Reducing transport electricity demand as Australia decarbonises

Meeting Australia’s Paris Agreement goals will require a lot of electricity

A big chunk of that electricity demand will come from electric vehicles (EVs) as motorists move away from cars that burn fossil fuels, and the country powers more of its buses, trains and trucks with electricity.

Climateworks Centre has shown that with the right planning, Australia can reduce this growth in electricity demand from the transport sector.

By adding other solutions into the mix, such as active and public transport, and reducing passenger and freight trips, Australia can limit electricity demand while ensuring it meets its climate commitments.

Why is it important to reduce electricity demand where possible?

Electrification is key to the energy transition.

Climateworks’ most recent economy-wide decarbonisation scenarios for Australia show electricity emissions reducing rapidly, with renewables quickly displacing fossil fuels in the nation’s electricity supply.

This helps decarbonise the rest of the economy as other sectors move away from fossil fuels.

For example, buildings shift from gas to electric heating and cooking, industry electrifies where possible and uses hydrogen made with renewable electricity – and road transport largely shifts from combustion engines to zero emissions options like EVs.

As you can see in the graph above, our scenarios see a massive increase in renewable electricity generation to support this shift – our 1.5°C-aligned scenario sees a 350 per cent increase in electricity demand compared to that modelled for 2024.

Reducing electricity demand where possible will be important for facilitating a smooth transition to a renewable energy grid.

That’s where our newest transport scenarios come in.

‘Diverse solutions’ can reduce the transport sector’s demand for electricity

Last year, we released our modelled decarbonisation scenarios for Australia’s transport sector.

This was the first time Climateworks’ transport scenarios included broader decarbonisation solutions beyond switching to low-carbon fuels and shifting to zero-emissions cars and trucks.

Our scenarios follow the globally recognised Avoid, Shift, Improve (ASI) framework to provide the basis for a credible plan to decarbonise the transport sector using all available solutions.

This ‘diverse solutions’ approach includes solutions that:

• Avoid the need for some travel and make car and truck trips shorter and more efficient
• Shift some travel to lower-emissions modes of transport, such as travelling by train instead of plane, using more active and public transport, and moving more freight by rail
• Improve vehicle and fuel efficiency, such as getting more EVs on the road and using lower-carbon fuels.

Our report compares this ‘diverse solutions’ approach to a ‘technology only’ scenario, which relies solely on solutions in the ‘Improve’ category.

In the ‘technology only’ scenario, transport is responsible for 24 per cent of Australia’s electricity demand in 2050.

In that future, Australians will be charging their EVs, and most freight vehicles, buses and more rail will run on electricity. Renewable electricity will also be used to produce green hydrogen for the transport sector.

By comparison, electricity demand from the ‘diverse solutions’ scenario is nearly 9 per cent lower.

This corresponds to a saving of 20 TWh – nearly three times as much electricity as the transport sector uses today.

This reduction in electricity demand comes through the addition of ‘Avoid’ and ‘Shift’ measures.

By avoiding some travel altogether – such as employees working from home some days or optimising freight routes – overall travel is reduced.

And because more people switch to active transport, which uses little or no electricity, or public transport, which uses electricity more efficiently, electricity demand drops.

A credible decarbonisation plan for Australia’s transport sector

A ‘diverse solutions’ approach has additional benefits beyond limiting the sector’s electricity consumption growth – it improves the transport system while decreasing emissions.

In a transport system that seamlessly integrates ‘Avoid’ and ‘Shift’ interventions, people will have greater choice in how they get around.

Increasing public and active transport use gets people out of their cars, easing urban congestion and reducing the costs of additional road infrastructure. Similarly, moving freight by rail instead of trucks reduces traffic.

A ‘diverse solutions’ approach provides more ways to decarbonise successfully.

Climateworks recommends governments adopt credible transport decarbonisation plans that strive for rapid uptake of EVs while including a diverse range of other solutions, ensuring emissions reductions are on track.

Read more: Decarbonising Australia’s transport sector: Diverse solutions for a credible emissions reduction plan