Big solar stalled on the grid
The governments of Queensland, New South Wales and Victoria have taken great delight in announcing planning approvals for a string of large-scale solar energy plants in recent months.
But as most of them will never get built under current policy settings, Australian clean energy groups want the federal government to embrace new forms of incentives to ensure that these and another $15 billion of proposed plants can see the light of day, as it were.
The industry is concerned that Australia is losing out on the potentially billions of dollars of clean energy investment because its Solar Flagships program only allows for the development of two projects in the first phase, and another two in the second phase if it goes ahead.
Given that areas of Australia have the best solar radiation in the world, solar enthusiasts believe that the government program is too little, too slow, and the country is missing out on the opportunity of taking a leading role in the roll-out of new solar technology.
Both the Clean Energy Council and the Australian Solar Energy Society are preparing submissions, and have been seeking feedback from the industry about which financing mechanisms would best suit – a choice, it seems, between the feed-in tariffs that are popular in Europe, loan guarantees used in the US, and banded targets – or a combination.
They argue that the flagships program is not broad enough and cannot achieve the scale and the cost effectiveness that would come from a broader mechanism. The head of AuSES, John Grimes, says 44 large-scale solar photovoltaic and solar thermal projects missed out on the shortlist for the flagships program, and believes 30 of these could be delivered with the right mechanisms in place.
“There’s overwhelming interest – (but) the financial setting is not right,” Grimes says. “We have got the best solar resource in the world – and it’s a tragedy to have a natural advantage and not be making use of it. We should be keeping up with rest of the world, but we not on the map at all.”
Those comments were echoed by Ed Wilson, the head of renewable energy wholesale markets at Lloyds Bank, the biggest renewable energy project financier in the UK.
“Australia is far more suited for solar and large-scale solar utilities than the UK,” he said in an interview in Sydney. “If the dynamics of regulation and pricing are right, solar PV and solar thermal has big potential and big international players will take an interest in the Australian market.
“You have the resources. Each country should look at resource they have and maximise energy generation from those sources. But you are in an international market for project finance. The challenge for policy makers is to basically make themselves more attractive than next door.”
The CEC, which has largely been viewed as a supporter of wind energy in the past, is now seeing solar as the next major renewable energy option for the country, particularly because of its ability to meet peak demand – the country’s most expensive energy challenge just now – and many of its largest members are turning to solar technology.
The CEC held a workshop in Sydney in early December, which was attended by more than 70 industry representatives, including several from the Department of Resources and Energy, to discuss financing and policy options. It intends to follow up with a meeting of financiers to find out what mechanisms would attract their interest before a final workshop in March
CEC policy director Russell Marsh said the study would look at policy options chosen overseas and see what might work in Australia. “We could be doing a lot more than the flagships program.”
Australia – almost uniquely in the world – has favoured flagships-style funding programs for emerging technologies such as large-scale solar, geothermal and wave, and – again, almost uniquely in the world – has precious little to show for it.
The geothermal industry is basically stalled, wave companies are more interested in what’s happening overseas (the one project funded by the federal government has not moved forward at all), and it has been nearly two years since former Prime Minister Kevin Rudd announced the $1.5 billion Solar Flagships program, and the first two recipients are still more than six months away from being announced.
One candidate, the Spanish renewables giant Acciona, one of the leading developers of large-scale solar projects in the world, withdrew its nomination because it said it could not afford to have capital tied up for so long in a project application. And the industry believes others will also turn their back.
State governments have played around with various policy options for large-scale solar, but the fate of Victoria’s 5 per cent solar energy target by 2020 is unclear, since the change of government (the coalition publicly supported the target without ever saying how it would achieve it), and the the ACT, which has proposed feed-in tariffs set by an auction process, is not likely to get its scheme underway until later this year, at the earliest.
Wilson said that Australia was facing a similar challenge to the UK, which also needs to spend an estimated $100 billion at least by 2020 to upgrade its energy infrastructure and to cater for growing demand.
The UK has focused on Renewable Obligation Certificates – rather like Australia’s Renewable Energy Certificates – but with two important differences: In the UK, the ROCS have a base price (£35), and some large-scale technologies can attract multiple ROCS to ensure they have the financial incentive to bring the projects into play. In Australia, multiple certificates have only been used for small-scale rooftop projects.
As the UK looks to replace more than one third of its current capacity within the next 5-10 years, it is looking at what incentives can bring investment and finance to clean technologies. Most will have to come from offshore wind and CCS (if it works), and upgrading and expanding on current nuclear sites.
