Solar package could boost Victoria’s renewable future

Solar-dukeLast week, Alcoa announced that Anglesea coal mine and power station will close this year. After more than 14 months on the market, the company couldn’t find a buyer for an ageing coal-fired power station with little social license left in the community. It’s likely this is the first coal domino in Victoria to fall, as coal is on the way out and solar and wind are on the rise.

With rooftop solar panels 40 times cheaper than they were thirty years ago, and solar becoming cost-competitive with fossil fuels, the transformation of our energy system is already underway.

However, governments in Australia have struggled to keep up with the pace of change in technology and price.

We know renewable energy is the future – but governments can embrace this change in one of two ways.

They can accept the onset of gradual change and adjust their planning and modernise their infrastructure when they are forced to. When the time comes, they will buy the necessary technology from countries and regions that forged ahead.

The alternative pathway is bolder, but much more rewarding. A government investing strategically and courageously in renewable energy now will be the government capitalising on profitable engineering, manufacturing, research and development and energy production industries tomorrow. They can then share this expertise to their own advantage, when others convert to these new technologies out of necessity.

Victoria has a new government, and this should be the catalyst for real renewables reform.

Rather than hiding behind Abbott’s inaction on renewables, and using it as an excuse to delay action in Victoria, the Andrews Government should declare its intentions to reform our energy sector and make it work without Abbott, just as the ACT has done.

There is a federal leadership vacuum on renewable energy – which means there is both the opportunity and the need for State governments to step into the breach.

During my time working in Premier John Brumby’s Office of Climate Change, I saw first-hand the opportunities governments have to accelerate transformative change at the State level. As a Member of State Parliament, faced with a complete absence of vision or support at the federal level, I feel more than ever that State Governments should be actively defining the energy future we will have in Australia.

This is particularly so because the public desire for this transformation is real: 4 in 5 Victorians support renewable energy.

We have seen some welcome steps in the right direction from the Andrews Government, but we need to be thinking holistically about reforming the whole energy system – not just tinkering around the edges with small renewables grants and minor wind-farm reforms.

Reform of the energy sector is complex and technical, but there are several core initiatives that could be at the heart of a successful transformation.

To start, Victoria could adopt a package of measures to support the solar industry and remove barriers, made up of three key reforms.

Fair price for solar

People are embracing household solar in droves, but those who export excess solar power to the grid, reducing the demand for coal-fired power, should be fairly paid for that electricity. Since the beginning of 2015, rooftop solar owners are paid 6.2c per kilowatt hour for the energy they produce, whereas purchasing a kilowatt hour of coal-fired power costs an average of 30c in peak times. At the very least, solar producers should be paid fairly for the energy they put into the grid.

Finance for renewables

Securing finance is the first challenge for significant new infrastructure. A Victorian taxpayer-owned, profitable investment bank could support larger-scale renewables projects to get off the ground, by catalysing private investment and kick-starting the bigger projects that will speed up our energy transformation.

The Victorian Government should establish a Renewables Investment Fund or Solar Bank which mirrors the Federal Clean Energy Finance Corporation. Within a year of commencing operation, the CEFC had invested $931 million in projects worth over $3.2 billion, leveraging private investment in renewable energy of more than $2.20 for every CEFC dollar. The CEFC makes the government money, and facilitates renewables projects, so it’s win-win. A similar investment bank in Victoria would create both environmental and economic benefits for our State.

Right to go renewable

We need laws and regulations that help, not hinder, the transition to renewable energy. By overhauling the rules governing connection to the grid, we could make sure that rooftop solar owners are not penalised by electricity companies, and help make it easier for communities to invest in renewables and take charge of their energy needs.

In Germany, when the Greens were in government with the equivalent of the Labor party, one key reform was to guarantee grid connection for renewables. We can do this in Victoria too.

This package of measures to support renewable energy, and solar in particular, would be an easy way for the Victoria to boost our economy, jobs and clean energy.

And beyond these measures, there’s no reason we cannot also be creative, strategic and ambitious.

What is there to stop us putting solar panels on the roof of every school? Powering public housing with renewable energy? Removing the barriers to community-owned solar so that local neighbourhoods can take their energy into their own hands?

