Last 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.