Everything is being considered – feed-in tariffs such as those in Spain and Germany, loan guarantees such as is in the US, contracts for difference, and an extra carbon levy (beyond the EU emissions trading scheme), to overlay the wholesale market.
Wilson says FiTs appeal most to financiers and developers, but because they are hard to manage – they create investment bubbles if the incentive is not ratcheted down quickly enough – that in turn causes regulatory uncertainty; the retrospective cuts announced in Spain have cause great angst among financiers.
But each form of incentive has strengths and weaknesses, and Wilson says the most important ingredient is certainty. “It’s the age old thing about risk and return. That is the big challenge globally – understanding where that balance is found. The Australian market has parallels to what is going on in the UK and elsewhere. Lots of investment is needed, there are big debates about decarbonisation, greenhouse gas abatement targets, attracting capital. There is downward pressure on gas prices and issues around carbon prices, and austerity measures in Europe causing governments to cut FiTs. Where are we going to find all the money?”
Comments on this article
The cost of not going solar
Greetings all,
It is the likes of commentators like Trevor Ridgway and Bruce Messmer which reveal the true ignorance of the people.
Trevor, the solar power you refer to (sugar cane, wheat crops etc.) can be applied to architecture, cooking, drying and many more things. 100% proven. If you receive free energy from the sun and use it to live, adopt it! Once the world goes free energy, how will financial disadvantage come into it? Does the sun have a cash register I don't know about? Wait? Wait for what? Wait until we deplete non-renewable resources or pollute ourselves out of existence?
Bruce, you are good. You are one for the ages. Bankrupt Australia and its citizens. Oh, that is good. Mate, fear is fear is fear - and nothing good ever came from fear. Free energy sir. You are so stuck in this "everything has a cost" mindset, solar just doesn't get through to you. THE SUN HAS NO CASH REGISTER! Manufacturing processes: free. Minerals extraction like stone to build houses: free. Wood harvesting: free. The processes can be fueled from sunlight. Yes, we still need to balance resource use with nature's production rates.
All this is about pressing the delete button on capitalism. Is it so hard to see?
Solar Power.
The only people (excluding the "Greens" & a few eco-nuts) urging the embracing of so called 'solar technology' are the financiers & the bureaucrats,both intent on securing their seats on the 'gravy-train'. The general public are not keen because the economics of 'solar power' are simply wrong.It is too expensive.The benefits are either non-existent or purely ideological ! Australia ALREADY USES SOLAR POWER to great benefit.It is used to power our huge wheat crops,sugar plantations etc & all the other crops.This is all done efficiently & cost-effectively & makes sense!We will be well advised to 'hang-back' on ANY implementation of 'solar power innovations' (apart from the few proven ones now available)until they have been irrefutably proven by others first. Simply inventing a product does not ensure us of it's long term financial or manufacturing advantage to us.Look at "penicillin" , "black box recorders"and all the other Aussie innovations we now buy-back from the rest of the world !
The argument that we must 'leap in now or we are lost' is spurious in the extreme,emotional nonsense and well past it's 'discard-by date' ....
(No subject)
Big Solar on the Grid
To Suzie Wright, "It's About Time, People"
"Take real action - vote 1 the Greens."
,,,and bankrupt Australia and its cirtizens? You've got to be joking!
And beore you get too enthusuaswtic about solar power (in it's present state) have a look at what the rest of the world is doing about windpower - ditching it. Spain is abandonong it because it is so expensive and has cost the government a fortune. Solar power could go the same way. Germany is having second and thirs thoughts about windpower and Britian's ocean windmills are sinking into the sea.
The cost of bureaucracy
Just another bungled opportunity by blind self-centred politicians. Simple fact is the people’s money is being wasted on bureaucracy and overpriced tenders. over 49% of state tax revenue goes directly to bureaucrats wages alone!
Leaves nothing left to provide us with any real services or basic infrastructure.. let alone forward thinking projects such as this.
Solar In Australia?
The evidence supporting Global Warming is diminishing by the day. China the worlds biggest emitter has an emission efficiency target, which if met, means it will be emitting roughly more than 22% more than it is today. The US is at economic war with the Chinese and is unlikely to give them an edge. Hence the two biggest emitter nations are extremely unlikely to reduce emissions at prior to 2020.
Both these nations are resource poor on a per capita basis relative to Australia. Australia produces less than 2% of world emissions, even if it reduced emissions to zero it would have no effect on Global warming.
Renewable energy technology (solar) is likely to become more efficient and less costly over time.
Copenhagen proved the big emitters do not care what Australia professes or does.
