, according to a 2015 report from the Australian Department of Energy and Science. Australia is the world’s largest exporter of this dirtiest of all fossil fuels.
With such deeply entrenched vested interests, Garnaut has no illusions about the difficulty of turning the tide. But he will spend the rest of his life trying.
“No other developed country is as vulnerable to the effects of climate change as Australia,” he warns, “and the consequences if humanity fails to deal with this issue are very severe.”
Tall and slender with a corona of thinning grey hair and wire-frame glasses that give him the appearance of a bookish academic, the mild-mannered Garnaut has become one of the southern hemisphere’s most respected and sought-after climate advocates, keynoting conferences where he is often surrounded by a scrim of reporters. Yet just a decade ago, environmental rock star is something he never thought would be on his resume.
Back then he was a trusted economic advisor to a succession of prime ministers. As a respected researcher and lecturer at the Australian National University in Canberra, Garnaut was in convenient proximity to the nation’s seat of power. He had served on the board of nearly a dozen different companies, organisations and academic journals, and chaired four of those businesses, including a gold mining outfit headquartered in Papua New Guinea.
Hardly the profile of a sandal-wearing tree hugger.
But in 2007, in the midst of a harsh, decade-long drought that turned the grasslands of the agricultural heartland into dust bowls and forced water rationing in coastal cities, Kevin Rudd, the head of the Australian Labor Party, and state and territorial leaders asked Garnaut to put together a report on the economic fallout from a rapidly warming planet. When Rudd became prime minister in December 2007, the report was sanctioned by the Australian government.
Garnaut was aware of climate change, but he thought of it as merely one of thousands of pressing issues jostling for attention. In the course of researching the report, he had a life-altering epiphany: if we failed to mend our carbon-chugging ways, we were headed for “catastrophic disruption”, he remembers thinking. “The failure of our generation on climate change mitigation would lead to consequences that would haunt humanity until the end of time.”
While Garnaut is a late-comer to the complexities of climate change, he has always had an aptitude for science. As a student at Perth Modern School in the early 1960s, he was torn between pursuing economics or physics, a career path that would have allowed him to explore the complexities of the universe. He participated in a summer school for top science students at the University of Sydney and loved it. But he was also captivated by the developing nations of Asia; he even took lessons in Malay after school. Ultimately, economics won the day – a decision he has never regretted.
Garnaut’s lifelong fascination with the region beyond Australia’s borders is part of what drives his now relentless push for climate protection. In a career spanning more than 40 years – including an early stint helping Papua New Guinea transition to independence and four years as ambassador to China in the 1980s, he has watched the developing nations of the Pacific basin undergo wrenching upheavals.
“I spent my life working on questions of development,” he says, “and that taught me that no matter how bad things are, things can get worse”. He recalls his days as a PhD candidate working in Indonesia in the late 1960s in the aftermath of the overthrow of the Sukarno regime by General Suharto, witnessing the country teeter on the precipice of chaos: “Often, it is good people who give up. That’s when the bad people have a very big win.”
“Often, it is good people who give up. That’s when the bad people have a very big win.”
Such experiences have given Garnaut a special sense of urgency in trying to thwart the worst consequences of climate change. “South and Southeast Asia are particularly vulnerable,” he says. “The biggest damage won’t come from the effects of drought or flood or extreme weather; the biggest damage will come from the destabilising effects of unmitigated climate change when the institutions that keep a society together fall apart.”
Australia, with its strategic relations with Indonesia and other South Pacific island nations likely to be profoundly impacted by climate change, is not immune to these problems. As the largest developed country in the Oceania region, Garnaut says, Australia is a big part of the climate problem, but it can also be a major part of the solution.
The irony is that while Australia continues to burn its extensive fossil fuel reserves, it is also blessed with what Garnaut calls an “exceptionally rich endowment” of largely untapped renewable energy sources. “Across southern Australia, even in my home town of Perth, you’ve got a wonderful combination of wind and solar,” Garnaut says. “Up the northeast coast, even in a place like Brisbane, and just inside the Great Divide on the Eastern Highlands, there is the combination of solar and bio-energy” — fuel derived from sugarcane waste and other organic materials.
Yet Australia has been a global laggard: while almost a quarter of the world’s electricity now comes from renewables, according to a 2017 report from the International Renewable Energy Agency, they account for just 14% of Australia’s electricity mix. Germany, which is hardly known for abundant sunshine, gets about a third of its electricity from renewables, and its wind farms churn out so much power that the state has to pay companies to switch off their turbines to avoid overloading the grid. Garnaut is convinced Australia could be no less a renewables leader. In a speech this past October at a renewable energy summit in Adelaide, he said South Australia, in particular, could be “a superpower of the low carbon world economy.”
