After Iron Ore? Sunlight in the ‘Lucky Country’

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Australia is sometimes called “the lucky country.”

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Although the phrase is usually meant positively to reflect its bountiful natural resources (and sometimes to its isolation from conflict and strife elsewhere in the world), the original meaning was not so complimentary.

At the start of the last chapter of Donald Horne’s book “The Lucky Country,” a passage reads  “Australia is a lucky country run mainly by second rate people who share its luck. It lives on other people’s ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise.”

Personally, my experience of Australians has been very favorable: there is no one we like better beating at sports, they have a good sense of humor and are one of the few societies that have maintained a reasonable work-life balance.

But maybe part of that comes from those bountiful natural resources, much like Norway and a few other mature but resource-rich economies. The country is partially supported by exports of commodities they have in abundance. The Reserve Bank of Australia estimated in 2014 that household incomes across the country were 13% higher than they would have been without the mining boom and real wages were 6% higher.

Just like a Norway without oil and gas, without iron ore, coal, natural gas and other natural resources Australia’s economy would have to work a whole lot harder to just tread water.

In a way, the conclusions of a recent West Australian government study could not have been more apt. Looking at what could come after iron ore is exhausted or demand from China slackens for the commodity, the study concluded Pilbara could develop from being Southeast Asia’s richest iron ore source to becoming the region’s most valuable supplier of low-carbon electricity. The Pilbara enjoys one of the highest levels of direct sunlight — or solar irradiance — on the planet, as this graph shows. making it an ideal location for solar power generation.

(The Pilbara is just below Broome on this map and Port Headland, from which the region’s iron ore is exported, is just down the coast.)

West Australia Today quotes from the report, concluding the technical viability of exporting power to Indonesia and estimates the economic viability of building a three-gigawatt solar farm and transmission undersea cable from the region that would create 2,000 jobs in the region and 12,000 in the state. Not only does the area have intense sunlight but cheap land, industrial infrastructure and is physically closer to major markets like Indonesia than to principal Australian cities like Melbourne or Sydney.

Solar power generating costs need to fall further to make the case strong enough to encourage investors, but the region has time. For now, the $75 billion that iron ore earns Australia in exports and the $10 billion in taxes and royalties it brings state and federal governments show no sign of slowing.

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Where once earthmovers have worked to remove billions of tons of ore, one day acres of solar panels may well cover the bare countryside and hide the scars of mining under scaly skin of shiny reflective panels.

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