Whether you believe in Global Warming or not, the smartest thing for Australia to do is burn coal, to provide the cheapest energy, attract industry, grow the economy, and save the money to deal with anthropogenic climate change should it be real, or spend it on something else when it is proven not to be so.
Shletered Solar Worshops, money for nothing and power for free.
Yeah...right on. Settings are wrong so lets get free Govt grants and the power will be cheap. Subsidise pensioners and unemployed, single mothers, anyone earning less than $60,000.
Solar doesn't have legs and when the hubris dies down, the real cost of slar frightens the pollies. As it rightly should.. All the above will be devastated when someone else has to pay for it.
Of course the real elephant in the room, and Paraphrasing Oscar Wild, "The power that dares not speak its name", is nuclear of course. And like poor Oscar must lurk around the edges.
One day nuclear will be outed, but not until the baby boomers die off electorally. The Gen-X, -Y and -D don't have the technolgy mentality of the 1960-70 "atomic frightened cold war" mentality generation.
And using the authors facile arguement that Australia is the best solar resource, then nuclear should be a shoe-in with 40% of the western worlds resource.
Time to move on to something serious, grounded, properly argued rather that money-oiling the squeakiest wheel.
Solar and governments.
My ol'man decreed "look after your pennies and the pounds will take care of themselves'!
My son decrees "Live for today and tomorrow will take care of itself"~~~~~~and thus our young generations are led ,blindly,by the decrees of ongoing blind,superciliously-self-centred,sanctimonious politicians who have but one interest in mind,,,,their own!
Solar and economics
Solar is not economic.
Big Solar Stalled on the Grid
Perhaps it is stalled because it does not make economic sense? If it was profitable then it would be more likely to be done. Seeing as it is not profitable standalone, the only way it can be built is using market distortions - subsidised by taxpayers money & increasing the costs of the competition.
Raising taxes and simultaneously rising electricity bills is a recipe to lose elections. Government's will talk the talk but not walk the walk.
Solar makes no sense
“There’s overwhelming interest – (but) the financial setting is not right,” Grimes says.
The financial setting is not right because none of these solar projects makes any financial sense at all.
All you will be doing is raising taxes AND power bills by building them while at the same time we greatly increase export infrastructure so we can sell more fossil fuels.
The stupidity and hypocrisy of Govt goes deep.
Do we want to actually reduce CO2 or make a living?
The fact that we never seem to have trouble finding the money to increase coal exports tells you what our real goals are.
Its about time people
The frustration here is palpable. I don't think it is fair however to attack the Greens when they are not in Government. It is not until July this year when they will hold balance of power that they will have a real say.
The Greens will pressure whoever is in govt to set a zero emission target, go for 100% renewable energy by 2050 - or whatever it takes. The whole climate change debate within the Greens is driven by the science.
The electorate continues to vote in the Lib/labs and then scream when it gets what it asked for. The Greens know that the major parties are determined to keep the coalfires burning and are trying to turn around 200 years of energy history.
Stop whinging people and get on board - help the Greens into government.
The Greens are in a political fight - this is not a game - and this is not even about energy. This is about the power of the vested interests - big mining and coal. These companies and their political puppets in the Labor and Liberal parties will do whatever it takes to set the agenda to keep up the profits.
Take real action - vote 1 the Greens.
Climate change betrayal. Coal is still in charge.
Coal is still in charge because Labor party minister Greg Combet believes in Clean Coal first. The clean energy initiative has three components. On the government website, "Carbon Capture and Storage Flagships Program" is listed at the top.
Solar Flagships Program and the Australian Centre for Renewable Energy come 2nd and 3rd.
How much brain power does it take to see that if we have 2 and 3 working already, we will not need to bother at all with 1 which has yet to be demonstrated in commercial practicality?
So the Labor party policy continues to be as is, and always has been fully demanded by the Coal industry, is that option 1 is paid for and supported, but will never progress, and 2 and 3 are thrown into bureaucratic maze with limited funds and policy starvation. Yet we need a zero emissions path right now.
We need a new minister and a commitment to changing our energy sources faster than the climate itself is changing.
Need for a National FIT based upon a reasonable R of R
In response to CCRD, (Climate Change and Resource Depletion), it would not be hard to develop a national FIT which simply ensured a agreed reasonable rate of return to renewable energy investors.
Each project, whether small or large scale, could be recompensed with the retail price of electricity, RECs, etc in a manner which ensured the capital outlay was recovered in say 8 to ten years.
Such a scheme would account for changing technologies, reduced costs per watt and increasing retail electricity costs.
As the NSW foray into FIT's has demonstated a flexible scheme along these lines is required and with todays computer software such a scheme could easily be managed.
