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Abbott modellers tip households to invest $30bn in solar

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shutterstock-china-solar-150x150ACIL Allen, the modellers hired by Tony Abbott’s review of the renewable energy target, is assuming that Australian households will invest $30  billion of their own money in rooftop solar in the coming decades, even if the government brings large scale renewable energy investment to a crashing halt.

The modelling conducted by ACIL Allen shows that whatever decision the government makes – halting the target immediately, halving it, and/or removing the small scale incentives, the installation of rooftop solar out to 2040 remains about the same – some 14GW of solar modules worth $30 billion.

This table reveals a little about their thinking – the tables are now publicly available here.

acil allen investment

 

And here it is in terms of capacity …

 

acil allen capacityIt is interesting to note that ACIL Allen suggest that the uptake of rooftop solar will be more if the RET schemes are brought to a halt. That’s because without large scale renewables, customers will pay higher electricity bills. ACIL Allen suggests this will increase the uptake of rooftop solar.

Australian households have already shouldered the bulk of investment in Australia’s clean energy technologies, accounting for two thirds of the $18 billion so far invested in wind farms and rooftop solar.

According to two of the scenarios modelled by ACIL Allen, households will account for all of the investment in clean technology between now and 2040. Under the repeal and the quick closure scenarios, no wind farms and only a little utility scale PV is built.

Even in the reference case – leaving the target at its current 41,000GWh target, the modellers expect household investment to account for nearly half of all clean energy spending.

As we pointed out yesterday, the modelling by ACIL Allen concluded that the two main reasons espoused by the Abbott government against the RET – that it would lead to higher costs and would be impossible to meet – are absolute rubbish.

Ominously, and as we suggested, Abbott’s own press spokesman chose instead of focus on the “caveats” expressed by the modellers. This does not augur well for a good result for the industry.

Instead, the modellers chose to focus on what it describes as a “transfer of wealth” from coal and gas generators to the public. In layman terms, it simply means that the fossil fuel industry gets less revenue, and the consumers get cheaper bills.

The other major complaint of the fossil fuel industry is that its current capacity will be sidelined. This graph from ACIL Allen shows that should the RET be repealed or diluted, there will be a lot more coal generation, and much of the mothballed capacity will come back into service. Hooray!

acil allen mothball

Extraordinarily, the modellers also anticipate new fossil fuel capacity to be built from 2025 on – even under the current RET target – with coal coming online in following years.

This, given the climate change requirements, and technology cost forecasts for wind and solar, the emergence of battery storage and home management systems, as well as solar thermal plus storage at utility scale, not to mention the fuel cost of coal and gas, and the financing risk attached to that, seems an extraordinary prediction. Proof, it seems, that so many can simply not let go of coal.

acil allen new entrant

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  • aussiearnie

    This raises a few interesting questions:

    – is the assumption by the modellers that an investment of $30 billion by households will be done for philanthropic reasons? Obviously those households will want to see their energy bills slashed – has this been taken up in the demand forecast?
    – they have assumed no carbon price out to 2040? A brave assumption if that is the case…
    – given that CSP is approaching parity with fossil fuel based generation, even in the absence of a carbon price why would any business build a new coal or gas fired plant in 2030 when the costs of these renewable generation technologies has come down even further?

  • Ian

    The milk herd of taxpayers and voters has invested 30 billion of their own money to buy some independence. That is unthinkable, they should be taxed more and the money given to the utilities to ensure that more milking can be achieved. By 2040 the old roof top panels will be cracked and faded and people will beg for more coal powered electricity. Even 70 year old power stations belching black smoke will smell sweet. What profits what Devine profits!

  • patb2009

    any model out past 5 years is usually ridiculous. But almost all the cases show 4 GW of household solar coming in, that’s quite a lot, and probably driven by a desire for cheaper electricity. Given the massive change in prices, the growth of PV is probably going to be inexorable.

  • MrMauricio

    Its amazing this ACIL just blindly going on as if nothing has changed or will be different in the future.Things have change-the earth is warming,the climate is getting more extreme and fossil fuel power generation is a major cause.Its a risky business!! Recently in the U.S Paulson (exTreasury Secretary under Bush) and other key business figures in the Risky Business Report warn that regional damage to agriculture and coastlines puts America’s businesses and the American economy in an extremely vulnerable position and warns of “the arrogance of doing nothing” and that the risks posed by climate change are “much more perverse and cruel than they were in the financial crisis,”
    It is different here -worse- as the blind have wrested control on behalf of the arrogant!