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ACT lifts 2020 target to 100% renewable energy, as Australia stalls

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The ACT government says it will better its 90 per cent renewable energy target by 2020, and will in fact source 100 per cent of its electricity needs from renewable energy by that date.

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In the same week that federal Labor was pilloried by the Coalition and most mainstream media for confirming its national target of 50 per cent renewable energy by 2030, ACT’s minister for the environment and climate change Simon Corbell said the switch to 100 per cent renewables was both achievable and affordable.

“As leaders in the renewable energy field the ACT is reaping the environmental and economic benefits of decarbonisation,” Corbell said.

“Not only are we providing clean power for the people of Canberra, we are also delivering jobs and economic benefits by securing $400 million in local investment through our reverse auction process.”

Importantly, Corbell said the ACT would retain its ranking as having the lowest electricity prices in the country, even with sourcing 100 per cent of its energy demand from renewable energy.

“We are demonstrating thru these policies that not only is a transition to a renewable energy future achievable, it is affordable and is creating jobs,” he said in an address to the Local Energy and Microgrids conference, hosted by RenewEconomy, where he announced the new target.

The irony is that the ACT is taking advantage of the stagnation in the national market caused by the fluctuating policies of the federal Coalition. That is offering the ACT opportunities to lock in low prices as developers knock down prices.

Corbell says because of that, the ACT will increase the size of its upcoming (and third) wind energy auction from 109MW to 200MW, which would be enough to lift the ACT from 90 per cent to 100 per cent by 2020.

“Adding an extra 91MW of renewables to our current auction process will allow us to take advantage of the record low prices and significant local investment we have achieved in our recent auctions,” Corbell said. Bids for that auction are due on May 13.

“The ACT government has set a significant undertaking with the vision of Canberra being an internationally recognised centre for renewable energy innovation and investment,” he said.

“Being powered by 100 per cent renewables by 2020 places Canberra at the lead, both in Australia and internationally, of cities taking effective action on climate change.”

Legislation will be introduced to change the ACT’s feed-in-tariff legislation to accommodate the extra capacity required to meet the new target.

Corbell said the total cost of the project is expected to peak at around $5.50 per household per week in 2020, before declining. But this cost is expected to be largely offset by energy savings from mandated energy efficiency measures, including the installation of free energy-saving lights.

 

Interestingly, the cost of the 100 per cent target is no greater than for the 90 per cent target, thanks to the declining cost of wind and solar, a fall that the ACT is taking credit for.

Indeed, the wind auctions have helped driven down the cost of wind to $77/MWh, which equates to a price in the mid-$60s/MWh because the 20-year price contract is fixed and does not rise with inflation.

“The target will demonstrate to industry, business and the community our community’s commitment to tackling greenhouse gas emissions by embracing new clean energy technology.”

Meanwhile, new data from Bloomberg New Energy Finance says that overall in Australia, investment in large-scale renewables has plunged again, with only $US69 million invested in the first quarter of 2016, although households and business invested five times that much in rooftop solar and battery storage.

Indeed, the only large-scale investment committed in the last three years has been projects from the ACT reverse auction process, and from projects assisted by the Australian Renewable Energy Agency and the Clean Energy Finance Corporation.

The national target, which was cut by the Coalition to 33,000GWh, is still likely to fall short because of the inability to lock in contracts with utilities and source long-term finance, although the market for solar is improving.

The national target equates to around 23 per cent renewable energy by 2020. The Coalition has said that this is “more than enough” and has said that Labor’s 50 per cent renewable energy target by 2030 would amount to a new “electricity tax.” The major networks and energy supply lobby groups are also fighting against it.  

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  • nakedChimp

    Oh the irony.. no comedian could have thought of a more bizarre joke than this – federal politicians surrounded and supplied by RE to the tune of 100%.

    Btw, with CSIRO being stationed in Canberra.. can’t Corbell just take those girls and guys which are supposed to be laid off for being the bearers of bad news into his department and keep them afloat for the time being?

    • Chris Fraser

      all those turbines … he really needs qualified welders and crane drivers.

  • John Bromhead

    The $77/MWh comes from the 100MW stage 2 of the Hornsdale Wind Farm that had already gained a $92/MWh price for the 100MW stage 1. The last contract written, that for generation from 100MW of the Sapphire Wind Farm in NSW was back up to $92/MWh.