Such a scheme would have dealt with a friend spending $20,000 for an installation at the beginning of the NSW scheme and me paying $11,500 for the same installation 11 months later. There was no need for such gross disparities which have rightly irked electricity consumers in NSW.
Its time for Gillard and the Greens to step up and support a financially reasonable national scheme that avoids the obvious shortcomings of so many FIT schemes around the world.
Bob Brown .. are you now part of this problem?
Maybe the real solution is to turn the spotlight on the person who is keeping the Labour Govt in power.
What are you doing now Bob Brown? What programmes are you driving through your coalition? Time flies. If we are all going to drown with Climate Change what are you doing about solar. We know that Rudd/Guillard/Swan/Wong have collectively actually done nothing substantial in the renewable area.
So what will you contribute Bob Brown? If the answer is nothing in this renewables/solar area then you have no voice of relevance in any discussion on climate change or environmental responsibility.
Origin Energy has failed us but got what it wanted
http://international.pv-tech.org/chip_shots_blog/transform_solar_sightin...
For nearly 10 years, Origin Energy has been stalling on a huge Sliver Solar Cell project that was invented by ANU in Sydney. At the time, all it needed was $100 million to keep it here but the Government of the day said that it had it's own solar plan about to be released, which doesn't exit anymore. If you google Sliver Cell, you will see how this has been delayed with manufacturing about to start in 2002 etc in a new factory in Adelaide Australia. Origin formed a joint venture with Transform Solar. Have we seen anything yet? NO! but the above link shows that the Sliver Cells are selling in the US. Origin says we will MAYBE get them in 2011 probably AFTER THE SUBSIDY EXPIRES!. USELESS. STUFF UP OR CLEVER??????????
The cells use far less silicon, much cheaper, are flexible, have a greater output and absorb suns energy from both sides.
NEVER let an electricity provider take over and invest in a solar project because this is what happens!
Inaction!
I wonder, is it mandatory for a politician, each & every one of them, to be administered a pill, or a potion, or do they take it intravenously?
Seems to me that some sort of metamorphosis occurs when the transition from mere mortal to 'politician' takes place, it's not evil but it's certainly not good. Why does it become seemingly impossible to formulate an idea & then put it in to practise? Billions of dollars are spent on 'commissions', 'inquiries', they fly all over the world, speak with experts in the field & still NO DECISION!
In WA they don't even know where to build a bloody football stadium after nearly three years & several million dollars!
How did the Snowy Mountains Scheme ever get built?
Where are the CY O'Connors of this country these days??
Where are the REAL men... & women...
Some mothers do have them but in Australia they rule!
Here we go again!!
I fail to understand why the 15 Billion Dollars cannot be used to install more solar installations across Australia. Why do we have to give the money away to companies in Spain etc? Many politicians have forgotten that their justification to live out of our tax money is to serve Australia and Australian and not some vague overseas interests.
Big Solar and Renewables
So interesting that a progressive coalition between the Greens and the Labour Party in Australia is unable to achieve anything in the area of major solar projects.
We are not talking NBN bucket loads of Government funds either. We are simply talking about simple and economically rational incentives to build.
If there was an ounce of real vision we would be dumping all of the carbon burying schemes and coal generation clean up programmes and putting 100% of these funds directly into large scale solar (hopefully using hot salt solutions as in Spain).
Then the Greens and the Labour Party could simply sit back and count the votes. Rather than the situation now where we all sit around and wonder why they can't get their heads out of their backsides and actually do something!
Little choice
We are stuck in the insane world where we have four parties in a four-way standoff. Labor has a few ideas but has proven it has no capacity to execute. The Greens seem more concerned about their social agenda than the environment and float impractical absurdities such as getting the coal industry to pay for the flood damage. The Liberals are too busy trying to be American Republicans and hence are devoid of any vision. The Nationals have even less vision than the Liberals and lament the loss of 1950's 'values' and would like to take us all back there.
This is a recipe for inaction.
Come on Australia
Hello? Is anybody in charge of this country and willing to make a decision?
Australia has huge amounts of unused land, and receives huge amounts of solar exposure each year. Oil and other fossil fuels are running out, no question, and what remains will become increasingly hard to extract. Australia is also becoming increasingly dependent on importing oil, which is going to cause massive problems in the future.
We have a significant opportunity to protect ourselves from the upcoming structural change in energy across the globe, and yet our government still can't make a decision to invest in solar. We should also be promoting home-grown companies so that not only do we provide jobs and opportunities for Australians, we can export our expertise to other countries and lead the world in this technology.
Come on Australia - there is no more time to waste talking and debating. Our 'lucky country' status is at stake.