The road to this turning point has been decidedly bumpy. When Garnaut dove into climate change policy a decade ago, there was bipartisan support for action to reduce Australia’s carbon emissions. Both major parties went to the 2007 election promising to introduce an emissions trading scheme, which would allow emitters to buy and sell carbon dioxide permits to stay within an overall limit. In his report, called the Garnaut Climate Change Review, published in September 2008, he calculated the national economic costs of failing to take action and laid out market-based policies to cut emissions “at the lowest possible cost”.
But by 2011, when Garnaut undertook an update of the review, consensus had evaporated. The Rudd government’s attempt to enact emissions trading had been thwarted by opposition in the parliament, and his successor, Julia Gillard, was forced to embrace an alternative scheme – a carbon tax. Garnaut’s update again provided a roadmap, which included a proposed starting price for a carbon tax and an analysis of how the scheme could help reduce emissions.
Opposition was fierce. Fossil-fuel interests launched a well-funded campaign warning of dire economic consequences. “If you’ve got a problem that requires a difficult and costly response,” he says, choosing his words carefully, “some people would prefer not to think about it.”
Garnaut, who was still on the ANU faculty, found himself the target of death threats and “astroturfing” – slick PR campaigns designed to create an artificial grassroots opposition movement. “It was deeply contentious and I was under huge pressure,” he recalls. “Thousands of emails condemning the report were sent to every journalist and politician to create the impression of a movement in opposition.”
Garnaut soldiered on, continuing to support the carbon tax. At the end of 2011, parliament passed the carbon tax package, which included $13 billion in funding to encourage innovation in clean energy technology. It also established the Australian Renewable Energy Agency (ARENA) to support early stage research and development.
But the tax did not last long. After the Liberal–National coalition, led by carbon-price opponent Tony Abbott, won government in 2013, it promptly set about dismantling the scheme, and in 2014 it was abolished, much to Garnaut’s chagrin. The tax seemed to be working: carbon emissions had declined by about eight percent, he notes (though some of the decline may have been due to the economic downturn). “We went for a couple of years where emissions were falling,” Garnaut says, “but now it’s all gone in reverse.”
Frustrated, Garnaut sought other ways to hasten the move away from fossil fuel dependency and harness Australia’s vast reservoir of affordable renewables. “I’d have dinners with chief executives of major energy companies and talk about what they could do to position themselves and make happen the things that could lead the Australian energy transition. I’d get a very polite hearing and have a nice dinner but there wasn’t any interest,” he recalls.
He began to think about what he could do himself. A friend, Raymond Spencer, who had spent 20 years in Chicago building up an information technology business, had returned to his native South Australia and bought into ZEN Technologies, a company that has supplied solar and storage systems since 2004. A proposed spin-off, ZEN Energy, had ambitious plans to scale up renewables generation from residential and small businesses to a level that could provide energy to entire communities and industries. “I felt the company could be part of the story of innovation in the energy sector,” Garnaut says of his decision to help launch ZEN and become chairman. “My motive is to provide a vehicle that can smooth the Australian transition to zero emissions.”
The centrepiece of ZEN Energy’s effort are massive battery banks that function a bit like mini-power stations. About 200 lithium-ion cells are stacked inside a 40-foot-long shipping container and generate about one megawatt of power – enough to power up to 1,000 homes. For comparison, the capacity of coal-fired power stations in Australia ranges from 300 to 2,880 megawatts.
While these battery powerhouses may not look quite as impressive as an array of sleek, shiny solar panels, they’re key to overcoming a long-standing challenge in making renewables such as solar and wind reliable. Power has to be available on demand at any time, and sunshine and wind are not constant.
The ZEN Energy system combines community-scale battery arrays that can store up solar surpluses during the day and wind energy at night with intelligent software to distribute the banked supply during times of peak demand. A major advantage of ZEN’s approach, Garnaut says, is that it can integrate diverse sources of renewables, including hydro and biomass energy, into customised systems that improve energy security and cut energy costs, allowing some users to meet their needs completely off-grid. It works for homes, businesses and even large scale industrial operations, such as farms or sheep or cattle stations — even mining companies like the one he once worked for.