    All of these projects will receive price-for-difference contracts that last for 20 years and the subsidy required from ACT electricity consumers is dependent on the market price these facilities can achieve in their respective markets.

    The ACT Legislative Assembly will need to pass a new bill to raise the amount of “new Generation above the 550MW that had been legislated.

    The ACT could end up with over 100% renewables after 2020 because of lower electricity usage in the territory, more self generation, and a larger credit for renewables in the mainly fossil-fuelled electricity fed into the ACT.

    Over 75% of the ACT’s renewable generation will arise from offsets from interstate generation and is to be achieved by cancelling the LGCs that accrue.

    • David Pethick

      Hi John

      Can you explain a couple of the points you make above? I’ve only taken a cursory look at the scheme, but it looks like the ACT Government is benefiting from being the only buyer in a market of sellers…

      * Swap Index Price – I understood this was a 20 year swap against the average spot price in the NEM region in which the wind farm operates. Effectively, if the average price is $55/MWh and the strike price is $77/MWh, then the additional $22/MWh is paid out to the swap seller (the wind farm). Is the swap settled half hourly (i.e. against generation) or is it a simple average of all 8,760 periods?

      * LGC Cancellation – I understand that the wind farm operator also transfers all LGCs to the ACT Government. Are you suggesting that these LGCs are extinguished, rather than sold into the market for the market price (which is obviously pretty high at the moment)?

      Cheers.

      Dave P.

      • David Osmond

        Wind farms for the ACT Auction must be registered as GreenPower generators, which means certificates get cancelled rather than sold on the market.

        “We have increased voluntary surrender of LGCs to reflect the commitment of the Hornsdale Wind Farm as the ACT Government has committed to voluntarily surrender LGCs as GreenPower for projects that it contracts with. We have increased voluntary demand by 333 GWh per annum by 2018”

        http://greenmarkets.com.au/news-events/report-quarterly-renewables-report-q3-2015

        • David Pethick

          Thanks David

          Thanks for that. Just to be clear, that means that the ACT Government is buying 100% GreenPower @ the clearing price of the reverse auction?

          Cheers.

          Dave P.

          • David Osmond

            That’s correct. The $77-$92 per MWh price pays for the both the electricity and the renewable certificates. The certificates then get cancelled, so that the ACT Government adds demand for renewable generation, instead of helping someone else meet the national RET.

  • Chris Fraser

    How do Corbell’s fine people escape the dreaded attention of the fossil arsehats ?

  • john

    The ACT is going to pay for the development of RE generators to feed into the grid at a set price.
    The ACT at the same time is encouraging consumers to put PV on the roof and battery backup to supply household power needs.
    Between the two simple efforts they are possibly being able to claim that 100% of the energy needs of the Territory is being meet with renewable energy.
    The fist is locked in the second is locked in, can anyone poke a hole in this?

    To ensure that the figures stack up, i would venture to say put in more PV and storage than needed, even if it means export, to ensure the Territory always meets its targets.

    • Mike Dill

      When you get to 100%, the people who do not have solar on their rooftops will wonder why they are paying more. Some will opt for their own arrays, and the ACT WILL go over 100%. Some of that power will be used elsewhere, cleaning up Australia even if the other states do not get in to the ‘act’.

      A lot of natural gas demand (and hot air) will go away, as energy prices will be stable for the next twenty years, and will be declining after that as the fixed parts of the solar and wind arrays will continue to produce and will be ready for the next generation hardware.

  • Phil

    The smart money is on both demand reduction and renewables. It really is that simple but it goes against any standard MBA business principles so it’s seen as anarchy

    FANTASTIC to see the ACT still seeing essential services as just that.

    Tony Abbott wont be pleased though describing ACT wind farms as noisy and ugly and Coal is the future.

    • john

      Tony is just waiting to reclaim his rightful leadership position.
      He should get this opportunity post the election, if this does not happen his whole career will be for nothing and will be consigned to history as a blimp in the road best forgotten by both sides of politics.

    • John Bromhead

      There are no wind farms in the ACT and the ACT Labor/Greens government did not even consider that there would be because there are environmental laws that prohibit that they be placed here.

      • Phil

        The ACT land area is so small the land would be far too valuable to use for wind farms.

        Wind farms 30km away from downtown Canberra were enough for Tony Abbott and Joe Hockey to complain about having to look at them when being chauffeured around Canberra.

        • Brian Tehan

          It’s such a shame that the Victorian and NSW governments are not bidding for the renewable energy in their own states.

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