Australia needs to build big to transform its economy as the world races towards net zero emissions or else be left behind as a relic of the fossil-burning past.
An unprecedented infrastructure building program is required this decade to unlock a $435 billion economic dividend by 2050, a report released by National Australia Bank on Thursday says.
It calls for crisscrossing the country with 10,000km of new transmission lines, doubling existing renewable generation capacity, and installing 15 gigawatts of firming capacity.
An additional $120 billion investment is needed on top of existing policies to wean the Australian economy off its reliance on fossil fuels, with exports projected to decline by $270 billion if no action is taken.
The report, commissioned by NAB and produced by Deloitte Access Economics, identifies renewable energy, green hydrogen, critical minerals and enhanced metals manufacturing as key opportunities to offset the drop in export demand and drive economic growth.
NAB group chair Philip Chronican says Australia's natural endowment of sunshine and wind puts the nation in a strong starting position to achieve the massive structural overhaul the economy needs.
"Australia has two challenges: getting to net zero and replacing our existing export industries as global demand falls away," he said.
"The harsh reality is that if we only hit our targets without replacing exports, we will become a materially poorer nation."
Clean Energy Council chief executive Kane Thornton says there remains a "raft of barriers" to renewable investment as a result of a lack of leadership, planning and foresight over the past decade.
Under-investment in transmission, grid connection challenges, inconsistent planning policies, constraints in supply chains and global competition for workers are getting in the way of new projects, the group's latest quarterly report found.
Just 348 megawatts of renewable generation received a financial commitment in the first half of 2023.
The NSW government is scratching its head over how it will plug a 2880 megawatt shortfall if the Eraring coal-fired power plant closes as scheduled in 2025 and Victorian authorities will have another 2210 megawatts in generation capacity to fill when Loy Yang A closes in 2035.
"The critical development needed to achieve 82 per cent renewable generation by 2030 is not guaranteed unless we target the obstacles currently creating investment uncertainty for new energy generation," Mr Thornton said.
As well as energy infrastructure, investment is required to drive innovation in new technologies, development of skilled workforces and growth across the supply chains of green industrial sectors.
"The scale, complexity, and cost of these challenges is profound and the timeframe for achieving them is becoming increasingly pressurised," Mr Chronican said.
"But we can and we need to. The cost of inaction or too little action is far too great."
