Abbott’s silly claim: 50% renewables will ruin us

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Contrary to Coalition claims, achieving 50% renewables by 2030 is not an economic or technical problem. It just needs to be made a policy priority.

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When Bill Shorten announced an ambitious, but achievable target of at least 50 per cent renewables by 2030, the public reaction was extremely positive. But not in all quarters.

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‘At least 50% renewables by 2030’ came under immediate attack from the Abbott government, who said this represented a massive cost burden that would cripple families and the economy.

So, who is right, and how much could it cost?

How you get to 50% renewables

The government says that the current Renewable Energy Target legislation will deliver 23 per cent of our electricity. Add to this existing hydro, and rooftop solar PV (both excluded from that 23 per cent figure), and utility analysts predict we will be at or near a real 30% figure by 2020.

So the 50 per cent target means we have to add 20 per cent additional renewable energy in a decade. Much of that will be delivered through the market without specific policy support.

The economics of solar PV and wind technology mean they are simply the rational economic choice for the lowest-cost electricity during that period.

Indeed the Bureau of Resource and Energy Economics has predicted solar and wind will 
be among the lowest cost of all types 
of electricity generation within
 10 to 20 years.

Bloomberg New Energy Finance suggests rooftop solar and battery storage are on track right now to account for more than half of Australia’s electricity needs by 2040.

And investment bank UBS has said solar will be the cheapest form of ‘new build’ energy, globally, by 2020. In fact UBS expects large-scale solar plants to become the industry standard, displacing centralised generation such as coal-fired power plants.

Technically, the Australian Energy Market Operator (AEMO) has shown 100 per cent renewables is feasible with existing technology. The AEMO report also shows how the electricity grid can manage high levels of renewables with variability of supply.

So if getting to 50 per cent renewables is not an economic or technical problem, what does it require? To achieve the target it will need to be a policy priority across government, to ensure an orderly and cost-effective transition to renewable energy.

This mindset that renewables are just too expensive, and without government handouts cannot be deployed, is simply wrong.

The Prime Minister and his environment minister, Greg Hunt, are stuck in the past. Their imagination goes no further than thinking a 50 per cent target means putting the existing RET on steroids.

There are multiple policy levers that can be used to support a 50 per cent target.

This portfolio of policy measures may include emission standard laws (like they have in the US), reverse auctions to pull through specific large-scale renewable energy projects (like they have delivered in the ACT, and committed to in QLD) and a carbon price of some form.

Stronger energy efficiency measures, targeted collaboration with the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC), actions by State and Territory Governments, the rapid uptake of energy storage at residential, commercial and industrial scale, could all play a role.

The more shrill the Prime Minister and Minister Hunt are on this, the more they betray their ideological blindness to the opportunities.

So, what are others doing?

In 2014, 144 countries had renewable energy targets. The European Union is on course to generate 50 per cent of its electricity from renewables sources by 2030. Germany has a target of 40-45 per cent renewables by 2025.

California has a target of 50 per cent renewables by 2030 and 1.3GW of energy storage by 2020. Fifteen G20 nations have committed to targets representing a 70 per cent increase in renewable energy capacity by 2025.

Australia needs to commit to at least 50 per cent renewables by 2030 just to keep up with our major trading partners.

What’s more, 50 per cent renewables is enormously popular.

An Essential Poll in May 2015 showed 71 per cent of Australians think there needs to be more emphasis on solar and 62 per cent thought there should be more emphasis on wind.

A Lowy Institute Poll this year indicated 43 per cent of Australians expected solar to be our primary source of electricity 10 years from now, by far the highest-ranked option. Coal was selected by only 17 per cent.

It is a policy that will create jobs and investment. In 2014, around 21,000 Australians worked in the solar industry.

More than 93 per cent of these workers worked for small- and medium-sized enterprises (SMEs). In fact 96 per cent of Australia’s 3,800 solar businesses are SMEs.

In 2014, Australia dropped from 11th in the world in renewable energy investment to 39th in the world. At the same time, again in 2014 alone, global investment in clean energy grew 16 per cent on the previous year to $US310 billion.

New energy jobs from renewables will be the basis for industry assistance and transition training for displaced workers in the electricity and other industries.

The bottom line

In terms of costs, ClimateWorks’ deep decarbonisation analysis showed that with strong renewable energy, energy efficiency and transport efficiency measures, retail electricity prices would increase at an average rate of 0.9 per cent per year or around 40 per cent to 2050, but average household electricity use (excluding for electric vehicles) would fall by half, so that average household power bills would be reduced by 30 per cent.

