Good policy will push renewables

Australian
Friday 5/1/2007 Page: 10

Time is fast running out for Australia to move across to clean energy, argues Susan Jeanes

THIS year's release of cabinet papers shows the nuclear power industry in Australia has been opposed for more than 30 years. This opposition was also highlighted in the Newspoll released earlier this year in The Weekend Australian, which reinforced the uphill battle for any Australian government seeking to introduce nuclear power.

In the past year, the commonwealth has established a number of reviews, taskforces and inquiries into the potential of nuclear energy,"clean" coal and geosequestration, the burial of carbon dioxide. These processes all indicated that nuclear power, clean coal and geosequestration face significant challenges, including higher costs, and they won't be available in Australia for at least 15 years.

It's time to focus on the role that renewable energy should play in the quest to address these challenges. First, existing renewable energy technologies can deliver significantly increased levels of electricity to the national supply system now. Second, there is huge potential for emerging renewable energy technologies to deliver power in the medium to longer term.

The commonwealth last examined renewable energy through its review of the Mandatory Renewable Energy Target scheme. This scheme delivers an incentive to the developers of renewable energy projects and infrastructure. The incentive meets the difference between the cost of electricity produced from renewable sources and electricity produced from existing coal-fired power stations with high levels of greenhouse gas emissions. The inquiry, chaired by former government senator Grant Tambling throughout 2003, recommended an extension of the scheme. But the commonwealth chose not to adopt this recommendation on the basis of cost.

The decision not to increase the MRET means that new projects that will deliver emissions-free electricity into the national market will now only be developed in Victoria, NSW and Western Australia, where state incentive schemes are in various stages of development. But these schemes do not provide the national framework required to develop a national clean energy industry.

The commonwealth and Victorian governments recently announced they would contribute more than $100 million to the construction of the world's largest and most efficient solar energy power station, to be developed by an Australian company, Solar Systems, near Mildura.

The potential for this technology to be sold across the world in the coming decades is enormous. But clean energy needs more than one-off grants to build economies of scale and bring costs down. Australia has some of the oldest and hottest rocks on the planet, relatively close to the surface and running through the centre of South Australia.

Geothermal energy from hot dry rocks has received nothing like the focus that its potential deserves. Perceived transmission problems can be overcome with clever planning. And, most significantly, geothermal energy is predicted to cost even less than all other forms of energy generation from about 2025. Further, the knowledge and expertise that Australian companies have gained in geothermal development is already being exported through projects in Europe, where the incentives offered by governments are extensive. A number of Australian companies are also exploring opportunities in China, where policy incentives are also considerable.

Hydro schemes have been supplying baseload electricity to Australian consumers for decades.
Geothermal energy has the potential to add to that supply and, in fact, there are enough sites in South Australia to meet all of Australia's present energy needs.

One site alone, Paralana in the northern Flinders Ranges, has enough heat to supply eight times South Australia's average daily demand. Imperative to the security of supply with renewables is the development of storage technologies and the integration of technologies such as wind with hydroelectricity.

Hydropower and battery technologies provide optimum storage solutions and a number of companies are trialing a range of these, but much more will be needed from the billions the commonwealth is spending on energy technology development than the $20 million allocated in the energy white paper in 2004. Most of those funds are going to assistance and subsidies for fossil fuels.

We also have to get smarter about the use of renewable energy to meet peak demand. Not only do we have to rely on new baseload generation, we must better understand the opportunities for intermittent technologies such as solar, which produce optimum levels of energy at the times when it is needed most, on hot sunny days, and at prices much less than the peak prices the market now pays.

We have a complex problem. Not only do we need to develop the new technologies that will deliver increasing levels of energy, but we also need to pull back the rate of increase in our emissions during the time it takes to develop the new technologies.

Renewable energy can play a significant role at both levels. But the industry needs a clear policy framework that enables the ongoing development of projects with existing technologies to pull back the rate of increase in emissions and to encourage the development of the new generation of technologies.

All the recent reports and inquiries conclude that climate change is a serious challenge, that we need clean energy, that it will come at a price and that the price is affordable. We need policy frameworks that cost the environmental impact of emissions and provide incentives for the development of a clean energy industry. Then, renewable energy technologies will be more than capable of successfully competing for market share.

Susan Jeanes is the chief executive of Renewable Energy Generators Australia, a former member of the Howard Government and an adviser to the Howard Government on climate change policy.