AUSSIES SEEK TO BOOST SUN

In big green push, Australia thinks too small on solar
Leonora Walet and Bruce Hextall (w/ David Fogarty and Clarence Fernandez), April 8, 2009 (Reuters)

SUMMARY
Expected to be approved by Australia’s Parliament in the next few months, the government’s amended mandatory renewable energy target legislation (MRET) – in conjunction with its just-developing carbon pollution reduction scheme (CPRS) – sets more demanding targets to move Australia toward getting 20% of its power from New Energy by 2020.

The new MRET is expected to draw an investment of A$20 billion to A$30 billion (A$=71 U.S. cents) to New Energy by 2020, most of it going into wind development.

Solar energy industry insiders say the incentives built into the new law are too complicated and inadequate to drive growth in solar energy capacity.

The policy is intended to drive dramatic growth. (click to enlarge)

To begin with, it lacks a subsidy for solar power plant development.

In addition, under the new incentive provisions the bulk of the rebate on a rooftop solar system covers only 1.5 kilowatts whereas the average home requires a 3-to-5 kilowatt system.

Australia’s Clean Tech Council has proposed allowing the full rebate on systems up to 200 kilowatts to entice owners of big buildings into the market.

Many Australian New Energy advocates, such as Solar Shop Australia, the country's biggest solar system installer, want the government to institute a feed-in tariff (FiT) similar to the ones that have boosted European solar markets to world leadership.

The country’s states and territories have introduced, or want to introduce, net tariff incentive plans that reward New Energy system owners for the power they send to the grid. Only the Australian Capital Territory, however, has approved an FiT providing an above-retail rate for all the power a system, up to 30 kilowatts, generates over an extended and guaranteed period of years.

Australia has so far squandered this abundant resource. To use it respectfully, its incentives may need to be reworked. (click to enlarge)

COMMENTARY
Australia gets 80% of its power from coal. Long entrenched and the beneficiary of advantages like transmission built at federal expense, established coal plants genrate electricity much cheaper than solar and the other New Energies. Coal’s lobby, known to New Energy advocates as “the Greenhouse Mafia,” has no intention of submitting to upstarts like solar energy. Ignoring Australia's urgent need to generate emissions-free power, the coal lobby characterizes New Energy as unworkably intermittent and raises unreasonable fears of even worse disruptive power outages than the country already endures.

The coal lobby neglects to mention that present power outages are the result of dependence on a less than entirely capable coal-fired generation and that building New Energy would be a perfect and emissions-free source of supplementary, peak-demand power.

CPRS creates a market that will price emissions and take the coal industry's power away. (click to enlarge)

Australia appears about to lose out on a tremendous opportunity to enrich its economy. Germany’s FiT drove an 11-fold increase to world leadership in solar capacity despite mediocre sun. China and Japan are in the process of instituting big incentives. China will offer a 20 yuan ($2.93) per watt peak subsidy for big solar projects and Japan, after spending $90 million from January to March to subsidize rooftop installations, will spend a further $200 million from April 1 on.

In response to Australia's tepid incentives, BP closed its Sydney panel-manufacturing unit, the only one in the country. Japan's Kaneka Corp, Sanyo Electric Co Ltd, and Sharp Corp and China's Suntech Power and JA Solar are expected to leap into the newly available void.

Australia’s Origin Energy Australia, Dyesol and Silex are working on breakthrough solar cell technologies and could use the benefit of a healthy incentive program.

When coal is priced at what it really costs, New Energy will be competitive. (click to enlarge)

Australia’s solar resource is so good that, despite the government’s non-existent incentives, multinational engineering powerhouse WorleyParsons Ltd is making plans to build the world's biggest solar power plant, a 250-megawatt project, in the sun-drenched Australian outback.

Suggesting their may be some method to the government’s apparent madness of not offering subsidies for solar power plants, the A$1 billion ($710 million) WorleyParsons project will be financed by remote outback mega-mining firms that consume large quantities of power and spew tons of emissions.

The incentive behind the WorleyParsons project is the government's new carbon pollution reduction scheme (CPRS), a cap&trade system. By shifting to the use of emissions-free energy, the mining companies will save the estimated A$20/tonne charges on emissions that will be created by cap&trade.

If the pilot project succeeds, WorleyParsons will build 34 solar power plants by 2020 to deliver 40% of Australia's New Energy requirements.

In terms of rooftop solar, though, Australia has tremendous assets and it is the height of arrogance for the government to provide such inadequate incentives for their development. Perhaps Australian leaders think WorleyParsions can make global climate change go away all by itself.

WorleyParsons has its own reasons to mine this resource. (click to enlarge)

QUOTES
- Muriel Watt, chair, Australian Photovoltaic Association: "The limit of something like 5 KW would have been a really useful driver…But the limit being 1.5 KW, it's not going to drive the large systems we'd like to see."
- Simon Troman, vice-president, Australian and New Zealand Solar Energy Society: "That's one of the hardest things for us to compete against. There's a real inadequacy of government programmes and inconsistencies but whatever they do it's still competing against cheap brown coal…"

Australia has good wind resources, too. (click to enlarge)

- Mark Diesendorf, New Energy policy expert, Institute of Environmental Studies/University of New South Wales: "Everyone knows perfectly well what's holding things back…It's a group called the greenhouse mafia. It consists of the coal industry, oil, aluminium, iron and steel, cement and motor vehicle makers…"
- Unnamed manager, energy systems supplier: "Even for very small commercial installations of 20 to 50 KW on buildings or small farms, there's very little incentive…The feed-in tariffs designed in most states exclude commercial solar projects."