ACT Energy Minister Simon Corbell on Wednesday opened the 20MW Royalla solar farm – the largest in Australia and the first in the National Electricity Market. Later today, bidding for the ACT’s auction of 200MW of wind energy capacity will also close.
In this interview with RenewEconomy, Corbell outlines his frustration with federal policy and the level of ignorance and ideology against renewables; why he plans to rally other states to push their own renewable support mechanisms; and why the ACT’s 90 per cent renewable energy target is such a good idea.
He also explains what’s next with the reverse auction program, for the 200MW of wind energy, and the plans for innovative storage projects.
RenewEconomy: On Wednesday you are officially opening the 20MW Royalla solar farm. What is the significance of this project?
Simon Corbell: This is a very significant project for the ACT and for Australia. For the ACT, we are in the process of implementing our 90 per cent renewable energy target. This is the largest solar plant yet to be developed in Australia, it is the first to be connected to National Electricity Market.
And it really does demonstrate that a large-scale, reverse auction feed-in tariff process can deliver large-scale solar at an affordable price and in a very timely manner. For Australia, it highlights what can be achieved with certainty, and with clear policy leadership, and it highlights that companies are willing to invest when they have that certainty of a supportive policy environment.
RE: This has probably been a costly exercise, given that it is the first of its kind. How quickly can costs come down to ensure that big solar does not need to rely on such support in the future.
Corbell: Clearly, a number of the companies involved in the auction process in the ACT have been keen to get a foothold in the Australian market. That has meant that bidding has been very competitive. The consumer wins, and the government wins, when you have a competitive environment for bidding in renewable energy. We have seen subsequent auction processes in the ACT deliver prices that match he FRV price at Royalla, and we will wait and see the result of the wind auction that also closes on Wednesday to see whether or not we are maintaining a competitive bidding environment.
RE: You have expressed fears that the federal policy may undermine the competitive process in that wind auction (which is for 200MW of wind energy capacity).
Corbell: I do remain concerned about that. The issue for the ACT is that we rely on a competitive and a diverse market to see a strong range of bids and a strong range of companies to compete against each other for feed-in tariff support. If the ongoing uncertainty with the RET review and the hostility towards renewables which is so clearly apparent within the Warburton report flows through to decisions of some companies to withdraw significantly from Australia, that means less companies willing to bid in the auction.
RE: Have you had many bids submitted as yet?
Corbell: I’m not privy to that, the bids go into a locked tender box so I will have to wait like everyone else until the auction process is concluded.
RE: When will the results be known?
Corbell: I expect that to be able to provide an update on the level of interest shortly after the auction process, and in terms of winning bidders, I am hopeful hat that decision will be made before the end of this year.
RE: You have some other solar projects from the auction process going through planning approval, but there has been some resistance from local residents.
Corbell: There is concern about the One Sun Capital proposal, which is in the Uriarra area, in the west of Canberra. About 100 residents in that village have concerns, largely about the aesthetic impact of the solar farm located adjacent to their village. These are issues that need to be worked through the appropriate planning assessment. The developer has demonstrated a responsiveness to that. Whether or not that is adequate will be determined through the formal assessment process that is now underway.
So I think that this is a first for Australia – the first time we have had that concern raised in the context of large-scale solar – and some of the lessons from Uriarra are being implemented in our wind auction in terms of having a criteria for the assessment to take account of public and community engagement.
RE: Your next stage is the 50MW solar park. Where are you up to on that?
Corbell: The government is going to proceed with that later this year. We will start with an EOI process to understand the range of proposals that may be coming forward from the industry, which involves solar with storage. And that will be used to design the auction architecture, which I anticipate will occur in the first half of next year. I think there are a couple of options for the government which need to be fleshed out – that includes to understand to what extent developers are interested in demonstration of different types of technology, and the second is whether, in addition to that, the government should be looking at a commercial solar with storage facility. The government has been very encouraged by the level of interest, not just from those companies who wish to demonstrate small-scale solar in a demonstration park, but also from companies who have indicated willingness to proceed with large-scale solar and storage, and whether or not that should be supported too.