Even ACIL Allen’s economic modeling for the 2014 Warburton Review concluded: “Regardless of direction, the impact on retail electricity prices is small, even when considered over the period to 2040.”

It’s time the government ended its scare campaign, and developed a positive plan for Australia’s renewable future.

The transition is going to happen anyway, but without leadership the change will be slow, inefficient and job and investment opportunities will be lost to Australia.

John Grimes is the chief executive officer of the Australian Solar Council

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21 Comments
  1. Peter 4 years ago

    This comment is almost in the same league as ‘Whyalla will be wiped of the map by Julia Gillard’s carbon tax’. Meanwhile South Australia is already generating about 40% of its electricity from renewables.

  2. David McKay 4 years ago

    I believe we have a charter of budget honesty. We really need a charter of politician honesty. Even when proven that their statements are blatantly incorrect, they continue to stand by them & repeat them endlessly!! The words politician & honesty/facts seem mutually exclusive.

    • Peter Campbell 4 years ago

      Abbott kept saying untruths often enough that people started to accept them as true and repeated them, and eventually the lies became unquestioned, accepted fact.
      Eg. The roof insulation industry had fewer deaths and injuries per installation during the ‘pink batts’ period than previously but everyone knows … and even the ABC automatically puts prejudicial adjectives in front of any mention of it.
      EG. Gillard’s so-called ‘lie’ was the first half of an explanation about an ETS, which only got a fixed price for the initial phase-in period during the negotiation that was required to get it passed.

  3. Jan Veselý 4 years ago

    50% of renewables will ruin us. Who are we? Coal baseload.

    • Pedro 4 years ago

      How so? Has not ruined SA, or Tasmania. No one in their right mind is suggesting turning off half the FF generators over night. It will be a gradual transition and retiring the oldest and least efficient fossil fuel generators first as RE capacity increases.

      • Jan Veselý 4 years ago

        I was just making fun of that statement. And I was specific with baseload plants. With such penetration of mainly wind and solar, there will be regular periods where those zero marginal cost sources will push baseload plants to the red.
        Coal may and will be left in the ever smaller niche of shoulder and reserve power. As is hard coal now in Germany.

        • Pedro 4 years ago

          Sorry, sense of humour failure. Abbott government has gone beyond being a joke.

  4. Michael Rynn 4 years ago

    Ruin from clean energy is not a silly claim. It is an outright lie, to cover ignorance. Mr Abbott is as clueless and useless as a lump of coal in our world on the edge of irreversible catastrophic runaway global warming.
    Estimated costs of continued emissions need to be multiplied, as they are a case of increasing marginal cost, amplified by positive climate feedbacks, over several centuries. Relative costs of mining fossil fuels continue to rise as extraction requires more energy. Demand deflation happens as our economy collapses and fossil fuel energy demand falls. We will stop digging up the unburnable and unextractable coal soon enough. The global networked economy is primed for coal-lapse.
    Real economic and financial collapse is in progress, and none of the bankers or Joe Hockeys of this world can make real shared growth happen during collapse. The bankers deliberately target the growing number of people without economic resources, by trying to sequester money and resources for the rich. Distribution of food of the bare rations kind is going to be a problem in near future.
    Miners and bankers still seem to want require a massive investment in coal and gas. Sure it is energy, but with a hefty increasing pricetag, and a mortgage on future survival. Resources are being wasted here, by diversion from clean energy. Ignore the climate consequences while they run off with the money. No more Hockey Shtick for todays privileged set of coal banker politicians. The climate “hockey stick” is how the distribution of wealth is becoming.

    At least the big banks have thought better of some of the grossly harmful projects like the Galilee Basin coal dream. The nuclear power dream is still kicking around, as I heard a federal politicians was spouting the standard nuclear nonsense dream only yesterday. There are still doubts on the time left for clean energy dreams as well, and the longer we fail to invest, the less we will be left to carry on with.

    Our fetish for growth has made the entire problem far too big. Nearly every Australian politician still spouts the endless growth dream. Maybe to counter the bad dream monsters we are creating now for our future generations

  5. Mike Dill 4 years ago

    Wind at US$0.02 per KWH will be less than the cost of the coal. This will be happening SOON, and will kill the coal industry, and no one will see it coming.

    • philofthefuture 4 years ago

      And specifically what magic elixir do you know about that virtually no one else in the world does?