In July 2016, the South Australian government awarded ZEN Energy contracts to install battery storage demonstration systems at three government-owned buildings in Adelaide, with the intention to show that the buildings’ carbon footprint could be reduced while saving money in the long term. If successful, these types of projects could lay the groundwork for the large-scale rollout of sustainable energy systems.
“The geniuses who oppose action on climate change like to broadcast their discovery that the wind doesn’t blow all the time and the sun doesn’t shine all the time so you can’t rely on it,” Garnaut dryly observes during an interview early one Saturday morning from his home in Melbourne, where he is on the faculty of the University of Melbourne. “But the right combination of diverse renewables and storage in different places can give you a reliable supply, and at a lower cost than building a new coal-fired power station.”
Batteries themselves are becoming more efficient and affordable. In the past decade, as battery storage technology has matured, prices have tumbled by 70% for lithium-ion batteries. Tesla’s second-generation Powerwall, unveiled late in 2016, is a sleek closet-sized battery with twice the capacity of the original model released less than 12 months before at about the same price. The battery provides enough backup power to keep the lights on and appliances humming in a typical two bedroom home.
Similar to Tesla, CSIRO has deployed its own version of a smart battery system. The federal science research agency has teamed up with Evergen, a Sydney-based startup, to sell and manage home energy systems based on CSIRO-developed technology. The systems analyse weather forecasts along with snapshots of typical household energy-use patterns to select the most efficient and economical energy source. If you like to turn on the air-conditioner at 8am on summer mornings but the system knows it will be cloudy tomorrow, it can charge its battery overnight, drawing power from the grid at the cheaper off-peak rate.
“This is what we call a managed battery system,” says Glenn Platt, director of CSIRO’s Grids and Energy Efficiency Systems Research Program and Evergen’s former chief executive. “Evergen has an automatic system that learns when you use electricity in your house, forecasts what the sun is going to do later in the day and then selects the most efficient energy source to minimise home energy costs.”
What’s more, several major projects are on the drawing boards or that are scheduled to break ground some time this year, that will help form the scaffolding of a 21st century sustainable, reliable energy infrastructure.
ARENA has teamed up with one of Australia’s largest electricity suppliers, AGL Energy, to create the world’s largest battery storage “virtual power plant”. The $20 million project harnesses the output of 1,000 batteries in homes and businesses in South Australia. The 1,000 systems, which are connected through centralised monitoring and management software, have a combined storage capacity of 5 megawatts.
On the generation front, ARENA is funding a dozen new large-scale solar projects in Queensland, New South Wales and Western Australia that will triple the energy output from large-scale solar in Australia to about 727 megawatts. ARENA also has launched demonstration projects that use hybrid systems—combining solar, wind and diesel— to power remote islands and hamlets in the bush.
Garnaut also has a hand in large-scale solar, as chairman of a fund established by the Impact Investment Group that plans to acquire and manage up to A$100 million in solar investment. The fund has rights to three large-scale solar farms under construction – one in Karratha, Western Australia, and two near Canberra. The largest of the projects, the 11.2 megawatt Williamsdale Solar Farm, is expected to generate enough electricity for 3,600 households.
“We’re expecting 2017 to be the year when large-scale solar really takes off in Australia,” says Darren Gladman, director of smart energy for the Clean Energy Council, an industry trade group headquartered in Melbourne.
Encouraged by the momentum that’s beginning to build, Garnaut believes the dream of a low-carbon Australia is achievable within his lifetime. The share of renewables is steadily climbing – there was a 20% increase in wind and solar generation in 2015 and costs for solar are expected to plummet at least 35% in the next couple of years. Tasmania already has the capacity to generate all its electricity from renewables (thanks to hydropower), and more than 40% of electricity in South Australia comes from sustainable sources. In states such as Queensland and New South Wales, though, the percentage of electricity generated by renewables remains in the single digits.
“The US withdrawing from Paris, or playing dead, shouldn’t stop the strong momentum towards much lower emissions”
Garnaut believes the world is well on the way to a zero carbon future, even with Donald Trump, who threatened to scrap the Paris climate change agreement that went into force last year, in the White House. “The US withdrawing from Paris, or playing dead, shouldn’t stop the strong momentum towards much lower emissions in China, Europe and other countries in which it is now well-established,” he says – though he adds that the “absence of US leadership might be decisive in countries still making up their minds about strong action.”
But anything less could be cataclysmic, which is why Garnaut feels so compelled to push for a carbon-free future. “I worry about the fate of our species,” he says. “I think all of us are capable of doing bad things, but Abraham Lincoln had it right: this will only work when we appeal to ‘the better angels of our nature.’”