By Jeremy Burke, IIG’s head of product and strategy, likes to find intriguing themes in the broad transition to a carbon neutral economy.
We’d like to connect the dots between transport, national security, food and health security, quality of life and the potential environmental benefit from speeding up Australia’s transition to electric transport.
Here’s the outline.
- Electrifying the transport sector is a big opportunity for climate action, and there are more potential benefits:
- Australia’s refineries currently import 80% of the crude oil they process.
- This hurts our balance of trade; we imported an estimated $34b of crude oil and refined petroleum in FY18.
- It also risks our security and reduces our resilience to emergencies; As of December 2018, Australia held only low fuel reserves:
- Petrol: 18 days’ stockholding,
- Diesel oil: 22 days’ stockholding,
- Aviation Fuel: 23 days’ stockholding.
- The international energy agency recommends 90 days’ demand coverage, and we’ve been under that for 82 months in a row.
- In turn, this endangers our ability to distribute food and health supplies. At point of sale we have only the following reserves (estimated):
- Chilled and frozen goods: 7 days’ reserve
- Dry goods: 9 days’ reserve
- Pharmaceutical products at hospitals: 3 days’ reserve
- Pharmaceutical products at retail pharmacies: 7 days’ reserve.
- But there are paths out of this precarious position. Shenzhen, China has the world’s first 100% electric bus fleet: 16,000 buses. (One is pictured above.)
- All of the big auto-makers are investing heavily in electrification. Tesla won’t have the dais to themselves for long.
- It’s early days, but the electric truck ecosystem is growing as well. A local angle is Australia’s SEA producing for local and US markets.
- When the Australian economy responds to this opportunity to clean up our transport system, help the balance of payments, and improve our security situation, we’d expect to see electricity demand increase.
- The IIG Solar Asset Fund, now open for investment from wholesale investors, assumes a relatively slow electrification of transport, but as a company we’d love to be proved wrong.