Victoria must commit to seriously transforming itself from laggard to leader on renewable energy. With a new government, and Greens holding shared balance of power in the Upper House, this is our chance. We need to build the core support for renewables – the right price, the right laws, and the finance for investment.

Once we have this foundation, we can quickly build on it with better technical standards for the industry, compulsory “renewables-readiness” for replacing electricity components like hot-water heaters, and government operations powered by 100% renewable energy.

I’m confident Victoria can lead the way, but if we don’t show leadership now, we may lose our chance.

Comments

7 responses to “Solar package could boost Victoria’s renewable future”

  1. Matthew Wright Avatar
    Matthew Wright

    We need the greens to propose a price for exported solar 10-13c/kWh – what is Ellen, what are the Greens proposing instead of 6.2c/kWh ??

    What about the rort where Citipower/Powercor are charging $300+ for every new solar connection while Jemena/SP Ausnet/United charge a much more reasonable (but still a rort) $30-$40 for new connections.

    We need to get away from motherhood statements – fair price for solar and hear what the proposal are and have them clearly put on the table!

    And the most important thing – Bolstering the Renewable Energy Target now that it’s been massively watered down at the federal level

    1. Hugh M Avatar
      Hugh M

      Sounds like their policy is a tariff of equal value to retail price (eg an average price of 30c/kWh):
      “1. Fair price for solar. The Greens will support the continuation of existing feed- in-tariffs that pay a fair price for solar. All future installations in Victoria will earn the owner a guaranteed minimum price, equivalent to the price they pay for energy.”
      http://greens.org.au/initiatives/vic/solar-savers

      1. Matthew Wright Avatar
        Matthew Wright

        Well if that were the case it’s actually too high. A solargain 5000W system for $5,500 would generate 6500kWh @ 30c/kWh = $1950. The system would be paid off in 3.3 years. Considerable stimulus for solar is available at 6 years – just slightly better than the magical 7 years (10% return). 14c/kWh would achieve that.

        Even cheaper systems can be had from companies like Truevalue who I saw offering $4300 for 5kW however they were using panels from unheard of manufacturers whereas Solargain uses quality kit.

        When you take into account that a house will achieve some level of self consumption then even the 14c/kWh figure is too high. That’s where you get a figure in the range of 10-13c/kWh depending on what level of self consumption you expect a household to achieve. I think the industry would be healthily back on its feet off the back of that and we’d be getting a lot more solar installed in the state.

        1. Tim Read Avatar
          Tim Read

          Thanks Matthew, it’s reassuring to see what even a modest price increase would achieve. In reality the Greens need to push for a feed-in price increase while other forces are lobbying hard for it to be reduced. Any increase will be a negotiated compromise and probably not as much as we would like, so it’s great to see that even 10 – 13 cents would do some good. Frankly it wouldn’t kill companies to buy it for more than that though.

  2. Matthew Race Avatar
    Matthew Race

    If you look at the wholesale pricing for electricity, the Feed-In-Tariff for solar is actually above the industry rate that coal fired plants receive for exports. While I agree with the idea for increasing renewable subsidies, we should seriously re-consider our financing of fossil fuel subsidies. After the industry has already seen such a mass penetration in residential solar, the price will continue to come down, in the short term future both should be on an equal playing by natural supply and demand, if we are to remove subsidies for the wrong players.

    1. Matthew Wright Avatar
      Matthew Wright

      Yes but a coal plant does not deliver into the market. I can get wholesale wheat at the farmers gate for much cheaper than bread at coles.

      But the wheat at the farmers gate isn’t transported to me (transmission and distribution poles and wires) and cooked up ready for me to use (transformed to 240VAC single phase. This is what I pay for when I’m buying electricity in the market at my gate.

      1. Mike Dill Avatar
        Mike Dill

        So someone has to pay for the Transmission and Distribution Grid, which is currently embedded in the tariff. The coal plants deliver to the grid, and the distributors then add the costs of T&D to get a retail rate.

        Paying you the retail rate for power you produce cannot work in the long term if a large percentage of consumers take the offer.
        On a separate note, I am currently running under a net metering scheme, getting the retail rate for the power i produce, and I can see myself adding storage or even going off grid if the tariffs are pushed too far.

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