Billions axed in clean energy: renewable target is next

Published by The Conversation. View original article

Many long-promised renewable and low-emission energy programs have been scrapped or cut back in the Coalition’s first budget. Lukas Coch/AAP
Many long-promised renewable and low-emission energy programs have been scrapped or cut back in the Coalition’s first budget. Lukas Coch/AAP

There are billions of dollars of broken promises in the Abbott government’s first budget for low-emission and renewable energy programs – and wiggle room to break even more in the next few years.

 

The budget forecasts spending on the A$2.55 billion Emissions Reduction Fund over the next four years to be more like A$1.15 billion. Click to enlarge

Among last night’s surprises was that government has budgeted to spend just A$1.15 billion, or less than half of its centrepiece A$2.55 billion Emissions Reduction Fund over the next four years (see the budget excerpt on the right).

Environment Minister Greg Hunt says the full amount could still be spent, with funds to “be allocated flexibly over time”.

But anyone with a long memory will be watching this very closely: under the Howard government, more than $360 million was budgeted but not spent on climate programs.

Going, going, gone

Gone are the Coalition’s promises for one million more solar roofs across Australia and at least 25 solar towns, for which the Environment Minister was promising A$100 million each as recently as six months ago. Those programs have been respectively abandoned and slashed.

In the case of the Solar Towns scheme, it will offer a total of A$2.2 million over the next three years to community groups, in barely more than a handful of electorates, several of them marginal seats like Corangamite in Victoria and Moreton in Queensland.

The Australian Renewable Energy Agency (ARENA), set up to support new and emerging renewable technologies into production and deployment, including funding world-leading solar research, is set to be scrapped, a cut of A$1.3 billion. That’s despite the Coalition’s repeated pre-election promises to keep it.

ARENA’s axing is on hold for now, because that the government needs support from other parties in the Senate to shut it down.

 

Respected former Reserve Bank board member and Clean Energy Finance Corporation chair Jillian Broadbent says the CEFC has a public responsibility to keep investing in clean energy projects. CEFC, CC BY Click to enlarge
Respected former Reserve Bank board member and Clean Energy Finance Corporation chair Jillian Broadbent says the CEFC has a public responsibility to keep investing in clean energy projects. CEFCCC BY
Click to enlarge
 

 The same applies to the Clean Energy Finance Corporation, an independent investment body that’s already mobilised A$2.5 billion of mostly private funding for low-emission energy and agriculture projects, which is set to make a profit for the government if allowed to continue.

A bill to close down the CEFC has already been knocked back once in the Senate. But until they are officially axed, the heads of ARENA and the CEFC have pledged to keep working.

Other axed industry and community clean energy programs include the Low Emissions Technology Demonstration Fund, the National Low Emission Coal Initiative, Energy Efficiency Programmes, the National Solar Schools Plan, Energy Efficiency Information Grants and Low Carbon Communities.

 

How the world’s electricity supplies would need to change by 2050 to try to limit the rise in global temperatures to no more than 2 degrees.International Energy Agency, CC BY Click to enlarge
How the world’s electricity supplies would need to change by 2050 to try to limit the rise in global temperatures to no more than 2 degrees. International Energy AgencyCC BY
Click to enlarge

 

While the axing of so many renewable and low-emission programs was predicted, it is significant. The Australian government cuts to programs driving greater renewable and low-emission energy use come just as we’re being advised to do precisely the opposite by global experts.

As Renew Economy has reported, this week a new report from the traditionally conservative International Energy Agency (of which Australia is a member) shows that the world’s electricity mix needs to switch from 68% fossil fuels now to at least 65% renewables by 2050, if we’re hoping to limit the rise in global temperatures to no more than 2 degrees this century.

All eyes on the target

After this budget, all eyes will be on the Renewable Energy Target (RET) review now underway.

At risk are up to 18,400 additional renewable energy jobs and A$14.5 billion of investment, on top of the A$20 billion already invested under the RET scheme. Public submissions on the renewable review close this Friday at 5pm AEST.

