The Northern Territory (NT) of Australia is at a turning point on its energy transition. As you’ll see, it’s leading the way through the energy transition in making the shift to renewables. Despite lagging behind other Australian jurisdictions in this transition, the NT government has shifted its focus from renewables to gas as a means of reducing local power prices. This change has raised alarms from energy analysts about the dangers of going too far and becoming overly dependent on gas. As a result, the NT has blueprinted away from its once ambitious target of 50 percent renewables by 2030. They’re using high costs to justify this decision. At the same time, game-changing projects such as SunCable are moving forward with plans to reshape the region’s energy sector.
Gas as a Stopgap Solution
Since 2018, the NT government has recognised gas as essential in reducing power prices for its consumers to the point of providing rebates. The Beetaloo Basin, an enormous shale gas deposit, has been registered as the next chapter in the territory’s gas story. Now, Tamboran Resources is leading the charge and has ambitious plans to first deliver gas by 2026. Empire Energy is further along, hoping to deliver gas later this year. This heavy reliance on gas has caused headaches. The NT government’s Power and Water Corporation (PWC) has been continuously purchasing emergency gas supplies from companies such as Santos and Inpex since 2021. They have all been paying seriously inflated prices for this gas. During fiscal year 2023-24, PWC paid $43 million dollars in emergency contracts alone.
“We’ve either got gas or renewables, and renewables has failed dismally,” – Gerard Maley
Energy analysts warn that while gas is part of a temporary fix, it’s not a long-term answer. These substantial costs incurred by the necessity to buy emergency gas further illustrate the volatility and risk of financial ruin this strategy entails.
SunCable: A Renewable Hope
As the NT flocks further down the path to gas dependency, SunCable still stands as a bright spot for renewable energy supporters. Dubbed the Sun Cable, the goal of this ambitious project is to ship electricity generated from solar farms through an 800km overhead transmission line to Darwin. From there, the power would be shipped to Singapore via an undersea cable. Having received federal environmental approval last year, the Central Corridor is targeting a final investment decision by 2027-28.
Alan Langworthy, author of the NT government’s Roadmap to Renewables report, emphasized the potential of solar power in the region.
“Nothing was being done on the network side to make way for new technology,” – Alan Langworthy
The report identifies solar power as the cheapest wholesale source of electricity in the Northern Territory, underscoring its potential role in the region’s energy future.
Challenges and Future Prospects
Even with these advances, the road ahead is riddled with obstacles. The NT government’s decision to cancel its 50 percent renewables target by 2030 was mainly motivated by budgetary reasons. The price of reaching this target was projected to be as high as $5 billion. This price point was considered unsustainable by the territory’s leadership.
These climate-related challenges, such as more powerful cyclones and bushfires due to rising temperatures, are a major hurdle. These sudden, intense events pose an existential threat to the energy infrastructure in the region.
“Increasingly intense cyclones” and bushfires caused by global warming. – Mr Bourne
As the NT navigates its energy transition, stakeholders must weigh the immediate benefits of gas against the long-term potential of renewables. The decisions they make today will create and reaffirm the territory’s energy landscape for decades into the future.
