The shift from petrol cars to electric vehicles appears to be more than a consumer-driven, Tesla-inspired phenomenon. The big utilities are also getting on board.
Origin Energy, one of country’s big three utilities, says Australia could a market leader in solar-powered electric vehicles, given the right incentives and policies that could encourage the uptake of renewable energy and force the closure of the most polluting brown coal power stations.
“With an already high penetration of residential solar PV systems in Queensland and South Australia and the emergence of home battery technologies, there is an exciting opportunity for Australia to be a market leader in electric vehicles powered by solar energy,” the company says in a submission to the Climate Change Authority.
Nearly one quarter of Australian homes are equipped with rooftop solar, and Australia is seen as the likely first “mass-market” for battery storage – because of that high solar penetration and because of the country’s high electricity prices, courtesy of its high-cost grid.
Anecdotal evidence suggests that many of the early adopters of electric vehicles are already charging their EVs with their own rooftop solar, and utilities are already switching controlled loads for electric hot water systems back to the day-time from overnight to take advantage of excess solar power.
Utilities say EVs can fill the same function, and the uptake of battery storage could help shift that solar-charging into the evening. And by using rooftop solar, it addresses criticism that EVs don’t really reduce emissions in a coal-intensive grid.
Origin says the potential for EVs is significant, but the take-up so far in Australia has been small, with less than 1,000 vehicles sold up to the end of 2014, although those numbers have since been boosted by the enthusiasm for the upmarket Tesla Model S, and more recently the huge interest in the yet-to-be delivered Model 3.
Origin suggests a range of policies that would help increase demand, such as support for fleet purchases, infrastructure such as charge points, and reductions for stamp duty and registration, along with preferential parking and traffic lanes treatment.
It also suggests electric vehicle sales can be coupled with GreenPower or similar products so that they are immediately powered by fully renewable electricity generation.
Origin also points to the opportunities for Australian industry to become more involved in the manufacture and support of electric vehicle components and the charging infrastructure.
The points made by Origin follow from similar proposals made by the Electricity Supply Council, and buy a consortium of utilities, network operators, advocacy and research groups, and city councils last week.
Australia currently has no standards on its vehicle emissions, and while the Australian government is talking about introducing such policies, it is now being urged to be highly ambitious by a number of industry groups.
Transport emissions account for around 17 per cent of Australia’s total emissions, and are growing rapidly. The report by the pro-EV consortium last week suggested that Victoria is the only state where the emissions would rise with widespread uptake of EVs, because of its brown coal generators.
Across the National Electricity Market, EVs would actually reduce emissions, and particularly so in South Australia, Western Australia and Tasmania.
Origin and others are now pushing the major parties to follow international examples and impose restrictions on brown coal generators.
“Standards are currently being implemented in North America with the US basing theirs on emissions intensity and Canada on the age of its generators,” Origin said in its submission.
“Either policy could be applied in Australia. In comparison to a carbon tax or emission trading scheme, standards are simple to communicate to the public and their results are more tangible.”
Alternatively, Origin says a proposal to fund the exit of brown coal generators proposed by ANU academics is worth pursuing. Although it does not favour payments to generators, it would support funding for communities for structural adjustment.
Another option is morphing the Coalition’s Direct Action scheme into something that is actually useful. This could be done by transforming the Safeguards Mechanism from something that protects the current level of emissions by large polluters into a mechanism that can force significant reductions.
Origin says it is supportive of a shift to an “emissions intensive” safeguards mechanism that would effectively set a bar on emissions and require heavily polluting facilities such as brown coal generators to buy permits from cleaner generators.
A policy brief released by the Grattan Institute released on Monday explores this further, saying that the safeguards mechanism could be a tool that could see the two major parties find agreement on climate policies – something that has not been achieved since John Howard supported emissions trading in the 2007 election.
Grattan says the safeguard mechanism needs to be set – virtually immediately – at a level that corresponds with Australia’s medium and long term emissions reduction targets. It, too, talks of an “emissions intensive” category for individual power generators, rather than an “overall” baseline for the sector.
But it wants the government to go further and reduce baselines to zero. “Businesses covered by the scheme will then have to hold permits for all their emissions. This final step, which should be taken within a decade, creates the structure to deliver tougher future targets at low cost.”
Grattan argues that this represents a sensible compromise to the toxic politics that has dominated the climate change arena for the best part of a decade.
“Our roadmap allows a Coalition Government to modify its Safeguard Mechanism so that it no longer merely prevents emissions from going up, but drives them down in line with agreed targets,” it says. “The roadmap enables the Coalition to do this via steps that are consistent with its political constraints.”
It notes Labor remains committed to emissions trading as its centrepiece for a policy that will meet an ambitious, but yet undetermined target and also deliver 50 per cent renewable energy. “The roadmap shows how a future Labor government could take the Coalition’s policy framework and move to its preferred emissions trading model.”
Giles Parkinson is founder and editor of RenewEconomy.com.au, and is also the founder of OneStepOffTheGrid.com.au and founder/editor of www.TheDriven.io. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.