There is room to improve the Renewable Energy Target, as I’ll explain. But after this budget, it’s now the last major remaining piece of federal government policy that supports ongoing investment.

As for big power generators’ calls for it to be cut back to a “true” 20% target by 2020 – that’s a stunning reversal from their past position. And I know, because I was there.

Will lobbyists get what they want again?

The Renewable Energy Target has traditionally had bipartisan political support, as a policy started by the Coalition and expanded under Labor. It’s led to A$20 billion of investment, while reducing the greenhouse intensity of the Australian economy and positioning us for future economic success.

The so-called 20% renewable energy target for 2020 is actually 41,000 gigawatt-hours of Large Scale Renewable Electricity (known as the LRET) and a complementary Small Scale Renewable Energy Scheme (SRES) that uses a similar certificate trading mechanism, but actually has no fixed 2020 target.

Big power generators and other industry are now calling for the LRET not to aim for 41,000 gigawatt-hours of electricity, but instead be set at 20% of whatever actual electricity consumption is in 2020 – which is expected to be far lower. They have justified this position by claiming they need “certainty”, and that excess renewable energy generation is cutting into their revenue.

Yet that’s not what they said more than a decade ago.

The original Mandatory Renewable Energy Target was developed from John Howard’s 1997 Safeguarding the Future speech just before the Kyoto Climate Conference. The original proposal was for 2% additional renewable energy (relative to 1997 generation) by 2010.

In intense negotiations, the electricity industry argued strongly for a shift from a percentage target to a fixed amount of generation – 9,500 GWh, in 2010. This rested on their need for “certainty” so they could plan to meet their compliance obligations.

I was involved in these negotiations, and even co-facilitated a four-day workshop in late 1998, in which many issues were addressed. The industry’s underlying reason for the change was that it thought the official electricity forecast on which the 9,500 GWh “effective 2% extra” target was based underestimated likely 2010 consumption. So the shift was likely to reduce their RET obligation.They also recognised that predicting electricity consumption even a year or two in advance is difficult, and would create real uncertainty.

The 2020 41,000 GWh LRET target was based on electricity forecasts of 2007, which were themselves based on data provided by the electricity industry.

But now the industry is seeing unexpected ongoing decline in electricity consumption, so it wants to switch back to a target as a percentage of actual consumption. It argues it needs this for planning “certainty”.

Of course, certainty is a relative concept. For the renewable energy industry, a fixed 2020 generation target does provide certainty, while a percentage target creates uncertainty for everyone, as it is very difficult to predict consumption, even a year or two ahead.

A better plan for the renewable target

The objectives of the Renewable Energy Target are to grow Australia’s renewable energy industry and reduce greenhouse gas emissions. A 2012 review by the independent Climate Change Authority found that it was, in fact, doing that fairly effectively.

So if we don’t want to see major new renewable energy projects cancelled across Australia, and lose renewable expertise overseas, the best thing we could do is leave the Large Scale Renewable Electricity Target (LRET) as it is at 41,000 gigawatt-hours of power by 2020.

In contrast, we could improve the complementary Small Scale Renewable Energy Scheme (SRES).

The SRES has been affected by years of chaotic state and federal government policy on rooftop PV, as well as a complicated revolution related to declining PV panel costs, emergence of new technologies such as storage, and smart demand management.

 

Solar photovoltaic uptake across Australia.
Solar photovoltaic uptake across Australia.
Going solar in the suburbs: solar PV uptake in Brisbane.
Going solar in the suburbs: solar PV uptake in Brisbane.

But its cost is declining, and it has been widely embraced by Australians, with research for the federal government late last year showing that outer suburbs and regional areas have led the way in going solar, as the maps of Australia and Brisbane on the right show. (You can see detailed city and state maps at the end of this report.)

