Energy Efficiency Council - Efficiency Providers | Energy Users | Australia

Efficient electrification for Australia's 2035 targets

The EEC has undertaken analysis of modelling by Climateworks^* demonstrating the potential for energy efficiency and electrification across all sectors of the economy to contribute towards Australia's 2035 emissions reduction target and  sectoral emissions reduction plans. Findings have been distilled into a policy brief, setting out abatement opportunities in stationary energy use^** across all sectors of the economy. 

The analysis finds that:

• Electrification and energy efficiency can contribute around 20% of the emissions reduction required to meet an ambitious 2035 target of 75% below 2005 levels.
• From 2026-2035 electrification and efficiency represent the largest abatement opportunity on the demand side, with average annual abatement of 33 MtCO₂-e (electrification) and 11 MtCO₂-e (efficiency). This compares to 3 MtCO₂-e per year for other fuel switching (e.g. hydrogen).
• Energy efficiency can offset increased demand from electrification of the stationary energy sector by up to 46 TWh (26% of the increase in electricity demand from electrification)
• Energy efficiency, electrification and the switch to renewables modelled in a high ambition scenario, could collectively double Australia’s average annual energy intensity improvement rate between 2025 and 2030, aligning with Australia’s COP28 pledge to double the rate of energy efficiency improvement by 2030.
• The analysis shows that meeting net zero emissions requires Australia’s energy mix shifting from around 24% electricity today to 50% by 2035 and 61% by 2050. The Australian Government could support this shift by setting clear targets for electrification.
• The resources sector offers the largest abatement opportunity with annual average emissions reductions of 21 MtCO₂-e between 2026 and 2050.
• The built environment offers the second largest abatement opportunity, with annual average emissions reduction of around 20 MtCO₂-e between 2026 and 2050.
• Electrification of households could deliver the largest emissions reductions within the built environment, with 89% of total gas savings in the built environment coming from homes, primarily in Victoria.
• Deployment of key technologies like heat pump hot water systems in homes needs to be about twice as fast to achieve the emissions reductions in this analysis.

Read the full policy brief and media release

Access the data here

Notes:

*Climateworks Centre, 2024, Climateworks Centre decarbonisation scenarios 2023: Paris Agreement Alignment for Australia, https://www.climateworkscentre.org/wp-content/uploads/2023/11/Climateworks-Centre-decarbonisation-scenarios-2023-April-2024.pdf

** Stationary energy excludes energy used in transport.