The new CEO of the Clean Energy Council, David Green, says ensuring that the renewable energy target remains intact is the number one priority for the industry and its peak body.
In an interview with RenewEconomy ahead of Clean Energy Week, which will be held in Sydney from Wednesday, Green said Australia had a unique opportunity to become a leader in the clean energy world, with all the revenue and jobs that would entail.
“There is huge potential for Australia to play an active role in that transition,” he said. “When you look at the climate of Australia – it really is purpose-built to have a wider deployment of renewables. It is an extremely big island with a lot of sunshine. And a lot of coastline.”
And, as he did in his interview with RenewEconomy in April, Green emphasised the importance of energy efficiency. And he noted that while some were using falling demand as a pretext to defer or delay the deployment of renewables in Australia, energy efficiency and demand management were essential measures to mitigate the cost of deployment of clean energy.
Giles Parkinson: David, welcome back to Australia, what are your main priorities?
David Green: The council’s main priority is the upcoming RET (Renewable Energy Target) review, which is clearly very important for the delivery of renewables in Australia. More broadly, I am very keen that the council takes steps forward on the supply side of green power, wind and other forms of energy, but also strongly engages on the demand-side agenda so we can make sure that when you utilise energy from wind and other renewable energy sources it is deployed into buildings that are energy efficient, so that precious green energy resources are used efficiently and effectively.
GP: The demand side of equation has just risen its head in Australia, but in a way it has raised the stakes. With less demand due to elasticity of prices or energy efficiency, it is being used as a reason to roll back the deployment of green energy.
DG: Clearly, I need to understand more fully the situation in Australia, but there are some shifts in usage patterns in Australia, and the biggest intensity in demand has been the summer load and air conditioning. But generally, through energy efficiency, that is how you manage the transition to a low-carbon future that is consumer friendly and is cost effective. Whilst you may have an impact on bills, you moderate the impact by helping households to use energy more efficiently – which is monitoring, using smart meters, deploying smart grids, smart demand, etc – which is in itself a very exciting area.
GP: Are you surprised that falling demand has been used as a pretext to roll back green energy initiatives? You seem to suggest it is a good reason to accelerate them.
DG: I don’t think it’s an either/or. What one needs to do is to make sure you have got a well-rounded policy and so that if you use more green energy, it is used efficiently and effectively. I think it is fantastic that Australia has reduced demand. Clearly, one of the issues is the huge increase in peak demand driven by air conditioning load. There is a whole range of things we can do with that – the design of buildings, orientation, etc, etc. Yes, you do need to have cooling house and offices, but there are ways to do it that don’t have a huge impact on cost to consumers, or the need for grid reinforcement.
GP: Are you surprised by level of pushback on renewable energy target?
DG: Not particularly. There is a strong push back in Treasury in the UK, and many of us thought that, while Australia has not had a difficult time as Europe in global crisis, people might not be quite as willing to go to a clean energy transition. However, what is clear is that the world is moving to a clean energy future and there is huge potential for Australia to play an active role in that transition. When you look at the climate of Australia – it really is purpose-built to have a wider deployment of renewables. It is an extremely big island with a lot of sunshine. And a lot of coastline.
GP: I think someone once described it as an island of coal surrounded by a sea of gas.
DG: That’s what people said about Britain once, and now its gas has run out.
GP: On that point about sunshine, surely it’s a case of if you can’t get that right in Australia, then you can’t do it anywhere.
DG: That’s why it is important to get the policy right in Australia. You have got to do it with a smooth transition and recognise that there are communities and industries dependent on different ways of doing things. You have got to make sure you can carry communities and voters with you on that journey.
GP: That seems to be very much the missing link in Australia – the ability to carry voters.
DG: There is a lot of potential to find creative ways of engaging communities, so that people can become part of that process of change, that they don’t see it as a threat and they see it as an opportunity for economic investment in that area, for doing things slightly differently, making their homes more comfortable as well. I think there is a range of things that can be done to show people it is not a threat, but it is a steady process of transition.
GP: On the issue of threats, they seems to be felt mostly by the incumbents; if you look at solar PV, socket parity and other forms of generation displacing their own assets.
DG: That’s a fairly natural human reaction to resist change, the important thing is to make sure that companies and individuals get to see that there is an economic future in doing things differently. That’s where the real challenge is: to design an institutional market framework so people do see things not as a threat, but as a transition. If you look at the huge transitions that have taken place in our economies, society does have the capacity for change, but people want to see the benefits of the process.
GP: In Australia, there is a big push from people who say that, because we now have carbon price, we don’t need complementary measures. Is the carbon price one size fits all?
DG: Lots of countries have been through this debate, it is by no means new. You get this debate between the purist economist view that markets will do everything and the reality, which is that there are lots of barriers, be they institutional, human, political or whatever, to energy efficiency and renewables, and you always need a whole range of measure to make sure you can go that journey effectively and efficiently.
In the UK, when the Conservatives came into government, they took the view that the market would not work efficiently, they needed a market framework to deliver incentives to deliver low-carbon technologies. These are designed to underpin and shape the carbon market to get investment flowing.
GP: And what do you hope to achieve out of Clean Energy Week?
DG: I hope that industry comes out of it with a strong sense of purpose, a feeling that they are part of the solution and a feeling that they have got a huge job to do to engage with voters and communities to demonstrate the very real benefits of a sustainable energy future, based on energy efficiency and renewables.