RE: Going back to the RET Review, were you surprised by the findings?
Corbell: I regret to say that the outcome of the RET Review was all too dismally predictable, in that it confirmed the prejudices of the reviewers, and clearly was not an objective assessment of the effectiveness of the renewable energy target. The Review’s own modeling, and the conclusions that come from the effectiveness of the RET, demonstrate that it is policy that is working, and the only things that got in the way of reaching those conclusions in the report was the prejudice against renewable energy.
RE: What will be the impact of that?
Corbell: I think the prospects are fairly dismal for renewable energy in Australia at the moment. The federal government needs to decide whether or not it wants to take an evidenced-based approach to renewable energy policy, or an approach based solely on the interests of incumbents, not renewable generators. It is a political challenge for the government, but based on what I have seen to date, I am not optimistic on the federal government’s position. The complicating factor is the position of the minor parties in the Senate and their opposition to any changes to the RET, and whether or not it becomes a case where the federal government has a policy position it cannot enact and quietly drops it, or whether we have an ongoing period of significant policy uncertainty.
RE: You are reasonably close to some of the decision makers, because of your role as an energy minister. How do you explain such antipathy to renewables? Is it based on ideology, or protection of vested interests?
Corbell: It is a mixture of factors. It is certainly based on the protection of vested interests in incumbent generators, particularly where energy ministers are effectively the owners of the assets. It is also fundamentally a lack of understanding of what is happening technologically. There is still an extraordinary level of misunderstanding about the capacity for solar to provide for dispatchable power, for storage to allow for electricity to be dispatched when needed. There is a lack of understanding of how widespread solar is in the future energy mix. Until we have a better level of understanding and visibility among our key decision makers about where we are going, we will continue to suffer second-rate policy settings on behalf of the national government and some state governments.
RE: You have said that one of your responses may be to reintroduce a feed-in tariff in the ACT. Is that seriously on the cards?
Corbell: I think that this has to be considered, particularly if there is closure of the small-scale scheme. I don’t believe for a moment that we need to have a premium feed-in tariff scheme, those days are well and truly passed, but whether or not we have a scheme that effectively provides the same level of support as the small-scale certificates is something that should be considered. It is an example of how states can act to counter some of the more regressive moves by the federal government around renewable energy policy. States have policy levers as well, and feed-in tariffs are an example of this. They can be managed equitably and at reasonable costs. In the ACT if we were to consider it my view would be to consider one that had a digression rate as part of it, so that it would not be subject to overheating.
RE: My next question was about the role of the states. We saw with Victoria, that they filled in the gap created by the Coalition government a decade ago, when the then MRET was brought to a close. Do you think they can play an important role.
Corbell: I think that sub national levels of government are going to have to do the heavy lifting if we continue to see this policy paralysis and lack of bipartisanship, and the ignorance on the part of federal policy makers. The states and territories are very well positioned to act. Thy can put in place their own renewable energy schemes, whether it’s mandated renewable energy targets, whether it is feed-in tariff support arrangements, and that combined with measures for mandated energy efficiency requirements that can help reduce demand, are a strong suite of tools that should be deployed carefully, and ingeniously by state and territory governments. That is the ACT’s focus. Once we see the result of the government response to the Warburton report, it would be my view to speak to my state counterparts to see if there was a will to develop some coordinated policies that could support renewable energy across the states and territories.
RE: And have you had any initial indication that they would be receptive to that?
Corbell: My sense is that a number of jurisdiction would be receptive to that, although the nature of policy settings is uncertain. But there is clearly support among a number of jurisdictions to support the development of a renewable energy industry. They see economic value of it in terms of economic development and jobs, and the importance of it in the transition to a low-carbon future, and the opportunities for investment that flow from that. We are seeing very encouraging signals from NSW, we are seeing strong push back against the Napthine government settings in Victoria, South Australia and Tasmania have both indicated the importance of renewable energy in their economic and energy agenda, so I think there is scope to support that. But it is still very early days.
RE: OK, thanks very much for that.