David Green, the newly appointed head of Australia’s peak renewable energy body, the Clean Energy Council, says some of his main priorities will be to focus on enhancing energy efficiency measures, distributed energy and consumer engagement about renewable energy technologies.
“I want to focus on energy efficiency,” Green told RenewEconomy in an interview from London last night, his first in-depth interview since his appointment. “The second thing I want to do is to make sure there is a good consumer information program, so that they understand the journey we are on, and the importance and the opportunities of moving to a sustainable energy future. It is very important to carry the public with us.”
Green’s appointment was announced to the CEC membership last week after a near six-month search following the resignation of Matthew Warren, who now heads up the Energy Supply Association of Australia. He comes with an appropriate name for the job and also the right background, having spent much of the last decade as head of the UK equivalent to the CEC, the Business Council for Sustainable Energy, and has travelled to Australia regularly in the last three decades.
In a wide-ranging interview with RenewEconomy, Green said he could not comment on specific policy issues before taking up his post in June or July, but he said made some key points – the first being the opportunity that Australia had in playing a key role in the green economy in Asia, and the importance of “complementary measures” in supporting the carbon price.
He says Australia has the potential of being a world leader in renewable technologies. “Australia could really make a mark on the global market, and particularly in Asia where there is enormous potential in these big, fast-moving economies for renewable energy.”
Complementary policies, such as renewable energy targets, feed-in tariffs and other green energy schemes, are now under attack in Australia from business groups as the country prepares to embrace a carbon price. But Green said a carbon price alone in the UK had proved insufficient for clean energy investments – which is one of the reasons the UK is adding an additional carbon impost on its energy market.
He said one of the biggest differences between Australia and the UK will be the lack of bilateral support for climate change policies. He noted that the new minister for energy and climate change in the UK government, Greg Barker, a Tory, was recently campaigning for more ambitious greenhouse gas abatement policies.
Green is familiar with Australia, having worked on energy efficiency policies on behalf of the Victorian government in the 1980s, and then helping develop cogeneration policies with CEDA. He was involved with Ric Brazzale on the creation of the Australian Cogeneration Association, which led to the Business Council of Sustainable Energy, a forerunner to the Clean Energy Council.
Among his major challenges will be managing the sometimes competing demands of the CEC’s diverse membership – which ranges from major utilities such as AGL and TRUenergy (Origin Energy quit a year ago), to major renewable developers, promoters of emerging technologies and solar installers.
The BCSE in the UK was also dominated by major energy utilities – both local and foreign. But Green said their involvement was essential. “There is a real opportunity at the senior level in industry to get behind the transformation of the market. What I learned from working with major energy companies in the UK was that it was good for their business.” And he said their involvement had been essential for all of the big investments in renewables in the UK, because of their deep pockets and better credit ratings. “One of the big challenges is to get sufficient liquidity in the market.”
Green said increasing the penetration of renewables would be much easier by moderating energy demand. He noted that this had been a fundamental part of the strategy of renewable country leaders such as Denmark and Germany (and now Japan).
“My vision of the future has always been one where energy efficiency is at the forefront; so when green power is generated from whatever is the most appropriate source, it’s efficiently and effectively delivered to people’s homes and offices. It’s really important that there are clear communications to community and consumers about the journey we are on about the clean energy future so they understand that journey and the benefits that are going to flow from it and the opportunities and costs that will flow as well.”
What about selling the message about green energy, that it might involve short-term cost increases before long-term benefits are delivered?
“It’s a very challenging message. That’s why we need to focus on two things: first is what you can do to reduce energy demand and manage the cost changes; and secondly we must recognise that an awful lot of consumers like the idea of their own renewables – be it solar or whatever else – because they see it as way of getting control of their own energy future, and that is very often the same for communities as well.”
So does he think we will see more distributed energy in Australia?
“I don’t know enough about the structure of market in Australia, but given the long transmission distances there must be more scope for distributed generation; in city centres there must be more scope for local embedded generation.” Green drew particular attention to the work that Allan Jones, a person he knows very well, is doing with the City of Sydney with its plan for a network of trigeneration projects that will significantly reduce its reliance on the grid.
He is also a fan of building integrated photovoltaics (BIPV) – the term used to describe PV panels on rooftops, and incorporating PV design in roofing and window panels. “I’ve always thought that, even in the UK, BIPV has a lot going for it if you can do it at the right stage of development. If you retrofit it, it can be quite expensive, but if you integrate from offset it is much better value.”
So what will be the biggest challenges?
“I suspect the biggest challenges will be how one engages with political community at a time of potential transition, and when people are very cost conscious and are looking at the impact of the bottom line of those policies. Hence the need to emphasise energy efficiency, long-term demand management, and the long-term jobs and economic benefits that come from green energy.
He noted that in the UK, unlike Australia, not only was there bipartisan support among the main political parties, there was in fact a competition of sorts among them to present the “greenest” policies at the last election. “The UK commitment to feed-in tariffs came out of the political competition between Conservative, Liberal Democrat and Labour parties over who is doing what for small-scale renewables.” That ultimately caused controversy, because the UK government wanted the FiTs to be focused on household renewable investments, and not large-scale solar farms.
In the UK, there has also been some kick-back against wind farms, as is now occurring in parts of Australia. “There have been concerns about visual intrusion, and the extent to which they are a cost-effective method of reducing greenhouse gas emission, which is why there is now a focus on offshore development, and the challenge for the industry to bring these developments down the cost curve.
Does he have a preference for particular mechanisms such as FiTs, and renewable energy targets?
“These mechanisms go alongside each other. Basically the FiT is a way of achieving a target. Public policy all around the world is littered with aspirational targets, be it for house construction, greenhouse gas targets, hospitals, etc. None of these targets work unless they are embedded in legislation, so people understand they are for the long term and can give investors confidence. And then you need the mechanisms to get there – one of the most popular mechanisms based on the German experience has been feed-in tariffs. In the UK, there has been a combination of feed-in tariffs and grants.
“One fundamental thing that may be relevant in Australia. In the UK, the government is in the process of reorganisation of the electricity market to make it more attractive to invest in low-carbon technologies – through new capacity mechanisms, contracts for difference; a whole range of things. There is a general view that the volatility in the European carbon price by itself has not provided the stability needed to get them to invest in these technologies.
“Australia is a fascinating country to work in. I’ve always been very taken with the willingness to change and to do so in a progressive and effective way. But I think I need to do a lot of learning before I can get off plane and offer solutions.”
Green’s position as secretary of the Carbon Capture and Storage Association in the UK – an organisation that shared the same building as the UK BCSE, has also raised eyebrows. Green described the role as a “nominal” position. He says the principal challenge for CCS, at least in the UK, was to reduce costs, and that would not happen until there were viable demonstration projects.
Asked about nuclear, which is part of the energy mix in the UK, Green said the government was struggling with its policy, particularly after the withdrawal last week of two key German players, RWE and E.ON. He said he had no knowledge of the nuclear debate in Australia, and said there were “more important tings to concentrate on.”
