With the fate and the format of Australia’s renewable energy target still uncertain as negotiations continue with back-benchers, one thing is apparently clear – Tony Abbott’s Coalition government wants to make it a predominantly solar target.
In seeking to justify the push against wind energy, the creation of a “wind commissioner” and its dealing with the Senate cross-bench, the Coalition is trying to turn the renewable energy target into a sort of de facto large-scale solar scheme.
“What we’re doing there is very significant and we’re increasing the focus on large-scale solar,” environment minister Greg Hunt told radio last week. “There should be a support for large-scale solar, which I think many Australians, if not all, if not the vast majority, would strongly support,” he said in another radio interview.
The comment conveniently ignores the fact that most Australians also support wind energy. It is a small, but vocal minority, including the Prime Minister, the Treasurer, many in Cabinet and key cross benchers, that don’t.
It’s now clear that Abbott, and the cross-benchers, would be perfectly happy if no new wind turbines were constructed. But can Abbott, an expert in arguing against things – the carbon price and wind energy being just two prime examples – actually argue in favour of something, and get investors to follow?
To do so, the Coalition will have to rely on an institution it has vowed to dismantle, the Clean Energy Finance Corp.
That much has been made clear in the letter that Abbott ordered Hunt to write to the back-benchers led by David Leyonhjelm, in which Hunt promises to ask the CEFC to ensure “significantly increased uptake of large-scale solar and energy efficiency”.
Hunt has not yet written to the CEFC, but the government does indeed have the power to change the mandate of the institution to focus on solar. The CEFC could respond by offering concessional finance for solar projects, or even take an equity stake in a project (something it has avoided doing to date).
The CEFC – which has $10 billion at its disposal over five years – has so far allocated around one-quarter of the funds it has committed to wind energy projects, including the new Taralga wind farm and the fourth stage of the Portland wind farm, and the refinancing of the Macarthur wind farm.
Solar accounts for an equivalent amount, but almost all of this is in the financing of rooftop solar PV, mostly through power purchase agreements and the like.
But CEFC chief executive Oliver Yates recently gave an upbeat assessment of the prospects of the big solar industry, noting the forecasts by Bloomberg New Energy Finance that big solar could account for 40 per cent of the RET.
He cited projects in the pipeline – and as yet unfunded – such as Solar Choice’s $1 billion solar farm on Queensland’s Darling Downs, FRV’s 150MW solar power plant at Clare in far North Queensland, the Collinsville Power station project and the Barcaldine Solar Farm.
“We are seeing a continued global and domestic trend downward with utility-scale project costs,” Yates said. “We encourage the diversity of renewables within the energy supply system and expect solar to play an increasing part.
“The predictability of solar generation, relative ease of construction and low development concerns around Australia is making it an attractive option.”
Yates noted that the CEFC could play a role in bringing private sector co-financiers to the industry, including where longer term PPAs were not available and in technologies that had not been widely deployed at the utility scale to date.
Meanwhile, the wind industry is left in the lurch. There is continued disbelief about the proposal to create what is, in effect, a commissioner for wind farm anecdotes, given that the government itself, and even the cross bench Senators, acknowledge there is no clear medical evidence for the supposed health effects turbines cause.
Leyonhjelm is believed to be pushing for more concessions from the Abbott government, including measure that could either cap the number of wind farms, or stop them from being built. He and fellow Senator John Madigan want the “wind commissioner” to have more powers.
In the meantime, the mainstream media continues to give vent to extreme views on wind energy, and indeed renewables in general.
One of the most laughable came from Alan Moran, a former energy “expert” for the Institute of Public Affairs, Abbott’s favourite thinktank, which now runs a consultancy called Regulation Economics.
His article in the AFR included this gem:
“Australia’s black and brown coal resources are low-sulphur and hence pollution-free. In contrast to windfarms they do not require vast tracts of land and disfigure the natural environment. Nor do they impose the detrimental health effects from low-frequency noise and infrasound that, according to the Senate Committee on Wind Turbines, appear to affect 10 to 15 per cent of the population.”
Moran also claims that wind energy costs around $120/MWh. Actually, wind energy is being built in Australia at around $80/MWh, as the ACT government discovered in its latest wind auction, and the coal estimate takes no account of its obvious health and climate impacts.
Moran also takes the Pope to task for pushing renewables over fossil fuels, claiming all sorts of financial impacts. It is remarkably similar to Madigan’s speech in the Senate last week.
The Abbott government’s own Warburton Review found this to be untrue, and the long-term savings overwhelmed the initial cost. Even the International Energy Agency says a transition to renewables will come at no extra cost to business-as-usual (meaning a coal-based grid), and wind forms a key plank of its plan to reduce emissions across the globe.
Moran, and others, including the Minerals Council of Australia, like to argue that wind and other renewables cannot effectively reduce emissions. The MCA argued last week that CCS for coal generators was the best energy solution. But the IEA says wind and solar are key in both the world’s biggest economies and energy markets, China and the US.
“In 2020, onshore wind offers the lowest abatement costs after hydropower, at less than $20 per tonne of CO2 (tCO2) abated, followed by utility-scale solar 2 PV (generally less than $50/tCO2), while the cost of abatement for CCS is in the range of $50-100 per tCO2. Coal-to-gas switching is an expensive way to reduce emissions in China, with an estimated abatement cost of $120/tCO2 or higher throughout the period to 2040. Investment in RD&D and learning through deployment reduce the costs of abatement through CCS to $10-70 per tCO2 in 2040, still generally higher than the estimated abatement cost for onshore wind power and solar PV projects.”
Investment bank UBS earlier this month said a scenario that saw 50 per cent of the world’s generation coming from solar by 2050 would add just one per cent to electricity bills – until 2025 after which point the cost would fall to zero.