Let’s start with a question: why has Denmark been so successful in renewable energy creation and uptake?
It can’t be that Denmark is a windy place (although that helped) or that it was a social democratic country (many others did not develop wind power). We think the answer lies in the way that Denmark was able to focus from the very beginning on one renewable energy option: wind power. It didn’t take a “portfolio approach” to renewables.
This had two major advantages, one economic and one political.
Economically, it was able to concentrate its limited financial resources on one thing. It could rapidly scale-up wind production to levels needed to make it a cost-effective substitute for fossil fuels.
Politically, it had the benefit of creating a united political constituency for renewables (that is, all the wind companies blowing in one direction, so to speak). So they could effectively challenge the dominant alternatives represented by the fossil fuel and nuclear power constituencies.
Australia has taken a very different approach. Given the fear that governments have of being accused of “picking winners”, Australia has clearly been more comfortable with the portfolio option. This has not only been inefficient from an economic perspective (with a scatter-gun spread of resources) but it has created a political problem: a fractured political constituency for renewables that is unable to form a united coalition against fossil fuel producers.
Behind the endless arguments over a carbon tax, over wind v solar, and the seemingly timeless benefits drawn from digging up and exporting coal, there lurks this factor – namely that renewables find it hard to speak with a unified voice.
We have a radical proposal to deal with this issue. It is time that Australia stopped backing every renewable option that presents itself, and makes a public choice to back the one with the best prospects for meeting domestic needs and creating an export platform.
It is not hard to choose such a candidate. Australia is blessed with endless solar input and Australian scientists have a track record of developing world-class solar technologies. One of the most exciting recent developments is the “Big Dish”. This concentrated solar power (CSP) technology utilises a parabolic dish made up of mirrors that can concentrate the sun’s energy 2000 times and heat a fluid (molten salts). It produces both industrial heat and electric power both day and night, because of the heat-storing capacity of the molten salts.
This is an Australian technology that is currently languishing because of the country’s portfolio approach. It is time to get behind it in a serious way, undistracted by too many alternatives.
This is not to say that the Big Dish is the only CSP technology or project worth backing; a modest portfolio approach within the CSP technology family would be sensible given the infancy of the technology and the Australian and global industry. It’s precisely the infancy of the industry that gives Australia a fighting chance of becoming a global player – but this chance won’t last forever, and odds of success would be greatly improved by focusing our efforts and resources.
The political gain from concentrating efforts on CSP is that the country might finally make a breakthrough in renewables and commercialise a scalable technology. It is one that could provide all Australia’s domestic power, and a technology that could be exported around the world. This would be a knowledge-based export with manufacturing possibilities that are never manifested in the coal industry. (We note that ZeroCarbonAustralia promotes such a strategy)
The political losers in such a strategy would be the businesses and associations pursuing other forms of renewable energy. How would we win them to such a national policy?
One approach is to follow the Danish example again. At the time that nuclear power was discontinued in Denmark, and before the wind power alternative had been established, Denmark put its nuclear engineers onto the task of developing a rotor along aerodynamic lines based on prior experience in the aerospace industry. The result was the winning three-blade turbine, that ousted even the US-promoted two-blade version.
So putting our skilled engineers onto the task of perfecting Australian CSP technologies like the Big Dish and seeking improvements to them, in terms of efficiency, cost and materials used, would be one way to deflect political opposition.
Another would be to designate “renewable energy technology creation” as a strategic export industry. We would give all the companies currently working on non-solar technologies continued funding for their research and create a “Renewable Energy Patent Bank” managed by the government. It would promote Australian-owned technologies as solutions to other countries’ energy problems.
Of course we are not advocating that companies be stopped from pursuing technologies of their choice. They will have every right to develop alternatives (such as wind turbines, second generation biofuels) but at their own and their investors’ expense. Public assistance would be targeted on the selected technology.
With such an approach we might end up selling new wind technologies to the Danes. There must be other ways that people could think of compensating renewable energy firms that feel they are being left out of a single national push on one technology.
Of course there are risks in such a strategy. But the alternative is to carry on dithering with a portfolio approach that in the end ensures that no technology “wins” – and Australia is the loser.
Jon Matthews is Professor of Strategic Management at Macquarie Graduate School of Management. This article was first published on The Conversation. Reproduced with permission.