With all that in mind, the government should maintain SRES as it is while implementing a more comprehensive, inclusive policy discussion to deliver a predictable, long-term policy for small-scale distributed energy.

As a side note, the Abbott government and the Productivity Commission both support a trend towards privatisation of the energy sector.

And the Renewable Energy Target has actually been a key driver of privatisation already: around 1.4 million Australian households are now private electricity generators, while the renewable energy industry is privately-owned and operated. So the RET should be seen as entirely consistent with the Coalition’s approach to energy.

Why should Australians reward bad business practice?

Australia’s electricity industry is beginning to confront the kind of change that Telstra’s landline business has had to deal with. Electricity consumption is declining. For a capital-intensive industry that has long-lived assets, this is very uncomfortable.

Major coal and gas generators now seem to see the RET as a focus for blame for many of their problems, particularly their loss of revenue.

But as explained on The Conversation before, the biggest factor driving uncertainty in the need for generation capacity is the trend of falling demand, which is not related to the LRET. The electricity industry has failed to invest sufficient effort to plan for and now understand that trend.

I know of no other large industry that knows so little about how its customers think and behave. Power generators got what they asked for more a decade ago with the design of the Renewable Energy Target – and now they want it changed again, at the expense of renewable investors.

As Treasurer Joe Hockey might put it, it’s time to end the age of entitlement.

Continue reading “Billions axed in clean energy: renewable target is next”

Snacks Powered By Wind Energy

Published by Energy Matters. View original article.

Wind Power - MarsThe makers of Mars and Snickers bars are getting their green on with a new 200MW wind farm that will generate all of the electricity needs of Mars’ U.S. operations.
 
With an annual output of over 800,000 megawatt-hours, Mesquite Creek Wind will provide 24% of Mars’ total global factory and office electricity requirements; which is equivalent to the power needs of 61,000 U.S. households. 
  
According to the company, the investment represents the largest long-term commitment to renewable energy use by any food manufacturing company in the USA.
Continue reading “Snacks Powered By Wind Energy”

U.S. Wind Power Blows New Records. Again. And Again.

Published by Bloomberg. View original article.

A wind turbine in Arlington, Oregon.

Photographer: Meg Roussos/Bloomberg
A wind turbine in Arlington, Oregon.

Wind was responsible for 4.8 percent of America’s electricity used in January. That’s the highest January total ever, breaking the record from last January, which broke the record for the January before that, and so on. The chart below shows the latest data from the U.S. Energy Information Association. Continue reading “U.S. Wind Power Blows New Records. Again. And Again.”

Where Wind Energy is Up, Electrical Prices are Down

Published by Sustainable Business. View original article

wind_hay

Electric bills are trending down for people that live in high-wind states, according to research by the American Wind Energy Association (AWEA).

The 11 states that get more than 7% of their electricity from wind energy have seen their electric prices decrease by 0.37% over the past five years, in contrast to all other states, where electricity prices have increased 7.79% during that time.

The 11 states are: Texas, Wyoming, Oregon, Oklahoma, Idaho, Colorado, Kansas, Minnesota, North Dakota, South Dakota, and Iowa.

Texas is on the verge of getting 10% of electricity from wind; Iowa and South Dakota already get 25%.

The more wind capacity they have, the more rates have come down.

Wind Top States 2012

But don’t AWEA’s word for it – at least 15 studies confirm that as wind energy increases, electric prices come down. Studies have been done by independent grid operators, state governments, academic experts, and others.

For example, research from New England’s grid operator concludes that when wind provides 14% of electricity, prices drop 10%, and when it reaches 24%, prices decline 15%. Find the links to these studies in AWEA’s white paper, Wind Power’s Consumer Benefits:

 

Continue reading “Where Wind Energy is Up, Electrical Prices are Down”

Is $15 a year really too much to pay for renewable energy?

Published by The Conversation. View original article

59pq66q7-1392013185

Cooling towers at Yallourn, one of Victoria’s major brown coal power generators. Flickr/ccdoh1

Australia’s Renewable Energy Target looks likely to be weakened or even axed, with the Prime Minister saying the scheme needs to be reviewed because it is causing  “pretty significant price pressure”.