      • Mike Dill 4 years ago

        “No one will see it coming” is a joke in the USA about the economists that somehow do not anticipate the things that happen that are different from their forecasts. Their myopic situation is shared with Abbot.

        The newest wind turbines are direct drive, eliminating the gearboxes. The maintenance costs are MUCH lower, and everything is monitored remotely, reducing on-site trouble calls.

  6. Ian 4 years ago

    i don’t understand this idea of a percentage of renewables. Is it a quota above which they will allow no further RE development? Is it a threshold at which a subsidy will be withdrawn? Or maybe a prediction of a future energy mix? Or perhaps a Wishlist of power generation assets? I think the idea of a percentage of renewables goal is a bit like the idea of carbon capture and storage – a lot of hot air .

    We need some positive policies: withdrawal of subsidy for coal generation. Open the electricity market to all generators and storage facilities. Allow unrestricted access to power exportation. Create a robust network that can handle any amount of power generation. This would include time of production pricing, subsidy and support of hydro and pumped hydro , subsidy of distributed battery storage. Subsidy and financial support for electric cars and other transportation.

  7. JustThink4Once 4 years ago

    Arguments about renewable energy targets and economic ruin miss the big picture. The generation of power is transitioning from mining companies to manufacturers. Manufacturers costs decrease over time with greater market penetration, whilst their products continuously improve through technological innovation. Mining costs increase with the increasing scarcity of prime sites and their significant transportation and infrastructure requirements. This is all despite any of the environmental considerations.
    Now, if you were an institutional investor, where would you be putting your money? Does anyone seriously think that renewable energy technology will not continuously improve in the future as Moore’s Law dictates it will? This is the reality that scares the crap our of the fossil fuel industry. Hence their desperation in appealing to people with emotional arguments about alleviating poverty and fallacious hip pocket fear campaigns.

    Right now all the fossil fool industry has left is incumbency and the political leverage this affords through large targeted donations. But that won’t stop the rot. Indeed, it may even kill the political parties that hitch their wagons to their dying horse.

    • philofthefuture 4 years ago

      Renewable energy will NOT improve by Moore’s law, they are two different animals. Moore’s law occurred because one could shrink the size of a transistor, and the more you shrunk it the smaller a given function could be accomplished. Solar panels gain nothing from shrinkage, virtually all solar gains have been via materials science, using less material, etc.
      Solar is over 25% efficient now, the efficiency has to do with light spectrum. Dual junction models capture two wavelengths and can get up to mid 40’s in efficiency. The best you will do is 100% so we could only double in improvement max.
      Both solar and ‘modern’ wind tech are over half a century old, the days of rapid innovation are long over. Going forward it’s incremental improvements, and volume production that will lead to cost reductions, likely 10% innovation, 90% volume.

      • OneHundredbyFifty 4 years ago

        People often confuse experience curves and Moore’s law. They are different beasts. Renewables, batteries and most manufactured products follow an experience curve which still leads to a predictable long term cost reduction trend. https://handlemanpost.wordpress.com/2014/07/10/experience-curves/

    • JustThink4Once 4 years ago

      Perhaps a link as to how I came about making the “Moore’s Law” statement is in order.

      http://blogs.scientificamerican.com/guest-blog/smaller-cheaper-faster-does-moores-law-apply-to-solar-cells/

  8. mick 4 years ago

    julie bishop v Bernie fraser on the numbers hilarious if it was another country

    • Chris Fraser 4 years ago

      Direct from the Guardian – “… modelling by leading economist Warwick McKibbin, showed the 26% target would shave between 0.2% and 0.4% from Australian GDP in 2030, but the same modelling based on similar assumptions, a 35% target would cut only 0.3% to 0.5% and a 45% target would cut between 0.5% and 0.7%…”So this the triple whammy massive python squeeze threat hovering over our heads ? Pity about Ms Bishop, i considered her view on many things in comparison to a lot of the front bench. Sigh – eventually they all break your heart.

      • mick 4 years ago

        1st visit to china got called a fool Russia don’t bother with her good news they are pissing everyone off

  9. Rob G 4 years ago

    Bottom line, we have no choice we must transform the way we make power. That is the only option to begin addressing climate change.

  10. Miles Harding 4 years ago

    By ‘Us’, I assume you are referring to the LNP and Tony?

    The LNP continues to slip into wipe-out territory in the polls and this sort of stand can only serve to accelerate that trend. (hooray!)

    Give Tone a shovel and he’ll dig a hole deep enough to bury the entire LNP front bench.

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