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Some good news for renewables

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Mark Bretherton, from the Clean Energy Council, explains the role of this peak renewable energy organisation and the role of other organisations and factors in Australia’s renewable energy sector.
The last few years have been challenging for the renewable energy sector when the federal government decided to review the Renewal Energy Target (RET) at the beginning of 2014. The RET is the most important policy for the renewable energy industry, encouraging the lowest cost types of renewables to be built.
The uncertainty created by that review meant that financiers were reluctant to lend the money required, investments dropping by 90% for large scale renewables like wind farms and solar farms. The 13 projects that were underway in 2013 slowed to a trickle, with only a couple of projects still underway. The 18 months of chronic uncertainty were ended when bipartisan support for a lower target was achieved.
The Renewable Energy Target was originally introduced in 2001 and expanded in 2009, the idea being for Australia to produce at least 20% of its energy from renewable sources by 2020. The level that was set took into account that Australia’s energy use would continue to rise as it had in the past. However power prices spiked dramatically and renewable energy became more affordable so people became more careful about their use of electricity, using it more efficiently and investing in technologies like solar panels and solar hot water systems. In the wider economy a major aluminium smelter closed down and the car industry was beginning to close as well, freeing up more power.
This meant that the target would overshoot. One side of politics saw this as a good thing while the government thought it was bad, hence the tussle over the level of the target and the frustration of the industry. The final deal reduced large scale solar by around 30% and since the new target was legislated some four weeks ago, four projects have announced they will go ahead in regional parts of the country.

Below: Greenough River Solar Farm near Geraldton WA, staffed by Bruce Hankin, solar technician. Photo By Craig Sillitoe.     

First was the Ararat wind farm, a $450 million project in Victoria with GE as a major player. Another wind project west of Glen Innes will be the White Rock wind farm and Queensland will have another wind farm along with a large scale solar project. There are around 20,000 people employed by the renewable energy sector across Australia, more than half from the installation of rooftop solar power. Farmers with wind turbines also benefit with yearly payments of $6-10 thousand per turbine.
The Australian Renewable Energy Agency (ARENA) is the central body that helps projects be the most efficient and draws together all the different funding streams from government. ARENA also assists projects in their early stages where they often need the most help to get started. It has assisted some very promising technologies like the Carnegie wave energy project in Western Australia and a large scale modular solar kit which can be assembled as needed by sites such as mines and then dismantled later on.
The Clean Energy Finance Corporation (CEFC) is the body that sits between those early stages and the commercial stage. The United States has lots of venture capital firms willing to lend amounts of $5-10 million, playing a large part in the innovation chain there. Australia, instead, has a series of big, dependable banks which are very conservative about how they lend money. The corporation helps to leverage finance for projects on their way to commercialisation, sharing the risks with the traditional banks. The corporation is required to make a profit, a good return for taxpayers.

Below: Walkaway Wind Farm near Geraldton WA, Site Manager is Carsten Johansen. Photo By Craig Sillitoe.    

In June however, the Treasurer and Finance Minister wrote to the Clean Energy Finance Corporation suggesting that they stop lending to mature technologies like wind farms and rooftop solar, effectively excluding them from the CEFC mandate. This has yet to be finalised but such an exclusion of commercially viable projects will make it much harder for the CEFC to achieve its goal of delivering the higher returns requested by the government earlier this year.
Just recently the Clean Energy Council held a Clean Energy Summit, a good opportunity for the whole industry to come together. Despite all the frustrations of the last couple of years it is now a pretty exciting time for the renewable energy industry. Australia has to double its output of renewable energy to meet its target in the next five years. There will now be new opportunities across the country, creating new employment opportunities and saving existing jobs. The summit reflected the mix of sectors that make up the renewable energy industry. Rooftop solar continues to do well in Australia and businesses are also seeking to move in that direction. There are already some innovative business models, like leasing solar panels by the month or solar power purchase agreements which result in lower electricity rates.
Renewable energy is supported by 70-90% of Australians every time the issue is polled so it would be a brave politician who deliberately tried to sabotage something that the public actually wants, not to mention the damage to sovereign risk. Mark Bretherton sees the finalisation of the Renewable Energy Target as good for Australia and sees a bright future for the five years until 2020, one that will require new energy levels to meet its target.

Mark Bretherton was interviewed for A Questionof Balance by Ruby Vincent. Summary text bt Victor Barry, July 2015. Images from the Clean Energy Council.

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