But does $15 a year sound like a “pretty significant” cost to you?

According to the last national review of the Renewable Energy Target, $15 a year from now to 2031 is all that an average Australian household would save if we scrapped our national scheme to drive extra investment in renewable power. Continue reading “Is $15 a year really too much to pay for renewable energy?”

U.S. Solar Capacity Grew 418 Percent In The Last Four Years

Published by ClimateProgress. View original article.

Colorado solarCREDIT: SHUTTERSTOCK

Solar energy is booming across the U.S., with capacity up an astounding 418 percent in the last four years alone, according to data released this week by the U.S. Energy Information Administration (EIA).

Residential and commercial rooftop solar, along with other forms of photovoltaic (PV), have grown steadily over the past four years, specifically those that are net-metered. When customers install their own solar panels in states with a net metering policy, they are compensated for the excess electricity they send back to the grid. According to the EIA, these net metered applications have increased every year by approximately 1,100 MW since 2010. California currently has the largest net metered solar capacity with 38 percent of the nation’s total. Not far behind are New Jersey and Massachusetts, which together represent 21 percent of the total capacity in the U.S. Continue reading “U.S. Solar Capacity Grew 418 Percent In The Last Four Years”

Grantham: Wind, solar to replace fossil fuels within decades

Published by REnew Economy. View original article.

renewable energy 2

Legendary hedge fund investor Jeremy Grantham says there is no doubt that solar and wind energy will “completely replace” coal and gas across the globe, it is just a matter of when.

The founder of $100 billion funds manager GMO Capital is known as a contrarian. But he suggests that the pace of change in the fuel supply will surprise everyone, and have huge implications for fossil fuel investments. Continue reading “Grantham: Wind, solar to replace fossil fuels within decades”

When will Australians finally stop wasting our energy?

Published by The Conversation. View original article.

Brisbane’s annual City of Lights show, which is sponsored by an oil and gas company. Flickr/Wei Lun Koh (some rights reserved)

From flicking on a light to travelling around town, our lives are utterly dependent on energy.

That’s why it’s so surprising that Australia has been so bad at thinking about our country’s future energy needs. Even after years of sharply rising electricity prices, as a nation we still take it for granted that we’ll have affordable power and fuel for as long as we want them.

With a new federal government in power, what – if anything – has changed? Continue reading “When will Australians finally stop wasting our energy?”

Wind Power Is Reducing Electricity Rates; Pays Back Tax Credit 17 Times Over

Published by Triple Pundit. View original article.

USWindTurbMtnsACORE

Higher performance turbines, lower manufacturing costs and lower prices for consumers drove new U.S. wind energy construction to record heights in early 2014 — despite the U.S. Congress still debating whether or not to renew the federal renewable energy production tax credit (PTC), which expired Dec. 31. In many parts of the U.S., wind energy is now the cheapest form of electricity generation – cheaper than natural gas and even coal, NextEra chief financial office Moray P. Dewhurst recently stated on an earnings call. Continue reading “Wind Power Is Reducing Electricity Rates; Pays Back Tax Credit 17 Times Over”

Wind Energy is a Key Wedge in the Fight Against Global Warming

Published by Energy & Policy Institute. View original article.

Wind farms reduce green house gas emissions in the overall electrical grid on close to a 1:1 basis. Typical grids produce 800 g of CO2 equivalent (CO2e) per KWh generated by their mixes of fossil, nuclear and renewable generation, and wind energy displaces virtually all of that. It’s difficult to imagine the mindset in which one would assert that black is white and that wind energy actually increases greenhouse gas emissions or does not reduce them. Yet many anti-wind commentary continues to make this claim based on an overlapping and baseless set of myths. Continue reading “Wind Energy is a Key Wedge in the Fight Against Global Warming”